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Innovation in adversity: Transformative approaches to outsourcing

As the year winds down, businesses across New Zealand reflect on lessons learned and strategise for growth. For some, this year has been transformative, driven by innovative approaches to overcoming industry challenges. Director of Auckland public relations agency Impact PR Mark Devlin, discusses how selective outsourcing can be leveraged to expand capacity and access lucrative export markets. For many SME manufacturers, this is a frenetic time of year. Trying to pack in two months of production and administration along with plans for time with the family in the three weeks before Christmas can be exhausting. The public relations sector is no different. Media continue to churn out content, client crises and issues still arise (frequently when the CEO is at the beach for some reason) and we work with journalists looking for stories they can hold to publish over the summer season when the news cycle tends to quieten. That said, the end of the year is often the only time many of us will get to reflect back on lessons learned and look ahead to better more efficient ways of achieving business growth. Over the past 12 months, I have worked with two businesses in very different sectors that stood out in this regard. Both of these have developed new ways of overcoming the challenges associated with outsourcing to dramatically expand their capacity and develop new export markets. Wool carpet manufacturer Bremworth is a great example of how unanticipated adversity can be turned into an opportunity for growth. In the months following the extensive damage to their Napier facility caused by Cyclone Gabrielle, the company moved to develop a hybrid manufacturing model under which New Zealand wool is sent offshore to be spun into yarn and dyed – before being sent back here to be made into premium wool […]

Elevating New Zealand Manufacturing: A Vision for 2025 and Beyond

-David O’Connor, Head of Emerging Markets, The Learning Wave As we bid farewell to the challenging winds of 2024 and step into a fresh new year, there’s a sense of optimism and energy for what lies ahead for Kiwi manufacturing businesses. The opportunity to drive growth while scaling operations presents an exciting challenge – one that calls for agility, adaptability, and steadfast commitment to a skills-first approach in talent development. With over 230,000 workers, New Zealand’s manufacturing sector is a cornerstone of the national workforce. This scale brings a unique opportunity to lead the way in creating long-term skills pathways and building a highly capable workforce. As we look at 2025, focusing on two key priorities will be pivotal: Cultivating highly capable leaders that can lead safe, productive and thriving workplaces – evidence shows that this has never been more critical or urgent. Creating a highly functioning and well funded pathway from school to work that ensures our young people can see their future and career pathway in the sector. By equipping today’s leaders and tomorrow’s workers with the transferable skills to lead the sector into the future, we believe that this is key to transforming the new green shoots of potential into lasting prosperity for NZ Inc. As we step into 2025, the sector has a prime opportunity to elevate itself to become world class, driven by a blend of advanced technology and empowered and skilled people. Success lies not in smart technology alone but in harnessing three key pillars: workforce development, innovation, and collaboration. A Future-Ready Workforce To fully harness the benefits of advanced technologies, manufacturers must invest in a skilled, adaptable workforce. With over half of New Zealand’s workforce lacking basic digital confidence, bridging the skills gap is critical. Businesses and training providers should co-design accessible, […]

New Zealand Manufacturing: A Year of Resilience and Transformation in 2024

Adam Sharman CEO LMAC-Group APAC The New Zealand manufacturing sector has navigated a complex landscape in 2024, with significant headwinds such as persistent inflation and increased operational costs, local and global supply chain complexities and global economic uncertainty; factors which led many to adopt the mantra of ‘survive to ‘25’ in order to navigate sales uncertainty and low market and consumer confidence. Whilst these realities are pervasive in the industry, economic indicators suggest a flat-lining of productivity rather than a significant decline and this year’s performance and the macro level is perhaps best understood through a detailed lens of economic indicators and sector-specific metrics. According to Statistics New Zealand’s latest manufacturing sector survey [1], the industry’s overall output experienced a modest growth of 2.3% in the 2023-2024 financial year, following a challenging period of contraction in previous years. This growth, while incremental, signals a gradual recovery and renewed resilience in the sector. Key economic indicators revealed: Manufacturing sector contribution to GDP: 11.5% (up from 10.9% in 2023) Total manufacturing sector revenue: NZ$55.3 billion Productivity growth: 1.8% year-on-year Labour productivity improved by 2.1%, demonstrating increased efficiency through technological adoption Export data from the Ministry of Foreign Affairs and Trade [2] painted a nuanced picture of New Zealand’s manufacturing capabilities: Total manufacturing exports: NZ$29.6 billion Top export sectors: Food and beverage manufacturing: NZ$12.4 billion (42% of manufacturing exports) Machinery and equipment: NZ$5.7 billion Chemical and associated products: NZ$3.9 billion Notably, the food and beverage sector continued to be the main breadwinner for GDP, with dairy-related manufactured products accounting for approximately 25% of total manufacturing exports. The sector saw a 3.5% increase in export value, driven by high-quality processing and global demand for New Zealand’s premium agricultural products. Whilst there is potentially some cause for optimism in these numbers, despite ongoing advancements in […]

2024 : We are experiencing the bust, are we prepared for the boom?

Dr Troy Coyle, CEO NZ Heavy Engineering Research Association (HERA) 2024 was a difficult year for construction and therefore manufacturing supply chains supporting it. Our levy, which is legislated under the Heavy Engineering Research Levy Act, 1968, is a reliable indicator of sector activity (at least in the segments that use structural steel, such as multi-storey residential, commercial and bridges). In June this year, we experienced the lowest levy level of any month in more than ten years. Boom and bust cycles are a pattern that is pretty consistent, and which we are not really learning how to avoid (e.g. through planned, transparent and sustainable infrastructure investments). The consequence is that in the bust, which we are certainly in, there is a significant reduction in the employment of our skilled workforce. Then, in the boom, we no longer have the available skilled workforce available to meet demand. They have mostly gone offshore. It would certainly help the sector if there was a bilaterally supported pipeline of national infrastructure projects, with a secured budget allocation, that were consciously timed to ensure stability of construction. Combine a construction bust with an inexplicable proposed “reform” of the Vocational Education System introduced by the Hon Penny Simmonds, Minister for Tertiary Education and Skills in 2024, and things are not looking good for the future of our sector. The link between boom and bust cycles and instability in our vocational education system means that looking ahead (possibly in 2026), construction-related manufacturing could experience an unprecedented skilled labour shortage when the market recovers. Our industry is reliant upon skilled apprentices and concerningly, at the moment, there doesn’t seem to be a lot of Government support for work-based learning appearing within the planned “reform”. For steel, there are also potential concerns with the proposed Building (Overseas Building Products, […]

A year to reflect and renew

From NZ Manufacturer magazine, December 2024. By EMA Head of Advanced Manufacturing, Jane Finlayson There’s no doubt that 2024 has been another challenging year for New Zealand’s manufacturing sector. Global uncertainties, local economic pressures, and significant supply chain disruptions have tested manufacturers across the country. Yet, despite these obstacles, the resilience, adaptability, and determination of our manufacturing community have shone through. However, the year also showed how much work remains to be done to turn the sector around and get productivity back on track. The latest BNZ-BusinessNZ Performance of Manufacturing Index (PMI) for November 2024 showed the 21st consecutive month of contraction for the sector, underscoring the ongoing pressures faced by many manufacturers. While some encouraging signs were visible midway through the year, with what looked like a gradual return towards the neutral 50.0 mark, October and November decreases highlighted the fragility of the recovery. The key sub-indices, such as production, employment and deliveries all registered below the neutral mark, with production activity in particular falling to its lowest point since July 2024. The general economic slowdown continues to weigh heavily on the sector, with many manufacturers grappling with high costs, reduced domestic demand, and external pressures such as the ongoing fallout from global inflationary trends and trade disruptions. These numbers don’t tell the full story. Beneath the surface, there’s a lot of good work happening. Many of you have been upskilling your teams, adopting new technologies, and finding smarter ways to operate. These efforts are setting the groundwork for a sector that’s not only resilient but ready to thrive when markets ease and new free trade agreements start to deliver better trading opportunities for some of our goods. Investing in People and Skills One area that stood out this year is the investment being made in people and their […]

Editorial NZ Manufacturer December issue: Challenges and success hand in hand in 2024

In a year that has brought its challenges, there are success stories of businesses striving and finding new opportunities and markets. And we also have a balancing act, one where we retain staff or see them leave for overseas in their quest to try something different. It has been a year of central government keeping the treasure chest closed and seeing restraint as the best way forward (for now). Let us hope that the Minister for Manufacturing, Andrew Bayly, can, at some stage, soon, be allocated some funding to benefit our manufacturing industries. In this issue we include our annual Year in Review and Innovations 2024 to reflect on where we have been and where we are going to. On Page 1, Ian Walsh from Argon and Co, describes this year as “The year to survive”, with businesses focused on managing costs, avoiding unnecessary spending and looking to how they can improve their productivity to improve returns. In 2025, Ian wants to see an increased adoption of lean techniques and tools, AI and automation tools and a unified approach to leadership and team capability. Adam Sharman, LMAC, (Page 14) believes the New Zealand manufacturing sector has navigated a complex landscape this year, a flat-lining of productivity rather than a significant decline. The industry experienced 2.3% modest growth in 2023-24 which indicates a gradual recovery and renewed resilience. David O’Connor of The Learning Wave, (Page 15) believes there is a sense of optimism and energy for our manufacturing businesses. Dr Troy Coyle, CEO, HERA (Page 15) would like to see a bilaterally supported pipeline of national infrastructure projects, with a secured budget allocation, consciously timed to ensure stability of construction. On Page 16, Director of Auckland public relations agency Impact PR, Mark Devlin, discusses how selective outsourcing can be leveraged to […]

What will 2025 bring? Ian Walsh, Partner, Argon & Co NZ

From December NZ Manufacturer magazine, The Year in Review If 2024 was the year of “survive to 25”, what will 2025 bring? Many businesses this year were very focused on managing cost, avoiding unnecessary spending and looking to how they can improve their productivity to improve returns. Of course, many of the traditional levers had already been pulled, so many businesses did not have a lot of fat to start with, so cost reduction did not offer a lot of opportunity. The need to avoid borrowing (due to interest rates), precluded a lot of capital options either new kit, or technology meaning many have relooked at productivity. The reality is many don’t know where to start, because they are unable to see how you could get more from the current team, given everybody is already working so hard. However, this is exactly what must happen, the reality is NZ has been lagging the world in the adoption of best practices, improvement techniques, workforce development for over 40 years. We now have a burning platform! So, my hope for 2025 is: We see an increased adoption of lean techniques and tools and a genuine interest to properly adopt these tools across all sectors of industry. These are proven globally for over 60 years; the key is the right sponsorship and the right sherpa. As business starts to recover, we see adoption of AI/automation tools to support item 1 above. The tools are not a solution in themselves but help build capability and can supercharge the productivity journey. The SIRI assessments supported by government have been helpful in getting business started on this journey, let’s hope this continues next year. A unified approach to leadership and team capability development, with Te Pukenga, NZQA and other parties becoming aligned in the need to […]

Report: China & New Zealand National Brands Forum

Held in November during the China International Import Expo in which New Zealand was the guest of honor. The forum was co-hosted by the NEXT Federation and the New Zealand Business Roundtable in China, with co-organisation by the China Chamber of Commerce of I/E Foodstuffs, Native Products and Animal By-Products, and Tus-Holdings. Fonterra and Taishan City served as principal partners, while strategic cooperation was provided by Dong Jiu, NZ Fos+, Heng Yuan Xiang, and Yudu Junyao. The forum received support from International Business Daily, under the Ministry of Commerce of China. With the theme “Conquering New Heights”, the forum convened senior executives from leading New Zealand enterprises operating in China, top experts in international relations and industrial collaboration, and prominent brand representatives from both nations. The event aimed to strengthen bilateral cooperation in trade, industrial investment, and brand development, while exploring New Practices, New Trends, and New Dynamics in China-New Zealand collaboration. Professor Wang Yong, from the Department of International Political Economy at Peking University, provided insights into the impact of U.S.-China relations on the global economy and examined the potential for enhanced China-New Zealand collaboration. He observed that the United States is entering a conservative era characterised by an “America First” doctrine, marked by intensified political polarization, protectionist policies, and a growing tendency toward unilateralism that undermines international cooperation. These shifts, he noted, are underpinned by deepening wealth inequality and other systemic challenges. David Mahon, Managing Director and Chief Investment Officer of Mahon China Investment Management Ltd., drew on his more than 30 years of experience in fostering China-New Zealand cooperation to share his insights. He emphasised the significant potential for collaboration in areas such as investment, trade, and innovation, even in the face of the challenges posed by globalization. The forum also attracted the participation of relevant government […]

NZ SME manufacturers primed for a bounceback, says report

The downward economic trend for the NZ SME manufacturing industry has stabilised, with key signals pointing to a recovery, according to new data from inventory management software company, Unleashed. The quarterly Unleashed Manufacturing Report showed purchasing activity by New Zealand manufacturers rose in Q3 for the first time since the end of 2022, indicating future growth for Kiwi producers. The 6.2% average rise in purchase orders over the past three months, combined with stabilising sales revenue, comes after a sustained period of decline for the wider sector. Unleashed Head of Product Jarrod Adam said New Zealand manufacturers had been waiting for a break in the economic clouds, and these positive metrics could be the start of further good news. “This is the first time we have seen purchase orders rise in over a year and a half, which points to the difficult situation that many local manufacturers have been in of late. The news will bring welcome relief to many businesses, and may be the sign that the storm is over and some brighter days are ahead for NZ Inc,” Adam said. Unleashed’s report analyses business performance across 12 manufacturing sub-sectors in Australia, NZ, and the UK – drawing on the live sales, inventory, purchasing, lead time and profit margin data managed within their cloud software platform – to assess the overall health of the sector. Purchase orders up 6.2% (June 31 2024 to September 31 2024) For the manufacturing sector, which generally has long sales cycles, tracking purchase orders is a useful predictor of future revenue. Purchase order numbers have been dropping consistently over the past three years (with exception of Q4 2022). While still down 26% on the same quarter in 2021, at an average of 82 orders, the change marks an important turning point for local producers. In a similar vein […]

Navigating a Reputation Crisis

Business leaders rarely expect a reputation crisis, but these situations do arise, often attracting media scrutiny. Facing media inquiries in challenging times can be daunting, particularly when potential brand damage is involved. Director of Auckland public relations agency Impact PR Mark Devlin discusses how manufacturers can navigate a crisis in front of the media. For many businesses, lacking a crisis response plan means CEOs and senior leaders might struggle to manage a sudden call from a journalist or an impromptu press conference. Some executives opt for a “no comment” response, which can imply a lack of transparency or unwillingness to address issues directly. In most cases, declining to comment isn’t the best strategy. Although there may be rare instances where silence is justifiable, generally, it’s more effective to respond with honesty, offering information where possible. The key to successfully managing media during a crisis is having a pre-existing plan, pinpointing potential crisis scenarios, and identifying who will address reporters’ questions. This spokesperson must be well-prepared and trained in media engagement to deliver a clear, impactful message. Preparation is the best defence against negative press. Most can recall a situation where a CEO’s or spokesperson’s mishandled responses amplified a crisis, but there are also cases where skilled media handling turned potential setbacks into reputation-building moments. The company’s most senior leaders, especially the CEO, should ideally be the face of media responses during a crisis, signalling that the situation is taken seriously. The CEO’s presence shows the company values the matter and is ready to act, as they are seen as the ultimate authority who can credibly commit to solutions or offer a genuine apology. Whoever is chosen to interact with the media must understand how to positively influence both the interviewer and the broader audience. An interview is an opportunity to […]

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