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Market conditions still a challenge

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during November 2015, shows total sales in October 2015 decreased 5.70% (year on year export sales decreased by 8.25% with domestic sales decreasing 0.88%) on October 2014. The NZMEA survey sample this month covered NZ$366m in annualised sales, with an export content of 64%. Net confidence fell to 6, down from 23 in September. The current performance index (a combination of profitability and cash flow) is at 103.7, up from 102.3 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 100, up from 97 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 106.5, up on the last result of 104.83. Anything over 100 indicates expansion. Constraints reported were 82% markets, 12% production capacity and 6% skilled staff. Net 24% of firms reported a modest rise in productivity in October. Staff numbers for October reported no change on the same month last year. Tradespersons, supervisors, managers, professional/scientists and operators/labourers all reported a moderate shortage. “Domestic sales fell back after last month’s good result, largely unchanged to sales in October 2014. Export sales also felt a drop in October moving into the negative compared with the same month in 2014; this was after a flat sales result last month. This is somewhat disappointing, as we had hoped last months results were a positive sign of a turnaround in trend – these lower results may reflect challenges in the global environment, as well as a slowing domestic economy. The very high market constraint of 82% shows the extent to which market conditions are effecting manufacturers.” says NZMEA Chief Executive Dieter Adam. “Staff numbers remained flat in October and confidence fell after the boost it felt in September. […]

RMA changes could do some good

BusinessNZ says draft legislation to amend the Resource Management Act is worthwhile. Chief Executive Phil O’Reilly says business is disappointed that the political landscape has made it impossible to change the Act substantively to make it more fit for its purpose of promoting sustainable development. But he says the changes contained in the Resource Legislation Amendment Bill released today could significantly improve planning and consenting processes. “While the Bill does not meaningfully address core fundamental problems with the RMA, it does make way for improvements in the way the RMA is implemented. “The Bill would give better direction to councils in developing plans, allow for faster consenting, curb council fees and constrain councils from some overly intrusive regulation – changes that would be welcomed by business. “If passed, this Bill could remove a significant amount of the frustration experienced by applicants for resource consents.” But Mr O’Reilly said he hoped future legislation would address RMA issues not addressed by the Bill including: • RMA’s damaging “either/or” approach to the environment and the economy – instead of supporting and facilitating both • RMA’s preoccupation with sustainable management, to the detriment of sustainable development • RMA’s lack of recognition of property rights • RMA’s lack of compensation for removal of property rights or loss of value • RMA’s lack of provision for contestable consenting

Offshore investment vital for manufacturing industries

“A breath of fresh air in the business landscape and important new momentum for the economy to benefit every New Zealander”. That’s the description two partners of DLA Piper New Zealand gave to the Government’s investment chapter of the Business Growth Agenda, launched mid month. “The message was clear and the Government’s strategy couldn’t be more determined,” says partner Sue Brown. “More offshore investment into New Zealand is vital because we lag behind. Without it, we can’t achieve appropriate investment in primary and secondary manufacturing industries to help them deliver for our prosperity into the future.” “Put simply, we need an extra $160 to $200 billion of new productive capital according to these reports – a 70-90% increase on current levels – to meet the country’s much needed target of lifting exports to 40% of GDP by 2025. The only way we can get that level of investment is through a significant growth in foreign direct investment,” she says. “For the first time, Government is speaking openly and explicitly about the need for foreign investment. We need it to shore up diversification in the products we make, and to add value to our primary sector,” says DLA Piper New Zealand partner Martin Thomson. “Capital from the world’s developed and developing economies – including traditional trading partners like the US and Europe and newer trading partners such as China and India – is looking for a home. The only question is: will New Zealand be open, attractive, willing and competitive enough to receive it?” he says. “If the Government has its way through these reports and strategies, we will be ready.” “The Government’s Business Growth Agenda recognises that it is businesses that drive economic growth and build a more successful economy with more jobs for Kiwis” adds Ms Brown. “The new […]

Find your 8 hidden marketing assets to attract your ideal target audience

By digging for the gold right under your nose, you can tap into your full business potential. David Frank specialises in communications for engineering, technology, and manufacturing firms – both external (marketing) and internal (technical documentation). He uses interviewing to tap into the ‘heartbeat’ of his client’s target audience, using counselling experience and training by an ex-TV talk show host. His career has spanned engineering & technology design, project management, and sales & marketing. 0800 385 1800 | david@spectra-media.net.nz | spectra-technical-media.co.nz As I was saying in my previous article Bridging the communication gap that limits engineering & technology firms, most websites and brochures tend to be ‘self-focused’ and not very customer-friendly or appealing. Your clients are in a different world, albeit linked to yours, with motivations and interests beyond the technical issues. Who are they? Your ideal clients may be the ones who appreciate your value and tell others, are willing to pay for it, take up minimal time, or give ongoing business… profitable clients… your real target market. Let’s focus on them and screen out the ‘tyre-kickers’, unreasonable complainers, time-consumers, or people that would be better served elsewhere. What are they really looking for? The key to your success Let’s tap into their heartbeat and find out their real ‘hot buttons’ – needs, fears, problems, pain points, questions, interests, and hidden emotional reasons to buy. We can find a certain amount in discussion forums or social media, but ultimately by going to the ‘horse’s mouth’ by interviewing. This can be easiest done by an objective outsider where the client can speak freely rather than saying what the business owner wants to hear. Mining the raw gold for your marketing message Now let’s see what assets you have to satisfy those ideal client hot buttons… 1. Identify the key benefits […]

NZ gluten-free boom prompts new testing service

New Zealand’s largest privately owned testing laboratory, Hill Laboratories, is offering a gluten testing service with the fastest turnaround-time in the Country. The company has introduced the service in response to the rapid increase in consumer demand for gluten free products, which according to Coeliac New Zealand Incorporated, is increasing in NZ by an estimated 26% annually. Technologist, Sam Marengo, said Hill Laboratories developed the test to ensure those purchasing gluten-free products can correctly label their gluten free foods for the benefit of consumers. “More and more Kiwi consumers are avoiding the ingredient due to gluten intolerance or simply dietary preference,” Marengo said. “As a result of more Kiwi’s going gluten free, manufacturers and retailers across the country are feeling the pressure to respond with gluten free products. “Supermarkets now dedicate whole aisles to gluten free products and more cafes and restaurants offer gluten free food. Marengo says the turnaround time for Hill Laboratories’ gluten testing service is 5 days, which is between 2 and 5 days faster than its competitors. “This service will enable manufacturers, retailers, local cafés and restaurants to accurately label their products and check for cross-contamination. “By utilising our gluten testing service, manufacturers, retailers, local cafés and restaurants across New Zealand can label their products appropriately, for this important gluten free audience.” Marengo said According to the Australia New Zealand Food Standards Code, manufacturers who label foods “gluten free” must not contain detectable gluten (no more than three parts per million)2. “When a manufacturer tests with us, they can find out whether their food adheres to the Code, and therefore ensure they have the correct labelling,” Marengo said. “In turn, consumers can be sure that what they are purchasing is indeed gluten free and safe for them to eat.” Marengo was appointed to Hill Laboratories in […]

Reporoa feed company taking on the world

After exporting its equine feed products into Asia for many years, Reporoa-based company Fiber Fresh has also now launched its calf feed products into the international marketplace. Fiber Fresh is New Zealand’s largest animal nutrition export company, specialising in high nutritional equine and calf feed products. It celebrated 30 years in business earlier this year. The company’s launch into the calf feed market in Japan also includes a research partnership with the school of veterinary medicine at Rakuno Gakuen University in Hokkaido. Fiber Fresh founding director Michael Bell says launching into the Japanese calf market is a milestone for the company. “We have been exporting to international equine markets for nearly 30 years, with many of the world’s top thoroughbred horses fed our products. It’s extremely exciting to now see developments in the international calf market, particularly in Japan, where we see many synergies with our fibre feeds.” Since the early days, Fiber Fresh has worked alongside scientific institutes in New Zealand and conducted multiple trials in order to support its claims that its fermentation processes, by which the forage feed’s nutrition is enhanced, produces the best possible feed for both horses and calves. “The partnership with Rakuno University is our first international research partnership, and involves trials on the health benefits of rearing calves on Fiber Fresh for their first 100 days. The results have the potential to be revolutionary for Japanese farmers and production,” Mr Bell says. Initial research involved rearing a trial group of dairy calves on FiberStart and milk alone for 100 days, as well as a control group fed the traditional grain-based diet. Results of the 100-day trial astounded researchers, with the Fiber Fresh-reared calves showing fully-developed and more robust rumens and papillae, larger lymphatic systems, no weaning checks once milk was stopped after 45 […]

Steel Industry in Crisis

by Gary Hook, CEO Metals New Zealand China steel chief says demand ‘evaporating at unprecedented speed’. If anyone were in any doubt about the magnitude of the crisis facing the world’s largest steel industry, listening to Zhu Jimin would put them right. Demand is collapsing along with prices, banks are tightening lending and losses are stacking up, the deputy head of the main steel mills’ group said in China on Wednesday. “Production cuts are slower than the contraction in demand, therefore oversupply is worsening,” said Zhu at a briefing by the China Iron and Steel Association (CISA). “Although China has cut interest rates many times recently, steel mills said their funding costs have actually gone up.” China’s mills – which produce half of the world’s steel – are battling against oversupply and sinking prices as local consumption shrinks for the first time in a generation. The fallout from the industry’s struggles is boosting trade tensions as China’s mills seek to sell their surplus overseas. “China’s steel demand evaporated at unprecedented speed as the nation’s economic growth slowed,” Zhu said. “As demand quickly contracted, steel mills are lowering prices in competition to get contracts.” Medium and large-sized mills incurred losses of 28.1 billion yuan (A$6.2 billion) in the first nine months of this year, according to a statement from CISA. Steel demand in China shrank 8.7 percent in September on-year, it said. Crude steel output in the country fell 2.1 percent to 608.9 million tonnes in the first nine months of this year, while outbound shipments jumped 27 percent to 83.1 million tonnes, according to official figures. Chinese steel mills face some of their worst conditions ever and the vast majority are losing money, Citigroup Inc. said in September. The outlook for mills in the country is the worst ever amid […]

Revolutionary wind energy conversion system

The novel cross-axis-wind-turbine (CAWT) is a new type of wind turbine that has the capability to extract energy from multi-directional wind that is commonly found in urban areas due to the interaction of airflows between high-rise buildings. Its ability to operate in areas with complex wind pattern and low wind speed overcomes the weaknesses of the vertical and horizontal axis wind turbines (VAWT and HAWT). The novel wind turbine consists of vertical and horizontal blades arranged in a cross axis orientation, therefore enabling it to function with airflows coming from horizontal and vertical directions. The horizontal blades serve as the radial arms that link and support the vertical blades and the hubs through specially designed connectors to form the CAWT. Any airflow streams channeled to the bottom of the turbine interact with the lower and upper radial supporting-arms, therefore maximising the wind energy potential that can be extracted. Viewed from the top, the upper and lower radial arms can be considered as a double-layered HAWT that extracts energy from the vertical wind. Moreover, the lift created by the interaction between the vertical airflow and the horizontal blades creates aero-levitation forces which reduce bearing friction in the generator, hence extending the lifespan of the wind turbine. Initial studies have shown that the CAWT can overcome the problem of self-starting ability of a conventional VAWT, and produce better performance output by up to 2.5 times. In conclusion, the CAWT presents an innovative outlook on the future of wind turbines, creating significant opportunities for the use of wind energy devices and therefore alleviating dependencies on fossil fuel power plants. -chong_wentong@um.edu.my

Offshore boost

New Zealand’s manufacturing sector continued its expansionary path for October, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for October was 53.3 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). Although this was 1.7 points lower than September, the level of expansion was still healthy. The sector has now been in continued expansion since October 2012. BusinessNZ’s executive director for manufacturing Catherine Beard said that despite the slower rate of expansion in October, the proportion of positive comments from manufacturers moved up from September. “Although the key sub-indices of production (53.1) and new orders (55.9) both experienced lower levels of expansion, they continued to lead the way for October”. “In addition, the proportion of positive comments for October (61.8%) picked up from September (58.7%), with many of these in relation to increased offshore orders and new customers. BNZ Senior Economist Doug Steel said “it was interesting to see a decline in inventory this month especially in the context of new orders remaining above-average – it’s a signal for more production ahead.”

Business addressing climate change

Climate change is moving up the agenda for New Zealand businesses, according to a survey released by BusinessNZ. Businesses that make up 36 percent of New Zealand’s private sector GDP participated in the BusinessNZ Climate Change Survey. The survey shows that 61 percent of those surveyed have introduced initiatives to reduce emissions, and that businesses want to see unified commitment at the international climate change COP21 negotiations in Paris this month. BusinessNZ has also released a Business Brief for the COP21 negotiations. BusinessNZ Head of Climate Change Policy John Carnegie says business will continue to take action regardless of what happens at Paris, but the negotiations are still an opportunity to set climate goals to give businesses the confidence to invest, innovate and act to reduce emissions. “We need to see an agreement that sets a predictable and transparent regulatory environment, to provide the direction to enable scaled-up action at a country level. “New Zealand businesses want to work with Government to develop and implement market-driven solutions to address emissions while maintaining our international competitiveness. This means supporting the development of international carbon markets to facilitate the global transfer of low emissions technology and finance to where it is needed most. “Through to 2020, businesses in New Zealand will focus on reducing emissions in the transport sector, improving energy efficiency beyond transport, improving urban infrastructure and being strong leaders on climate change mitigation and adaptation.” Survey findings: • 52% of respondents said climate was a material issue that warranted a business response. • 61% have introduced initiatives to reduce climate emissions. • Two-thirds of respondents have emission reduction targets in place, with strong representation from energy, transport, telecommunications and retail sectors. • 85% of business climate activity sits within business operations, working with customers and through supply chains. • Climate […]

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