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Fonterra’s real turnaround was productivity

From April issue of NZ Manufacturer magazine Geerten Lengkeek, Managing Director, Productivity People Miles Hurrell’s resignation marks the end of a significant chapter for Fonterra, and in many ways, for New Zealand. Fonterra isn’t just another company. It’s our largest business, a global-scale manufacturer, and the commercial engine behind a big part of our primary sector. When Fonterra performs, New Zealand performs. What stands out to me about the Hurrell era is this:the real turnaround wasn’t about growth, it was about productivity. He inherited a business that had achieved global scale, but not always strong returns. Revenue was high, but capital wasn’t working as hard as it could. Over the past six to seven years, that has fundamentally shifted. Return on capital has moved from around 5–6% to consistently around 11–12%, without a material increase in milk supply. That tells you something important. This wasn’t a volume story. It was a conversion story, and that’s what productivity really is. Better conversion of milk into value. Better use of assets to drive throughput and margin. Better deployment of capital into earnings. A big part of that has been strategic focus. Simplifying the portfolio, exiting lower-return businesses, and refocusing on Ingredients and Foodservice where Fonterra has real advantage. But just as important is what’s happened inside the system. This is a manufacturing business at scale. Productivity is won or lost in how well you manage flow, yield, and asset utilisation: from farm through to processing and export. Many years ago, my colleague Nick Brownsword and I were involved in the early operational excellence work in Fonterra. Even then, it was clear how much opportunity existed in improving flow, reducing waste, and aligning the system end-to-end. What’s been encouraging is seeing how those ideas have evolved and matured, and how this is […]

How one local council helped 1,200 low‑income residents finance solar and home energy upgrades

Could this work in New Zealand? Feedback please. Paris Hadfield, Research Fellow, Monash Sustainable Development Institute, Monash University Most of Australia’s existing homes are old, uncomfortable and expensive to run. Too many are energy inefficient, and rising electricity and gas prices are making things worse. Mainstream programs are supporting home energy upgrades. But the transition isn’t happening quickly enough and risks leaving behind the households that could benefit most. Innovative finance models could help. Local initiatives can make solar and electrification more accessible. Darebin City Council’s Solar Saver program Running from 2014-2025, Darebin City Council’s Solar Saver program helped almost 1,200 low-income and vulnerable homeowners in the area get A$4.8 million worth of home energy upgrades. Council paid the upfront cost of installing solar and, in later iterations of the program, reverse cycle air conditioners and hot water heat pumps. Factoring in state government rebates, these costs were added to the homeowner’s property taxes as a “special rates charge”. The homeowner could then repay this money over ten years – interest-free. Suppliers were selected through council tender to make the process easier for homeowners, while ensuring quality products and services including component and performance warranties. This provided certainty for residents, one of whom said: the council’s not going to get involved with some shonky person who’s going to come in and tell you: “Terribly sorry, we’ve got to double the price because you’ve got a nail in the wrong place on your roof” or something. The scheme reduced financial risks and burdens for low-income homeowners. By using council rates to repay the money, the loan is attached to the property itself rather than the homeowner. This means any remaining debt is recouped if and when the house is sold, avoiding a situation where someone is paying a debt for solar […]

McCain employees walking towards production facility

Turning manufacturing around

The announcement by McCains of their closure in Hastings and that of Heinz Wattie’s to close three sites around the country has come with a (wait for it) vacuum of comment, suggestions and concern. Neither does it affirm the benefits of having fifty cent cans of vegetables coming into NZ for sale in supermarkets. It shows greed is alive and kicking! Especially if growers need to readapt and align with the dairy and sheep sectors to survive. Where are the industry leaders, Government officials and ministers leading the charge to do something about the situation, so we do not continue to see the reduction in manufacturing throughout this and other sectors? Have any ideas been expressed and shared as to how this situation can be reversed because, after all, we do want home grown produce and continue to have pride in our land-based industries, don’t we? Is the lack of outrage down to the lack of belief in the ability to come up with concrete ideas to turn the sector around. This must at least be the bottom line to bring about change. Here are a couple you can feed back to me on. Or you might have an idea you want to share: Idea No.1 Is it possible for all affected growers to pull together their produce and start a grower’s co-op, on the North Island and on the South Island, to take on the supermarkets, get a decent return for their efforts and continue to have the populous support “home grown”? Idea No 2 The nation of 5m deposits $1 a week, for a month, into a bank account, NZ Future Manufacturing (for example). After the month there will be $20m in the account. A site is selected, central North Island (Palmerston North, for example) where a manufacturing […]

Why our car dependence is now a strategic liability

Timothy Welch, Senior Lecturer in Urban Planning, University of Auckland, Waipapa Taumata Rau The war in Iran and the effective closure of the Strait of Hormuz have sent oil prices past US$100 a barrel – and Kiwis flocking to fill up. Petrol just hit NZ$3 a litre and some stations have reported running dry. In response to about 20% of the world’s oil supply being shut off in just a few days, the International Energy Agency announced its largest-ever coordinated reserve release of 400 million barrels. But analysts warn oil could reach US$150 a barrel if the strait stays closed. For a country that imports every drop of its petrol, diesel and jet fuel, this is not only a problem, it’s a hard reminder New Zealand has failed to mitigate such strategic vulnerability. Since Marsden Point stopped refining oil in 2022, New Zealand has imported all its refined fuel, mostly from South Korea and Singapore. Those refineries rely on crude oil shipped through the waters now blocked by Iranian drones. The latest official fuel stocks update suggests roughly 52 days of total cover, with less than 33 days of petrol in the country. This buffer was only designed to smooth over short disruptions, not substitute for a prolonged supply crisis. Motorists are already starting to hoard supplies, with petrol stations in Auckland already selling out of fuel cans. Some drivers may well be regretting not having bought an electric vehicle earlier. Failure to electrify New Zealand generates more than 85% of its electricity from renewable sources – rising to a record 96.4% in the last quarter of 2025. It has one of the cleanest and most oil-independent electricity systems in the world. Yet transport, which consumes nearly 40% of all energy in the country, remains almost entirely chained to imported oil. Electricity provides just 0.5% of domestic transport energy. It didn’t have to be […]

Uncertainty and opportunity for Kiwi exporters

By EMA Head of Membership and Export, Simon Devoy With the global trading environment shifting rapidly, uncertainty is the new normal for Kiwi exporters. The latest developments around tariffs from the Trump Administration show just how quickly the rules can change, and how vulnerable small, open trading economies like New Zealand can be when the rules-based global system begins to fray. In late February, the United States Supreme Court ruled 6–3 that President Trump had exceeded his authority by imposing broad “emergency” global tariffs under the International Emergency Economic Powers Act (IEEPA). The Court reaffirmed that under the US Constitution, only Congress has the authority to set tariffs. At first glance, that might have seemed like good news for exporters around the world. The ruling removed the legal basis for the 15% “reciprocal tariff” that had been applied to most imports, including New Zealand goods. But within hours, the Trump Administration moved quickly to reinstate tariffs under a different legal mechanism: Section 122 of the US Trade Act of 1974. This allows the President to impose temporary tariffs of up to 15% for 150 days. Initially announced at 10%, the tariff was soon raised to 15% and took effect on 24 February. In practical terms, that means many New Zealand exports to the United States continue to face a 15% tariff, essentially restoring the same rate exporters had already been dealing with. Some agricultural products are expected to remain exempt under earlier announcements. But exporters still need to confirm classifications carefully at the HS-code level. Meanwhile, other tariffs remain untouched by the Supreme Court decision, including Section 232 tariffs on products such as steel, aluminium and copper, as well as potential investigations into sectors like pharmaceuticals. Given the highest court in the US just ruled the gathering of these […]

Busy Isn’t Productive: The Hidden Cost of Broken Flow

A practical reset for factories stuck in firefighting, batching and workarounds. By Neil Robinson, a Senior Business Consultant with Argon & Co (Auckland) specialising in productivity improvement, Lean systems and capability building. A Six Sigma Black Belt and experienced facilitator, he helps manufacturing teams make flow visible, stabilise performance and embed practical continuous improvement routines from frontline to leadership. Busy isn’t productive. Most manufacturing leaders have seen it up close: people are flat out, machines are running, forklifts are moving — and yet output, delivery and margin are unacceptable. The hidden cost isn’t laziness or lack of commitment. It’s broken flow. If you’ve ever launched a “transformation initiative” that looked perfect in the boardroom but lost momentum on the shop floor, you’re in good company. Programmes rarely stall because people don’t care. They stall because the one thing everyone needs to understand — how work actually flows — was never made visible in a way that sticks. Flow is the backbone of every World Class operation. When product moves smoothly from one step to the next, everything improves: quality, productivity, lead time, DIFOT, cost and morale. But when flow is interrupted, busyness increases, work piles up, frustration grows and improvement stalls — even with good people trying hard. Why flow matters — and why it’s hard to teach Every operation wants work to move smoothly from start to finish. When flow is strong, performance becomes predictable. When flow breaks down, the system pays — in delays, rework, expediting, excess WIP, stressed teams and missed delivery. The enemies of flow often look “normal” in day-to-day work: batching, long changeovers, unclear priorities, waiting for information or materials, bottlenecks, and the classic workaround — “just put it anywhere for now.” These interruptions are easy to tolerate individually, but together they quietly drain […]

Cyber security no longer an IT problem

From February issue, NZ Manufacturer magazine It’s a reputation risk manufacturers can’t ignore With corporate cyber breaches in the spotlight increasingly, NZ Manufacturer magazine advisor and Impact PR director Mark Devlin looks at how firms can protect their brand in the event of an incident. For years, cyber security sat comfortably in the IT bucket. It was treated as a technical risk to be managed through software, consultants and compliance exercises, largely removed from day-to-day operational and commercial decision-making. That separation might once have worked. It no longer does. For New Zealand manufacturers, cyber security has become a frontline business risk, one that increasingly plays out in public. When incidents occur, the damage is rarely limited to systems or data. It shows up in halted production, delayed orders, disrupted supply chains and, critically, lost trust. The reputational consequences often outlast the technical ones. That reality has been reinforced by the way cyber incidents are now covered in the media. Stories that once appeared in specialist technology columns are increasingly leading business news. Journalists are less interested in the mechanics of a breach and far more focused on impact: what stopped, who was affected and how leadership responded. In that environment, cyber security is no longer just about prevention. It is about preparedness, judgement and communication under pressure. Why cyber incidents hit manufacturers harder than most Manufacturers are particularly exposed. They operate at the intersection of physical production and digital infrastructure, where disruption in one area quickly cascades into others. Production lines, logistics platforms, inventory systems, payroll and supplier portals are deeply interconnected. A cyber incident does not just inconvenience office staff. It can shut down machinery, breach contracts and place long-standing customer relationships under strain. Unlike many service businesses, manufacturers cannot simply work around the problem while systems are restored. […]

Backing Capability: Lessons from Fi Innovations and the Future of NZ Manufacturing

From February issue, NZ Manufacturer magazine New Zealand’s manufacturing sector has always relied on one core strength: capability. Not scale or low-cost production, but the practical skill, judgement, and adaptability of the people who make things here. In a recent podcast, Caliber founder Jonathan Prince spoke with Gareth Dykes and Derek Manson from Fi innovations about how that capability is built over time. Their story is a reminder that sustained engineering know-how, not quick wins, is what underpins resilient manufacturing in New Zealand. Fi Innovations is a Southland business with deep roots. What began as a specialist plaster and fibreglass shop has expanded into composites, industrial flooring, moulding, and now advanced additive manufacturing. They have diversified far beyond their original customer base and invested early in technologies that many companies were still evaluating. Their journey illustrates what it takes for a regional manufacturer to build resilience and stay relevant in a changing industry. One of the strongest themes in the discussion was the role of persistence. Fi Innovations focused on building long-term relationships by showing up, solving real problems, and delivering consistently. Some of their most significant customer partnerships began with small, speculative jobs. Steady effort turned these into ongoing programmes of work. This is a familiar pattern across much of New Zealand industry where trust, reliability, and follow-through often matter more than formal processes. Another theme is the value of people. Gareth and Derek were clear that the strength of their business lies in the capability of their team. Their growth into new materials and technologies was made possible by people who were willing to learn, experiment, and solve problems in practical ways. This emphasis on people aligns with what many manufacturers know: technology investment only works when capability grows alongside it. “We’re not here to make CAD models. […]

The Learning Wave Free 90-minute taster: Accelerate team cohesion and performance in times of change

What happens when frontline teams are truly connected to each other and the business? You see fewer handovers going wrong, safer decisions on the floor, better problem-solving, issues owned and closed out properly, and people who actually speak up when something’s not right. This complimentary 90-minute taster gives manufacturing leaders a practical look at how that connection is built. Not through posters, slogans, or another toolbox talk, but through deliberate capability building where the work actually happens. In this session, we unpack what “connection” really means in an operational environment. You’ll see how trust, communication, confidence, and shared ownership show up in everyday behaviours that directly impact safety, quality, downtime, and productivity. We’ll share real examples of how frontline teams move from just turning up and completing tasks to thinking, contributing, and taking responsibility for outcomes. This is not theory and it’s not leadership jargon. It’s grounded in real manufacturing sites, real people, and real constraints like shift patterns, production pressure, and literacy challenges. If you’re an operational leader grappling with engagement, ownership, or change fatigue on the floor, this session will give you practical insight into what actually works, why it works, and how learning becomes the engine for performance, not a distraction from it. What you’ll experience in 90 Minutes: Across the 90 minutes, you’ll experience practical frameworks we use to accelerate team performance. You’ll explore a simple roadmap to identify where your team is at today and what it takes to move them forward, uncover how individual strengths build trust on the floor, and learn a clear, practical model for strengthening trust, accountability, and psychological safety. No cost. No fluff. Just insight that translates to performance. Click here to secure your spot: https://thelearningwave.com/free-taster-session-connecting-together-24th-feb-2026/ DATE: Tuesday 24th February, 2pm – 4pm VENUE: Level 3, 9 Hargreaves Street, Freeman’s […]

Manufacturing starts year by shifting up a gear

Hon Chris Penk New data showing New Zealand manufacturing is experiencing its highest level of activity since December 2021 signals a strong start to the year, Small Business and Manufacturing Minister Chris Penk says. The latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI) shows the seasonally adjusted PMI for December has risen by 4.4 points compared to November, bringing it to 56.1. “This is an incredibly positive signal, as a PMI reading above 50.0 indicates the manufacturing industry is generally expanding. The data suggests New Zealand manufacturing growth is outperforming major economies including the United States, China, Japan, the United Kingdom, and Australia,” Mr Penk says. “The success of manufacturing is central to the health of the New Zealand economy. The sector directly employs more than 220,000 people, contributes around eight percent of GDP and accounts for 60 percent of our exports. “We know some manufacturers felt the pinch of harder months last year. Today’s great news coupled with a 1.1 percent uptick for national GDP in the September quarter indicates a brighter future for businesses. “The Government is focused on setting the right conditions and fixing the basics so that businesses can thrive. Manufacturers are turning that certainty into growth through hard work and innovation. “The creativity and resilience of the sector, and its contribution to national prosperity deserve to be celebrated. It’s therefore my pleasure to announce the second annual Minister for Manufacturing Awards will be held at Auckland Showgrounds on 27 May. “This year’s awards will again recognise the Manufacturer of the Year, Manufacturing Leader of the Year, Apprentice of the Year and Excellence in Process Innovation. It will also introduce three new categories. “This includes a dedicated Manufacturer of the Year award for businesses with fewer than 50 Full Time Equivalent Employees (FTEs). With around 97 percent of manufacturers falling into this group, opening a new category ensures small businesses receive the recognition they deserve. “An Emerging Manufacturer Leader of the Year award is also being added to shine a spotlight on the next generation of innovators and trailblazers, alongside a Manufacturing Lifetime & Legacy Award to honour those who have […]

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