Uncategorized

By Stephen Graham. When it comes to business, a lock-up isn’t a criminal offence, but it should be. In my view it is a crime against that most essential of business elements, cash flow. A lock-up means that while you do have cash, you cannot access it yet need it in order to fix or improve cash flow problems. So how does cash become ‘locked up’? To continue the prison analogy, there are three key crimes that cause a lock-up. One is the debtor (specifically poor debtor management), of which most businesses have plenty and indeed, over the past two years would have seen an increasing trend of more customers taking longer to pay. The second crime is having too much finished stock on hand awaiting sale. This can be a difficult balancing act as not enough stock may mean lost sales while too much stock will definitely tie up your cash. Thirdly, having raw materials or work in progress which are yet to become finished stock will lock up cash. And, the longer this transformation process takes, the bigger the problem.  Every business experiences this – even service industries including accountants where client work is delayed to the point where it cannot be invoiced because of hold ups in the job completion process. To prevent and/or manage a lock up, there are some key areas to focus on. Debtors – Focus on selling to your better customers; not necessarily those who purchase the most, but those who actually pay on time!  Poor payers get chased immediately and credit stopped. Finished Stock – Improve your stock management to reduce the potential for carrying old or obsolete items and then being forced to fire sell them.  Negotiate better terms with suppliers for delivery, pricing and payment. Ensure you understand your costs […]

The recent installation of a 60 meter pipe bridge, weighing a hefty 15 tonnes, marks the end of the first stage of construction of paint manufacturer Dulux’s new site in Gracefield, Hutt City -two weeks ahead of schedule. In a challenging exercise for the crane operators, the entire 60 metre pipe bridge was slotted into place on six support legs in a single lift, using the coordinated effort of three cranes. What made the exercise particularly complicated was the number of piping services that run across the bridge. The 60m span supports 1km of pipework in a 1.5m2 cross section and weighs a total of 15 tonnes. Once operational, the pipe bridge will transfer 200,000L of acrylic latex every week. With roading improvements also in place, the next step will be to move ten 50-60,000L tanks to the new tank farm. “We’re delighted with the progress,” said Dulux New Zealand General Manager Patrick Jones. “With stage one almost complete, we can see our investment in local manufacturing really starting to take shape.” Dulux is investing significantly to expand and reconfigure its water-based paint manufacturing operation for better traffic management, safety and logistics. Construction of the new plant, part of its $28 million investment in its Hutt Valley-based manufacturing operation, will continue in four stages until late-2011.

While Emerging Markets are leading the world out of recession, New Zealand businesses need to be well prepared and targeted before they engage with these markets, according to Peter Sherwin, a leading New Zealand business adviser for accounting firm Grant Thornton New Zealand. Commenting on a recent international survey of 7400 chief executive officers from 36 countries, Sherwin said that business leaders in emerging markets were vastly more optimistic about the prospects for their country’s economy than those for more mature economies. ‘A balance of 57% of respondents from emerging markets were optimistic about their country’s prospects in the year ahead compared with only 2% in more mature economies.  ‘The survey also looked at the countries identified as offering most opportunities and this was again led by China,  Sherwin said that for New Zealand companies to reap the undoubted benefits, they had to be thoroughly prepared and with a recommended focus on China and India. Many businesses entering the China market have found success through strategic joint ventures with a lot of information available from the likes of the Economist Intelligence Unit on the experience of other companies doing business in China. Companies need to be cautious and well advised when entering any of these markets, as fraud and corruption are systemic in many emerging markets and far removed from normal business practice in this country. Fonterra’s experience in China is a prime example of how a brand can be badly damaged by corrupt practices.                                                            ” China and India are not without these problems, but the potential benefits are enormous. Combined, India and China have in excess of two billion people and we have double tax agreements with both countries.  “India is also the largest democracy in the world, with English as the language of business along with a Commonwealth-style […]

by HERA Director Dr Wolfgang Scholz With the recent decision of government-owned Crown Research Institute NIWA to contract the multi-million dollar upgrade of its research vessel Tangaroa to a Singapore dockyard, and the KiwiRail announcement that the Auckland light rail trains will be imported, the Heavy Engineering Research Association (HERA) analysts have two other interesting case studies to add to the list of recently imported or to be imported heavy metals based articles. HERA’s statistical analyses showed that from 2008 to 2009, New Zealand experienced an increase of $43 million in the value of imported steelwork in the single category of articles used in steel structures. This import value increase has to be seen in context of significant rises in steel cost during 2008/09 and also the worldwide recession, where pressure was put on everyone to win contracts at all cost from a reduced number of projects and this includes importers. This $43 million is not a large increase but in our calculations for this category alone, we have lost over 150 direct jobs. This is serious enough to mean that our industry should be alerted to this trend and monitor developments, and be ready to take action to fight for our market share. Heavy engineering is of strategic importance to the NZ economy be it for food processing, petro-chemical, infrastructure, mining, marine, defence or the transport industry. Steel construction innovation has provided a viable alternative to concrete construction and is continuing to provide considerable cost savings and sustainable alternatives to our economy. Our heavy steel fabrication industry has remarkable depth of capabilities due the relative isolation of New Zealand and has grown continuously since the 1990’s at well above the general rate of GDP increase. Our heavy fabricated metals product sector has also built a considerable export market, amounting […]

Now here’s the thing. New Zealand is responsible for 0.2 percent of the world’s emissions that affect our planet. Soon we will be paying money to Government for these domestic and business environmental out pourings’. More money than we care to for an ETS which is, at best, highly questionable. What do you think about this? New Zealanders are too compliant. We don’t march up and down the streets enough to have our say and responsibly give feedback to what is wrong. As long as we have the All Blacks and the All Whites it seems that we are doing okay. We lock up the house when a test is on, take the phone off the hook and smugly watch a 15 man side defeat a 14 man Irish side. How good is that? But unlocking the door and facing the issues is different. We still pay too much business tax, our incentives to sell overseas need to be improved and the price of everything continues to go up (without us making as much as a wimper). It is very ‘nice’ of us to continue to look after the Government’s bank account but there are more important issues to deal with than continuing to meekingly submit to this revenue massaging. For example how about the state of manufacturing in this country? On another note, our lead story this issue is about Blair McPheat’s ‘snappy invention’ which attracted significant visitor attention and resulted in distributors being appointed at a recent trade fair in Nuremberg. In Analysis, Dr Wolfgang Schotz, supremo at HERA, talks about the strategic importance of heavy engineering to the New Zealand economy and John Walley, CEO of New Zealand Manufacturers and Exporters Association (MEA) says our confidence for manufacturers “is built on the hope of more sales and […]

Marine Leaders appearing in the first-ever program release of LeadersReview.co.nz, marine leaders featured claimed that no matter how hard it was to break in, domestic-only players would  find that developing an export side earlier was often a “saving grace” down the track. The old adage of hopping on a plane for 9 a.m. meetings in London next day, was never truer according to Ian Cook, Managing Director of internationally acclaimed Yachting Developments. Though current Marine Industry Association President, speaking in his own capacity as a businessman, Mr Cook contends that for his firm, the world market had from early days redefined his operation: “The globe is the boundary –  there’s not really a local market (now) for what we are producing. For near hundred percent exporters such as Southern Spars, who supply internationally eighty percent of the world’s superyacht and racing boat market, including the America’s Cup, Group CEO, David Glen had noticed the ‘super buyers’ returning to the European boat fairs at the end of 2009 and fortunately their interest had continued. Prior to that, the introduction of product innovations to match other sectors of the market had been a timely inflexion point for their business. Regardless of where in the local industry folk harkened,”a lot of the top NZ brands internationally had developed from early days a (now) predominant export component to their operation,” said Mr Glen. Myles Fothergill, who heads Whanganui-based Q-West Boatbuilders, one of the country’s larger custom commercial shipbuilding operations, claimed that while 2009 exports had suffered, efforts continued unabated during that time towards securing offshore custom. Known best domestically for their Kaikoura ‘Whale Watcher’ craft, fishing patrol and Police Deodar projects the past few years, 2010 had now presented a significant “win or two ‘including a break into the Sydney tourism market – ‘After […]

A North Shore Auckland man’s ‘snappy’ invention attracted a thousand visitors at this month’s Powtech 2010 (powder technology) show in Nuremberg resulting in distributor appointments and potentially millions of dollars in sales. Three years ago Blair McPheat created the world’s first ‘snap in’ flexible connector that unlike traditional connectors doesn’t need hose clips. Connectors are generally used by bulk handlers and processors of dry or dusty powders in food, pharmaceutical, and other dust generating industries. Made from flexible fabric or eurothane film, they link and reduce vibration between ‘moving’ plant and stationery machinery. Until Mr McPheat’s invention, connectors were usually secured by hose clips or clamps – whose resistance is affected by pressure. The resulting leaks or bursts can contaminate products and create safety hazards. McPheat’s BFM connector simply ‘snaps’ into place without the need for tools or multiple workmen, guaranteeing a 100% dust-tight seal, and preventing dust loss from the connector into processing plants. And it seals tighter as pressure increases. Blair McPheat’s family-owned company, BFM Fittings, had overseas distribution and several millions of dollars of sales before he attended the Nuremberg trade show. The connector was already being sold in the UK, USA, Australia, Argentina, Denmark, Germany, Canada, Singapore, and Japan, South Africa, and the Netherlands. Now distributors have just been appointed in Italy and Spain. And there’s keen interest from companies in France, Israel and Switzerland. Mr McPheat says there’s the potential to more than double sales of BFM connectors over the next two years. Another North Shore McPheat family business, filtration manufacturer and exporter, Filtercorp International is the New Zealand distributor of BFM connectors.

Suggestions of strong growth in New Zealand’s manufacturing and engineering sectors have been borne out with local and overseas professionals touting the highly successful engineering, machinery and electronics exhibition EMEX 2010, recently held at the ASB Showgrounds in Auckland. The success of this event backs up recent performance of manufacturing index (PMI) figures that show consistent and sustained growth, with an April figure of 58.9 (anything above 50 shows manufacturing is expanding). It is the second largest employment sector in the country, and largest in Auckland. Now Kiwi-owned, EMEX has thrilled its new owners and management team, XPO Exhibitions. Brent Spillane says he was initially apprehensive given the shaky economy, but has been overwhelmed by the success of the event. “I spent a lot of time at EMEX walking the halls and talking to exhibitors and visitors. Constant positive feedback and reports of strong sales at both the low and high-value ends, with a good number of substantial machines sold on the floor, was an excellent sign of how good the manufacturing and engineering sectors are at present. As one exhibitor told me: ‘The show has been a financial success for us. I have never in all my time coming to these shows seen so many business owners attend as visitors’. “It was interesting to hear ANZ economist Khoon Goh, who spoke to a packed audience, note that the economy is improving and that this message translated to our trade visitors as a good time to buy capital equipment. There were very few ‘tyre-kickers’ among a very high quality of visitors and, as mentioned, a lot of sales were made. Confidence in sustained growth is high too, with a higher proportion of exhibitors than normal already  One of the exhibitors over the moon with EMEX 2010 is LZ Electrix Ltd. […]

When I first heard that Alice Schroeder was writing a biography of Warren Buffett, I was excited. Buffett knows Ms. Schroeder well, and had given her extensive interviews and unprecedented access to his records — this was sure to be the definitive tome on one of the richest and most ethical people in the world. The result of the collaboration is the 816 page tome The Snowball: Warren Buffett and the Business of Life. It’s an exhaustive look at Buffett’s life and career but it’s also, frankly, exhausting. The problem is that the book is just too long, with seemingly hundreds of pages devoted to Buffett’s friendship with Washington Post matriarch Katherine Graham, and huge amounts of pop psychology discussing his complex relationship with his wife. There is even a detailed discussion of Buffett’s colonoscopy and the polyps that were found — minutiae that only diehard value investors will appreciate. There is some fascinating material here, especially in the beginning: did you know that The Oracle of Omaha was a bona fide juvenile delinquent, stealing golf clubs from Sears every weekend? But funny anecdotes like that aside, Warren Buffett’s personal life is just not interesting enough to be a major component of a biography. He plays bridge, eats hamburgers, and pals around with Bono. The most interesting story is the business story, and you can get a more interesting look at that in Roger Lownstein’s Buffett: The Making of an American Capitalist.

September saw the annual Delcam Technical Summit which was held this time in Korea. With close to 100 delegates from all over Asia and the Pacific region, the final day of the summit coincided with the 20th Korean Delcam User Group meeting. The technical summit dealt with the new generation of Delcam products and introduced for the first time in Asia the latest version of PowerMILL Delcam’s premier product. With the right hardware configuration, PowerMILL 10 is around 2.5 times faster than its predecessor due to its use of multi-core PC processors. The GUI has also been revamped allowing users to learn the intricacies quicker than before with all items being accessed off one form. It is also quicker to navigate. Robert Gain, from Lee-Ming Institute of Technology in Taiwan, presented his research on machining with robots. With six axis readily available in modern industrial robots and coupling this with Delcam’s PowerMILL, previously unthinkable multi-axis machining becomes a relativity simple task. Whilst the inherent stiffness of robots and their drive systems may not be able to give accuracies in line with those achievable with conventional machine tools, the application of the technology for rapid prototyping is obvious. Some of the applications presented dealt with Delcam’s ArtCAM for the generation of statues and copies of works of art. Medical applications was a major feature of the summit being promoted under the ‘Healthcare Solutions’ banner. Following on from the 2008 event, Delcam has obviously been developing hard in this area. Maxillofacial reconstruction is perhaps the ultimate application for rapid prototyping techniques and Delcam is leading edge in its developments. Using this technology delivers opportunities to reduce waiting times; remove unnecessary surgery; compress process times; reduce patient trauma; speed up recovery times and reduce material costs. Another medical application is in the custom […]