NZ Manufacturer September 2013 September 2013
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Peventative Maintenance Taking a closer look on the inside.
Page 6
The Interview
Alistair Russell on the steel industry. Page 11
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www.solidtec.co.nz
The Future of Manufacturing Focussing on Success.
Page 18
America’s Cup a massive opportunity for NZ’s marine industry
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egardless of the final result, the America’s Cup is a great endorsement of New Zealand’s marine heritage and our ability to deliver complex, leading edge technology. Our performance in San Francisco marks a sea change for companies across the sector. Even for companies in prosaic markets for equipment and workboats will see benefits from the link being demonstrated between our country and high technology sailing. Our Marine High Impact Programme is about taking New Zealand marine companies through a step-change in their internationalisation. We have committed to putting our resources into supporting plans led by business that will help our customers enter new markets, exploit new opportunities and address constraints to their business. By design, our principle is collaboration and working as a team. It’s the same sort of spirit illustrated by Emirates Team New Zealand, and our goal is no less as audacious as winning the America’s Cup. The internationalisation of the New Zealand marine industry has been entwined with America’s Cup successes of the past. From the mid1990s and through the defences of 2000 and 2003, marine exports jumped five-fold as companies leveraged the international exposure and demonstration of our technical capability.
Winning on the water inspired a generation of young people to enter marine trades, helping to sustain the transformation of our marine industry to its present form. In 2011 we exported over $600 million of marine products and services, and whilst this is made up of a healthy diversity of companies and technologies, export growth has slowed in recent years. We want to change that, and the marine sector has set a target of $1.5 billion by 2021.
However, that will only be achieved if more marine companies are better engaged into growth markets. While there are good signs of demand returning to the US recreational boat market, Europe remains clouded in uncertainty and Asia is still a largely nascent opportunity. Much of the potential lies in penetrating supply chains into boatyards and marine manufacturers. We hypothesise that this represents our best opportunity
By Graeme Solloway,
New Zealand Trade and Enterprise
in China and Taiwan, where both local and international boat-building firms are using cost advantages to manufacture for world markets. And so to test this we are commissioning research on the demand in China and Taiwan, the structure of supply chains and the opportunities for New Zealand companies. Continues page 30
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NZ Manufacturer September 2013
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NZ Manufacturer September 2013
CONTENTS Advisors
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DEPARTMENTS
Larry Wiechern
BUSINESS NEWS
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PREVENTATIVE MAINTENANCE
Is the Manager of the Maintenance and Reliability Centre, Manukau Institute of Technology.
Clever solution shifts tax goal posts. Taking a closer look on the inside.
MANUFACTURING TECHNOLOGY Huge improvements thanks to FeatureCAM.
MANUFACTURING TECHNOLOGY
Page 9 – MANUFACTURING TECHNOLOGY – Waikato electric car to race in Australia.
• NZ technology gives better warning of disasters. • Reducing costly network redesigns.
Craig Carlyle
Craig Carlyle is Director of Maintenance Transformations Ltd, an executive member of the Maintenance Engineering Society and the Event Director of the National Maintenance Engineering Conference.
THE INTERVIEW
Alistair Fussell on the steel industry.
DEVELOPMENTS
• Top innovators race up the growth curve. • Mighty River Power supports engineering research.
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ANALYSIS
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Catherine Beard
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Page 16 – DEVELOPMENTS – Special steel for headlamps.
Is Executive Director of Export NZ and Manufacturing, divisions of Business NZ, New Zealand’s largest business advocacy group, representing businesses of all sizes.
Manufacturing moving at the speed of business.
WORKSHOP TOOLS
• Beacon lamps set new benchmark. • Capabilities of custom rubber parts.
WORKSHOP TOOLS
Brian Willoughby
Flow analysis ensures moulding “right-first-time”.
THE FUTURE OF MANUFACTURING Focussing on Success.
THE FUTURE OF MANUFACTURING Transmission developer attracts overseas interest.
Page 23 – FOOD MANUFACTURING – Lab expansion for Asure in Christchurch.
WAIKATO FOCUS
FOOD MANUFACTURING
• NZ gourmet food producers urged to target India. • Webinar explores operational efficiency. • Analysis of the global market for Polystyrene. • Can Gun 1 makes aerosol spraying easier.
Lewis Woodward
Is managing director of Connection Technologies Ltd, Wellington and is passionate about industry supporting NZ based companies, which in turn builds local expertise and knowledge, and provides education and employment for future generations.
• Hamilton plants officially green. • $4m upgrade at treatment plants.
DEVELOPMENTS
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Is president of the NZ Manufacturers and Exporters Association and managing director of Contex Engineers and Plinius Audio.
➡ Page 27 – EXPORT NEWS – Why your business needs to export.
ANALYSIS
Professor John Raine ➡ Is Head of the School of Engineering and Pro Vice Chancellor – Innovation and Enterprise at the Auckland University of Technology.
New era of health and safety on the horizon..
ENERGY REPORT
• Iconic sustainable building a winner. • World Green Building Week had its stars.
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PRODUCTIVITY
Productivity performance poor.
REAR VIEW
Exports at 40% GDP a realistic target?
Page 29 – ADVANCED MANUFACTURING – Tom Tom’s latest.
Bruce Goldsworthy
An advocate for NZ manufacturing for 40 years, he was Chief Executive of the Auckland Manufacturers Association for seven years He has been Manager of EMA’s Advocacy and Manufacturing Services, and lately manager for Export New Zealand in the north.
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NZ Manufacturer September 2013
EDITORIAL Publisher
Media Hawke’s Bay Ltd, 1/121 Russell Street North, Hastings, New Zealand 4122.
MANAGING Editor
Doug Green T: +64 6 870 9029 E: words@xtra.co.nz
CONTRIBUTORS
Wolfgang Scholz, John Walley, Kevin Kevany, Alistair Fussell, Craig Atwill, Martin Nobbs, Craig Carlyle.
ADVERTISING
Doug Green T: + 64 6 870 9029 E: words@xtra.co.nz
Design & PRODUCTION
Karl Grant T: + 64 6 857 7942 E: daylightmarketing@xtra.co.nz
WEB MASTER
Dan Browne E: dan@membrana.co.nz
PUBLISHING SERVICES
On-Line Publisher Media Hawke’s Bay Ltd
DIGITAL SUBSCRIPTIONS
E: info@nzmanufacturer.co.nz Free of Charge.
MEDIA HAWKES BAY LTD
T: +64 6 870 4506 F: +64 6 878 8150 E: mediahb@xtra.co.nz 1/121 Russell Street North, Hastings PO Box 1109, Hastings, NZ NZ Manufacturer ISSN 1179-4992
Vol. 4 No. 9 September 2013 Copyright: NZ Manufacturer is copyright and may not be reproduced in whole or in part without the written permission of the publisher. Neither editorial opinions expressed, nor facts stated in the advertisements, are necessarily agreed to by the editor or publisher of NZ Manufacturer and, whilst all efforts are made to ensure accuracy, no responsibility will be taken by the publishers for inaccurate information, or for any consequences of reliance on this information. NZ Manufacturer welcomes your contributions which may not necessarily be used because of the philosophy of the publication.
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Successful people are always looking for opportunities to help others. Unsuccessful people are always asking, “What’s in it for me?” – Brian Tracy
We must be doing something right
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he boat’s in San Francisco, the marine industry is on a high and the PM’s been talking to the Queen ..But we need more. Why?
Well, the Productivity Commission’s recently released report on our productivity performance through time and in comparison to other OECD countries is not that flash. It says our productivity performance is poor (Page 28). It says that New Zealand companies need to have a clear focus on improving productivity. That is the efficiency with which resources – such as labour and capital – are converted into outputs of goods and services. Productivity improvements mean that more output can be produced using the same amount of resources, meaning higher living standards, including improved health, education and environmental standards. Manufacturing needs to take this on board because productive jobs are being automated away, even if you count industrial workers globally, including the toiling masses in India and China, such workers are not nearly as large a percentage of the world population as they used to be. There is some debate over productive jobs. What are productive jobs? The administrative sector keeps a lot of people in work. So why spend money employing people to do worthless tasks when they could be more highly productive? Just asking.
Doug Green
NZ Manufacturer September 2013
The common question that gets asked in business is, ‘why?’ That’s a good question, but an equally valid question is, ‘why not?’ – Jeffrey Bezos
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BUSINESS NEWS
Clever solution shifts tax goal posts
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cebreaker and Douglas Pharmaceuticals – two of New Zealand’s biggest manufacturing success stories. They’re also tax savvy companies that have discovered how to retain cash for expansion and growth, while managing to pay their provisional tax on time, at rates up to 50% lower than a traditional overdraft. Cashflow can be a major issue for manufacturing businesses – especially when provisional tax must be paid on specific dates throughout the year. It’s not always possible to extend current overdrafts or go to the bank for a short term loan. Plus, it’s difficult to estimate the precise amount of provisional tax a business is required to pay. In reality, manufacturer’s earnings rarely remain the same from year to year. But if you don’t pay the correct amount, you’re hit by high interest and penalties. Faced with these problems, Icebreaker and Douglas Pharmaceuticals found their perfect solution through Pay My Tax from the tax innovators, Tax Management NZ (TMNZ). Businesses can go online to www.paymytax.co.nz or use their mobile devices to shift their tax payment dates and secure instant approval for funds through this innovative, affordable and easy to use service from TMNZ. TMNZ has helped Icebreaker, the company that pioneered the wool adventure apparel category, with its cashflow management, so its taxes are always paid on time. Head of Finance, Andy Wells says: “Given the number of countries we export to and the ongoing volatility of the New Zealand dollar, it’s hard for us to accurately predict at the start of a year what our final NZD profits will be.” Pay My Tax lets Icebreaker manage this volatility so they are never exposed to the IRD’s painful use of money interest rates. The fluctuating exchange rate and erratic export receipts have also made it hard for the huge West Auckland company Douglas Pharmaceuticals to accurately
PayMyTax helped with cashflow, ensuring Douglas Pharmaceuticals continued to grow.
predict earnings for provisional tax. Being able to access immediate cash using Pay My Tax in May was hugely beneficial, says the company’s group financial controller, Kent Durbin. “Significant outgoings haven’t always matched up with lumpy cash receipts from the export side of the business. The ability to tap into Tax Finance has been employed from time to time when cash is required
in other parts of the business.” Three days before the 7 May tax date, Durbin sought funding of several million dollars for a month and a half. “It cost us 5.4% - much lower than through a bank as an unsecured short term line. We had an immediate response, put in place with minimal fuss.” CEO of TMNZ Chris Cunniffe says Pay My Tax is particularly
useful for businesses that earn income unevenly throughout the year. “The business makes an upfront payment of the financing cost of the tax instalment. At a preselected date later in the year, when businesses have sufficient cash, they pay TMNZ for the tax instalment. IRD treats the tax payment as having been made on time. So there are no costly late payment penalties.”
PayMyTax lets Icebreaker manage their volatile cashflow to avoid the IRD’s penal rates.
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NZ Manufacturer September 2013
PREVENTATIVE MAINTENANCE
The person who says it cannot be done should not interrupt the person who is doing it. – Chinese Proverb
Taking a closer look on the inside
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he ability to inspect internal surfaces and other features of a product without causing damage is one of the key benefits offered by industrial videoscopes. Remote Visual Inspection (RVI) of materials, components and structures allow technicians to detect cracks, bubbles, and other flaws that might lead to failure or other problems with equipment in the future. Olympus—a world-leading manufacturer of optical, electronic and precision engineering products—has been at the forefront of videoscope and endoscope development for many decades. This experience has given the company a major share of the world market for medical endoscopes. The two types of Remote Visual Inspection (RVI) instruments were developed from the same combination of lens and light technology.
The inside story A videoscope is an inspection instrument that allows an engineer or technician to view the components of a machine in situ or see inside confined spaces. It consists of a small camera mounted on a length of cable that can be controlled by the operator. Modern videoscopes incorporate light sources into the tip of the probe as well as motors to move the LED and lens assembly. The camera and cable connect to a portable base unit and the images are viewed directly on a built-in monitor or plugged into a larger, separate monitor. The head of the device is carefully threaded through an opening. As the camera moves, it provides a real-time image of the environment
Inspecting marine turbine engine manifolds with an iPLEX LX.
until it reaches the target area. The technician operating the videoscope can adjust the focus and move the camera as needed to examine different features of interest. The outside diameter of a videoscope can be extremely small— the smallest produced by Olympus is 2.4 mm—which allows them to be used for activities like checking the quality of internal welds and looking inside delicate systems to determine the causes of errors. While images can be viewed in real time, data can also be recorded for later review. Technicians are able to search for faults which may have
been missed on the initial pass while looking at real time video.
Technological advances Improvements for videoscopes during the past two to five years have been in battery and LED technology. Batteries are smaller and lighter so videoscopes are decreasing in size as well. The limitations of original videoscopes were getting light into the area being inspected and the size of the power supply. Early videoscopes were large, bulky devices with CRT displays. Moreover, they had the restriction of
T Specialists in: Established in 2004, DDM Ltd has an industrial design department with cad facilities which enables us to produce drawings for our customers and to assist with their design process. Through to workshop capabilities, milling, turning, cylindrical and surface grinding and electrical discharge machining. Other capabilities include Roll forming design and manufacture, Tool making, including injection moulds and press tooling are all so carried out along with precision machining, we also cater for all types of welding and fabrication in house. Our staff are skilled to cater for all types of engineering that could be a problem for others and we pride ourselves on what we achieve. Contact: Lloyd Wilkie. Email: ddmltd@xtra.co.nz Mob: 021 150 1099 Hm: 06 8748 666 www.nzmanufacturer.co.nz
needing to be plugged into a power socket, with long lengths of trailing cables. Technological developments have meant that the cost of the units has dropped significantly, with the latest MX2 model half the cost of its predecessor. This has made the instruments affordable for a wider range of customers. Other developments have also had an impact. Untethering videoscopes from mains power has opened up whole new market segments. Smaller organisations, like pest control companies and business aircraft operators, can now afford to use the latest test instruments.
Employment law changes
he employment law changes currently before Parliament are part of the catch up process needed to reflect common practices already in place in today’s workplaces, David Lowe, Employment Services Manager for the Employers and Manufacturers Association told Parliament’s Transport Industrial Relations Select Committee. “The present law limiting a worker’s right to discuss flexible working arrangements to those with dependents is out of date,” Mr Lowe said. “It’s sensible that anyone can ask for flexible work hours for any reason, as proposed by one of the amendments.
“Another seeks to change the current law which sets out precisely when coffee breaks can be taken. This is unworkable and openly flouted by employees and employers alike. “The law should simply require that reasonable breaks are provided then let those involved work out the details how it should apply to them. This is what happens now - the amendment is just catching up with the modern workplace. “Industrial action, the ultimate weapon, can cause long-term issues both within the workplace and for customers. The changes proposed are welcome as they will encourage strikes to be well considered and as orderly as possible,” Mr Lowe said.
NZ Manufacturer September 2013
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NZ Manufacturer September 2013
MANUFACTURING TECHNOLOGY
I am not a product of my circumstances. I am a product of my decisions. – Stephen Covey
Huge improvements thanks to FeatureCAM
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raig Atwill, Machineshop Supervisor, Andar Engineering Solutions, a Timaru company which does a lot of smart stuff, spoke to NZ Manufacturer recently about how they use FeatureCAM.
NZM: We understand your company uses FeatureCAM?
CA: Yes we have been using the FeatureCAM Software for approximately three years now and it has been a huge improvement in how we use our CNC machinery. It is hard to imagine how we used to get on before we bought it.
NZM: Why have you chosen this particular software?
CA: We used to use our CNC machinery by programming our parts directly off the controller which was fine for a while but we were found that the scope of work was increasingly getting more and more complicated. We tried four types of software and found that FeatureCAM was the best for taking a solid model and using it’s ‘features’ for producing your tool paths off, thus getting from the programming stage to the machining stage in a very short time.
NZM: How has FeatureCAM made your company work better?
CA: We have a PC with FeatureCAM set up on each of our machines thus allowing the operators to quickly program each job. We also have a design office as part of our company so we can work with them to build solid works models for us or take 2D or 3D models directly from the client to start the machining process. The type of work we do tends to be low numbers but quite complex so we can simulate the work being machined in 3D beforehand which is especially important for exotic materials like titanium and inconel. The ability to quickly modify or fine tune a program that is being used is also a very easy process.
NZM: Is your company more efficient from using it?
CA: It is great to be able to store all of our programmes on our server so when the job is repeated in the future, all you do is bring up the programme, load the tooling in the correct pockets and away you go! Any updates or changes to the program are also automatically saved as well; giving us the ability to speed up our processes as tooling technology improves. www.nzmanufacturer.co.nz
NZM: What applications is FeatureCAM used for? CA: We use FeatureCAM on two of lathes and our two machining centres. One machining centre with a 4th Axis dividing head and one twin spindle lathe with live tooling, which used to be very time consuming to program before we got FeatureCAM.
NZM: Has the software allowed your company to open up new markets?
CA: Yes it has. We have recently made the tough transition from being a predominantly wool textile manufacturer to a contract and jobbing company. FeatureCAM has been an extremely important tool for us in this transition as it has opened a lot of opportunities for us to diversify into other types of work.
NZM: Is it Lean related?
CA: The FeatureCAM package has taken us down the ‘Lean’ path; we can see the advantages this software offers in quite a few ways. The benefit of having so much control over how you program a job is great. The way the tool cribs and
It is hard to imagine how we used to get on before we bought it.
the stock control work can really save time setting up between jobs and have less time cutting air in your tool paths. We have a few jobs that are repeated quite often with relatively small quantities and via FeatureCAM these programs are so finely tuned, the time to setup and do the jobs is certainly a lot less than the way we used to do them.
NZM: Has business increased?
CA: Yes. We have found that we are constantly getting enquires from new clients all the time as word is getting around about the scope of work we can provide. We are really pleased that FeatureCAM software has made us much more competitive in our traditional markets and has really opened the door to markets we would not have not even considered in the past.
NZM: Can you foresee more work coming in to your company?
CA: The amount of enquiries we are receiving from new clients is quite exciting as we get our name out into new areas. We are also seeing more work coming from our traditional customers as we can develop different ways of producing their parts. This has also resulted in more one off development parts to trial the superseding of older components due to our more advanced capabilities.
Craig Atwill
NZM: Do you export? CA: Yes we have been exporting our machinery all around the world for 65 years and run a busy OEM spare parts division supporting the wool industry.
NZM: Do you contract manufacturer?
CA: We Have a few companies that we do contract machining for as well as their making their prototype parts and recently brought a foundry into our group of companies for whom we do all of their machining.
NZM: How do you see current NZ business conditions?
CA: The last three years have been very busy for us; while we have seen a definite slow down for the last six months. This seems to be changing though as enquiries are up and the future is looking promising.
NZ Manufacturer September 2013
There is only one way to avoid criticism: do nothing, say nothing, and be nothing. – Aristotle
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MANUFACTURING TECHNOLOGY
Waikato electric car to race the length of Australia
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group of University of Waikato mechanical engineering students have unveiled their masterpiece – an electric car they will race 3000km from Darwin to Adelaide over six days next month. The team has been working on the refurbishment of the car for the last six months in preparation for the 2013 Bridgestone World Solar Challenge which begins in Darwin on 6 October. The UltraCommuter car was unveiled at an exclusive event at the University’s Gallagher Academy of Performing Arts, before its transTasman journey to Darwin, ahead of the team. The University’s electric car was built in 2007. Its latest refurbishment has included reformatting of the suspension system and upgrading control systems, brakes and the body shell. About 44 teams from 25 countries are signed up to compete in this year’s challenge, the world’s largest solar electric vehicle event which began in the 1980s. A total of eight University staff and students are heading to Darwin
for the race, including the four key engineering students, Sam Berkers, Luke Overton, Sam Waetford and Kyle van de Pas and their supervisor, Senior Engineering Lecturer Dr Mike Duke. The biennial event attracts international teams from universities, technical institutes and private entrepreneurs that compete in three main classes: Challenger, Cruiser and Adventure. This year the University car has been invited by the WSC organisers to pioneer the new EVolution (EV for electric vehicle) class aimed at demonstrating practical and low environmental impact vehicles. As well as pioneering the EVolution Class, it will be the only New Zealand car in the event. “It’s a pilot to see if EVolution class vehicles can complete the route in six days and also gauge interest in the new Class from other teams,” says Mike. Mike says the plan is to travel the 3000kms over six days at highway speeds of 90kmh or more. The car has a range of 350-400kms on a single charge and can boost-charge in between main charges. The World Solar Challenge fosters
Waikato engineering students and their supervisor following the big reveal of their electric car: Clockwise from back left, Sam Berkers, Dr Mike Duke, Luke Overton (in car), Sam Waetford and Kyle van de Pas.
innovation in technology and design, and promotes alternatives to conventional vehicle engines
that often lead to the development of products that end up on the production line.
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NZ Manufacturer September 2013
MANUFACTURING TECHNOLOGY
Inspiration exists, but it must find you working. – Pablo Picasso
NZ technology gives better warning of disasters
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n innovative New Zealandmade product is set to give people improved alerts and information about emergencies. When a disaster such as a tsunami or volcanic eruption happens, the Tsunado, a compact plug-in alert radio unit, sounds a loud alarm before tuning into a Civil Defence radio broadcast. It will soon be available for use in homes and offices. The Tsunado is made by Disaster Warning Systems Limited (DIWA), who received funding and mentoring from Callaghan Innovation. After a successful pilot, DIWA recently signed a license agreement with Auckland Civil Defence, a division of Auckland Council, to broadcast public alerting messages using this system. The Tsunado builds on the longestablished system whereby Civil Defence can request radio stations to broadcast public alerts and survival information. DIWA CEO Rhys Greensill says that even if the power is out, the Tsunado’s long-lasting battery enables authorities to communicate with people for up to ten days, allowing them to advise where to get fresh drinking water, shelter or food. “Cellphone-based systems are useful, but experience in New Zealand and overseas shows that they are very fragile in major disasters. With cellphone networks overloading or disrupted, they operate for only a short time after an event, if at all. We are therefore using a combination of broadcast technologies such as satellite and FM radio.”
www.nzmanufacturer.co.nz
DIWA was initially awarded $5000 from Callaghan Innovation to undertake a freedom-to-operate search as part of the process of protecting intellectual property. This year they were awarded a $255,000 grant to complete the Tsunado system’s development. “While the funding was important to help us continue to develop the technology, our relationship with Callaghan Innovation evolved into one more akin to a mentor. They gave us useful suggestions on a number of the technical and marketing problems we faced, as well as linking us to a number of
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useful networks and individuals,” Greensill says. Callaghan Innovation Acting Manager R&D Grants Ross Baker says disaster management technology benefits New Zealanders directly, but also has promising export potential. “We have the opportunity here to build on New Zealand’s reputation for being at the forefront of disaster preparedness,” Baker says. Tsunado alert radios will be available by early November through the company’s website. They can be pre-purchased now. The idea for the Tsunado came
from DIWA founder and Executive Director Gary Benner, after he heard the news of the earthquake and tsunami on Boxing Day 2004, when he coincidentally set off his smoke alarm around the same time.
Services profiles allows customers to quickly gauge readiness based on real-world data, which brings a new level of accuracy to the process. AirMagnet Survey PRO is an accurate solution for planning and designing 802.11 a/b/g/n wireless LANs (WLAN) for optimal performance, security and compliance. For Cisco Location Services to work optimally, there are strict wireless network guidelines including access point placement, access point separation distance, minimum signal level thresholds, preparedness for voice and data coexistence, and more. Therefore, it is important to maximise the accuracy and minimise variance between simulated and real-world data when determining readiness for the service. When deploying key wireless services, it’s vital to survey the
network and gather real-world information that is representative of actual network performance. Cisco Location Services offer customers an innovative capability that can be strategically deployed to track personnel and ensure security, but verifying that the network can support this service is critical.
Reducing costly network redesigns
he AirMagnet Survey PRO is the first to offer pre-configured profiles that use real-world wireless data to help wireless engineers instantly determine, with a higher level of accuracy than ever before, whether or not a network adheres to deploying Cisco Location Services. With just one click, organisations can improve wireless rollouts, eliminating the need for costly post-deployment redesigns. Cisco Location Services allows organisations to use wireless for more than just traditional connectivity so they can track devices and personnel via tags and their mobile devices on a wireless network. But, for this service to be successful, customers need to meet certain critical wireless infrastructure requirements. AirMagnet Survey PRO’s new integration of Cisco Location
NZ Manufacturer September 2013
People often say that motivation doesn’t last. Well, neither does bathing. That’s why we recommend it daily. – Zig Ziglar
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THE INTERVIEW
Alistair Fussell talks Steel
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listair Fussell, Manager, Steel Construction New Zealand talks to NZ Manufacturer aout the industry.
Let’s talk about the structural steel industry: Where has success come from?
Back in the early 1990s steel’s market share in multi-level construction was virtually nil, largely as a result of a heavily unionized workforce, a lack of workable steel design standards, and steel simply wasn’t cost competitive against concrete. Remember the BNZ building in Wellington? But since then we’ve experienced a good deal of success. Firstly, the industry, led primarily by the Heavy Engineering Research Association (HERA), funded and developed structural steel standards, particularly regarding seismic and fire performance. Based on local research and overseas best practice, New Zealand now has world-leading seismic steel standards, and these have been proven by the good performance of steel-framed buildings in the Canterbury earthquakes. In the fire engineering space, we’ve developed new fire design approaches, such as the slab panel method used on Auckland’s Britomart project, which have reduced costs and improved the performance of steel structures in fire conditions. Secondly, the industry has invested heavily in R&D, 3D modelling software and computer controlled fabrication technology. This has improved accuracy and lessened rework, and reduced labour costs per tonne of fabricated steelwork. The industry has also developed standardised pre-engineered steel connections which have reduced both their cost and the time it takes for engineers to design steel buildings. We’ve also seen new products come onto the market, for example metal deck composite slab solutions, which require less steel support structure and therefore cost less. Importantly, we offer an ongoing professional development programme by way of design guides and seminars to support professionals engaged in the design of steel buildings and infrastructure projects. This has been instrumental in helping to educate local engineers on how to design steel buildings. So today’s structural industry is very diverse, and comprises manufacturers of structural steel and steel products, distributors, fabricators, designers, detailers, galvanisers, and paint and building supply companies.
We are now an extremely efficient producer of around 90,000 tonnes of fabricated steel per year, and enjoy a market share in multi-level construction of around 50 percent and growing. Interestingly we’re still some way behind the UK and the US - 70 per cent and 60 per cent, respectively. One of the key drivers for us at present is, of course, the rebuild in Christchurch. Thanks to the good overall performance of steel-framed buildings in the earthquakes, and advances in low-damage structural steel design solutions from the likes of Auckland and Canterbury Universities, we have important role to play in the rebuild.
What are your concerns for its future?
The key threat facing the New Zealand structural steel industry at present is cheap, prefabricated structural steel imported from Asia, which is often of an unproven or inferior quality to our own. We are a competitive industry focussed on delivering value and certainty to our customers. We also respect New Zealand’s overseas trade agreements but the concern with imported prefabricated steel is that it does not carry the same quality assurances as New Zealandmade steelwork. We are aware of several projects in New Zealand over recent years which have used imported prefabricated steelwork. Some of this imported steelwork either failed to prove it meets AS/NZ standards, or failed on-site testing and had to be removed and repaired, or replaced altogether. The outcome is that any advantage achieved by paying a lower upfront cost for the imported product is more than outweighed by remediation costs – costs which, in the case of public sector projects - are ultimately borne by ratepayers and taxpayers.
How do we control/manage this?
There’s two ways. The first is that we have been working closely with the Government on revisions to their procurement rules, which are due to come into effect on 1 October. The new rules will see less emphasis on upfront cost (which has opened the door to imports) and more emphasis on whole-oflife costs, which will result in better value for money over the life of a project. The other way is to control our own destiny. We have a really good story to tell in terms of our ongoing investment in R&D and people, our robust quality assurance framework, and delivering certainty and value
for our customers. Together with HERA and economists BERL, we have taken the initiative and developed a tool to help procurers evaluate the wholeof-life cost of their projects. Based on the new government procurement rules, the tool enables procurers to assess competing bids on a number of criteria, to which different weightings can be assigned: price, quality, whole-oflife costing, corporate responsibility and local content. We are also finalising plans for an accreditation scheme for New Zealand’s structural steel fabricators. Based on the ISO system, the scheme aims to provide public and private sector procurers with certainty that the accredited fabricator meets international best-practice quality standards, and will provide us with a big point of difference with imported prefabricated steelwork.
How important is the Steel Industry to NZ?
It’s very important. We employ a significant number of people, pay our share of tax and contribute to the country’s biggest and most important building and infrastructure projects. Structural steel is used in stadiums, hospitals and schools as well as commercial and industrial buildings. It’s also used in most road and rail bridge projects. Earlier this year we made a strong case to the Opposition-led inquiry into the manufacturing sector to highlight this. In particular, we were able to discuss some recent projects which highlighted both the risks of using imported prefabricated steelwork and the financial gain to New Zealand of using local product.
How do you look after (and build) your market?
By constantly focusing on meeting the needs of our customers. We do this by providing value and certainty. Value means providing a full project management service for both fabrication and erection of the steelwork – the customer need only deal with one party. Fabricators also utilise their expertise to reduce costs through optimising material usage and connections, and by addressing build-ability issues. Certainty means always delivering on time, on budget and to the specified quality – and being accountable for it. We also invest a lot of time on working with specifiers such as engineers, architects and builders to help them understand the benefits of using structural steel in their projects. We’ve put on some major events
Alistair Fussell
in the past couple of years to bring the industry together, share knowledge and hear best-practice case studies from local and overseas experts.
How is Business?
We’re building back following the global financial crisis. While we’re still some way off the output peaks of 2008, the Christchurch rebuild is gathering pace, and we expect to get busier as various projects reach procurement stage. We also hope to get some benefit from the Government’s infrastructure investments, particularly on large transport projects such as Transmission Gully and Waterview. The new Government procurement rules will hopefully be good for us.
Do you enjoy what you do?
Yes, I enjoy being part of an industry that is cohesively and proactively working to improve its value and competitiveness. The fact that HERA and SCNZ exist is testament to the industry’s desire to grow its market share.
Most satisfying business decision?
The Steel Innovations 2013 conference held in Christchurch earlier this year. It came at an important time in the rebuild because the earthquakes had proven to be a game changer. We were keen to have a forum where engineers could learn about the latest in the design of steel structures so this knowledge could be widely used in the rebuild, and nationally. The learnings from Christchurch are certainly impacting the design and construction approaches in other seismic-prone parts of NZ.
Do you have a passion for manufacturing? Tell us about it.
Yes, I’m driven to see our members succeed in the market place and to have sustainable and profitable businesses. They invest heavily in their businesses, plant and people and they possess great expertise and know-how. We need a thriving manufacturing sector in New Zealand and it’s great that SCNZ can play a small part in helping them succeed. www.nzmanufacturer.co.nz
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DEVELOPMENTS
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The difference between a successful person and others is not lack of strength not a lack of knowledge but rather a lack of will. – Vince Lombardi
Top innovators race up the growth curve
rice Waterhouse Coopers finds innovation is moving from the fringes into the mainstream. The world’s most innovative companies expect to grow by more than 60 percent, enjoying a NZ$318 billion revenue boost over the next five years, finds a new PwC study released at a meeting of the World Economic Forum in China. In the largest study of its kind, PwC asked more than 1,700 worldwide business leaders across 25 countries and 30 sectors what they see as the role for innovation in their organisations. And the survey found there is a direct link between innovation and growth: the top 20 percent of innovators worldwide say their growth rate over the next five years will be double the global average and three times higher than the least innovative companies. PwC New Zealand Chief Executive Officer Bruce Hassall says, “The findings are startling and clear: if you’re not innovating you’re not growing. For the first time we can now quantify and benchmark the business benefits of innovation. “It’s exciting and confirms the findings of the recent World Economic Forum Global Competitive Index that show although we’re doing well as a good place to do business, we need to buck up our investment in innovation.
“Innovation is a competitive necessity. It should be treated like any other business process and aligned to organisational objectives to deliver serious returns. Hopefully, this is a bit of a wake-up call to New Zealanders that number eight wire thinking should have more structure around it and not left to chance,” adds Mr Hassall. The study proves successful innovation is dependent on welldeveloped strategies. Nearly 80 percent of top innovators have well-defined innovation strategies, compared with less than half among the least innovative. “Innovation is delivering transformational change. It’s for all businesses across all countries, and unlike five years ago, is overtaking globalisation as having the greater impact on growth.
“Companies are also innovating the way they innovate. It’s moved beyond products and services and the domain of tech and digital companies, it’s also relevant to the way businesses think about their business models, operating systems and customer experience,” says Mr Hassall. The top tier of innovators identified in the study come from a diverse range of sectors from healthcare to automotive to financial services, and from India to the Netherlands and Brazil. “Looking to China as an example of how attitudes to innovation are changing, we see its businesses are moving from a strategy of fast-follower imitation to pure innovation. China is now behind only the US in terms of its R&D spend – they’re outspending everyone else
and we in New Zealand should take notice,” tells Mr Hassall. Bucking commonly held beliefs, just one in five of the most innovative companies described their approach to innovation as ‘informal,’ compared with about one-third of the least innovative. Yet, Mr Hassall cautions, “Innovation is not always smooth sailing, it can be disruptive or may involve a business cannibalising its own products or services for the long-term good.” “Business leaders need to remember, there’s no single roadmap for innovation, yet by learning from others, making it a key focus and following some simple steps, they can make success more likely. Perhaps innovation is our key to jumping further ahead of Australia?” concludes Mr Hassall.
Mighty River Power supports geothermal engineering research
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nergy generation company, Mighty River Power has pledged $1 million over the next five years to support the establishment of a chair in geothermal reservoir engineering at The University of Auckland. After an international search process, the University has appointed Professor Rosalind Archer to hold both the Mighty River Power Chair in Geothermal Reservoir Engineering at the University and the directorship of the University’s Geothermal Institute. She is the first woman to be appointed as a chair in engineering in New Zealand. Professor Archer was earlier this year appointed as the head of the Department of Engineering Science at the University’s Faculty of Engineering where she has taught and contributed to research projects for 11 years. Her appointment to the chair brings with it a promotion from associate professor to professor. “I want to extend my thanks to
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Mighty River Power for their support of the chair.” says Professor Archer. “It says a lot about the company’s commitment to geothermal in New Zealand.” “I have also been appointed as the director of the Geothermal Institute and I look forward to growing the Institute as an interdisciplinary endeavour that addresses geothermal energy from many angles.” “The Geothermal Institute is being rebuilt and re-launched after a hiatus of many years. The University’s vision for the Institute is that it will be the first point of contact for any external party wanting to engage with the University on matters relating to geothermal energy,” she says. “I look forward to helping realise the potential the Institute has.” Professor Archer has a PhD in Petroleum Engineering with a PhD minor in Geological and Environmental Science from Stanford University, a Master of
Science in Petroleum Engineering from Stanford University, and a Bachelor of Engineering in Engineering Science from The University of Auckland. Professor Archer led The University of Auckland’s portion of a successful bid for $4.4 million funding for research into geothermal power from the Ministry of Business Innovation and Employment. The grant to the ‘Geothermal Supermodels’ project supports research for the next four years and was awarded to a team combining The University of Auckland and GNS Science. The University will receive $1.45 million of this funding over the next four years. The research aims to develop next generation integrated geothermal modelling tools capable of building models of multiple geothermal systems to better understand the interactions between them and their sustainability. Outcomes from the research will include economic, social,
Professor Rosalind Archer
environmental and scientific benefits to New Zealand through an improved ability to manage existing geothermal developments and a greater reliability to predict capacity and sustainability of future developments.
NZ Manufacturer September 2013
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ANAYSIS
Obstacles are those frightful things you see when you take your eyes off the goal. – Henry Ford
Manufacturing moving at the speed of business
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umans are terrible at gauging speed. Jets never seem to be going 550 mph in the sky and 20 miles per hour in a school zone. Sometimes this seems slower than walking. But, the speed of business in definitely accelerating and the implication of this on manufacturers is telling. Several manufacturer profiles have emerged in recent years. Some still yearn to run their firms in nostalgic, time-tested ways. Some have never snapped back from the 2008 recession and restricted credit days. Some, though, are possessing new forward looking views, processes and technologies that will enable them to match the speed of change in business and eclipse competitors. Look how quickly certain products have been embraced in the consumer world. The Apple iPod went from a simple product announcement to a runaway success in a matter of months. And, just as quickly, some products, like the Sony Walkman, can disappear almost overnight. Change, therefore is not linear and we do our businesses and employers no favours by pretending that it is. For many manufacturers, especially long-lived manufacturers, change has been something to assimilate on their own schedule for decades. If typical, your company possessed a straight line ability to change and adapt that was far in excess of the changes occurring within your business and competitive environment. You probably maintained this ability for decades and it represented a great opportunity for your company. Recently, you may have begun to notice that the industry, your competitors, customers and/ or suppliers are changing and demanding changes that are faster than your firm has an ability to manage. This is becoming a growing problem and it won’t get any easier. For example, look at the growth in patent issuances over the last few decades. Patent grants act as a good proxy for understanding the overall growth and innovation within an economy. What’s even more important is to understand what is facilitating the growth in patents and innovation. It is precisely the same kinds of new tools and capabilities found in more modern manufacturers and suppliers. Your firm and its peers can now take advantage of low-cost CAD/CAM, 3-D printing and other technologies which dramatically reduce time to design and time-to-
market. Something has changed in the past few years. Technology has made collaboration, telecommunications, shipping and other things faster, more efficient and more costeffective. The barriers to competition have fallen and competition has grown keener. Some manufacturers may lack of awareness of the changes going on in the environment or lack the ability to make the requisite changes in speed and flexibility within their companies to remain relevant. The best manufacturers today are finding ways to change at the speed of business. But what are those requirements?
manufacturer does not live exclusively in the here and now. They are focusing their plans, market strategies and more on events they believe will transpire within the next one to five years. They are big consumers of information and use it in ways competitors have yet to understand. These are cosmopolitan firms that are very aware of macro economic, political, commodity, consumer, and other factors that will influence markets and drive growth for their firm. The World of Manufacturing is Evolving at an Accelerating Rate. Fifteen to twenty years ago, most manufacturers had disparate, often divisional business systems.
The Nostalgic manufacturer is dated. The plant, equipment, IT, business practices and possibly their management are stuck in some sort of time warp. The Functional manufacturer has made some adaptations over time. Rarely is this company the first to adopt a new technique, tooling or technology. Rather, this company possesses many of the very same commodity capabilities of its competitors. Its survival is often due to good luck and a handful of just-in-time life-saving changes. The manufacturer of the Last Decade was materially relevant a few years ago. Their technology, manufacturing practices, etc. served them well for several years but they have fallen behind their peers in adapting to change. The Hunker Down manufacturer has been beaten down by the economic recession that began in 2008. Their credit lines have been constrained and their investments have been almost nonexistent. Costcutting has driven every decision within the company. Tensions between owners, management and workers are strained. Going forward doesn’t happen in this company as the hunker down mentality has created a no growth culture of stifling dimensions. The Forward Focused
Multiple MRP software packages were connected to different accounting solutions while significant amounts of work were performed on PCs or paper-based systems. The most sophisticated businessto-business systems involved EDI (electronic data interchange). Collaboration from a business-tobusiness perspective was expensive and slow given the state of the telecommunications industry at that time. Simply put, operations had to be efficient and effective at the local level and anything beyond that was often cost prohibitive to coordinate. Improvements in logistics, cargo container technology, lower-cost telecommunications and more ubiquitous communications globally started to lay the groundwork for a more interconnected business world. Simultaneous with these changes, the economies of the BRIC (Brazil, Russia, India and China) nations began to soar as did the economies in many Eastern European, African and other nations. This combination of factors created both more markets for manufactured goods, but also made numerous new suppliers available to serve a greater global customer base. This new generation of manufacturing was further fuelled
by more open trade agreements (e.g., NAFTA), cross-border manufacturing opportunities and other opportunities frequently begun as a result of one simple question: What’s your China price? Another round of changes is beginning to impact the manufacturing world. Technologies such as CAD/CAM are now costeffective for even the smallest companies. Three-dimensional printers and prototyping devices continue to increase in availability and decrease in cost. Manufacturers are learning to deal with new kinds of problems related to the ownership and/or theft of intellectual property. New kinds of super tier suppliers are emerging that provide incredible global supply chain and manufacturing capabilities. Even basic ERP software has begun to change and can now be found in a variety of different on premise and cloud options. Compliance costs continue to add costs and affect competitiveness. And, supply chain uncertainties driven by natural disasters (e.g., volcanoes, earthquakes, pandemics and fires), rail and ship delays, etc. are pointing out painfully weak areas in too many companies and their over-extended supply chains. The typical manufacturing plant can be depreciated over 25-30 years. Accounting rules that were devised many, many decades ago during the Industrial Age assumed that a large physical asset like a manufacturing plant would operate continuously for that time. Nowadays, it is hard to imagine any product or product line lasting even a fraction of this time. In essence, the speed with which manufacturing companies must launch, make products, and retool themselves once again has shrunken dramatically. The processes, strategies, technologies and more that manufacturers use to run their businesses must also change at this newer, more dynamic speed of business. Continuous change and adaptation must become a core business capability for any manufacturer to survive. The gap between successful and unsuccessful manufacturers will only continue to widen. Businesses that have prided themselves in maintaining constant from decade to decade will come to realise that this previous strength is becoming a critical weakness of the organization. The best manufacturers will possess exceptional competencies in reinvention, retraining, global awareness market savvy and information expansion. www.nzmanufacturer.co.nz
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NZ Manufacturer September 2013
WORKSHOP TOOLS
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Definiteness of purpose is the starting point of all achievement. – W. Clement Stone
Capabilities of custom rubber parts
f there is a more versatile material that we use in our daily lives, in almost everything, it has to be rubber. Like steel, there are limitless possibilities with rubber. Rubber and elastomeric parts have natural elasticity making them very adaptable and excellent for mechanical uses. They are tensile, tear-resistant, have resilience and can elongate. Rubber is adaptable, flexible and can be customized and moulded to fit into anything that requires it – for this reason, custom rubber parts are used in all kinds of industries especially where elastomeric parts are key components like aerospace, transportation, medical, marine, oil
& gas and even semiconductors. The customised rubber and elastomeric parts can be tiny as well as large, making them fit into everything from tiny o-rings used in seals, valves, medical devices, diaphragms, connectors, inserts to large, heavy-duty rubber based materials like aerospace landing gears, to seals for noise reduction, grips and much more including some every day consumer products. In just one industry, it can have multiple uses and customization helps in production of various vital parts, for example in the transportation industry, maintaining high standards is very important, hence reliable and safe, good quality rubber parts and other elastomeric
Beacon lamps set new benchmark
parts are used for compression moulding, transportation transfer moulding, transportation injection moulding and transportation rubber to metal bonding. In aerospace, these versatile elastomers can be used for critical applications such as in airframes, engines, landing gears, brakes, wheels and where non-slip materials are required. Custom rubber parts have innumerable capabilities, two of the most important are listed below: It’s durable: Rubber is prone to cracking, but custom rubber parts are more durable and can be made according to your industry needs. It can be tested for heat and cold tolerances. You can also choose the rubber that is best suited for your industry so that they don’t crack; they fit in well with the elastomeric components and increase the lifespan of the component piece. Without customized solution, rubber can break easily and also might not fit right. In machinery where durability is of utmost importance, these customized rubber parts offer that elasticity and longevity. Better fit: Although you do
get readymade rubber pieces, customized rubber parts just fit better making the whole part work better. It can be moulded to any shape, fit any metal or instrument – like in door stoppers, nut covers in electronic gadgets, fitting windows of vehicles and make them resistant to leakages, children’s toys so that they are slip resistant – they fit in everywhere because of which, they are more reliable. The high quality fitting will make your machinery run longer and last longer than cheap readymade pieces. A small compromise can cost a lot in the long run; hence paying attention to the small parts will be very beneficial for the life of the machinery and its elastomeric components. Most custom rubber parts or custom elastomeric parts are long lasting, resistant to abrasions and rough handling, resistant to the effects of the environment and flexible. They reduce end product cost while offering durable and high quality solutions for multiple applications. For elastomeric components, custom rubber parts are a must-have.
UV-A flood lamps for large areas
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i-Optics Rotating Beacons are described as the new benchmark in emergency/ warning lighting. Combining exceptional engineering with the latest in L.E.D technology the warning lamps are as powerful as they are reliable and they are now available in New Zealand. The lamps deliver all the performance attributes of traditional rotating beacons with lighting brilliance and the long life of L.E.Ds, making them ideal for hard working contracting equipment, as well as emergency vehicles and those operated by utilities and local authorities. Eight powerful 3-Watt L.E.Ds work in combination with a precision reflector to produce a brilliant light output that meets Class 1 approval. Multi-voltage solid state circuitry is used with a brushless magnetic
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drive system for ultra-quiet and smooth operating performance without the wear and tear of belts, gears or brushes. The beacons utilise the latest in durable materials, making them ideally suited to the harshest of operating conditions. Virtually unbreakable polycarbonate lenses are impact and shock resistant, while the aluminium base dissipates heat and resists vibration during the expected long operational life. Within the range of options available is a magnetic base lamp complete with a high strength rubber suction pad for extra safety and vehicle protection. This lamp includes a pre-wired spiral lead with a cigarette lighter/merit plug. Red, Amber and Blue lens options are available in these multi-voltage 12/24-Volt, low current draw lamps, which each carry a 5-year L.E.D Warranty.
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he PowerMAX 365 Series UV-A LED flood lamps for uniform coverage of large areas are ideal for installation overhead or in-line with NDT inspection booths or MPI/DPI (magnetic particle inspection/dye penetrant inspection) benches. The PowerMAX 365 has a large coverage area of 38cm x 15cm, and lamps can even be joined together for wider coverage. PowerMAX 365 lamps feature a panel of 16 powerful UV-A (365 nm) LEDs, and are available in high-
intensity and standard-intensity models (with or without a black light filter). The high-intensity lamps produce a nominal steady-state UV-A intensity of 8,000 µW/cm? at 38 cm, while the standard-intensity models provide a UV-A intensity of 4,500 µW/cm? (maximum at 38cm). The PowerMAX 365 meets ASTM UV-A intensity and wavelength specifications for MPI/DPI and a certificate of compliance is supplied with each unit.
NZ Manufacturer September 2013
WORKSHOP TOOLS
Eighty percent of success is showing up. – Woody Allen
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Flow Analysis Ensures Moulding “Right-First-Time”
ne of the most important questions that product designers and moulders want answered about a new moulded part is : “ how will it distort?”. To get the product and tool “rightfirst-time” will save many hours of tool modifications and will go a long way to help the profit margin. This is especially important with fibre reinforced materials as the fibres will have a major effect on the way that the moulding shrinks and warps when it comes out of the mould.
Figure 2. Showing the “twist” of the distortion predicted with the end gate option.
An excellent example of this was in a recent project undertaken by ACS Design. Their customer was embarking on a multi component project of which one critical part was to be moulded from a glass filled nylon material. The function of the part required minimal distortion in the moulding process. As the mould tool was to be a single cavity, the position of the gate became a critical factor in the design of the part and tooling. Conventional thinking would point to the part being gated at one end to allow the flow path of the molten polymer to run along the length of the part thus reducing the chance of significant distortion occurring as the fibres in the material can align along the direction of flow. However, gating at one end of the part would require a long cold runner splitting into a twin gate arrangement. This in turn would
require a large offset in between the centre of the part and the injection point of the mould machine creating undesirable unbalanced force on the tool and machine. A centre gate position would then appear to be a cheaper and more robust option, but conventional thinking again points to this option creating a much higher risk of the part distorting in a “cupped” fashion. This cupping distortion was a definite disadvantage for the function of the part. This is where ACS Design was able to step in and provide definitive answers on the distortion question. Using their VisiFlow injection moulding flow analysis software ACS Design ran “virtual moulding” side by side analysis studies on both moulding options, complete with runners and gates for accurate filling and packing simulation, to predict the potential distortion. The analysis allowed the optimum moulding settings to be selected for each set-up and then the resulting distortion measured. The results where contrary to what the customer expected. True, the centre gated part (with a cold sprue – hot nozzle gating was not an option) did show a “cupped” distortion
pattern (shown in Fig 1.) but this distortion was no worse than the “twist” pattern (Fig 2) that showed up on the end gated option. In fact, the cupping effect showed a more uniform distortion pattern that could be easily compensated for in the tool if required. In addition, the analysis showed that the injection pressure required for the centre direct sprue option was far less than that of the end gated option. This lower pressure requirement leads to less mouldedin stresses which also reduces the potential for warp in the part. This injection pressure result can be clearly seen in the graphs (Figs 3 &
4), which form only one of the many results tools available through the VisiFlow analysis software. The mould tool was subsequently made with the centre direct sprue and the resulting moulded part matched very closely the distorted shape as predicted by the analysis. Overall a very satisfying result for the customer as they saved a considerable amount of money on tooling and avoided possible costly tool modifications that may have been required if the initial end gate option had been employed. This example is only one of many successful flow analysis projects carried out by ACS Design for a variety of customers. All have found that the analysis process has helped immensely and allows key decisions in the product and tooling development process to be made with confidence. The ability to “get it right first time” is a major advantage in getting the product to market in the best timeframe possible. If you or your company want to take advantage of the injection mould simulation tools that can help you with product development and mould trouble-shooting then give ACS Design a call today. For more information please contact – Andrew Simpson ACS Design Ph./fax 07 3770675 Email – acsdesign@maxnet.co.nz
Figure 3. Showing the Pressure and Flow Rate vs. Time graph for the fill portion of the moulding cycle.
Figure 1. Showing the cupped distortion (in yellow) of the centre sprue option. The transparent green is the target finished size of the part.
Figure 4. Showing the Pressure plot for the end gate option. Note the higher injection pressure. www.nzmanufacturer.co.nz
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NZ Manufacturer September 2013
DEVELOPMENTS
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If the wind will not serve, take to the oars. – Latin Proverb
Special steel for headlamps
eadlamps for cars are by no means mere light sources anymore - today their shapes and functions are among the unique selling points of various car brands. To manufacture the ever more sophisticated plastic components needed for lenses, color fields and headlamp moldings, but also for the precise transmission of power in small electric motors as found in dynamic bend lighting systems, automotive suppliers need highgrade and high-performance steels.
In addition to high and low beams, daytime driving light, position light and turn lights, motorway light, town light, country light, adverse weather as well as static or dynamic bend lighting systems are part of the standard repertoire of modern vehicle headlamps. Developments have long been moving away from the classic halogen light sources towards energy-efficient LED technology. The custom designs of individual makes are also increasing in importance. BMW, for example, is easy to recognise in traffic by their ring-shaped lighting elements, while Audi uses light strips. “In future generations of cars, single LEDs will no longer be seen as light sources,” explains Franz-Josef Klegraf, Member of the Executive Board, Business Division Lighting, at automotive supplier HELLA. “The trend is rather to homogeneous light fields with a certain 3D effect - such as light curtains and light guides, depending on their application on the vehicle.”
Injection Moulds with a Profile
With 27,000 employees in more than 30 countries worldwide, HELLA is now one of the world’s leading automotive suppliers for lighting systems and electronics. At the tool manufacturing site at Lippstadt, the company produces some of the injection moulds for the plastic parts used in the various headlamps. They produce innovative lighting impressions, e.g. by using sophisticated surface structures on their plastic parts or optics that distribute the light as it leaves the headlamp. This microstructure slightly resembles a piece of leather and is applied by means of the injection moulds to the plastic surface. Since often only a single injection mould is produced for the headlamp components of a certain car model, www.nzmanufacturer.co.nz
The light module of dynamic bend lighting system includes sensors that measure the beam setting of the headlamps and adapts it depending on the load.
the requirements for the steels used are very high. They should not only be corrosion resistant and hard in order to guarantee the long life of the tools, but also have a surface that is easy to polish.
Sophisticated mould production
The basis of steel production at Deutsche Edelstahlwerke is steel scrap melted with other high-grade secondary raw materials in a 130 t electric arc furnace. After adding the alloys necessary for the corresponding grade of steel (such as, for example, chromium, nickel, molybdenum, vanadium, wolfram or cobalt), the liquid steel is emptied into an existing ladle for further treatment. This ladle then undergoes the secondary steelmaking stage in which the reduction of undesired gas and oxygen content from the steel takes place and fine analysis is done by means of micro alloying.
Even the smallest of impurities in the steel can have an impact on the plastic mould and thus also on the parts and the headlamp’s light pattern. This is why Thermodur 2343 Superclean material is remelted a second time and virtually filtered (ESR / VAR process) in this remelting process to remove even the smallest segregations and impurities. The ensuing diffusion annealing processes, the forging to the final dimensions as well as extensive annealing treatments produce steel blocks with a consistently homogeneous structure which serve as the basis for mould production at HELLA. The headlamp manufacturer and one of their suppliers then carries out most of the machining steps on the mould and sends the workpiece back to Deutsche Edelstahlwerke for vacuum heat treatment. Heat treatment is one of the most decisive work steps because this is where the mould is given the hardness it needs for later use. In this process, the form is
heated and allowed to cool at certain intervals to change the steel’s internal structure to meet the requirements. The last work steps on the mould itself are undertaken by HELLA. The specialists for lighting systems polish and machine the surface of the mould, depending on the desired final result. For example, to achieve design effects, parts of the form are processed by means of an etching process. After several test runs and release, the injection mould is finally ready for HELLA’s headlamp production sites in Lippstadt, Eastern Europe, Mexico or China. In addition to the Thermodur 2343 Superclean material, Deutsche Edelstahlwerke also recommends other materials for plastic injection moulding applications. Formadur 2083 Superclean because of its higher chromium content is even more resistant to corrosion and wear. The latest development is PH X Superclean which does not require the usual heat
NZ Manufacturer September 2013
DEVELOPMENTS
The two most important days in your life are the day you are born and the day you find out why. – Mark Twain
In the electric arc furnaces of Deutsche Edelstahlwerke, stainless steel is melted from selected scrap and certain alloy elements.
treatments and still manages to meet the highest corrosion requirements. Formadur 2738 and new development Formadur 320 are steels with low hardness. They make production much more cost effective of simpler plastic moulds without elaborate surface designs or which have fewer demands on service life.
Dynamic Bend Lighting - Precisely Directed
In addition to light-emitting elements, modern Xenon or LED headlamps will also contain several motors that adapt the light cone to the actual circumstances. When the car is started, sensors, for example, measure the height of the beam and adapt its direction, depending on the vehicle load so as not to dazzle oncoming traffic. Even more complex is the control
• • • •
The remelting of stainless steels in the electro slag remelting furnace clearly improves the level of purity, the material’s strength and toughness, and ability to be polished.
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of the dynamic bend lighting system. Compared to static bend lighting which illuminates the areas along the side of the road at a fixed angle, dynamic bend lighting systems flexibly adapt the diffusion of the light cone to the vehicle’s environment. To do so, sensors constantly measure speed and steering angle of the vehicle. The latest systems also use data provided by an onboard camera or GPS data to predict driving situations. The optimum degree of illumination derived from this data is transmitted by an electric pulse to the bend lighting system’s motor and the beam is adjusted accordingly. In setting the turn angle, both a rapid response as well as a high degree of accuracy are important. In this case, motor shafts are needed that are precise and translate the incoming pulse in an exact movement. A suitable material is the ETG 25, a special high-grade bright steel which is supplied to various automotive suppliers as the starting material for drive shafts ETG 25 is a material that unites apparent opposites. It is both easy to machine as well as very strong in application - without necessitating further processing steps, such as heat treatment.
The Bottom Line
Headlamps for the automotive industry are becoming more and more complex in design and functionality. Lighting systems today now adapt automatically and flexibly to a wide range of road and weather conditions and process a vast assortment of data. The design of headlamps and rear lights is also increasingly becoming a unique selling point for car makers and new shapes and designs such as light curtains and light-emitting elements are opening up numerous possibilities. As headlamp complexity increases, there is also a rising demand for high-grade special steels.
Do you have a story you want to share? Developments? New markets discovered? How are you finding business in this challenging economy?
Email Doug Green at words@xtra.co.nz and share your story with readers. www.nzmanufacturer.co.nz
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NZ Manufacturer September 2013
THE FUTURE OF MANUFACTURING
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Education costs money. But then so does ignorance.
Focussing on success
ALCO, National Aluminium Ltd, based at Highbrook, Auckland is an award winning company and a leading supplier of aluminium extrusion and rolled product, They specialise in design and manufacture and distribute to both local and international markets. Recently Martin Nobbs, assistant product manager, spoke to New Zealand Manufacturer about business and the future.
How is business?
Business is going well, however the economic conditions have been challenging for ourselves and our customers. To succeed in a tough marketplace we have focussed on doing what we do best, which is supplying the highest quality products and services we can offer. The result of this is we have taken positive steps, with the opening of new branches, and diversifying our product and service offer.
What are the growth areas for your company?
Due to the demand for new housing in Auckland and in Christchurch Nulook and Bradnam’s are experiencing large amounts of growth as customers demand the best for their new homes. Our NALCO Industrial business is also experiencing growth from the areas of NALCO’s added value, such as die design, extrusion, and our dual CNC router offer.
Do you export?
Yes we export to both Australia and the Pacific Islands. We have a long successful history of supply into these markets.
Are there new products being considered by your company?
New products and services are continually developed and tested at NALCO for both Industrial, Nulook and Bradnam’s, this to help meet customer demands and needs.
see plenty of opportunities going forward, due to the Christchurch rebuild, Auckland and other projects we are working on.
Where does demand for your products come from?
NALCO focusses on both Industrial markets, and Windows and Doors (residential and commercial), so demand comes from all over New Zealand, such as: residential housing, commercial buildings, marine, transport, general engineering, electrical applications, structural uses, architectural, this is to name a few. It is amazing how aluminium is incorporated into a large majority of everyday products.
Do you contract manufacture?
At NALCO Industrial we specialise as a contact manufacturer of Aluminium products. The products we manufacture for customers are aluminium extrusions and we offer light fabrication, surface finishing, CNC router cutting, plate cutting and rod cutting for companies throughout New Zealand and Overseas.
Does your company spend much on R @ D?
To remain at the forefront of the industry, NALCO places a large focus on in house R&D for NALCO Industrial, Nulook and Bradnam’s. Our focus on R&D and using the latest systems for it helps to mean NALCO can react to customer demand quickly, and develop new products with a short turnaround.
Is it hard to get the right staff?
At NALCO we believe our employees are what gives us the competitive edge over our competitors, and enables us to please and retain our customers. This means that when we take on new staff a
Ron Holden, managing director, meeting Princess Anne
large focus is placed on making sure they are the right staff for NALCO. This means our employment process is comprehensive, and involves multiple steps to secure the right staff. The impact of this is it can be a hard and timely process finding the right staff, but we believe finding the right staff is worth the wait.
Company Mission Statement is...?
Creating a better world for our Customers.
About
NALCO has branches in Auckland, Hamilton and Christchurch supplying one of the widest ranges of sheet, plate, treadplate, coil, and extruded aluminium profiles in New Zealand. They also offer custom extrusion design and mill runs, with a range of finishes available and is a leading supplier to the building industry, owning five Bradnam’s branches and supplying to over 40 Nulook Licensees. Nulook: In both the residential & commercial markets Nulook enjoys the reputation of being a market leader in aluminium joinery, trusted by Builders, Architects
Biggest challenges?
One of our largest challenges has been preparing NALCO to take advantage of the expected building activity from Auckland and Christchurch, to anticipate what will be needed, and to meet the expectations of our customers.
How do you see the current business climate in NZ?
The current business climate is challenging at the moment but we www.nzmanufacturer.co.nz
– Sir Claus Moser
The NALCO team.
and Homeowners for the past 50 years. Nulook is the country’s leading brand of aluminium joinery, with a commitment to outstanding quality, service & advice. Nulook is a licensed brand of NALCO. Bradnams: Wholly owned by NALCO, Bradnam’s was established in 2002 to deliver quality residential joinery specifically to the group housing segments and commercial. Bradnam’s has built a successful track record supplying leading national and regional building companies and export markets with single and double glazed joinery. Bradnam’s takes great pride in the service and quality provided to customers. Because our Bradnam’s business units are company owned and strategically placed, we can guarantee national supply to an agreed standard.Our Bradnam’s branches operate from Auckland (2), Christchurch, Rotorua, and Wellington.
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ANALYSIS
You can never cross the ocean until you have the courage to lose sight of the shore. – Christopher Columbus
Transmission developer attracts overseas interest
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ew Zealand transmission developer Gyro Technologies Ltd. has received proposals from centres of excellence in the USA and the UK to develop its unique wind power transmission system. Gyroscopic Variable Transmission (GVT), the brainchild of New Zealander Mr Jega Jegatheeson is designed to make wind and wave power more efficient and cost effective. GVT recently featured in a new book, “Innovation in Wind Turbine Design”, by Glasgow-based wind expert Peter Jamieson who described it as “being on the leading edge of wind power technology”. Agreements have been signed with Narec Capital in the UK and a US consortium of Texas Tech University Department of Mechanical Engineering and renewable energy development company Group NIRE. GTL has issued new shares to raise $500k for local development work, support for the US and UK initiatives and to maintain their patents. “We are delighted to announce our joint venture with Gyro Technologies Ltd on the commercialisation of their gyroscopic variable transmission (GVT) concept.” said Jerry Biggs, CEO of Narec Capital. “As we move further towards a low carbon economy, the requirement for improvements in the reliability and efficiency of wind turbines is paramount in order that generating costs can become comparable to that of fossil fuels”. ”Narec Capital considers many technologies that may help to improve the efficiency of wind turbines but GVT stood out
as a potentially ground breaking concept. Replacing the gearbox of conventional wind turbine systems with GVT should help us to achieve better reliability, flexibility in operating terrain and improvements in overall turbine efficiency. Our goal is now to take this from conceptual design to proof of concept, utilising our in house engineering expertise and commercial incubation process”. Professor Siva Parameswaran of Texas University adds, “It is becoming evident that the gear system in a wind turbine fails within 10 years (instead of the ideal 20 year life of the turbine) and replacement and associated downtime is very costly. Initial studies performed at the CFD laboratory at Texas Tech University confirm that GVT is a promising technology to keep the Wind Turbine transmission system running for 20 years. Designing a GVT system for a 660 kW Wind turbine is underway at the Department of Mechanical Engineering. Group NIRE and CFD Laboratory are actively involved in seeking funding from potential investors. In addition to Group NIRE, the CEO of NextraTEC, Dr. Carsten Westergaard (Former Director of Global Technology at Vestas) is interested in applying for Phase I of
That’s the reality of developing such challenging technologies in a small country.
Tony Herewini Managing Director of TP Engineering with the Gyro version of GVT. T P Engineering have helped with some of the engineering design work and would have been contenders to continue development of the technology here in New Zealand if the company had en able to get the support here.
Small business Technology Transfer (STRR) funding with Computational Fluid Dynamis (CFD) Laboratory to study the market potential of GVT technology. “We are very positive about our link with Gyro Technologies as we think GVT could be the ideal way to transmit power from a wind turbine to the generator”, said Professor Parameswaran Mr Jegatheeson, previously an engineer with the former Electricity Corporation of New Zealand, has worked for over 15 years to solve the problems faced by the wind power industry of gearboxes breaking as a result of the massive wind gust forces they are subjected to. “It’s widely recognised in the industry that the wind turbine gearboxes cannot stand up to the incessant forces over time and many fail within as little as five to seven years. The costs of repairs and also downtime are very significant and alternatives such as direct drive create other expensive problems,” says Mr Jegatheeson. “Unlike traditional wind turbine gearboxes around the world, GVT technology doesn’t rely on gears and expensive electronics. It instead uses gyroscopic reaction forces to transfer the power from the blades to the generator at variable speed ratio with less stress on the turbine. This will significantly reduce costs – possibly as much as 50% compared to existing systems.” “Wind power is growing at a phenomenal rate worldwide and it would be nice if a New Zealand invention could be powering wind turbines of the
The cover of a new book “Innovation in Wind Turbine Design” by renowned wind power consultant Peter Jamieson of Garrad has a whole chapter devoted to GVT.
future.” “We are currently raising funds to support the development of GVT at National Energy Centre in U.K. and Texas University in U.S. New shares have been issued towards this end. In the past we were looking to build a large GVT transmission and test it in a full size working wind turbine. A major New Zealand power company offered us a turbine for the trial, but the problem, as always, was funding. Unable to find a suitable partner and support in New Zealand we have had to look overseas. That’s the reality of developing such challenging technologies in a small country,” says Mr Jegatheeson.
Gyro Technologies Technical Director M. Jegatheeson and advisor Warren Snow with a desk top model of the GVT system www.nzmanufacturer.co.nz
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NZ Manufacturer September 2013
WAIKATO FOCUS
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You can’t fall if you don’t climb. But there’s no joy in living your whole life on the ground. – Unknown
Hamilton plants officially green
n line with Laminex New Zealand’s aim to be New Zealand’s trusted business partner for decorative surfaces and panel products, Forest Stewardship Council (FSC) Certification has been achieved across all three Manufacturing Sites (Hamilton, Papakura and Taupo). This complements the certification throughout Laminex NZ’s Branches and Distribution Centres achieved in 2012, enabling FSC certified products to be manufactured and distributed to NZ customers. This important step has been spearheaded under Laminex New Zealand’s ‘Green First’ initiative an ongoing programme of sustainable projects that span the entire breadth of the business from re-cycling to corporate social responsibility, FSC certified substrates are now available across the majority of Laminex NZ’s product portfolio including MDF and Particleboard with laminated products to follow suit soon. This latest FSC accreditation joins a number of other robust eco-labels held by Laminex NZ, including Environmental Choice NZ and ISO14001 (Environmental Management Standard). FSC also provides opportunities with the NZ Green Building Council and its GreenStar and HomeStar accreditation programmes. Laminex New Zealand is part of the Laminates and Panels division of Fletcher Building Products Ltd. Laminex New Zealand
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established ‘Green First’ - a companywide sustainability initiative which includes numerous programmes of environmental management and certification reflecting our belief that action must follow good wellintentions and ambitious goals. The company continually develops strategies that enable them to move toward sustainability with efforts to:
• ensure active water stewardship
• reduce carbon emissions by optimising energy usage in the production of products
• work with suppliers to increase recycled and eco-friendly content in raw materials, making mandatory the use of fibres from sustainable forests. Together with the Formica Group, Laminex New Zealand forms the Laminates and Panels division
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upgrades will significantly improve the quality of wastewater from these plants.” “The upgrade at Ngaruawahia means we now have four levels of cleaning in the treatment process which ensures the wastewater leaving that site is of a much higher quality. This will also help improve the health of the river’s ecosystem.” Results from early testing indicate the wastewater processed at both sites is much higher in quality than statutory requirements. Mr Harty says all Council staff operating the plants have received extensive training which will enable them to evaluate processes and recommend improvements if necessary.
FSC accredited and comply with all relevant local, provincial and government regulations encompassing air emissions and quality, noise level, water discharges, and liquid and solid waste disposal.
Leading advisory firm now in Waikato
• reduce energy use throughout the life of products;
$4m upgrade at treatment plants
aikato District Council’s commitment to improve wastewater quality is being boosted with the completion of a $4 million upgrade to Ngaruawahia and Huntly’s wastewater treatment plants. Initiated as part of Council’s Joint Management Agreement with Waikato-Tainui, the project has seen the installation of new pumping and filtration equipment at both sites. Tim Harty, General Manager Service Delivery says the new equipment provides extra screening of up to 22,000 cubic metres of wastewater treated at the plants each day. “Council has a commitment to improve the health and wellbeing of the Waikato River and these
of Fletcher Building and as such, shares the commitment of Fletcher Building to corporate leadership in sustainability. Laminex New Zealand manufacturing plants are all
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rowe Horwath (formally known across New Zealand and Australia as WHK) is investing in the success of Waikato with the opening of its flagship Waikato office in Hamilton. Crowe Horwath has appointed Hayden Dillon as Managing Principal, with a robust team of specialists including Colin Tasker providing Audit capability, Geoff Roan specialising in Bloodstock, and Lynette Mortleman focusing on Business Advisory. Crowe Horwath is the 5th largest Business Advisory firm across New Zealand and Australia, and is in the top 10 world wide. “This gives us local practical knowledge coupled with our international reach, which is critical for our client’s success in the Waikato” said the new Managing Principal, Hayden Dillon. Crowe Horwath in New Zealand is a business that has grown out of the regions, and is very strong across the country. It has the largest foot print of any advisory firm in New Zealand, and is one of the largest players in the Agribusiness market as well. These things are very important when you’re looking
at establishing a new firm, even in a region with as much potential as the Waikato. Also coming on board and bringing a skilled team to the table is new Principal Colin Tasker. Colin had been delivering Audit and Business Advisory services in his previous partnership. Geoff Roan, Crowe Horwath’s new Bloodstock Senior Manager is also excited about the opportunity for his specialist area. “The Bloodstock Industry is a big part of our region, but requires a specialist understanding to ensure our clients are provided the best advice, so I am excited to be part of national firm that have a commitment to the industry through their national Agribusiness division.” Similarly the national Agribusiness division also provides Lynette the additional specialist support she needs. “Having access to Specialist Agribusiness; Tax, Employment, even HR issues will be of significant benefit to our clients” said Lynette Mortleman Crowe Horwath’s new Business Advisory Senior Accountant.
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www.nzmanufacturer.co.nz
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NZ Manufacturer September 2013
FOOD MANUFACTURING
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The question isn’t who is going to let me; it’s who is going to stop me. – Ayn Rand
NZ gourmet food producers urged to target India
ine food producers in New Zealand looking for growth opportunities need to consider India, a market with a top-end income population as large as all the citizens of Japan. Indian brand consulting firm BrandKnew Ideas (BKI) says the Indian gourmet food market has a compound annual growth of 20 per cent and is currently worth around US$1.3 billion. New Zealand exported NZ$178 million of food and beverages to India in 2010, 106 per cent up from 20091. However, the Indian packaged food industry is expected to be worth NZ$44 billion by 2016. BKI co-founder Prashant Iyer says the Indian gourmet food market represents a wide open market for New Zealand gourmet food producers. “Currently, organised retail2 is in a nascent stage of growth as it has just a 5.9 per cent share in total India retail trade,” Iyer says. “However, in recent years, organised retailing has been growing at a robust rate due to the rise in the number of shopping malls as well as in the number of organised retail formats.” Iyer says by 2015 middle class consumers in India are expected to constitute around 25 per cent of households and account for 44 per cent of disposable income. The figures for 2025 are 46 and 58 per cent respectively. “Plus, increasing internet use and global travel means Indian consumers have become much more aware of brands and are compelling retailers to widen their offerings in terms of brands and in terms of variety.” Another driver, Iyer says, is changing demographics. “India is one of the youngest and largest consumer markets in the world. It is expected that more than half the population will be under the age of 30 by 2020, which means the potential for the Indian retail segment will be enormous. “This population will be more dynamic than the previous generations because their consumption is driven by wants rather than needs. Thus, the organised retailing, which thrives on lifestyle products, is expected to receive a boost because of the young population by 2020.” So why is there this new fascination with gourmet food among Indian consumers? Iyer says the trend is in line with India’s growing economy. “India has a growing base of super rich who are splurging their incomes on discerning consummables. Their
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aspirations are global in nature and hence the demand for high end watches, gourmet food, luxury bags and designer clothing. “This is the demographic that global luxury majors are eyeing for growth – given the slackening of demand in the developed world.” Iyer says the current perception of New Zealand foods is one of quality which has been coloured by a recently highly popular MasterChef Australia television series in India. “There are other signs, too,” he says. “New Delhi’s bustling INA market - once a hub for expatriates to shop for western ingredients
India, by numbers:
- now attracts a large number of Indians hunting for handcrafted ham, almond tagine sauce, Swiss truffles, porcini mushrooms, Greek olives and much more.” He says Indians are experimenting with all types of gourmet foods and wines – “they could be abalones, blue cheese, olives, avocadoes, wines and more”. “India is a very complex country to navigate from a language, taste, culture and customs perspective,” Iyer says. “However, the wellheeled segment understands a global language, which has been influenced by travel and television.
Population: ………………………… Gourmet food market: ………………………… Gourmet foodcompound annua growth rate:… NZ F&B exports ………………………… Packaged food industry India:………………… Middle class consumers:…………………………
The focus on organic, health and fitness has created rapid demand for luxury gourmet items and this will continue to evolve exponentially.” Iyer says BKI can help New Zealand gourmet food exporters by advising on market entry strategies, JV partnerships, market testing, legal and technical assistance and marketing and communications support. “First point of contact in New Zealand is our associate Pead PR which has a specialist food industry team who can put New Zealand gourmet food producers in touch with us,” Iyer says.
1.21 billion (2011 census) US$1.3 billion current; projected US$2.8 billion (2015) 20 per cent NZ$178 million (2010), up 106% on 2009 NZ$44 billion by 2016 25% of households; 44% of disposable income (2015); 46% and 58% respectively by 2025.
1 http://www.nzte.govt.nz/en/export/market-research/food-and-beverage/food-and-beverage-market-in-india/ 2 In India, a nation of small specialist shop keepers, “organised retail” is the name for retail outlets that have a wide range of items under one roof e.g. supermarkets
MPI initiative to boost industry partnership a success
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he Ministry for Primary Industries (MPI) has welcomed two new secondees from industry to its policy branch, after an initial secondment into the standards branch has proven to be a success. Alistair Mowatt from Zespri International Limited and Mark Ward from the Riddit Institute bring industry expertise to the policy group’s strategic team which focuses on long-term decision making and future work programmes. This follows on from an initial secondment in March.
“Having worked with a range of primary sectors at different levels of development enables me to add a unique set of strategic and innovative skills to the team,” says Mr Mowat who is working on the Export Double programme. Principal Advisor Mark Ward will lead the value chain mapping project and the seafood component of the team’s Export Double work. Policy Branch Strategy Manager Dr Sharon Adamson says there will be continuous rounds of secondments into the strategy team.
“Part of our motivation is to deepen the partnership between MPI and the primary industries. Secondees will not only learn about how government processes work, but also take work programmes back to the industry to use,” says Dr Adamson. Secondees are put through a rigorous recruitment process. The new round of secondees will work at MPI for the next year. It is expected the next round of secondment selections for the policy branch will occur from February 2014, and start 1 July, 2014.
NZ Manufacturer September 2013
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FOOD MANUFACTURING
Nothing is impossible, the word itself says, “I’m possible!” – Audrey Hepburn
Major laboratory expansion opens in Christchurch
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sureQuality recently celebrated the opening of its newly refurbished and expanded Christchurch food testing laboratory, with the Prime Minister, Rt Hon. John Key and many of its customers in attendance. The upgraded facility in Sir William Pickering Drive, Burnside now has over 400 square metres of laboratory space for food analysis.
The expansion is expected to create up to 25 new jobs over the next one to two years.
AsureQuality’s Chief Executive, Michael Thomas said that with continued growth in food manufacturing and the dairy sector
Webinar explores operational efficiency in food processing
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ntegrating the right weighing and measuring equipment in food production processes is key to increased efficiency and product quality. A new on-demand webinar, “Increasing Operational Efficiency with High Performance Weighing, Measuring and Inspection Solutions and Services”, explains why and provides viewers with comprehensive information to speed up food production. This free webinar offers valuable insight and best practices information with the potential to significantly improve a company’s bottom line. Topics covered include filling, batching, checkweighing, quality-control and inspection techniques, such as X-ray, metal detection or sensor management. Weighing and measuring are crucial in many food production
process steps. Selecting the right technology and inspection methods—and making sure they can be easily integrated into a company’s existing systems—are key to increased efficiency and therefore bigger profit margins. Product inspection expert Ilya Kurbatsky and process analytics expert Stephan Bardeck cover 16 key topics, including material transfer for manual and automated processes; minimising waste through tracking and tracing; packaging quality control, including label verification and x-ray detection; equipment performance verification with compliant calibration procedures; intelligent in-line analytical measurements and much more. Watch the webinar at your convenience at: www.mt.com/OEfood-webinar.
in the South Island, the time was right to invest in this expansion of the company’s South Island capability. “Increasingly our customers are looking for faster turnaround times of results as they develop opportunities in the export sector. Expanding our Christchurch laboratory in capacity and scope ensures we continue to meet our customers’ needs in the future.” The new laboratory will expand the microbiological capability, as well as add chemistry testing to the Christchurch facility. The expansion is expected to create up to 25 new jobs over the next one to two years, and represents a significant investment for AsureQuality in the South Island. It is a vote of confidence in one of New Zealand’s most productive regions.
AsureQuality is a State-Owned Enterprise and New Zealand’s leading food testing, auditing and certification company with over 1700 staff spread nationwide, and has world class laboratories in New Zealand, Australia and Singapore. It provides food safety testing for food producers and processors across the dairy, meat, horticulture and viticulture sectors. AsureQuality’s Auckland Laboratory is the largest and most sophisticated commercial food testing laboratory in the Asia Pacific zone, and its Wellington Laboratory is New Zealand’s leading contaminants testing facility. Together with the expanded Christchurch facility, these laboratories provide a comprehensive laboratory network for the New Zealand food industry.
White Paper discusses sustainable quality with weighing
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n food production, accurate weighing can greatly impact the overall quality and integrity of the product, as well as enhancing a business’s productivity and competitiveness. When a food manufacturer’s weighing equipment is not verified, it risks inaccurate weighing and inadequate process quality, safety and compliance. In a new white paper, The Global Weighing Standard for the Food Industry, experts have outlined how the global weighing standard can help companies ensure consistent quality for cost savings, comply with regulations, pass audits successfully and save money by avoiding overfilling. The free white paper describes the principles of GWP the global
standard for risk-based lifecycle management of weighing equipment, and explains how businesses can benefit from its use. GWP is a science-based global weighing standard for efficient lifecycle management of weighing systems. www.nzmanufacturer.co.nz
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NZ Manufacturer September 2013
DEVELOPMENTS
Life is 10% what happens to me and 90% of how I react to it. – John Maxwell
Analysis of the global market for expandable polystyrene
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lobal demand development for expandable polystyrene (EPS) in the construction and packaging industries will slow down, but continues. Important factors are the recovery of the construction sector after the financial and economic crisis in 2008/09, state-funded programs to improve energy efficiency, and increasing wealth and population in emerging countries. Average growth rates of 4.8% p.a. that have been generated in the previous eight years are unlikely to be reached again, but the international market research institute Ceresana nevertheless expects consumption to increase at an AAGR of 3.8% in the next eight years. An expected market volume of more than US$15 billion in 2020 shows that the market for EPS is well worth a closer examination.
Growth Motor AsiaPacific
Asia-Pacific already is the most important consumer of EPS worldwide, accounting for about 54% of global demand, followed by Western and Eastern Europe. Distribution of market shares is likely to change notably in the upcoming eight year period. Market analysts forecast AsianPacific countries to continue to gain shares of the global EPS market, mostly at the expense of saturated industrialized countries in Western Europe and North America. Developing and emerging countries, on the other hand, can capitalise on an increasing per capita consumption of packaging materials and other EPS-based products. The by far most important growth motor on the international market is China. Changes in regional demand will also have an effect on the production structure of manufacturers. Current EPS capacities of more than 10
million tonnes will be expanded by over 1 million tonnes. Almost 43% of these new capacities will be created in Asia-Pacific.
Regional Differences
This most comprehensive report worldwide analyses how the utilisation of EPS will develop on individual markets. Due to its technical properties such as low weight, rigidity, and formability, this material can be used in a wide range of different applications. It may be used as heat insulation, cold and sound insulation, in the packaging industry or in the manufacturing of recreational and sports products. One of the major application
areas is the construction sector that accounted for more than 61% of total demand in 2012. European countries in particular record a widespread use of EPS in the construction sector, as a range of state-funded programs target at improving energy efficiency. All around the world, EPS-based products are used in the construction of new residential building and in the refurbishment of old buildings. Even on saturated markets, this can create growth impulses because EPS consumption in the construction sector is expected to increase by 4.1% per year. Packaging made from EPS that is, for example, used to transport fresh fish or electronic goods, account for
more than a third of global demand. Especially in Asia-Pacific and South America EPS products are accounting for a significant share of total demand. Other EPS-based products include recreational goods such as helmets, cores for surfboards, life jackets or foam cups for hot beverages. A particularly large consumption volume in this segment is recorded in North America, last but not least due to a comparatively high consumption of foam cups. EPS is also used in child safety seats, casting moulds, and horticultural applications. Taken together, all these applications accounted for about 4% of global demand.
Can Gun 1 makes aerosol spraying easier
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or those who find using an aerosol spray can a difficult and messy proposition, here’s an award-winning invention just arrived in New Zealand that will make it a whole lot easier and more convenient. It’s the Can Gun 1, a revolutionary new, patented pistol-grip spray can tool that easily snaps onto standard aerosol spray cans and transforms them into professional-style spray guns with effortless control and pain-free spraying – especially useful for people suffering with arthritis. The Can Gun 1 is claimed to be the world’s first full-grip, can tool trigger, fitting over the tiny nozzle on the top of a regular aerosol that many people find awkward and messy to use. It’s already become a success in its home market in the United States. The American manufacturer says the arthritis-friendly FullGrip trigger offers 22 times the surface area, compared to a standard spray can’s tip. This trigger and the unit’s 2.5:1 leverage advantage, makes the tool,
on average, eight times easier to spray with and it’s the only spray can tool usable while wearing work gloves. Its one-of-a-kind trigger eliminates finger fatigue and numbness, wrist and forearm strain and hand cramping. It also dramatically reduces chemical contact normally associated with extended application by frequent heavy users of, among other products, paints, coatings, cleaners, adhesives, lubricants and cleaners. The Can Gun 1’s one-size-fitsall FutureLock attachment ring is compatible with all standard spray cans worldwide and requires the lowest amount of effort to attach, spray and remove, says it manufacturer. And what’s more, it is also environmentally responsible because it is manufactured with recycled, non-toxic plastic and utilises zero-waste, space optimised, recyclable packaging. The Can Gun 1 was recently awarded a Silver North American Retail Hardware Association’s Packaging and Merchandising Award for the following categories:
The Can Gun 1 turns an aerosol can into an easier-to-use spray gun.
Overall shelf and sales appeal; Attractive graphic design; Innovative, new ideas, techniques, materials, design or advancement in field; Economical packaging efficiency; Shelf performance, and durability and Selling Features, how well the packaging conveys the features and benefits of the product. According to the New Zealand distributor, Griffiths Equipment Ltd, the Can Gun 1 helps the user to do a better spray painting job than by using the original aerosol nozzle, due to the improved control and accuracy afforded by the pistol grip. It can also be re-used again and again.
E-mail: acsdesign@maxnet.co.nz www.nzmanufacturer.co.nz
NZ Manufacturer September 2013
ANALYSIS
When I let go of what I am, I become what I might be. – Lao Tzu
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New era of health and safety on the horizon
recently raised the topic of the changes to the Electrical (Safety) Regulations and the impact this will have on industrial electrical maintenance. Judging by the feedback I have received, my concern that some sites may be unaware of the new requirements was well founded. Where possible, I have grabbed the opportunity on sites to cover off the topic with site electricians, doing my bit to spread the love. While I was able to blunder my way through the basic detail and the requirements for industrial electrical maintenance (as opposed to new or domestic installations), there was one recurring question put to me that I could not answer: Why? Has there been a rash of electrocutions in industrial premises? Has there been a re-evaluation of the risk of the status quo? Has the technology, supply or risks changed? Is this an “alignment’ with Australian Standards? I’m sorry, but my attempts to find an answer drew a blank. Which concerns me. I have seen too many examples of bureaucratic madness in the “name” of health and safety to not ask the tricky questions. In an environment of major change in NZ H&S management over the next five years, it is imperative that logic and common sense does not (once again) become a victim. While I would not disagree that industrial electricians could lift their game in terms of testing and signing off on their work, locking requirements into statutes and codes is a huge responsibility that demands transparency and rigour. Disagree? Remember the one-size fits all requirement to test electrical leads every 6 months regardless of the situation? This code overrode the H&S Act mandate to manage (i.e., establish the hazard/risk and test accordingly) depending on the situation and use. The result: embarrassing examples of health and safety in the office or staff canteen (e.g. microwave leads) making it even more difficult to
convince staff to take the topic seriously, added compliance cost for business and a nice little earner for the electrical industry. I am unsure where the latest changes fit as no one is answering my questions, so I just have to trust that the answer lies in logic and fact. When I asked the same electricians whether they took the time to contribute to the development of the changes, the unanimous response was “No.” So why bleat now? If you have not yet taken it on board that we are in for major changes in health and safety, hold onto your hats. The world has changed since the Maintenance Engineering Society stood bravely in front of the health and safety industry in 2008 daring to say that health and safety was not working. The Pike River disaster was a watershed that brought formal recognition of systemic failure at multiple levels. Heads rolled and changes began. Self examination confirmed the worst and a period of interaction and consultation heralded the new “WorkSafe NZ” crown agency tasked with leading “an urgent, broad-based step change in attitude and commitment” and targeting a 25% reduction in fatalities and serious harm injuries. The new WorkSafe will take overall lead from aligned regulators, (ACC, EPA, MNZ, NZTA, CAA and Police). New health and safety legislation based on the current Australian model will be enacted in December 2014 with an emphasis on risk based approach, a broader range of sanctions and tougher penalties. Penalties, responsibilities and definitions for business owners, managers, staff and suppliers will all change. Gone are the terms “Employer, Employee, Principal, and Person in Control of a Place of Work” replaced with “Person in Control of a Business or Undertaking (PCBU), Officer ((Directors and Executives), Worker and Upstream Suppliers of Goods and Services”. There are no longer “Employees” or “Contractors” and the new “Workers” group are subject to personal responsibility, fines and imprisonment.
KEVIN KEVANY
09 520 5206 kevwrite@xtra.co.nz
PETER ISSAC
06 340 8134 peter.isaac@xtra.co.nz
There is a significant amount of change for industry to take on board. A timeline of 5 years is projected during which the whole industry will need to gear up for the new model, unashamedly based on the Australian model law. Other than accident stats half that of NZ, (which is a compelling argument), established Australian case law is seen to provide a beneficial head start for our own case law. The regulator model has already changed with the inspectorate approach becoming a three tier system; Assessment teams who are the proactive arm charged with inspection and education, Response teams to triage serious harm incidents looking for signs of systemic failure and Investigation teams dealing with serious breaches. The current focus is on targeted industries and sectors. Meanwhile, the Ministry of Business, Innovation and Employment has begun the task of aligning our codes with Australia, starting with Safeguarding of Machinery, AS4024. Which brings me back to the point. Have your say now or suffer the consequences. Changes to codes and regulations require vigorous input if they are to be of real value. The Australian guarding code is a huge and prescriptive document; one that site engineers will have a responsibility to be familiar with. Before we rush to adopt the Australian code, should we not consider the implications? Is it indeed better? What are the relative guarding incident stats between the two countries? Is it a fair assumption that accident stats will improve with better guarding or are psychological tipping factors (culture) the major driver behind guarding accidents? Are we just going to add huge compliance cost to industry for no improvement in safety? If you think that’s a bit hard, remember that 20 years of huge cost to business has only lined the pockets of the H&S industry whilst demonstrably failing to improve our stats. Have the companies featuring in the top 20 most prosecuted companies list not invested heavily in guarding already?
DAVID BURKE-KENNEDY 09 473 8635 dbk@compublicity.co.nz
– Craig Carlyle, Secretary MESNZ
If we have learnt anything from the last 20 years, it should be what DOES NOT work. The new H&S model reflects a lot of the Maintenance Societies standpoints; better education, more personal responsibility, proactive advice channels for SME’s and business. Fantastic. The consultation phase featured a lot of discussion on “culture” and behavioural psychology. We know the bureaucratic approach of more rules, tougher penalties and downwardly driven management struggles in our Kiwi culture. The Ministry has taken the feedback on board and has gone on the front foot to invite discussion and consultation from the workforce on the proposed guarding changes. The feedback from the workforce is an embarrassing vacuum. We have a huge opportunity to improve our H&S performance in New Zealand. The need for change is recognised, right from the top. It is unreasonable for us to expect the bureaucrats and legislators to get it right by themselves; their pathways, industry advisors and methodologies are hard coded. The Kiwi way is to say nothing, leave a vacuum and then bleat about the results. Yet coal face staff will recognise that safety (more than health) is about logic, practicality, reality and culture. You may not see what value you can provide with your input and feedback, but it is what the regulators are crying out for now. Give it a try!
SANDRA LUKEY 021 2262 858
sandra@shinegroup.co.nz
www.nzmanufacturer.co.nz
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NZ Manufacturer September 2013
ENERGY REPORT
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Two roads diverged in a wood, and I took the one less traveled by, and that has made all the difference. – Robert Frost
Iconic sustainable building a winner
ne of New Zealand’s most iconic sustainable buildings has achieved a ‘market leading’ NABERSNZ rating for energy performance. The Meridian building on Wellington’s waterfront has achieved a 5.5 star base building rating, which is the highest to be awarded under the 6-star scheme. Launched earlier this year, NABERSNZ is set to become an industry standard for benchmarking and improving office building energy performance. Owned by DNZ Property Fund, the Meridian Building was the first 5 Green Star commercial office building to be occupied in New Zealand. NABERSNZ rates the energy performance of existing buildings while Green Star rates the environmental performance of new buildings from a design and build perspective. NABERSNZ, which uses 12 months of in-use energy data, has now verified the building’s Green Star design objectives for reduced energy use.
The Meridian building was designed and built to the highest standards of sustainability and efficiency, with many innovative features. Although known to be performing well for tenants, this rating proves it conclusively. Ratings are available for whole buildings, base buildings and tenancies. The Meridian Building is the first to get a base building Certified Rating under the scheme. Base building ratings include services such as lifts, base building air conditioning and common areas like foyers. DNZ Property Fund has helped sponsor the introduction of NABERSNZ. New Zealand Green Building Council chief executive Alex Cutler says the rating shows the importance of tuning and commissioning a building well. The NABERSNZ Certified Rating, carried out by Ben Masters of BECA and Lance Jimmieson of Jackson Engineering Advisors, showed that the building uses a tiny 34kWh of energy per sq metre, per year. The Meridian Building’s
sustainability features include a double-skinned façade; exposed thermal mass; automated window opening, automated, external louvres
and internal blinds to control solar gain and glare; daylight-controlled lighting; solar hot water, and airconditioning via chilled beams.
World Green Building Week had its stars
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o celebrate World Green Building Week 2013, two of New Zealand’s most sustainably designed, and highest-performing buildings were open to the public in September. In a first ever two-city Green Building tour, award-winning buildings in Auckland and Christchurch opened simultaneously for limited, escorted public tours. The Geyser Building in Auckland’s Parnell achieved New Zealand’s first Green Star – Office Design rating. Among its sustainable features is a system that delivers 100% fresh air to occupants. Geyser uses state-of-the-art technology to heat and cool the building by trapping warm air between its walls in the winter, while in summer the entire outer skin opens electronically for full ventilation. Te Hononga, the award-winning Christchurch Civic Centre, is the highest-rated Green Star building in the country, having scored a ‘trifecta’ of 6 Green Star Design, Office and Built ratings. Among its sustainable features is a double skin façade and a unique tri-generation renewable energy system. “These buildings are truly inspirational, and exemplify the very best in green building. Aside from being amazing to be in and around, www.nzmanufacturer.co.nz
they cost less to run and deliver better comfort and productivity, and a wonderful space to inhabit, every day,” says New Zealand Green Building Council Chief Executive Alex Cutler. “The great thing for New Zealanders is that green building is becoming more mainstream, as increasingly developers and owners realise the benefits of building for the future. “Around New Zealand, there are more than 95 Green Star rated buildings delivering lower costs, higher efficiency and more pleasant environments for owners, tenants and occupants.” In September, Green Building Councils in 98 countries representing more than 25,000 organisations hosted events, ran campaigns and celebrated World Green Building Week under the theme: ‘Greener Buildings, Better Places, Healthier People’.
The great thing for New Zealanders is that green building is becoming more mainstream.
The Geysor Building
“Green buildings play a fundamental role in addressing some of the most pressing challenges of our time. World Green Building Week showcases how green buildings are reducing the global carbon footprint, saving money and improving productivity, creating jobs and improving the lives of millions of people,” says the World GBC’s Chief Executive Officer, Jane Henley. The World Green Building Council (World GBC) is a network
of 98 national Green Building Councils (GBCs), making it the largest international organisation influencing the green building marketplace. GBCs are memberbased organisations that partner with industry and government to transform their building industries through the adoption of green building practices. GBCs create change in their local markets as a way to globalise environmentally and socially responsible building practices.
NZ Manufacturer September 2013
The only way to do great work is to love what you do. – Steve Jobs
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EXPORT NEWS
Why your business needs to export
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ll successful businesses, regardless of size or specialty, must remain proactive and growth-oriented. A failure to grab the reigns and take charge can result in too much time spent on a stagnant plateau, instead of on the path towards improvement and increased profits. So, how can you jumpstart sales and revolutionize the way you do business? The answer is exporting to foreign markets. Exporting is an option for businesses of every size, in every industry. If you want to manage risk, generate new revenue streams, produce more efficiently, neutralise competition, and increase the stability of your business, exporting is the next logical step to take on your path to success. There is countless potential in untapped foreign markets ‚it’s up to you to take advantage of them and make sure your products end up in the hands of the people who want and need them. Here are some of the main reasons why your business should start exporting: 1. Market diversification. If you aren’t exporting, you’re putting all of your eggs in one basket. Many companies realize how dependent they are on the health of a single market only after it’s too late. To damper the effects of a localised economic downturn, diversify your client base and find new foreign markets you can export to. Being proactive about diversification insures your company against poor economic conditions in one part of the globe. This is a great way to manage risk and become more profitable in the process. 2. Jumpstart growth. You already have the products that people need, so why limit sales by working exclusively within domestic markets? Exporting gives your company the chance to quickly bring in revenue that can be reinvested in the business. Instead of waiting for the local market to exhaust stock, export to expand the range of your business and generate capital faster. This proactive strategy allows your company to be more competitive in its industry as you eclipse competitors at speedier rates. 3. New sources of revenue. Exporting products gives your company the opportunity to create new streams of revenue. There are untapped markets worldwide that are waiting for your products ‚it’s just a matter of locating them and then forging new business relationships. Once you’ve established reliable
distributor contacts, your exports can lead to a tremendous increase in annual revenue without much additional work on your part.
4. Increased stability. Almost every business is affected by the seasonal swings of their industry. If your numbers are significantly impacted by the natural rhythms of the domestic market, exporting to countries with opposite trends can give you much- needed stability. For example: If you sell winter apparel, don’t accept dwindling sales during the spring and summer months at home. Instead, counteract these Predictable downturns by finding cold-weather markets with a high demand for your products. This strategy is an easy way to maintain consistent production and profitability, year-round.
5. Take advantage of full production capacity. As an industrial manufacturer looking to get the most out of existing resources, it’s important to take advantage of your full production capacity. If you are scaling back production because you are tied to the demands of a local market, exporting can solve this problem and make you more money. Find foreign markets that give you the chance to increase production while reducing fixed costs. Higher production levels also means more influence during price negotiations for raw materials. 6. Extend product lifespan.
After selling your product to a domestic market for a long period of time, sales may begin to decline as demand slowly tapers off. When you notice this trend, consider new markets before you consider new products. Products that are considered ‘mature’ in one market have the chance of becoming a desirable new product when exported to a foreign market. Make sure you’ve gotten the most out of your existing ideas before investing in new product development. Exporting is an effective way to achieve this. 7. Better feedback. Businesses that cater to diverse markets find it easier to collect accurate feedback and product improvement suggestions. When working with a sole domestic market, customer response is not as well-rounded. The multi-national and multi-faceted feedback you get from working with diverse global markets allows you to improve your products in a more efficient manner. This advantage makes it easier to be competitive in a domestic market.
8. Neutralise competition. If your competitors are exporting and you aren’t, you are giving away a competitive advantage. There’s no way to compete with a business that works with diversified global markets if you are unwilling to look beyond your borders. By sending your products abroad, you can counteract the advantages of your competition and level the playing field in your industry. Exporting also helps to neutralise foreign competitors that are selling within your domestic market. By shipping your products overseas to their home markets, you can offset a key imbalance. There is unlimited potential in the growing global economy and little reason to avoid the opportunities provided. While exporting may not have been a practical option in the past, it is now a widespread strategy that is increasing the cash flow, competitiveness, and stability of large and small businesses alike. Sending your products abroad is the next logical step for companies that are limited by their domestic markets.
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NZ Manufacturer September 2013
PRODUCTIVITY
There are no traffic jams along the extra mile. – Roger Staubach
Productivity performance poor
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comprehensive assessment of New Zealand’s productivity performance for the whole economy and for individual industries has been documented in a paper by the Productivity Commission. The paper describes New Zealand’s productivity performance through time and in comparison to other OECD countries. The focus is on illustrating productivity trends; the paper does not assess in detail the underlying reasons for New Zealand’s poor productivity performance (the subject of ongoing Commission work). The paper’s overall finding of a generally poor productivity performance – both at the economy wide and industry levels – underscores the need for New Zealand’s policy environment to be strongly supportive of productivity growth and for firms to have a clear focus on improving productivity. Many initiatives to improve productivity are also industry specific, requiring a detailed understanding of productivity performance at this level. The paper provides that perspective and is intended to be a helpful resource for policy-makers and industry leaders. It also provides an important foundation for deeper debate on New Zealand’s generally poor productivity performance. Productivity refers to the efficiency with which resources – such as labour and capital – are converted into outputs of goods and services. Productivity improvements mean that more output can be produced using the same amount of resources, allowing countries to enjoy higher living standards, including improved health, education and environmental standards. Productivity growth is a means to an end – improvements in wellbeing. So while productivity growth contributes directly to higher incomes and material standards of living, this matters to the extent that it enhances the wellbeing of New Zealanders. A society can also achieve higher incomes by working harder (i.e., increasing hours worked per person) or getting higher international prices for its exports (i.e., higher terms of trade). In New Zealand, productivity growth has been an important contributor to income growth over recent decades. New Zealand has also enjoyed strong employment growth – particularly over the 1990s – and good terms of trade gains over the 2000s. But there are natural limits to www.nzmanufacturer.co.nz
employment growth, especially in the context of population aging, and the terms of trade cannot keep rising indefinitely. So productivity growth will become increasingly important as a source of higher incomes for New Zealanders. Overall economy-wide performance New Zealanders put in plenty of hours at work, but lag behind other countries in the amount of goods and services produced from each hour on the job. From the mid-1990s, New Zealand has been very successful at increasing participation in the labour market and employment growth has been among the strongest in the OECD. It has also enjoyed periods of good productivity growth – such as the mid- to late-1990s. But overall, New Zealand’s productivity performance has been poor compared with other developed economies. Indeed, for a number of decades, New Zealand’s labour productivity has been falling behind other OECD countries (Figure A). Labour productivity growth has also slowed considerably in New Zealand in the 2000s compared with the 1990s.So as well as having a low level of productivity, New Zealand also has one of the lowest rates of productivity growth in the OECD. This is unusual internationally and raises serious concerns.
Comparison across industries within New Zealand
There are wide differences in productivity levels and growth rates at the industry level. Since 1978,
Why productivity matters “…nothing contributes more to the reduction of poverty, to increases in leisure, and to the country’s ability to finance education, public health, environment and the arts.” Alan Blinder and William Baumol (1993)
labour productivity growth has been stronger in the primary sector relative to the goods-producing and services sectors. Some industries – such as information, media and telecommunication and finance and insurance – ‘punch above their weight’ by contributing a much larger share of aggregate productivity growth than their size as a share of GDP. Other industries – such as construction and some lowproductivity-growth service industries (such as the relatively large professional, scientific and technical services industry) – have detracted from New Zealand’s aggregate productivity growth over recent years. The productivity growth slowdown over the 2000s has been reasonably broad based with all but three industries having slower productivity growth in the 2000s compared to the 1990s. However, the transport, postal and warehousing and agriculture, forestry and fishing industries have made the largest contributions to the slowdown. Since the onset of the Global Financial Crisis, falls in productivity growth have been most pronounced in some of New Zealand’s service industries.
Comparison with other countries On average, New Zealanders work about 15% longer than the OECD average and produce about 20% less output per hour worked. New Zealand’s labour productivity now ranks in the lower third of OECD countries and is similar to that in Slovenia, Israel and the Slovak
Republic. It is because of this poor labour productivity performance that GDP and average incomes per person are low in New Zealand. Closer to home, New Zealand and Australia have had remarkably similar employment growth since the mid-1950s. But Australian firms have been much more successful than their New Zealand counterparts at converting that labour input into output. In other words, labour productivity in Australia has grown considerably faster than in New Zealand over a long period of time. This has been a key driver of the increasing income disparity across the two trans-Tasman economies. Differences in industry mix explain a sizeable share of the transTasman productivity gap, with Australia having a greater share of employment in high-productivity industries. However, even within the same industries, New Zealand’s productivity lags Australia over most of the economy. Indeed, across a broader set of countries, the available evidence indicates that the productivity performance of most New Zealand industries does not compare well internationally. The Commission is currently undertaking industry-level productivity analysis on: the industry contributions to the 2000s productivity growth slowdown, the contribution of labour reallocation to aggregate productivity growth and the shares of income going to labour and capital. In early 2014, the Commission will publish a productivity outcomes monitoring report (a series that the Commission will publish periodically).
NZ Manufacturer September 2013
Believe you can and you’re halfway there. – Theodore Roosevel
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ADVANCED MANUFACTURING
Tom Tom’s latest
f like me, you were one of those who reckoned that your smartphone could do the navigation from now on, ‘free’ – so no need for a dedicated GPS system in the car – this is the moment to take a close look at Tom Tom’s latest device. The global leader also ‘got smart’, I believe, appreciated that the market had changed and people did not like paying for updated maps every year, and have made Tom Tom Traffic subscription-free for owners of the new device. The Kodak moment has clearly passed. Instead they are focussing on continuing to cover, what they claim is nine times more roads in New Zealand than competitor traffic services. That’s to eliminate the likelihood it will not take you out of one traffic jam just to drop you into another. You immediately feel that the driver’s real needs – rather than what the technology available will deliver – is the basis for the newbie. For example, as you approach the tail of a jam on their route, the route bar on the right-hand side will zoom in on that incident; tell you exactly when you’ll hit the jam; give you an estimation of the jam’s length and even warn you, in case you’re moving at a faster speed than the cars in the jam. This zoomed-in ‘Jam Ahead’ warning appears about 30 seconds before you reach the incident and is an absolute winner, and I believe I’m right in saying, unique to the new device. After a couple of days of using the spanking new interactive map-which responds and scales to touch (you need only your fingertips, to zoom in and out to find and explore places on the map and tap to get an instant route to a destination) -- on a decent-sized (6”) high-resolution, capacitive touch-screen, with 3-D rendering and maps-for-life, as well as the most effective live traffic updates on the screen. The big click-in-click-out screen, sits firmly in the bracket, but it comes away easily and slips in your pocket as you walk from the carpark. There’s great definition (thanks to zillions of pixels), instantly reminding you how much eye and neck strain you’ve incurred with your notso-smart-phone (when it comes to traffic), sitting smugly in its dashboard cradle, as you missed yet another turnoff. Two taps and you are navigating, with the Live Traffic update displayed (provided you’ve set up your mobile connectivity) and ready to offer you alternative routes – for me, the best reason to have a dedicated GPS device – whether
that’s to avoid traffic jams in the city or another plus that I’m using more frequently; avoiding areas out in the country with potential for landslips/ flooding in very wet weather. The high-definition screen enables you to see clearly, at a glance, the distinction between primary, secondary and tertiary roads. The company claims to cover 99.9-percent of all roads allowing you to have precise traffic information wherever you go. You have to assume it is a term borrowed from the near 200-year-old Johnson Matthey, the original reputable gold refiners who stopped short of claiming its gold was 100-percent pure. TomTom reckons to give you the fastest route through traffic because it has the traffic conditions on all roads, while most competitors focus only on the main ones. By offering the real-time TomTom Traffic for the life of the device (ensuring a minimum of four map updates per year) on all its new TomTom GO models for the first time, they’ve effectively put the map at the heart of the navigation experience and built the device and its functions around it, rather than the usual tuther way round. You can connect to TomTom Traffic via a suitable smartphone, via Bluetooth on your existing data plan. To give you a ballpark cost; if you drive for an hour a day during peak-time traffic, you will use approximately 7MB data per month (downloading or streaming 2 music tracks a month is about 5MB). If you have iPhones (iOS v6.0 and above) and Android devices (Android v4.0 and above) you’ll be good. The map works intuitively by providing core interactive screen features such as pinch-to-zoom, tap to select waypoints and drag to reposition. It is designed to always give relevant information, even when not navigating, although I’d only use some of the commercial points-of-interest in an emergency. All your saved favourite locations are on display too, giving you the option to quickly navigate to them, rather than endlessly re-entering them during your daily drive.
Every icon or point on the map is interactive. Tapping a traffic incident, your route or a random point on the map will open a popup box with additional information – such as the length of the traffic incident, more details on the address you selected or additional options for your route. This makes many operations possible, without ever having to scroll through menus. Some examples include adding a waypoint on your route or changing your destination. The new TomTom GO 3-D maps are designed not just for visual appeal, but to assist orientation in cities and enhance the driving experience. Many 3-D map products in the market try to replicate reality by adding photorealistic 3-D building facades and even trees and bushes. The company took an alternate route, based on the view that elaborate 3-D images do not simplify navigation for drivers and might actually end up distracting
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By Kevin Kevany them in the limited time they have to look at the screen. Significantly, their simpler choice not only succeeds in making complex urban environments more familiar and understandable, but also makes the smaller, sometimes hidden side-streets easier to find. They have also moved the buildings slightly away from the road graphically. This makes the roads on Tom Tom maps appear wider and enables drivers to distinguish the road network better in-between the buildings, even in complicated and cluttered environments.
Taking measurements in rugged environments
he NI cDAQ-9188XT, an 8-slot NI CompactDAQ Ethernet chassis, is designed for distributed or remote measurements in extreme environments. The cDAQ9188XT can withstand temperatures from -40 to 70 ¬∞C, 50 g of shock and 5 g of vibration. Engineers in the automotive, military and aerospace industries have used it to successfully acquire data and avoid costly repeat tests. “We are using the cDAQ-9188XT to track pressure, vibration, velocity and more in our jet - powered vehicle as we try to break the world land speed record,” said Steve Wallace, data acquisition scientist for the North American Eagle Project. “So far it has survived everything we’ve thrown at it and given us great results.” In addition, the chassis is the first in the NI CompactDAQ platform to offer an onboard watchdog with defined safe states to help protect your tests and equipment. The platform includes 10 chassis options, three buses and over 50 C Series modules with a wide range of connectivity and I/O. The platform also has native integration with NI LabVIEW system design software, which provides signal processing libraries
and user interface controls designed for data visualisation. From single-signal benchtop measurements made in laboratories to distributed, rugged or standalone measurements made in some of the most extreme conditions on earth, it is amazing how applications have evolved over the past 25 years. Another example of NI’s continual investment in the NI CompactDAQ platform is the support for the LabVIEW Electrical Power Suite. With this toolkit, NI CompactDAQ users can integrate power analysis functions such as energy, frequency, voltage unbalance and event detection into their monitoring systems. www.nzmanufacturer.co.nz
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NZ Manufacturer September 2013
OPINION America’s Cup a massive opportunity for NZ’s marine industry
We become what we think about. – Earl Nightingale
From page 1
As you would have seen from recent stories, our America’s Cup business leveraging programme has allowed us to showcase the breadth and depth of New Zealand’s marine technology, including: • In the workboat sector, customers such as HamiltonJet, Naiad, Marops and Vesper demonstrated solutions to senior officials of US port authority and emergency services agencies. • Our capability to manufacture
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advanced composite structures was not only clearly demonstrated on the water, but informed the key messages of a day-long technical seminar to an audience of US manufacturers from aerospace, aeronautical, energy and infrastructural companies. • A full day programme of reinforcing New Zealand’s capabilities in superyacht manufacturing was delivered by a group of New Zealand’s leading manufacturers and suppliers.
These activities link into some of the major objectives of our marine programme focusing on the North American public sector marine market, to establish new markets for new applications of our advanced composites, and to capture a share of the premium superyacht market from new buyers in the US and in emerging markets. Positioning New Zealand as the premium marine brand in Asia is also a goal, and we will build a multi-year programme that may well converge on the next Cup regatta, and will also take into account the 2014/15 Volvo roundthe-world race. New Zealand’s involvement in the 34th America’s Cup has
The 34th America’s Cup has already delivered an estimated $350 million
Graeme Solloway
already delivered an estimated $350 million for the New Zealand economy through the building of ETNZ, Oracle and Luna Rossa boats (except their hulls) and the spend of syndicates, employing 500 additional high-tech, manufacturing jobs in New Zealand. The Auld Mug creates many different opportunities and NZTE will continue to partner with our marine industry in realising our shared ambitions for an iconic industry.
NZ Manufacturer September 2013
REAR VIEW
When everything seems to be going against you, remember that the airplane takes off against the wind, not with it. – Henry Ford
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Exports at 40% of GDP a realistic target?
f New Zealand’s exports are to increase as a share of gross domestic product what should be the policy targets? Should we relax and point to the successful and hope for more of the same, or would seeking to address the matters confronting those struggling around the threshold of failure have a greater macro impact? The New Zealand Centre for Small and Medium Enterprise Research has recently released a report “Understanding Internationalisation Behaviour”, which shows the importance of networks and returns to exporters, and looks at some of the challenges and reasons for exit from export markets. The report shows just how much the exchange rate can influence export success over time once a business has found a way to sell in export markets. Of the top four reasons for exporters abandoning export markets, two mention exchange rate explicitly while the other two depend directly on the exchange rate. For exporters, appreciation of our currency has a direct effect on margins. Many firms cannot simply raise their prices in response, indeed if they are not priced at the level of the market they are failing at a basic level. For most elaborate products price positions are determined by market competition and cross rates determine what comes back to New Zealand; these problems cannot be hedged or wished away. The hit on margins can be even more disastrous for an already struggling export firm, by way of example, one firm we have met must sell today twice the unit volume to return the same
Most frequently reported reasons for disengagement from overseas markets
(Source: Statistics New Zealand BOS 2011 Tables, Table 54/ Understanding Internationalisation Behaviour)
revenue in New Zealand as was the case a decade ago. It should not be forgotten that the exchange rate also hurt our import competing manufacturers; cheaper imports creating competitive disadvantage in the domestic economy. Our policy framework must understand these factors and aim to bolster firms that are close to the threshold of failure and support future growth in offshore markets rather than stand back and witness retrenchment. Policies which support marginal firms will do the same for all other firms to a greater or lesser degree. Exporting is the foundation for our economic success, but due to the numbers involved the domestic sector gets the policy focus when and exporters miss out when it comes to hard priority decisions.
Witness the screams over loan to value debt expansion controls when the other option might have been higher interest rates that would have a currency impact. Macroprudential intervention by the Reserve Bank can target debt expansion without currency implications; the domestic economy feels the pinch but exporters are supported. It is worth recalling we all depend, one way or another, on the performance of our relatively small export sector; the loss of a single market or export firm should be significant to us all. In 2012, only 1133 firms made up 95% of New Zealand’s exports, and just 77 companies contributed 67% of exports. This means that 0.77% of firms which have one or more employees, make up 95% of New Zealand’s exports. Such a small number of firms, though vital to our
NZ MANUFACTURER • October 2013 Issue • Features Opinion Manufacturing Profiles Letters to the Editor Politics of Manufacturing Trade Fair World Diary of Events World Market Report Q/A Export News Machine Tools Business Opportunities Commentary As I See It Business News Appointments Around New Zealand Australian Report New to the Market Lean Manufacturing Equipment for Sale Recruitment Environmental Technology Manufacturing Processes
John Walley
New Zealand Manufacturers and Exporters Association Chief Executive
economy, seem to have the policy attention warranted by their number not the importance. We need export policy that deals with all these issues and challenges to support and bolster success on the world stage. When the marginal operators can succeed, so will the stars. The greater the success, the lower the risks that fall on exporters and the more export activity will eventuate, and maybe 40% of GDP is possible. One thing is sure, just pointing to the stars and claiming all is well will not make it happen.
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The Future of Manufacturing Workshop Tools National Maintenance Conference & Exhibition – Preview Marine Industry Automation & Control Advertising Booking Deadline – 24th October 2013 Advertising Copy Deadline – 24th October 2013 Editorial Copy Deadline – 24th October 2013 Advertising – For bookings and further information contact: Doug Green, P O Box 1109, Hastings 4156, Hawke’s Bay Email: words@xtra.co.nz Tel: +64 6 870 9029
Editorial material to be sent to : Doug Green, P O Box 1109, Hastings 4156, Hawke’s Bay Email: words@xtra.co.nz Tel: 06 870 9029 Fax: 06 878 8150
At NZ MANUFACTURER our aim is to keep our readers up to date with the latest industry news and manufacturing advances in a tasty paper morsel, ensuring they do not get left behind in the highly competitive and rapidly evolving manufacturing world.
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NZ Manufacturer September 2013
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