Developments

Goskin Duman, Country Manager – Turkey Turkey continues to offer exciting opportunities for New Zealand businesses. Not only was bilateral trade at an all-time high of US$173.8 million last year, but relations are strengthening between New Zealand and Turkey with the commemoration next year of 100 years of ANZAC. The Turkish economy continues to prosper with 4 percent growth in 2013, and 4.3 percent in the first quarter of 2014. There is a growing middle class hungry for products and services. Istanbul alone is home to 17 million people. Organic products, healthy food supplements and sophisticated food and beverage products show around 20 percent growth rate in the last five years. With Turkey’s unique geographic position straddling both Europe and Asia, the country is increasingly becoming a hub for multinationals supporting the Middle East, Europe and Africa. Political unrest in parts of the Middle East is affecting exports, yet in 2013 exports reached US$151.7 billion. GDP per capita is now $US10.782 and increasing year-on-year. Turkey manufactures 60 percent of all its industrial goods in an area stretching from Bulgaria to the Chinese border – in other words from Eastern Europe all the way down to Asia. Turkey has started to become a major world player in a number of sectors. It is: • the second biggest flat glass manufacturer in the world • the fifth biggest automotive manufacturer in Europe • the eighth largest shipbuilder in the world and fifth in mega yacht manufacturing • the largest manufacturer of durable goods in Europe. While trade between Turkey and New Zealand is increasing, it is off a fairly low base. New Zealand’s traditional exports of butter and other dairy products, raw skin and aluminium have been the mainstay of our exports. But over the last three years we are seeing an […]

Glen Murphy, Regional Director NZTE, Greater China  Do you predominantly think of China as a market to sell your products to or do you think of China as a customer with unique needs that you could help with? The way people talk about China would suggest many take the market view. If that’s your approach you need to ask yourself: ‘To what extent could we increase the value of our relationship by creating more complete solutions?’ Are you building long-term trust with your customer that will sustain your businesses through the inevitable ‘hiccups’ in any relationship? And China does have needs New Zealand can help with: Safe food There is a well-discussed need for food products and a safe supply chain the Government and consumers can believe in. Maybe it’s time to stop thinking about food safety requirements for China as a compliance hassle and think about the opportunity to gain a competitive advantage by meeting these needs and communicating to Chinese consumers in creative ways? The middle class This consumer group is significant, growing and getting more sophisticated in their desire to buy experiences, products and services that reflect their values and express their personality. Let’s understand these needs and provide premium, high quality products and services that allow Chinese consumers to express themselves. Urbanisation The rate of urban growth means huge numbers of people are seeking leisure options as part of a modern urban lifestyle. Kiwis are creative about how we use our leisure time, so let’s teach our Chinese customers how to enjoy theirs. The environment It’s no secret that China’s growth has come at serious cost to the environment. As the country reaches a tipping point of wealth, they are trying to address these problems. We love the environment in New Zealand, so let’s help China […]

Dr Wolfgang Scholz, Director Heavy Engineering Research Association (HERA) The New Zealand heavy metals engineering industry overall had an outstanding year of growth. The 12 monthly rolling totals for heavy steel usage in NZ end of September stood at 151,000 tonnes p.a., while a year earlier it was 130,000 tonnes, an increase of close to 16%. However, the fact remains that the industry is still around 20% below its October 2008 pre-GFC peak of 179,000 tonnes of heavy steel usage – so there’s room for further growth. Looking specifically at sub-sectors, steel construction was the winner with considerable market share growth particularly in multi-storey construction in Canterbury, where market studies indicate that 70% of buildings currently under construction are going up with a structural steel frame. The New Zealand steel fabrication capacity discussion continues but with less intensity. Main clients are realising that the industry is responding to increases in demand by putting more highly efficient plant in with expanded capacity. They also recognise the capacity reserves by the industry with potential for multiple shifts, something which can be done with relative ease in the factory-based steel construction environment. No doubt the year’s biggest industry achievement was the introduction of the Steel Fabrication Certification (SFC) scheme in a joint effort between HERA and Steel Construction New Zealand (SCNZ), and industry members. In a short time, eight New Zealand steel fabricators have achieved the SFC and ISO 3834.2 certification. This new scheme raises the bar by providing independent, expert certification of New Zealand steel fabrication companies. The scheme ensures participating fabricators have appropriate personnel and quality management systems in place, meeting national and international best practice standards giving assurance to its clients that indeed the expected quality is being achieved. The general and not steel-construction focused sectors of our industry had […]

Tony Waite.                New Zealand is a fantastic place to do business.      Trade Shows play a significant role in the growth in business across the country. A face to face platform to taste, feel, smell and sight the latest business innovations, products, services, expertise and methods to grow your business to new levels. No wonder then that the tagline for NZ’s largest trade exhibition organiser, XPO Exhibitions (XPO), is “Showcase. Educate. Sell.” Tony Waite, National Events and Sales Director talks to NZ Manufacturer about the XPO’s position in the New Zealand business environment, 2014 in business and their activities in 2015. How has XPO found 2014? 2014 has been a very busy, exciting and rewarding year indeed! We expanded our portfolio through the purchase and acquisition of the Haley Media pofrtfolioportfolio of trade events. We launched and sold out in record time a brand new event, buildnz | designex Canterbury, which we’re excited to confirm will be a regular fixture in our calendar going forward. Concurrently we’ve been investing in exciting new smartphone lead retrieval technology that will exponentially enhance both exhibitor ROI and visitors’ event experience. New technology is to be launchedbe earlylaunched early in 2015. Across the shows we have seen increased visitor attendance at each and every one of the 6 events we ran in 2014. Some of those increases are the highest in 10 years, and to top it off we have won, for the second year running, best in class industry awards from the Exhibitions & Events Association of Australasia. (Deep breath, exhale!) What do you consider to be XPO’s prime role in the business community? XPO’s trade events provide effective, engaging and dynamic forums that allow industries to connect and grow, and, in doing so, foster […]

-Catherine Beard, BusinessNZ Looking back at the various measurements of manufacturing activity over 2014, the overall picture is one that Kiwi manufacturers can be proud of. Despite challenges, the BNZ – BusinessNZ Performance of Manufacturing Index (PMI) has continued to expand throughout the year. It was rising steadily in the first quarter, and while it did flatten out in the second quarter, it still remained in expansion territory (above a 50.0) and has been steadily increasing since. According to Statistics New Zealand’s Economic Survey of Manufacturing June 2014 quarter, that flattening out can mainly be attributed to meat and dairy manufacturing. The survey reported that “After adjusting for seasonal effects, the volume of total manufacturing sales fell by 0.7 percent. This was led by a 1.4 percent fall in meat and dairy product manufacturing. “The sales volume for total manufacturing, excluding meat and dairy, was up 0.1 percent in the June 2014 quarter. Sales fell for seven of the 12 manufacturing industries in this group. When the effect of price changes is included, the total value of manufacturing sales fell 1.9 percent ($481 million). This decrease was driven by a 5.7 percent ($485 million) fall in meat and dairy product manufacturing sales.” By October, the BNZ-BusinessNZ PMI (the most recent one at the time of writing this article) stood at a healthy 59.3, and the survey results showed employment at its highest ever level since the survey began in 2002. As the October report’s title “Staff Wanted” suggests, this provided another boost in the arm for the sector and sends a signal of confidence. In addition, the proportion of positive comments from manufacturers (68.7%) was well up on results from previous months. This all bodes well for a healthy end to 2014. As the Bank of New Zealand reported on […]

Jane Tongatule, General Manager, Greater East Tamaki Business Association Inc. (GETBA) East Tamaki is Auckland’s largest industrial precinct. This significant manufacturing and distribution hub continues to grow at a rate higher than the regional average and provides 30,000 jobs. Business NZ’s Performance Manufacturing Index has shown continued growth since mid-2014, and industry-leading local manufacturers such as Fisher and Paykel Healthcare and GMP Pharmaceuticals are evidence of this. GMP Dairy, a division of GMP Pharmaceuticals, opened a second canning line at GMP Dairy’s plant in East Tamaki in September. Fisher & Paykel Healthcare have had another strong year and also feature in the TIN 100 (Technology Investment Network) leading technology businesses. Companies such as Bobux International and Alpha Laboratories have grown their exports, despite the challenge of the high NZ dollar. It is heartening to see the 2014 Exporters Survey undertaken by Export NZ shows exporters planning for growth, which bodes well for 2015. It’s clear that manufacturing is changing and that there is more emphasis on technology and innovation. Investment in new plant and capital equipment, which has historically lagged is moving in the right direction, up 9% on an annual basis. We have seen several local companies increase their focus on R&D. East Tamaki businesses including SIKA Technology Ltd, Tandarra Engineering and Technopak Limited have been recipients of R&D funding this year. SIKA Technology is an example of the change in manufacturing, moving from a traditional foundry business to a company that specialises in the design and manufacture of high quality, innovative cast aluminium solutions. In August Fisher and Paykel Appliances, acquired by China’s Haier in 2012, sought some 40 workers for research and development after opening a new design centre at its East Tamaki headquarters. It is now one of Haier’s five global centres of excellence for product […]

Manufacturing is about people.   -Roger Usmar, Sector Development Manager, Competenz A manufacturing career that spans ‘shop floor to senior management’ in operations, competitive (‘lean’) manufacturing and human resources has helped Roger Usmar understand the challenges manufacturers face. It’s also convinced him that investing strategically in training to build a skilled and adaptable workforce is one of the keys to managing these challenges. Now Sector Development Manager at manufacturing industry training organisation Competenz, Roger shares his thoughts on how to build training into an effective workforce development strategy. “Attracting good people, then building the skills they need in a competitive manufacturing environment, is a challenge – and it’s one New Zealand manufacturers need to take seriously,” says Roger who joined Competenz in October. “In my thirty-plus years in manufacturing with Fonterra, Kiwi Dairy and Woolworths, I’ve seen the difference a good workforce development strategy makes – and the vital part training plays in supporting the company strategy. “Manufacturing is about people. You can have the best technology, but without engaged employees with strong technical and commercial skills, who can solve problems, adapt and look for continuous opportunities to improve, you won’t get the best from this technology.” Roger recommends manufacturing companies take a structured approach to training, whatever their size. He shares his recommendations: 1. Put training on your board agenda. “Your people’s skills and competencies can be a critical risk or major asset in executing your strategy. So I’d like to see people development discussed around every board table in the country, every month. Directors should scrutinise training plans and budgets the way they do investments in new plant.” 2. Look ahead. “Skills take time to build, so companies need to be constantly looking ahead. When you produce your strategic business plan, map out the skills you need to […]

Importantly, the price of oil has collapsed by 30 per cent with more to follow. -Kim Campbell, chief executive of the Employers and Manufacturers Association kim.campbell@ema.co.nz Last century we used to say anything good for the Australian economy was good for New Zealand. When their economy went well they bought more of what we had to sell, and Australia remains today the major market for our manufactured goods and services. But the past two years have not been kind to Australia, at least not to their manufacturers. Hard on the heels of a ‘Dutch disease’ epidemic whereby the Australian dollar explored new heights on the back of high mineral prices – hard going for the competitiveness of their manufacturing exporters – came the announcement of vehicle plant closures. Reflecting this, Australia’s Performance of Manufacturing Index (PMI) has registered a steadily shrinking industrial base every month since August 2012. On this side of the Tasman over the same two years New Zealand’s PMI has in contrast recorded a steady, robust expansion, as high as 63 in November 2013 and 60.6 in October this year. Its been a remarkable run. Even more so because over the same period we have seen a large number of businesses laying off staff. Yet the unemployment rate has kept falling. This year the job losses have included 200 from Summit Wool Spinners, 120 at Fitzroy Yachts, 100 at Contact Energy, 84 at SafeAir, 120 to go at Holcim Cement, 100 at Croxley, 20 at ITL in Taranaki, 40 at Wellpack in Upper Hutt, 120 at Alloy Yachts, and several hundreds from various sawmills. Many of these well publicised losses were blamed on the high exchange rate, though there have been other contributing factors. But despite the jobs lost the official unemployment rate went from 6.4 per […]

They (the primary industries)will need a higher proportion of well-qualified staff – with post-school education and training. Andy Somerville, CEO Primary Industry Capability Alliance. A recent investigation into the future capability needs of the primary industries has clearly spelt out the significant challenge that exists. The primary industries – including pastoral farming, horticulture, fishing, forestry and the associated enterprises such as manufacturers and marketers – accounted for 350,000 or 16% of the national workforce in 2012. A report commissioned by the Ministry for Primary Industries and industry groups that was released in April 2014, shows that in order to meet their growth targets these industries will need to maintain this proportion of the workforce, taking their total worker numbers up to 403,500 by 2025. But more significantly, they will need a higher proportion of well-qualified staff – with post-school education and training. In particular, more specialist skills will be required in science, marketing, engineering, IT, robotics, automatic processing and technical and management support. Leaders of these industries are confident they can offer interesting careers for young people. Their challenge is to communicate this to young New Zealanders. With this in mind, several organisations are backing the new Primary Industry Capability Alliance – known as PICA. MPI is a partner in PICA, along with DairyNZ, Beef+Lamb, Young Farmers, Primary ITO, Lincoln University and Taratahi. A number of other organisations are looking to join to assist in this collaborative approach. PICA has started by developing a strategy to support schools in providing clear career options for students. This will be a major focus for PICA over 2015. The PICA alliance members will join forces at the Careers Expo to provide an industry wide message about the breadth of exciting and rewarding jobs available. The PICA stand will provide collateral to educate the […]

The Employers and Manufacturers Association has joined the call for an early cut to interest rates. According to the EMA the Reserve Bank should reduce the Official Cash Rate right away or risk deflation next year when the economy is predicted to slow. “A year ago we said interest rates did not have to be raised this year and that has proved correct,” said Kim Campbell, EMA’s chief executive. “We are concerned the Reserve Bank has paid too much attention to domestic house price rises in Auckland and Christchurch and not enough to the rapid changes in global markets. “Inflation during the year has scarcely tested the bottom end of the Bank’s 1 to 3 per cent inflation target. “Now inflation is falling further as the costs of producing the $50 billion worth of goods we import decline due to the collapse internationally of the price of oil, steel and other commodities. “The price of oil especially, which has reduced by at least 30 per cent, is slashing the costs of production and freight worldwide; this is not being adequately factored into domestic inflation forecasts. “The recovery from the GFC has not been accompanied by inflationary pressures driven by rising demand as has been the case in previous economic cycles. “This time our fortunes have depended on different vectors than hitherto. “New Zealand has to a large degree decoupled from the US and Europe where there has yet to be a sustained recovery. Asia and Australia are far more significant to us. “But helped by higher than necessary interest costs, the cross rates with the US and Australia have remained unduly high which has shredded margins, particularly on our $10 billion export trans Tasman trade. “In addition, the cost of borrowing internationally is at historically low levels while a global […]