Bay of Plenty Business News | February 2021

New labs for Zespri harvest test

Two Te Puke-based laboratories are among the six labs chosen to recommence Zespri’s valuable taste profile testing on this season’s crop.

By RICHARD RENNIE

Pand Verified Laboratory Services will be the Bay of Plenty providers for the taste sampling process that had to be ditched by the industry last year when the previous analytical lab Eurofins Bay of Plenty dropped the testing process.

Eurofins said the MPI protocols laid out under Covid operating conditions were too difficult to comply with over the harvest season.

Alastair Hulbert, Zespri’s chief global supply officer, said the industry underwent an intensive three-month process seeking expressions of

interest in the extensive testing process.

“Independence had to be weighted against experience and the start-up or scale-up ability of the providers,” he said.

“The selected service providers include a combination of independent and post-harvest owned companies.”

Three season commitment

Hulbert confirmed the lab services would be providing the sampling test for the following three seasons.

The taste component based on dry matter analysis has become an increasingly valu-

able incentive component of fruit payment.

In 2019 the taste payment made up about 40 percent of total fruit and service pay-

and Linnaeus

In response to the unexpected loss amid the Covid crisis that broke on the eve of

This will allow us to continue to produce great tasting fruit and support an even flow of fruit through the pack house.” –Alistair Hulbert

ments on class one fruit.

The other labs include AgFirst in Hawke’s Bay and Nelson, Hill Laboratories in

harvest last year, the industry was compelled to remove taste payments across all varieties.

Payments for last year’s

harvest were uniformly redistributed back to growers.

Early harvest kiwifruit growers are often the biggest beneficiaries of the taste profile payment through the KiwiStart programme, which has a large component of taste payment, compensating for early harvest’s impact on taste profile.

Zespri intends to carry out an education programme to familiarise the industry with the new system, which includes a new maturity software system.

With the newly commercialised Red kiwifruit now on the market, Zespri is also continuing to explore potential taste incentive arrangements as

volumes

In

planting.

Hulbert says there has been an adjustment to align grower behaviour with consumer preferences following a wide review of Zespri’s sampling and testing process for harvested fruit.

“This will allow us to continue to produce great tasting fruit and support an even flow of fruit through the pack house.

“More broadly, ongoing consumer sensory research in our key markets will better inform any future changes that may be considered for the taste programme.”

Hamilton

in Gisborne.

the

of the crop build.

2020, 150ha of the new Red fruit was licenced for

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From the editor

As I have remarked often in recent months, these are very strange times, especially in politics.

Summer holiday makers may be leaving the beaches across the Bay but behind the scenes big development continues, for example the Luxridge project we have featured on our cover this month, as well as a swathe of other construction projects throughout the region.

This positive local impetus is in sharp contrast to the political quagmire in which our friends in the US now find themselves.

We now have large sections of the Republican Party still attempting to claim it won an election it clearly lost. Currently, we have the Republicans in the main attempting the difficult task of defending Donald Trump.

For some reason the idea that Trump cannot be tried for offences committed when no longer in office seems to have been adopted by a large part of the Republican Party, even though it is, of course, nonsense.

My personal view is that Trump’s coming years without the levers of presidential power will see him eventually cease to be relevant, but who can tell what will happen next.

Meanwhile, the bizarre spectacle of GameStop (GME) has attracted widespread attention in the US markets.

Those who follow US stocks will have noted that GameStop – essentially what

CNN described as a “left for dead” bricks and mortar game retailer – suddenly shot up an astonishing 135 percent-plus and as of going to print remained volatile.

Why? Because traders coordinating on Reddit essentially realised their power. When they saw that traditional short sellers betting that GameStop would crash could in fact be outmaneuvered, they

are no longer all powerful.

No-fee trading platforms like Robinhood are now affecting the market. As CNN remarks, the damage has already been done to the short sellers in the midst of the melee.

For example in a Youtube video posted by large short seller Citron Research’s Andrew Left, he confessed to having covered most of his

When [Reddit traders] saw that traditional short sellers betting that GameStop would crash could in fact be outmaneuvered, they proceeded to do exactly that and showed the traditional short sellers they were no longer all powerful.”

proceeded to do exactly that and showed the traditional short sellers they were no longer all powerful.

The reason is simple: these days they all have at their hands equally powerful tools. When this article goes to print, it is equally likely that GameStop will have again plummeted down in value. Watch this space.

However, what the “amateur” traders have shown is that the short sellers who previously dominated the market

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GameStop short sales at a loss of 100%.

Strange times indeed and to be watched closely, wherever you are sitting.

I have my own modest confession to make. Sadly, I didn’t spend my Christmas break as planned taking it easy, but rather found myself in Tauranga Hospital while staff laboured to adjust my blood pressure medication.

Two points can be made about this. First, my utmost appreciation for the speed at

which Emergency Services showed up at my car – less than 10 mins after my call – and whisked me off to hospital. The two staffers were highly efficient.

And once consigned to bed for a week or so, hospital staff continued to prod and probe me until they were satisfied I could be released. I consider myself to be very lucky to have finished up in such good and caring hands.

And it was certainly a wakeup call for those of us who felt that their modest exercise and diet programme was enough. It wasn’t and I urge you all to actually listen to your GP.

Secondly – and most amazingly for those of us who spend a lot of time watching news from abroad – it was amazing to be resident in a hospital that did not seem to have heard of Covid-19 and its complications. Or at least not to any extent I was made aware of.

Although many of our readers may not be fans of the current prime minister, trying to hold the infected hordes at the border clearly has a lot to recommend it.

David Porter

Equity markets rally to year-end highs

Investment market update (for the quarter ended 31 Dec, 2020)

Global equity markets rallied to end the year strongly as confidence in a vaccine-led recovery in 2021 grew. Adding to the positive sentiment was the agreement to additional financial stimulus by US lawmakers, the promise of additional monetary and fiscal support from central banks and policymakers globally, stronger than expected manufacturing data in the US, Europe, and Asia, and a relatively successful split by the UK from the European Union (EU), which took effect from the end of the year (Brexit).

Central banks continue to provide the heavy lifting in monetary support and with the third wave of the pandemic surging through the northern hemisphere, the European Central Bank (ECB) and the US Federal Reserve (Fed) both indicated an increase in the level of liquidity they would inject into the markets going forward, as the effects of the pandemic linger.

The impact of central bank policies has been to keep interest rates down, even as economies start to recover.

Investment grade and corporate borrowing costs remain historically low and many companies have taken advantage of the cheap funding costs to issue bonds and reduce their overall funding costs, which of course is positive for profit margins and therefore earnings.

New Zealand’s recovery swifter than others

The New Zealand equity market finished the year on a high with a return of +11.4 percent for the quarter and +13.9 percent for the year. The big sector performers during the year were the large-cap Utilities (benefiting as central banks slashed interest rates) and Health Care.

During December New Zealand’s GDP for the previous quarter of the year was released, which came in at +14.0 percent, the largest quarterly rise in growth on record, confirming the strong recovery of the domestic economy from the Covid-19 lockdowns.

New Zealand’s annual GDP growth by the end of September also expanded into positive territory, significantly outper-

forming all other developed economies including Australia and the US.

This stronger relative economic performance was also reflected in business confidence, with the ANZ business survey indicating a very positive outlook for profit expansion and investment intentions in the year ahead.

The strong relative economic performance was also reflected in the NZD, which continued its appreciation against the USD during the quarter. New Zealand commodity prices remain firm, with the important milk powder price trading at 12-month highs as global (Asian) demand for the food and goods we produce remains high.

This continues to be reflected in our higher terms of trade, or the net amount the country earns from our exports less what we pay for our imports. Higher terms of trade are a positive for our national income, and another factor boosting domestic confidence and the outlook for our economy.

Good backdrop for asset prices despite shortterm risks

We believe the backdrop remains a positive one for investing in risk assets such as shares and property. Real interest rates (after inflation) are generally negative. Central banks’ commitment to ultralow interest rates is forcing investors to look for alternatives outside of traditional safe havens such as term deposits and bonds.

The lack of any significant inflation means this position does not look likely to be

reconsidered any time soon.

Global economic activity has exhibited a V-shaped recovery in areas such as housing sales, construction, retail sales, and manufacturing. Many companies in New Zealand and offshore are experiencing better-than-expected outcomes, which is translating through to better employment demand. Investors should be confident that, in general, the trough in company earnings is behind us.

The recovery could face a setback over the next few months as the latest wave of lockdowns sweep through the Northern Hemisphere. However, the recent success around vaccines means markets are largely looking “over the hill” to a world where medical solutions are being rolled-out.

The year ahead

Many will be glad to see the end of 2020. Despite the virus still rampaging around much of the world, optimism about the development and distribution of several vaccines is paving the way for a recovery in economic activity in the year ahead. We remain positive for a number of reasons, but we also expect the recovery to be uneven with volatility likely to continue. In the year ahead we expect the following thematics will be important:

• Monetary and fiscal support to continue, which will underpin economic activity, rising employment, asset prices, and healthy consumer confidence.

• Vaccines to eventually dominate the virus, which will allow economies to re-open and some sectors, currently in survival mode,

WHAT TO DO WITH YOUR MONEY

> BY BRETT BELL-BOOTH

Investment Adviser with Forsyth Barr Limited in Tauranga, and an Authorised Financial Adviser. Phone (07) 577 5725 or email brett.bell-booth@forsythbarr.co.nz.

to re-start normal activities.

• Mergers and acquisitions will remain an active part of the equity market as very low funding costs and the attractiveness of certain assets listed in New Zealand continue to attract global capital.

• Climate change and the impact on the environment is now one of the dominant investment themes globally. Almost all major governments have signed up to some emission reduction targets and investment philosophies and mandates are rapidly changing to reflect this important trend. Geopolitics will become a more important consideration in investment strategy

with particular interest in the Asia-Pacific zone. China’s assertiveness and New Zealand reliance on trade with the world’s second largest economy will pose risks and challenges that will need to be navigated carefully.

Given the recovery in equity market values since March, we note that:

(1) markets are able to remain resilient in the face of bad news, (2) share prices reflect the long-term earnings companies will generate over the years and decades ahead, not just the next six to 12 months, and (3) it’s not possible to consistently time or predict shortterm movements in markets.

Overall, it’s important to establish and remain committed to an investment plan which meets your long-term goals. Hopefully you have enjoyed a peaceful and happy holiday season. As the holidays come to an end the New Year offers an opportunity to reflect on your financial goals.

This column is general in nature and is not personalised investment advice. This column has been prepared in good faith based on information obtained from sources believed to be reliable and accurate. Disclosure Statements for Forsyth Barr Authorised Financial Advisers are available on request and free of charge.

LUXRIDGE APARTMENTS TAURANGA APARTMENT

LIVING ASPIRES TO NEW HEIGHTS

A ground-breaking new development project unveiled in central Tauranga will set an unprecedented standard for luxury apartment living in the region.

By DAVID PORTER AND ALAN NEBEN

The Luxridge Apartments project on Selwyn Street will encompass 23 luxury apartments offering two bedroom apartments ranging in size from 88m2 to 146m2 and three bedroom apartments ranging from 160m2 to 209m2. Prices start at $946,000.

The project is being managed by the directors of Tauranga’s renowned Gartshore Group. Selwyn Street Luxury Apartments Ltd (SSLA) is developing the project. A factor setting Gartshore apart from competitors is its history: for more than 65 years Gartshore has consistently reinvested back into its operations, ensuring the company is robustly well-placed to meet the needs of the modern construction environment.

Gartshore’s managing director Rob Gartshore notes that while most developers try to squeeze as many apartments as possible into a build to maximise profits, SSLA have adopted

a unique alternative approach aimed at not only meeting, but exceeding investors and residents lifestyle expectations.

“Through extensive market research we have elected to have fewer apartments of greater size, comfort and luxury to meet the demand of a market not previously seen in the Tauranga region,” he said.

Changing demographics of Tauranga

“This reflects a change in demographics of the region in recent years with an influx of corporates and fast growth of local business, coupled with the return of expat families.”

Gartshore Group has itself been at the epicentre of massive commercial property growth in Tauriko while just ‘down the road’ Port of Tauranga continues to boom. This clearly pointed to concurrent growth in demand for premium luxury apartment living in the right location.

“Luxridge has that in spades,” he said. “We knew we had the right location. For developers there is always potential risk in property transactions, but any fears we may have had were quickly allayed when, less than 48hrs after we acquired Selwyn Street, we had an unsolicited offer on the table from another developer”.

“Most developers would have taken this and moved on”, said Gartshore. “But this only bolstered our confidence – we knew we were onto something special.

After careful consideration they declined the offer.

Spectacular views

On further reflection the developers remained resolutely convinced; the location was right, the views spectacular and there was easy access to excellent local amenities on the doorstep, and as if any further reassurance was needed, resource consents were largely in place.

They were then faced with the challenge of determining the best use for the site in terms of number, size, look and feel of the apartments.

“After vigorous market analysis, feasibility studies and ever-evolving concepts, our due diligence pointed us towards a small number of large luxury apartments, with sprawling decks to soak up the ever-changing views.”

It is not lost on Gartshore that the city is a core part of the “Golden Triangle” (Hamilton, Auckland, Tauranga). The developers knew this type of development was precisely what the region needed in terms of space, luxury and exclusivity, with the Tauranga CBD going through a redevelopment phase and the recent completion of the University of Waikato campus in Tauranga adding impetus. Gartshore’s views on the development are pragmatic, “Whilst not all developers target the higher end of the market, the region needs this type of development. It is not feasible or

Continued on page 9

DELIVERING A LUXURY PRODUCT

SSLA directors Kelly Cotter and Rob Gartshore, along with the other executive team members, are constantly reinforcing the focus that the development must deliver a luxury product.

“We will deliver luxury as in the size of the apartments, the size of the balconies and the size of the master bedrooms,” said Cotter, who also has many years’ experience as a solicitor.

Luxridge considered the health and well-being of the end users, and will provide residents a fully-equipped fitness centre – not one tucked away in the back corner of the building but one overlooking the harbour with plenty of natural light, views and a deck space. Apartments will also feature high quality Bosch, Miele, or Fisher and Paykel appliances, not just the basic lines from those manufacturers.

“An important aspect of luxury living is being in the right location.

“Luxridge Apartments’ prime location on Selwyn Street provides apartment owners with fabulous harbour and city views along with close proximity to the Tauranga CBD,” said Cotter.

“The city’s best attractions are so accessible, they may as well be an extension of your living room,” he quips.

He points to the proximity of Luxridge to the city’s most popular locations, including Wharf Street’s Dining District, The Strand, the Tauranga City Library, Baycourt Performing Arts Centre and the Tauranga Art Gallery which are all less than 600 metres from the Luxridge doorstep. “We believe that great homes and apartments start with great designs,” he said.

“SSLA briefed the architects with one

particular focus: make the apartments luxurious!

“We discussed the definition of luxury, because we found that some products are marketed as luxurious, but in reality they simply do not ‘stack up’ when a purchaser ‘moves in’ or ‘drives off the lot’. The architects understand our vision and our determination to guarantee all apartments look and feel luxurious … because they are.”

“Whilst called “Luxridge” the developers don’t want luxury to be in name only, but we want the apartments to look and feel luxurious because they are. We are using actual Italian tiles, real timber floors and even the kitchens are lacquered rather than man made substitutes. This is a project where they are wanting to put a stamp on inner city living and I think they will certainly achieve that.”

– Sally Lines, Creative Director, Urban Lounge Interiors

SUCCESSFUL SOLUTIONS

Graham Price, principal of First Principles Architects has worked symbiotically on the project with the other designers.

“We create a successful solution even before we get into finishes and fittings,” said Price.

“In terms of being a cost-effective development we also try to layer an apartment and structure them vertically.

“If you’re doing the first three or four floors, the basic layout may be very similar on each level, but on any one floor there will be four or five different apartment layouts,” he said, adding that the two service lifts include access to extensive storage sections in the basement.

“We wanted to enter the market at a different end with more generous apartments – less of them – but at a very highend. There are a lot of other apartment projects that are mid-end, but this is a point of difference at a higher end.”

Price noted that Tauranga was running out of green space to keep growing outwards, so the new development is an obvious solution.

“It’s not just about an architectural response,” he said. “The construction is very robust and externally bulletproof.”

The concept for design was to find a point of difference in terms of design feeling, space and height.

“We really want you to feel you are arriving at a five-star hotel.”

sustainable for Tauranga to continue with the rapid urban sprawl it has seen in recent years. We need to learn from other cities and have the opportunity to get it right here in Tauranga. We cannot simply keep pushing infrastructure (power, water, waste water, etc) further and further out in Papamoa, Omokoroa, Bethlehem, etc. We have the infrastructure here in the CBD and its time we had a real focus on delivering quality high density living to the market.”

The ultimate challenge for developers is to get everything right. According to Gartshore, the developers believe on this occasion Luxridge has ‘got it right’.

“The mild Tauranga climate and outdoors-driven lifestyle lends itself to open span large decks that maximise indoor-outdoor flow”, said Gartshore.

“They are big enough that residents will be able to watch the sunrise in the morning and set in the evening across several different settings on the one deck,” he said.

Gartshore also noted that the developers have opted for a somewhat non-traditional method of procurement. Normally a developer contracts a margin-driven builder.

“As those margins increase developers often make design changes that so often cheapen the overall look and feel of developments,” said Gartshore.

To develop and to build

How do they counter that and reduce the inflated margins? The answer in this instance: The developer is the builder; The result: the margin between the builder and the develop-

ers is eliminated. While the civil, structural and exterior works will be sub-contracted to specialist suitably experienced contractors, Gartshore has full overall control and will most certainly come into its own on the interiors – its trump card.

Rob Gartshore points out that the superbly thought-through design details make the difference – for example every bedroom comes with its own ensuite and additional guest powder room comes standard in each apartment. All wardrobes are custom designed and built to owners’ requirements and kitchen and bathroom specifications are exceptional.

“There is still some scope for the penthouses to be reconfigured, depending on owners’ specific requirements,” he points out.

“The experience of the global Covid pandemic also showed we needed to consider the demands of the residents to work effectively from home.”

The developers have catered for this quite uniquely - some apartments incorporate home offices while level B1 also incorporates separate office spaces that overlook the harbour. The level also incorporates craft room and yoga studio facilities, and a fitness centre all available to the residents.

“At Luxridge, this development commands the best and that’s what the developers are delivering.”

The Luxridge developers have recently completed the fitout of a 300-room five-star hotel in Auckland and an award-winning hotel redevelopment in Wellington – exacting standards of excellence are their forte.

“The team and their state-of-the-art joinery production facility in Tauriko are excited to create the luxury look and feel Luxridge will undeniably be renowned for.”

LYON O’NEALE ARNOLD BRING THEIR EXPERTISE

Lyon O’Neale Arnold are solicitors for the Luxridge development. Mike O’Neale is the firm’s director in charge of this project. Mike specialises in land development and has worked alongside many local developers, completing complex and often difficult subdivisions and unit title developments. The last few years have seen a huge amount of growth and change in the Bay of Plenty. Mike’s practice has moved with these changes and created a wealth of local knowledge to the benefit of the firm and its clients.

“Our firm has acted in the development and sale of many large apartment projects in the Tauranga area, including a number of Mount Maunganui’s premier apartments”, O’Neale points out.

“We have also completed developments netting thousands of residential sections. We are pleased to extend our expertise to this new project”.

Luxridge is a unit title development. Unit titles are attractive in combining individual ownership (each unit) with shared

common areas and facilities. The common areas outside of the apartments are managed by the body corporate for the mutual benefit of all owners. Areas such as the proposed Luxridge gym provide opportunities for recreation far exceeding what individual owners are likely to be able to manage and afford on individual sections or in smaller developments.

Unit titles have ensured that individual owners of apartments can share in the capital appreciation of developments similar to Luxridge. The day-to-day running of unit title complexes is placed in the hands of a competent manager reporting to a committee of owners. Any owner can stand for the body corporate committee, ensuring maximum input by the owners. That format generally works well for the owners as a whole, with committee members bringing a range of skills to the committee table.

“We look forward to working with the developer during the titling and sales for this landmark project”, Mike O’Neale says.

There’s a tsunami of generational wealth coming…

A perspective on quality lifestyles and exceptional living in the Bay

ILUXURY & LIFESTYLE

> BY CAMERON WINTER

Director of Oliver Road Estate Agents, a leading BOP-based high-end residential property specialist. Each month he shares his take on current luxury trends. He can be contacted on 021 800 889 cameron@oliverroad.co.nz

did wonder if it was an aberration, a short-lived, one-off, ultimately self-correcting, blip on the graph.

A graph entitled ‘What are you worth?’ A living graph whose diagonal property value, median value, wealth value, ‘anything’ value line has recently veered from a gentle slope to a slightly upward bending curve to a Rocket Lab inspired vertical take-off.

But why has the line (whichever one you choose to marvel at) become so steep?

Although many did initially think the ‘self-correcting’ bit would kick-in, just like the ebb and flow of the biggerthan-big, headline-obsessed property market commentators as they change out the week’s headline, replacing ‘steady’ with ‘booming’, then with ‘faltering’, then ‘plummeting’, then ‘resurgent’; I’m not so

sure now. This seems different. This is a whole new ballgame, or perhaps the same old ballgame but one in which some of the players have been given 3 shots of coffee and shoes with springs in them.

The headlines don’t seem to be changing. The tide goes in and out, but a tsumami … well that’s a whole different act of nature.

So what is happening?

From our vantage point at Oliver Road (admittedly we are working exclusively in the high-end of the market), we are seeing a perfect storm brewing – a storm with two fronts.

On the one front there are a lot more – and by a lot more I mean a six-fold increase – of enquiries and sales of $2m+ properties from returning expats fleeing overseas lockdowns and seeking a more

stable and relaxed country in which to raise their families. These buyers are often much younger than our previous $2M+ buyers and have come from high-earning overseas jobs – lawyers, accountants, pilots and “tech dudes”.

Illustrating the trend, Oliver Road sales in the last quarter 2019 consisted of three prop erties, all between $1.5M and $2M with only one of the buy ers under age 50; By compar ison, we saw 18 sales in the equivalent 2020 quarter, eight (44%) of which were in excess of $2M and of those above $2M, five of the buyers were under 50.

But cashed-up returnees only half the story – we also have to consider the other front

Tauranga’s oldest firm celebrates 125 years

In 1896 Henry Sharp opened his law practice. 15 years later he invited fellow lawyer, Archie Tudhope, to join him and 125 years later one of Tauranga’s most respected business and our oldest celebrates a milestone in the region as Sharp Tudhope celebrate 125 years in business this year.

Partner John Gordon says the 125 year celebration is as much about Sharp Tudhope as it is about our region.

“We have always been a firm that is deeply invested in this community, our city and region. We have deep connections with our community and have played a very active role in the economic development of our city.

“As we celebrate this year, we are acknowledging this place we passionately call home and our enduring commitment to our region’s future.”

Sharp Tudhope has always played an active role in the region, both in the business sector and also, importantly, across the community and social sectors.

They actively support a number of community organisations including Waipuna Hospice, Tauranga Arts Festival, Tauranga Art Gallery, the Graeme Dingle Foundation, Rescue, Revive, Rehome and Riding for the Disabled to name but a few.

As we celebrate this year, we are acknowledging this place we passionately call home and our enduring commitment to our region’s future.” – John Gordon

At the heart of our region are our people.

Talented people like Amelia Smith, our newest Associate.

For 125 years we’ve been upholding legal excellence and we couldn’t do it without the dedication and expertise of our team. Since 2016 Amelia Smith has been an integral part of our property and agribusiness teams and today we acknowledge her hard work, dedication and excellence.

We’re immensely proud to announce Amelia’s promotion to Associate.

We have generations of clients and families who trust us to deliver quality and excellence in everything we do and with Amelia’s sound advice we know our clients are in the very best of hands.

Benefit from the best advice on property law including subdivisions, commercial property development, residential property transactions, and leases. Talk to Amelia today on 07 928 2001 or amelias@st.co.nz.

Amelia Smith

“It’s about giving back and nurturing vital organisations in our community that provide pivotal and often life changing services and support. We take great pride in the role we play in supporting this,” says John. Sharp Tudhope’s focus on leading the way in their legal profession and their approach to doing business is particularly evidenced in their landmark offices on Devonport Road. When it was completed and opened in 2012 it was Tauranga’s first green star-rated building.

“When our founder Henry Sharp went into partnership with Archie Tudhope, they took an extremely practical and innovative approach and used bullocks to literally pull their two offices together on Spring Street!

“Our approach was just as innovative with our building that we now enjoy. Its environmentally sustainable design helps us look after the health and wellbeing of our staff, our clients and the environment. Now we look across each day from our office windows at the

$200M Farmers Development. It feels good to be part of a growing city and to see investment of this nature in our city centre.”

With a history spanning 125 years and generations of clients and families on their books, Sharp Tudhope has a strong commitment to the region and Tauranga’s future.

“We don’t compromise

on quality, we genuinely care about the outcomes we can achieve for our clients and we are very passionate about this region. It’s home. It’s where we are connected. After 125 years nothing has changed.

“We remain steadfastly and passionately committed to Tauranga and to contributing to our growth and development as a region.”

Tauranga VC Oriens partners with Hamilton’s IVS Group

By DAVID PORTER

Tauranga-headquartered Oriens Capital Private Equity Fund LP has agreed to an unconditional investment transaction into Hamilton-based IVS Group Holdings (IVS).

The transaction will eventually see the venture fund acquire 70 percent of Webb’s family interests.

Established in 2016, Oriens Capital has committed capital of $50.6 million in Fund 1 and this will be its final investment from Fund 1.

Oriens Capital targets investments in private businesses with enterprise values between $10 and $50 million, providing both expansion (growth) and succession (buyout) capital. Fund 1 has made six investments, into Rockit Global, Bluelab, Retirement Income Group, About Health, Rhino Manufacturing and IVS.

Level 4, 152 Devonport Road Tauranga 3110 07 928 2000 lawyers@st.co.nz www.sharptudhope.co.nz

Oriens will partner with IVS Group’s founder, Peter Webb, and his family interests. Webb will remain chief executive officer of the Group, which encompasses Independent Verification Services, IVS Labs and IVS Training.

Following completion, Oriens Capital will own a 70 percent shareholding with

“Oriens brings sector relevant relationships, plus capability and capital to support bolt on acquisitions. It is an exciting time for IVS and we look forward to growing the company considerably over the next few years.”

– Peter Webb

Webb interests retaining 30 percent. Oriens said that IVS is extremely well-positioned as an integral partner to New Zealand’s international trade sector. IVS demonstrated excellent resilience during 2020, a challenging year for all, and is well positioned for future growth.

Helping deliver on strategic growth

Webb said that the Oriens capital investment would help the company deliver on its strategic growth opportunities both domestically and internationally.

“Oriens brings sector relevant relationships, plus capability and capital to support bolt on acquisitions,” he said.

“It is an exciting time for

IVS and we look forward to growing the company considerably over the next few years.”

IVS Group (IVS) is a multifaceted Hamilton based business that supports and facilitates trade, focused on ensuring New Zealand industry continues to grow and prosper, whilst protecting the New Zealand environment for future generations. Encompassing biosecurity, certification, testing and training, IVS is fully embedded into the regulatory processes and supply chains of New Zealand’s trade sectors.

Oriens Capital chief executive James Beale said that IVS will be the last investment in Oriens’ first fund, and final preparations for the second fund are well underway.

Henry Sharp ArchieTudhope

John Gordon – SharpTudhope Partner

The original law practice Henry Sharp founded in 1896

Final Te Ahi Tupua chapter closes

Partners, funders and con-

tributors marked the successful completion of the striking Te Ahi Tupua at the end of January with a karakia at the sculpture, which is the centrepiece for upgrades to the intersection of State Highway 5 and 30, the roundabout at the southern entrance to Rotorua.

It was an opportunity for partners and contributors to come together to acknowledge and recognise those who had a hand in telling a significant Te Arawa story.

They spoke to the complex journey, the significance of the design and location, and the importance of storytelling to our people and place.

Te Puia CEO, Tim Cossar, said it was pleasing to see Te Ahi Tupua complete and in place to showcase the rich Māori heritage, identity, and values of Rotorua.

“Whilst it was a complicated project, with many ‘firstever’ initiatives, we are very proud of the concept, which speaks to a significant Te Arawa narrative and represents the arrival of geothermal to our district.

“The innovation in the way it was designed and constructed provides a perfect example of the talented people we have within our rohe.”

Designed by Te Puia │ NZMACI, the sculpture is seen as a unique way to tell the stories of the region, including the origins of the geothermal fea-

tures and the story of Te Arawa tohunga (high priest) Ngātoroi-rangi, who was responsible for the safe passage of his people to Aotearoa.

“The sculpture also provides another opportunity for NZMACI to fulfil its Government mandate, to perpetuate, preserve and promote Māori arts and crafts – but in a contemporary way, with the design derived from whakairo rākau (wood carving),” said Cossar.”

Kilwell Fibretube Chief Executive Craig Wilson said the creation of this significant piece of art for Rotorua is the result of collaboration across many organisations and with many individuals.

Partners were able to acknowledge the innovation and perseverance of local composite engineering firm Kilwell Fibretube. The family-owned business has operated in Rotorua for more than 50 years with its sports division operating for more than 80.

“We are immensely proud of our staff for the thousands of hours of work during the two year construction period and today was an opportunity to acknowledge that work and the work of the many others that contributed to Te Ahi Tupua. From the start this project aligned with our businesses principles of continuous learning and giving back to the community.

“We also want to acknowledge Stacy and the team from Te Puia │ NZMACI. They were willing to try a new medium and explore the possibilities of blending traditional practices with a different type

of modern technology. This brought with it challenges but our crew were able to meet those challenges with innovative solutions which is one of the most important parts of our business.”

Wilson told Bay of Plenty Business News there were a number of issues in becoming involved in the project.

‘Lakes Council at the time was having trouble raising funds and we were at the time

approaching a whole lot of stuff for an American firm and thought that printing would be a good option because of the curvature and the design of the sculpture,” said Wilson.

“It is line with our principles of trying new things and putting back into the community so it ticked a lot of boxes.”

Although Kilwell has been operational in Rotorua for many years, some 90 percent of what it produces goes offshore, so Wilson said it was also a good opportunity to demonstrate that “Kilwell doesn’t just make fishing rods”, he said.

“ We do make a few, but it’s only one or two percent of our business,” said Wilson.

“Now we produce everything from aerospace to airships, plus we’re doing a lot for the America’s Cup,” he said.

The journey began in 2015 when Rotorua Lakes Council and Waka Kotahi NZ Transport Agency agreed to enter into a partnership to commission a large-scale artwork to become the roundabout centrepiece.

In the last month, the three remaining manaia, lighting and decorative base cover were installed. In late January, Dr Ken Kennedy and Rawiri Waru blessed the finished sculpture with a karakia to embed the mauri (life force) into Te Ahi Tupua after its journey from conception through to installation.

TeAhiTupua in place. Photo/Stephen Parker.

The hub of entertainment in the Bay of Plenty

Living up to their reputation as the Hub of Entertainment in the Bay of Plenty, Trustpower Baypark launches into 2021 with a packed calendar of upcoming events for everyone.

Speedway

Speedway season is on its final stretch – with some great nights of racing for adrenaline junkies in the next three months. These include 6 & 20 February, 6, 13 & 27 March and there will be a fireworks extravaganza to close the season on 3 April.

To enjoy watching the races in style there are a number of exclusive, spacious Corporate Boxes with balconies available to entertain up to 20 guests comfortably. Please contact events@bayvenues. co.nz or 07 577 8593 for more information.

Falcon Events presents…

Kanine (UK) and special guests, Lee Mvtthews on 5 February with support from Poris, Tricky, Justa Dueller & Peasoup at Trustpower Baypark.

Supported by some of the biggest and most influential names in Drum & Bass, the young Londoner known as Kanine is living up to his potential and developing into a headline act with a long career ahead of him.

Originally recognised as one of the leading names in the new wave of Jump Up producers that have helped force the sound into the mainstream, his sound is evolving all the time as he moves towards being one of the more versatile artists in the 175 BPM range. Tickets are available online

– you need to be quick before they sell out.

Charity ball for children

The children’s ward at Tauranga Hospital are hosting a charity ball on 13 February to raise money to buy a muchneeded sensory trolley costing around $9000.

Specialised for children with sensory issues, autism, developmental delays and mental health conditions, the equipment is essential in helping with recovery, pain distraction and general well-being whilst in hospital.

Come along for a jampacked evening filled with fantastic entertainment, live music and special performances. Included with your ticket are canapés, which will be served throughout the night, along with a cash bar. There will also be some excellent prizes in the auction and raffle, kindly donated by local businesses.

Seniors

and Travel Annual Expo

The Seniors and Travel Annual Expo is on again 27 & 28 February from 10am to 3pm. There will be caravans on show for tripping around, and lots more options to suit all tastes and budgets.

Colin explains “The purpose of the Expo is to provide seniors with first-hand opportunities to discuss products and services usually advertised in magazines and newspapers alone.”

The Expo is showcasing a vast range of services and products for seniors in one convenient location and it’s all for free! An event not to be missed, loads of information and entertainment, and tastings for all.

Constellation Cup comes to Baypark

The Silver Ferns will face the Australian Diamonds for the first time in over a year when the Constellation Cup comes to New Zealand in March, as part of the Cadbury Netball Series.

The Constellation Cup, which was postponed due to Covid-19 last year, has been confirmed to be played in New Zealand with Christchurch Arena hosting the first two matches on Tuesday 2 and Wednesday 3 March before the action heads to Trustpower Baypark Arena in Tauranga on Saturday 6 and Sunday 7 March.

It will be Australia’s first series in New Zealand under new coach Stacey Marinkovich and the side will undergo a two-week quarantine period to comply with the New Zealand Government’s Covid-19 requirements.

The Diamonds team will travel to Christchurch on Monday 15 February and prepare for the series during 14 days of managed isolation.

Netball NZ Chief Executive Jennie Wyllie said she was delighted to announce the series against their trans-Tasman neighbours after what had been a long wait.

“We’re really excited to confirm this series after the disappointments of postponing the Constellation Cup in 2020 due to Covid-19,” Wyllie said.

“We’d also like to acknowledge the Australian Diamonds for agreeing to come to New Zealand where they will go into the mandatory two-week quarantine leading into the series.

“To be able to host inter-

ality of our new world. With his trademark blend of satire and surrealism, stories and dismantled jokes, crowd sing-alongs, weird instruments and musical showstoppers, don’t miss this legendary comedian, musician and actor back on stage in New Zealand in 2021.

But wait, there’s more...

national netball in the current climate is something we do not take lightly so we’re excited to see our world champion Silver Ferns have the opportunity to take on one of their toughest opponents.”

Silver Ferns coach Dame

Noeline Taurua said she was looking forward to the challenge of playing the Diamonds.

Bill Bailey – En Route to Normal

Following a thumbs-up from immigration, Bill Bailey makes Aotearoa his first touring destination post Covid-19, announcing a 12-centre 2021 tour of New Zealand, landing in Tauranga on 25 March. How did we get here? How do we find our way through this? And exactly who are we again?

In Bill’s new show, En Route to Normal, Bill ponders these and other questions that this moment in history has thrown up and tries to see a way through the strange unre-

Some other exciting events that have been secured by Trustpower Baypark include: NZ National Bridge Inc who will bring their National Competition and Congress each year to Tauranga – the first in September 2021, Magic Netball ANZ Premiership – May 2021 (3 games), Olympic Weightlifting National Championships – November 2021 –just to name a few. Stay tuned for more information on these in the upcoming months.

Premier conference venue

Trustpower Baypark is Tauranga’s Premier Venue for conferences, meetings, entertainment and exhibitions. Offering a complete package in one convenient location that features state of the art meeting rooms, in-house catering, audio visual services, professional conference organiser (PCO) and marketing/promotional services.

Kanine. Photo/Supplied.

The Silver Ferns are playing theAustralian Diamonds in the Cadbury Netball Series for the Constellation Cup. Photo/Michael Bradley Photography.

Bill Bailey

Vehicle questions that frequently arise

I tend to spend a good deal of time talking about vehicles. Similar questions come up all the time – I want to get a new business vehicle, what is the best way to save tax? Should I buy with cash, get finance, or take a lease? How do I allow for private use? Does the type of vehicle make a difference to tax?

FBETTER BUSINESS BUYING

> BY TOM BESWICK

Director at Ingham Mora Chartered Accountants in Tauranga, is a business advisor who specialises in buying and selling businesses. He can be contacted on 027-5744- 019 or tom@inghammora.co.nz

or many small business, vehicles are one of the biggest assets they own, but there is still no need to whip out the calculator. I think something has gone wrong if I need a calculator in a meeting, as quickly the client will be left behind!

Now for starters, the best way to save on tax is not to make any money. Make a loss even. Great – no tax!

Of course, this is tongue in cheek – but some clients do focus on the wrong question and can forget that focusing on making the most money is the way to go.

Even if you talk yourself into that flash car so that you can save 28 percent or 33 percent (or 39!) in taxes – you are still at least 61c worse off for each dollar of interest you spent that you did not need to.

My first question back is

always – what vehicle do you need for your business? Try not to let finance, or lease, or a pending midlife crisis trick you into buying bigger or better than you need. This is a work vehicle – not a Sunday morning showpiece. Yes, spending more will save tax –but see above.

Should I buy with cash?

Occasionally. But often no for a business vehicle. I know businesses who will pay for a new vehicle with cash when the bank balance is healthy. But because they have not got a cashflow forecast, they have not realized that money is already needed for next month’s GST, etc. It is much easier to borrow for the car than for the GST. If you want to buy with cash, make sure it is not going to be needed later.

Should I lease or buy?

There are times that leasing is the way to go, but generally for your typical tradie or small business I recommend they look past the lease.

The interest rates are much the same as a vehicle loan. But the key difference is the lease vehicle is returned in roughly three years and you have to rinse and repeat the process.

Whereas a vehicle purchased through a loan can be run into the ground if you want, or at least you can have a couple of extra years where its paid off before you renew.

The type of vehicle can make a difference to tax. For example, tradie vans will save more tax than a typical SUV – as an SUV obviously is of more benefit for private use. Sign writing a vehicle can also help save tax.

What’s the best way to claim vehicle costs? There are

Tradie vans will save more tax than a typical SUV – as an SUV obviously is of more benefit for private use. Sign writing a vehicle can also help save tax.

multiple ways to claim vehicle expenses allowed by the IRD, but many of them are a real pain. Getting a client to complete

a logbook of all journeys or days the vehicle was available for private use for three months every three years is just about impossible.

Early valuation – the key to a succesful business sale

As the population ages, an increasing number of owners are starting to plan (or should be) for the day that they exit their business. Whether they sell to a third party, family member or work through a management buyout, one of the main pieces of information required is a valuation.

Business valuation is a mixture of science, logic and art. Unfortunately, some are embracing the art at the expense of logic and thereby causing many businesses to be incorrectly valued.

Owners understanding what their business is worth in the market is arguably the first important step in the planning process as it helps you start that process in the hope that you may realise your expectation of the business’s value.

We often see business owners who for a variety of reasons are forced into having to hurriedly sell and too many have an inflated view of what their business is worth.

This is mostly based on what they need to sell the business for and not on what the market is willing to pay.

When we tell them what that market value is and because of their current circumstances, they are then forced to have a major rethink about that exit plan and this can add to an already stressful personal situation.

At Tabak we know that getting a business into shape for a sale takes time and it’s unfortunate that only 20% of SME owners come to see us

early enough.

The key to a successful sale is preparing the business so as to maximise its sale value. Sounds simple enough but very few business owners do it. We emphasise the need to talk to us when you are first thinking of selling your business.

Our most successful sales are when the process goes smoothly and the maximum value is achieved.

Inevitably these are businesses that we have been working with for a significant period of time prior to going to market.

What is the value of my business?

A common misconception held by business owners is that their past performance will determine the business value and unfortunately this leads to unrealistic expectations.

There has been a lot of discussion around business values post Covid and its clear that Buyers and their professional advisors (accountants and banks) are focusing on the more recent business performance and profitability and will want to ensure that the current profits are

No one wants to track actual costs between what was private or business. So long as there is business use leave this to your accountant to sort out the private use adjustment. Generally, my advice with clients getting new vehicles is to keep it simple. Try not to buy something more then you need and do not spend cash that you may need later. Choose a loan over lease most of the time and soon you will have the vehicle paid off and be saving those payments until you renew.

maintainable in this continuing Covid business environment.

Establishing the Net Profit or Future Maintainable Earnings of your business with an element of “certainty” will be the key to establishing the market value of your business.

This is where the experience of the Tabak team can assist. We are used to applying rigor, structure and the appropriate steps and safeguards to ensure that value is

optimized – we virtually undertake a full due diligence process which is a great dress rehearsal for the real inquiry from buyers.

We stand by our valuations, telling it like it is and we will not advise business owners with an unrealistic price, hence why we sell businesses for (on average) no less than 5-10% of the price we value them at.

So if you are looking for confidential, tailored advice on how to prepare your

we

Technology resilience essential

Resilience; the capacity to recover quickly from difficulties; toughness.

ATECH TALK

> BY TONY SNOW

– but also require cyber resilience to be in force.

Tony Snow is chief executive and co-founder of Stratus Blue. He can be contacted at Tony@stratusblue.co.nz.

s we look back on 2020, it might be better to look forward to 2021. The invisible enemy we all face in Covid-19 is still here and offering challenges and opportunities across the globe in our business and personal lives.

From an IT perspective, we are also being constantly attacked by invisible forces.

With distributed workforces and new privacy laws, the requirements to focus and plan are becoming increasingly important for organisations at all levels, especially for executives and boards.

Proactive planning and support are always required in

a technology perspective and cyber resilience is no different.

We have frequently mentioned this element of technology, but increasing digital dependency is amplifying cyber-vulnerability.

Cyber Resilience equates to being prepared for an attack: keep the business operating and have the ability to respond and recover. It also means, if there is an attack or breach, knowing what to do, who to notify, and who is to take action.

The new privacy act is hot on notifying rules and your IT team should be well across this. The Institute of Directors

of New Zealand (IoD) has recognised that Cyber resilience is in the top five issues New Zealand organisations need to be across in 2021.

More IT leadership skills needed

Last year’s IoD Sentiment survey identified that 65 percent of Directors thought that their board did not have the right capabilities (skills and experiences) to lead their organisations into a digital future.

Big data, Internet of Things, data privacy, artificial intelligence machine learning, are creating great opportunities

ALTOGETHER

Regulatory authorities are making it clear that boards need to take more responsibility and oversight of cyber security and no longer can a director or trustee sweep it under the carpet, leave it to operations and take a she’ll be right attitude.

Organisations must have adequate cyber security measures in place, and this will more than likely have a flow on affect with insurance and other costs.

2020 saw some high-profile attacks from a variety of means and involved government agencies, NZX listed companies and even the NZX itself.

Attackers, hacktivists and ransom seekers, don’t really care about the country you are in or the size of the organisation – these invisible enemies attack a bunch of numbers, which can be targeted or random.

As mentioned in previous articles, your organisation is more than likely getting attacked right now and you need to make sure you have preventative measures and cyber resiliency in place.

Actions for 2021

• Understand your data –what data do you have, how is it used, where does it come from, go to and what is the infrastructure, policies, and process in place to protect it?

• Ensure enough digital capability in your team –operational and importantly at board level (including micros and small business) to stay on top of the risks, as well as the opportunities. Develop your team’s capability and / or seek expert, third party advice if needed.

• Put cyber security on your agendas – operations and governance. It is a risk for the whole organisation –

not just an IT issue.

• Focus on people – Make sure owners and staff know that cyber security and data privacy are priorities across the whole organisation – provide regular reminders and invest in training. Cert.govt.nz provides a good starting point for information.

• Test, measure and report – ensure comprehensive, accurate and timely reporting is received and test cyber resilience within the organisation on a regular basis.

Assess technology governance, business process and tools now.

With the new Privacy Act in place, senior management and ownership must have visibility and understand the cyber resilience framework. The new act introduces mandatory notification of breaches, so over the coming months we expect to see more reporting of these invisible attackers.

Zespri to re-visit China fruit trial

Bay of Plenty kiwifruit growers will have an opportunity to quiz Zespri closer in coming weeks about the marketer’s proposed Chinese SunGold kiwifruit trial that was recently rejected by Kiwifruit New Zealand (KNZ).

By RICHARD RENNIE

Zespri had proposed working with Chinese orchardists who are illegally growing the company’s licence protected SunGold variety, in the hope the quality and quantity of the fruit hitting the Chinese market could be better managed.

Zespri staff have estimated there is now over 4000ha of illegally grown SunGold fruit in China, a significant area that compares to the 4900ha being grown in Bay of Plenty.

In total over 6000ha of Sun Gold is now growing in New Zealand.

In a case of “if you can’t beat them join them”, Zespri has determined that getting more of the Chinese orchard ists on board and growing the fruit to Zespri quality stan dards offers a constructive and pragmatic approach to dealing with the growing problem.

Boosted prosecutorial powers

Zespri has already been granted boosted prosecutorial powers for dealing with coun terfeit fruit in China, sharing the status with global giants Nike and Disney, and enabling it greater reach in prosecution

cases.

Matt Crawford, Zespri’s China strategic manager says to date these powers have not been called on, although Zespri staff are frequently dealing with prosecutions for fake branded fruit.

“We felt this was the way that offers a pragmatic approach.”

He says subsistence orchards can make identifying illegal growers difficult.

More than low risk

quality, food safety and brand reputation.

But Zespri maintains the trial’s risk cannot be assessed separate from the risk the 4000ha of illegally grown fruit already poses.

“Looking through a commercial lens the risk of doing nothing is significant. The risk with the trial is minimal,” says Crawford.

He says it was highly likely the area planted in illegal SunGold was likely to grow over time.

Zespri has had expressions from interest from Chinese growers keen to participate in the trial that would involve about 50ha.

They would have been required to grow, manage and harvest fruit that would meet

Zespri’s standards. The trial would have been reviewed annually, and in year one would have produced 200,000 trays.

Part of the Zespri brand

Crawford says those growers appreciated the value of being part of the Zespri brand, with the ensuing quality and premiums that came with that.

Growing fruit in the Northern Hemisphere to help keep valuable shelf space full in New Zealand’s off season is not new for Zespri.

European growers and particularly Italian orchardists supply almost 20 million trays a year of fruit, with a partnership that extends over 20 years.

the

will be revisiting its risk

igation in the trial and re-applying to KNZ for approval to continue.

“We will also be going to growers to ask them to take a vote on it. There is a massive risk if we do nothing too,” she said.

She says growers have acknowledged their concern over the illegally grown fruit in China and had a real desire to understand what actions were open to stop it.

“We have already started that dialogue with growers.”

She anticipated there would be a grower vote taking place in June if the decision could be approved by KNZ.

Zespri sustainability officer

Carol Ward says

marketer

mit-

NEW APPOINTMENTS

BBN’S GUIDE TO NEW PEOPLE AND NEW ROLES ACROSS BUSINESS IN THE BAY

To feature in New Appointments email us at new.appointments@bopbusinessnews.co.nz

Some big moves kick-off 2021

With the uncertainty resulting from the Coivid-19 pandemic and the subsequent lockdowns, many of us wondered if businesses would ever ‘get up and going’ again. This February issue New Appointments section shows clearly that business here in the Bay is well and truly on the up again. Please contact us if your organisation has any exciting personnel changes you would like to share.

Cathy Hendry

Strategic Pay have the great pleasure of announcing the appointment of Cathy Hendry, currently Senior Consultant Tauranga, as incoming Managing Director. Cathy has over 15 years remuneration consulting experience and has been a Senior Consultant with Strategic Pay for 10 years. For the last 4 years Cathy has successfully set up and run Strategic Pay’s Tauranga office, resulting in significant growth in Tauranga and the Bay of Plenty Region. A recent focus of Cathy’s work has been pay equity where she has been working on and leading client assignments in this area.

Daniel Vernall

Daniel joined the CKL Tauranga team as a senior engineer after being referred to CKL by a friend in the industry. Tauranga was also a big attraction as Daniel and his wife Lucy were keen to move to be close to family. Daniel has slotted right into the CKL team, and he has wasted no time learning new systems and procedures whilst running straight into land development projects across the greater Bay of Plenty and Waikato regions, transforming engineering designs into infrastructure and buildings that will be a part of history and impact people’s lives.

Tracey Morse

Tracey recently joined CKL as a senior planner. Able to turn her hand to projects of any scale and relentlessly client focused, Tracey divides her time between the Hamilton, Te Awamutu, and Auckland offices according to project requirements. Tracey loves challenging and complex projects – “the curlier the better!”. This attitude has seen her apply her expertise to projects with consenting requirements that include contamination, ecological, archaeological, special character, and heritage elements. Tracey is outcome driven and is able to effectively navigate a pathway within the RMA to ensure the best solution for all parties.

Jordan Cranshaw, Josh Howard, Jeanette Mindham

There have been a few changes in the Enterprise Angels team as they prepare for another exciting year in the fastpaced startup industry. In recognition of their hard work and achievements, two internal promotions were made at the end of last year.

Jordan Cranshaw was an intern

with EA for 18 months and recently graduated from Waikato University with a BMS degree. He has been promoted to Investment Graduate. Josh Howard joined the team just over a year ago and has proven to be a great team member, quickly learning the ropes, he has now been promoted to

Investment Associate. Jeanette Mindham joined the team as Marketing Co-ordinator in January. Her skillset and network of contacts is a valuable addition to the team in their pursuit to support the growth of startups and strengthen the entrepreneurial ecosystem.

To guarantee credit or not

Without doubt, one of the most contentious and litigated issues in credit management these days is the practice of obtaining and providing personal guarantees.

We have just seen a large construction company personal guarantee case go through the courts with the guarantor found liable for more than NZ$1million.

Although the guarantor states that they will appeal this ruling, it highlights both the importance and danger of personal guarantees in the credit management arena.

For new companies (under two years old) applying for a credit account with a supplier and a personal guarantee being requested is typical and understandable.

If there is no long term data available to support the assertion that the account holder has the ability and intention to settle invoices as they fall due, if they are a subsidiary of a larger company with an established trading history then a corporate guarantee would be advisable also.

Getting a director of a large established company to agree to personally guarantee a trade account would be almost unknown outside of a major critical supplier situation.

One reason that a corporate guarantee is often advisable in supplying subsidiaries is the case of smaller subsidiaries that are either acquired or started by larger businesses when the consider the risk of having that business activity under the existing trading entity.

Too risky in an untested market

These can be seen as by the decision makers or stakeholders as being too risky due to risk of litigation or business failure in an untested market. They are also at risk if the smaller business was acquired for a “Strip and Liq” where the business is purchased as a going concern, but the inten-

tion is to acquire infrastructure and client base and then liquidate the entity.

As always doing the correct due diligence before accepting an application for credit based on accurate historical credit data and having a perfected security interest will mitigate the risk for the supplier somewhat.

If possible, a Personal Guarantee or Corporate Guarantee will give you two shots at goal if the trading entity is not economical to pursue in a liquidation or insolvency event.

Often my clients ask me for

The simple fact of the matter is that when a customer asks to have an account on credit, they are in essence having the supplier and its stakeholders guarantee the account.”

CREDIT CONTROL

> BY NICK KERR

Nick Kerr is Area Manager BOP for EC Credit Control NZ Ltd.

He is also a director of International Private Investigations Ltd.

Nick can be reached at nick.kerr@eccreditcontrol.co.nz

some replies when their customers say to them “why do I need a personal guarantee, don’t you trust me?”.

The answer to this is quite simple: “Why don’t you want to sign it, do you not trust us?”

The simple fact of the matter is that when a customer asks to have an account on credit, they are in essence having the supplier and its stakeholders guarantee the account.

Most businesses of size will have access to institutional lending and most of this has a personal guarantee. So if the client doesn’t pay the supplier, someone still needs to pay the

bank and they don’t often let you off just because someone didn’t pay you.

Watch everybody

A quick story from the other side: a few years ago we were asked by a mother to investigate her daughter as she had been asked to put her mortgage free house up as security so her daughter could get a debt consolidation loan to pay her $50,000 worth of debts.

After one month of investigations we discovered that the daughter had four credit active identities, over $300,000 of

uncollected debt and had allegedly been defrauding the government for years.

Had the mother not sought information and just gone with what she knew to be true, she would have lost her home.

The moral of this story is to acquire the only guarantee you have control over. And seek legal advice on how to mitigate the risk of doing so if you do commit to giving someone a second chance using your assets.

You could either be their savior or the victim of a poor decision. Only time will tell.

Just a thought.

Why these could be the Golden Years for franchisors

I have previously written on when is a good time to purchase a franchised business and asserted that post Covid lock-down, we could see a renewed interest in entrepreneurship through franchising in New Zealand. But what about the prospects for franchises themselves and also companies, concepts and business that are considering growth via a franchise model?

Iam going to go out on a limb and say 2021 and beyond could be the golden years for franchise development and growth.

My reasoning is based around two fundamentals and the factors influencing these: the first being the franchisee market and the second being the economic and social environment.

Without a question the single most referenced and actual challenge to growth in a franchise model is being able to recruit franchisees. Franchisees are the consumers or purchasers of the business model – without them there are literally no franchises.

Significant increases in franchising

We are not at all surprised that in late 2020 and into 2021 we are seeing significant increases in franchisee enquiry.

Over 2020 I outlined what I believed would influence this trend.

This included record high property prices and low inter-

est rates, regional migration, returning expatriate Kiwis and structural employment changes, either forced by redundancies or via personal choices and those seeking lifestyle changes.

The combined effects are filling a franchisee pool to levels that I have not seen in New Zealand in my 20 years of franchising.

Current or potential franchisors may have potential customers, but equally economic and social environment are also ripe for growth.

There is almost daily commentary on record low interest rates and high property prices. Rising property prices are great if you have or are selling property, and as discussed,

if you are borrowing against equity.

Lower interest costs present the opportunity for franchisors or would-be franchisors to have the ability to invest in business units, test innovation and development and/or pass the reduced costs through to franchises by altering traditional fee or cost models.

Rising property prices are also driving down returns from rentals and smart investors will inevitability start to look elsewhere.

Franchise business models that can demonstrate good returns will be desir able and effective investment vessels. This

There is a real and significant limitation on labour supp ly. With continued border restrictions adding to the pressure, there may just not be the labour supply for continued growth under a corporate model in many sectors.

FRANCHISING

> BY NATHAN BONNEY

Nathan Bonney is a director of Iridium Partners. He can be reached at nathan@iridium.net.nz or 0275-393-022

can assist with fueling growth, and every system needs to grow and get to a certain size to be viable.

Surprising rebound for economy

The New Zealand economy’s surprising rebound in late 2020 no doubt has pleased business. Many areas that we are seeing spending happen to have strong franchise brands or sectors. Whilst conditions for business growth may generally be promising, there is one last and significant reason why a franchise model may fair better versus a corporate model over 2021 and beyond. There is a real and significant limitation on labour supply. With continued border restrictions adding to the pressure, there may just not be the labour supply for continued growth under a corporate model in many sectors. Conversely, by the nature of the relationship, franchising re-allocates the responsibility of labour attraction and retention to the franchisee, and in many cases the franchisee provides the labour.

CONNECTING BUYERS AND SELLERS OF QUALITY BUSINESSES

When is the right time to sell your business? Right now.

At TABAK, we promise to guide you through the sales process with focus, integrity and complete confidentiality.

First on the scene

REALISTIC

TEAM

PRE-QUALIFIED BUYERS

Partners gather to celebrate the installation and blessing of the iconic Te Ahi Tupua sculpture in Rotorua.

Photos courtesy of Stephen Parker

2021 – workforce culture stocktake?

“In the rush to return to normal, use the time to consider which parts of normal are worth rushing back to.”

Last year, not long out of our Level 4 lockdown, one of my articles touched on the new working norms that have surfaced post Covid. Certainly businesses have had to adapt, pivot and change within an incredibly short period of time.

The way in which we work and do business has changed immensely and we probably won’t see a return to those old working styles.

Why? We have evolved –and we quite like it. From an HR point of view we now need to align the business strategically to ensure that our people and the culture that’s been built over many years adapts to accommodate these new norms – accommodating new working styles and continuing to building strength in people.

It’s something I’ve thought

about a lot and researched – how to maintain the company culture, ethos, spirit and innovation when the workforce has potentially become fragmented.

No rush to the old

It has become apparent that many people and businesses aren’t in a rush to return to the pre-Covid days of being committed to the traditional 40-hour work week from the office, and for most it’s working well.

We have the technology to support it. There are many, many businesses and employees out there who simply won’t, now they’ve proven that they can, return to their ‘old’ business working models. Working from home is the new norm, and businesses are

taking more consideration of the need for flexible hours and four day working weeks.

There is an emphasis on mental health and wellbeing, which is more evident than ever before and perhaps a recognition that employees that have more control over how and when they work, are more productive team members.

For some, allowing flexibility into their businesses was once feared. But Covid-19 forced that change in mindset upon us, and perhaps the reality of it hasn’t been so bad after all.

However, in embracing this new norm, there are aspects of our business that also need to pivot to account for this change in work styles.

Businesses are having to navigate their way through a new set of challenges, for

Kiwifruit growers come together for foodbank drive

Bay of Plenty kiwifruit growers will have an opportunity to quiz Zespri closer in coming weeks about the marketer’s proposed Chinese SunGold kiwifruit trial that was recently rejected by Kiwifruit New Zealand (KNZ).

By DAVID PORTER

New Zealand Kiwifruit Growers Inc (NZKGI) is encouraging its members to pitch in and donate to the most vulnerable through The Foodbank Project, a joint partnership of Countdown, The Salvation Army and Lucid.

The drive recognises that Covid-19 continues to have an economic impact upon New Zealand with kiwis struggling financially, said the industry body, which advocates for 2,800 growers.

Despite restrictions brought about by Covid-19, the kiwifruit industry has had a successful year, returning almost

$2 billion in direct payments to communities around New Zealand. The industry has also welcomed people who have been displaced from their previous employment.

NZKGI CEO Nikki Johnson said it was great to see the drive as a continuation of the 2020 grower initiative launched in the Bay of Plenty to help support the unprecedented demand due to the ongoing impacts of Covid-19.

“Growers answered the call and donated thousands of dollars’ worth of food and necessities,” she said. “As a result of the drive’s success, NZKGI committed to rolling out the appeal in other kiwifruit grow-

We believe in giving people a hand-up, not a hand-out. We walk alongside people and offer practical support to improve their situations.” – Jono Bell

ing regions.”

Jono Bell, Salvation Army

HUMAN RESOURCES

> BY KELLIE

HAMLETT

Kellie Hamlett is Director and Recruitment & HR Specialist, Talent ID Recruitment Ltd. She can be contacted on kellie@talentid.co.nz

example, alignment of values and culture.

With a fragmented workforce, a very relevant dilemma is how to keep the values and culture aligned so that those working from home don’t get left by the wayside out in the cold.

We all know the benefits of co-location and collaboration, so how can we pivot to ensure that what inspires us does not get lost?

Focus on a theme

One way includes focusing on a theme that binds all employees together and concentrat-

ing on the core aspects of the leadership team and how their actions and behaviours impact others.

Examples on the ground level include making a day of the week that everyone is in the office – covering off some of the important face to face messages so that the whole team is on the same page, perhaps a team activity, brainstorming, and some time for social interactions.

This allows and encourages continuity of social interactions between team members and essential face to face communication.

It brings the team together

in a way that can’t be done via email or zoom.

Ask your employees for ideas around the redevelopment of the company values and culture, try them, analyse the results.

What are others doing? What can you do better? What is not working for you anymore? Great leaders look within and ask questions of their team.

The challenge now is re-building to account for our new working landscapes –rebuilding a positive energetic and encouraging culture that fosters connections and teamwork, and empowers people.

housing, but our remit goes far beyond this, he said.

“We believe in giving people a hand-up, not a handout. We walk alongside people and offer practical support to improve their situations.”

Instead of utilising drop-off points for growers to deliver food, The Foodbank Project allows a more

accessible way for busy donors to help Kiwis in need by donating online and choosing from a range of products and bundles that are critically needed for food parcels.

The order is then packed and delivered by local Countdown stores to The Salvation Army foodbanks of the donor’s choice.

The runs until 5 March. To join the drive, visit the website www.foodbank.org.nz/NZKGI

Don’t go it alone with your next product launch

Launching a new product into the marketplace can be an expensive endeavour. It takes time to understand your target audience, and even longer to build awareness and trust.

One of the more powerful, but under-utilised approaches – available to businesses or all sizes – is to work alongside existing players who already know the industry. Whether they are industry bodies, influential individuals, or other businesses with mutual goals, having them on side can provide you with an immense head start.

Industry bodies

Striking up a relationship with an existing industry body should be near the top of the list for anybody seeking to fast track their route to market.

Industry bodies are typically well connected, have extensive membership databases and strong social media followings, and may even run popular annual conferences or events.

In many cases they are also well trusted – sometimes administering quality assurance schemes or accredita-

tion. Think Master Builders or Qualmark; if you were launching a new building product or a tourism offering, these would be ideal choices.

One way to forge a relationship with an industry body is to involve them in development of your product, either through seeking their advice and expertise, or offering an early version of your product to them to test with their membership.

This early version might be offered free of charge to a select group of their members – helping you to gain exposure and providing valuable insights and feedback based on their experience. The aim of either of these processes it to gain the buy in of the industry body.

Once a relationship has been developed, you might offer an exclusive discount to members of the industry body, or perhaps form a partnership that involves offering them a certain percentage of every sale to their membership in

exchange for their ongoing promotion of the product.

The advantage of the latter is that the industry body is incentivised to let people know about your product, and is therefore more likely to put some thought and effort into the best way to promote it to its members.

Existing influencers

Working with an influencer – whether they be a an individual or a group – can be a cost-effective strategy. It can also come into its own when you are trying to launch a product overseas.

Your business may be well known in the New Zealand, but only a select few Kiwi companies have enough recognition to go it alone in offshore. By working with an influencer who believes in your product, you can leverage their existing audience and capitalise on the brand they may have already developed.

A hospitality business

THE LAST WORD

> BY JAMES

HEFFIELD

Director of Bay of Plenty marketing and PR consultancy Last Word. To find out more visit lastwordmedia.co.nz or email james@lastwordmedia.co.nz.

looking to break into the Australian market might try to forge a relationship with a well-known Australian chef, while an outdoor gear retailer might look to partner with an organisation that manages a popular long-distance hiking trail to grow awareness among walkers.

When doing this, it is important that their values align well with those of your business and product. If you are competing on price, don’t align yourself with a celebrity or business that is firmly entrenched in the luxury market, and vice versa.

Complementary businesses

Last, but not least, remember that the business community can be a supportive bunch. Not every business is a competitor, and you can often achieve more by working together.

Partnering with other businesses can help get your name out there, while also adding value for both parties.

For example, if you were launching a new wine, you might work with a well-respected wedding venue, or somebody who does corporate gifts. You may need to offer

your wine to them at a lowerthan-ideal rate to begin with, but if you gain exposure to the right crowd, this can be a valuable way of gaining awareness among your target audience. In all of the instances mentioned above, the key is to start with your ideal customer. Where do they get their information, who do they trust, and what else might they be doing – in tandem with using the product you are launching. If you can answer those questions you will be well placed decide who you might work alongside for mutual success.

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