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Issue 114 – May 2014 $6.30

Publicatio n o f t h e E m p l o y e r s & M a n u f a c t u r e r s A s s o c i a t i o n Inc

Going global with the New Zealand Story

The latest tax changes: what they mean In this issue: • • • •

You need to know more about salary surveys

Do you have to pay KiwiSaver contributions for over 65s? Plugging the leadership gap with Jack Welch Lessons from manufacturing 10 commandments for China!

Photo: Chris Williams


BusinessPlus is published by : The Employers and Manufacturers Association (Northern) Inc 159 Khyber Pass Rd, Grafton, Private Bag 92066, Victoria Street West, Auckland 1142 Ph: 09 367 0909 or 0800 800 362 Email: ema@ema.co.nz Website: www.ema.co.nz Chief Executive: Kim Campbell Manager, Advocacy & Govt Relations: David Lowe Manager EMA Learning: David Foley Manager, Strategy & Enterprise: Mauro Barsi Waikato Denis Quigan 07 823 9311 Russell Drake 07 838 0018 Bay of Plenty Terry Arnold 07 575 8401

mob 027 203 0694 mob 021 686 621

ISSN No. 1176-4953

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05 Beating the exchange rate 14

IN THE LOBBY: Innovation lessons

from manufacturing

news 06 EMA re-organises

21

07 Taking the pulse of your IT system: Ricoh

08 Tax pooling survey highlights tax payment patterns

14 Rebooting manufacturing in Australia

OH&S conference covered

mob 021 662 656

Editor Gilbert Peterson Ph: 09 367 0916 gilbert.peterson@ema.co.nz

Advertising Sales Colin Gestro (09) 475 9313 colin@affinityads.com

04 In the dock

20 She won’t be right, mate!

BusinessPlus

Designer Ripeka Mikaere

Advocacy

10 Compulsory KiwiSaver supported

Rotorua / Taupo / South Waikato / Whakatane Clive Thomson 07 348 0334 mob 0274 372 808

Writer Mary MacKinven mary.mackinven@ema.co.nz

CONTENTS

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25

EXPORT: Going global

22 Letter from Australia:

B2B marketing: Same, same but different from B2C

23 10 Commandments for China!

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features 10

tax tips: Light entertainment and somewhere to sleep becomes less taxing

24 member noticeboard: Targeting the lunchroom

24 Vanilla company builds own premises

25 Construction industry innovators

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27 The wonder of trees advice 12

EMPLOYMENT CHAT: Will you

still love me when I’m 65? What if someone has been convicted of fraud? Inappropriate touching

BusinessPlus news | advice | learning | networking

Issue 114 – May 2014 $6.30

Publication of the Employers & Manufacturers Association Inc

LEARNING 17

Garbage in, garbage out: Remuneration Strategy

19

Plugging the gap on leadership, through renowned leader Jack Welch

Going global with the New Zealand Story

On the cover... Chris Williams shot our cover photo this month, of an audio testing laboratory, for the New Zealand Story library of visual assets you too can access, at no cost, to help with your marketing. The details are on page 21.

The latest tax changes: what they mean In this issue: • • • •

You need to know more about salary surveys

Do you have to pay KiwiSaver contributions for over 65s? Plugging the leadership gap with Jack Welch Lessons from manufacturing 10 commandments for China!


ADVOCACY at work

In the dock Auckland’s port on the Waitemata Harbour was the scene of a recent gathering of EMA’s Infrastructure and Local Government Committee.

We were privileged to receive a guided tour of the facilities to gain a better understanding of shipping and port operations, and represent members’ logistical needs. Developing the EMA Election Manifesto

EMA is preparing its 2014 Election Manifesto and will be calling on members to have their say on the priorities business wants the next Government to implement! EMA believes when business is strong, so too are the families and communities connected to it. New Zealand relies on business success for jobs, income, and funding for government. Running a business in New Zealand is a choice of the business owner and should not be taken for granted. The requests in our Manifesto aim to balance Government support for business in New Zealand with business’ support of the wider community. Labour’s monetary policY warrantS consideration

On the changes to monetary policy proposed by Labour, EMA said they appear to have merit and warrant consideration, particularly as the Reserve Bank’s independence would be preserved. “It could work out well in the longer term,” said EMA CEO Kim Campbell. “But it wouldn’t work unless Kiwisaver was made compulsory, an idea whose costs may fall unfairly on small businesses. “The idea that the Reserve Bank should have responsibility for inducing a positive external trade balance is farfetched.”

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Minister of Labour meets employers

Employers’ concerns were relayed face-to-face to the Minister of Labour Simon Bridges at a recent EMA meeting. Simon Bridges The Minister listened to member concerns including on the 90-day trial period and the accrual of annual leave and other entitlements when employees are off work on ACC payments. Speaking to Govt about impacts on business

EMA’s objection to the unreasonably short time allowed for public submissions on the Health & Safety Reform Bill was successful. Initially the Select Committee gave three weeks for submissions, but following our complaint the time has been extended to five weeks. EMA has lodged submissions on the following in the past month: • Auckland Council’s Draft Auckland Unitary Plan EMA requests included realistic population projections; the 30-year timeframe be reduced to 10-15 years; and more focus on Council’s ‘business-friendliness.’ • Building (Earthquake Prone Buildings) Amendment Bill EMA wants risk mitigation to be practical, and to consider more beneficiaries than just the building owner, and with different building standards applying in different seismic risk zones.

• Tauranga Council Draft Annual Plan 2014-15 We supported the 4.7% storm water levy plus 2% general rates rise, proposed cuts to service levels, lower increases in fees and charges, and rescheduling of the timing of some capital projects. But Tauranga debt is high. • Commerce Commission review of the cost of capital input methodologies EMA contributed to BusinessNZ submissions on: • NZ Productivity Commission’s Inquiry into Boosting Productivity in the Services Sector; • Statistics NZ’s public consultation on the CPI Advisory Committee 2013 recommendations; and • Commerce Commission’s review or amendment of the cost of capital input methodologies. Wood + plastic? Plant products = new fibres for industry

EMA’s Manufacturers Forum was treated to a presentation on the innovative product development and its commercialisation going on at Scion, the forestry and wood CRI. Read more on page 27.

Obituary - Arthur Lincoln Laidlaw EMA acknowledges with deep regret the passing of Arthur Lincoln Laidlaw, a former member, chairperson and active advocate for New Zealand manufacturing. Lincoln was Past President of both the Auckland Manufacturers Association from 1972-74, and the NZ Manufacturers Federation from1974 -76. (AMA merged with the Auckland Employers in 1996 to form EMA, and the NZ Manufacturers and Employers Federations merged in 2002 to form Business NZ). Lincoln Laidlaw made a major contribution to business through Lincoln Industries (formerly Lincoln International). Lincoln toys and its Fun Ho! brand were household names in the 1950s and 60s – 8 million miniature models were cast for them by Underwood Engineering in Taranaki. “Boy Oh Boy! A Lincoln Toy!” was part of the New Zealand lexicon. Lincoln’s father Robert founded the Farmers Trading Company.


ADVOCACY By Kim Campbell,

Beating the exchange rate The international economic literature shows the clear link between the volume and prices earned for the bulk of our exports and the strength of the New Zealand dollar, other things being more or less equal. That is, our terms of trade largely drive our exchange rate, though the continuous flux of other currencies and interest rates frequently obscures the longer term trend. This means our economy’s success is largely determined by the success or otherwise of our dairy, meat, logs and other commodities since they comprise the bulk of our exports by value and set the level of the NZ dollar. A NZ Treasury paper in 2005 said as much. In the Contribution of NZ’s Primary Sector to NZ’s economic growth the author noted “Generally speaking.. the exchange rate has tended to move in the same direction as overall commodity prices, smoothing the impact on the New Zealand dollar prices that our exporters receive.” A graph shows the correlation between commodity prices and the NZ Trade Weighted Index. (Though occasionally the paths of the exchange rate and commodities diverge, and plotting when these might occur could present interesting opportunities for exporters of other products.) Until recently our commodity exports have largely been keeping our exchange rate at an all-time high, that, and the ongoing money printing activity in the US, Japan and Europe depressing the value of their currencies. Our terms of trade haven’t been this good for more than a generation. But here’s the rub. The success of our farmers and foresters reflected in the high exchange rate can harm the export receipts earned by non-primary exporters. For instance, manufacturing exporters’ returns may well be reduced as the exchange rate rises. Clearly that’s happening in relation to Australia as hedging cover runs down. This process leads to an inconvenient conclusion: commentators who argue for a change in the Reserve Bank’s terms of reference to “rebalance” the economy in favour of manufacturing exporters are in effect arguing for

a reduction in the income of our primary goods exporters. Why would you do that? Why would you change the rules governing the Reserve Bank so exporters of commodity products earned less? Businesses totally support the tight management of inflation in the nontraded sector, by monopolies, and of central and local government charges, (though politicians aren’t known for their scruples when it comes to spending constituents’ money). But even if inflation is held down, the larger and more pressing question is: How can our manufacturing exporters continue to flourish while the exchange rate is forever held

or they otherwise circumvent it. Their success is salutary. What’s behind it? The practices they follow demonstrate a constant focus on innovation, a willingness to re-invent their organisations, and a commitment to invest heavily in R&D and in skills and market development. In this way they grow their company productivity and value. As it is for the companies profiled in the Castalia report, so it is for NZ economy as a whole. Nobel laureate Professor Robert Solow was writing about this in 1957, and Professor Paul Romer in 1987. Along with others since, they established that innovation, and

“Even if inflation is held down... how can our manufacturing exporters continue to flourish while the exchange rate is forever held hostage by the success of our primary producers in export markets?” hostage by the success of our primary producers in export markets? Most certainly it is in New Zealand’s interests for them to flourish, with the reasons highlighted recently in the latest report on New Zealand manufacturing, the NZ Manufacturing Sector: Its Dynamics and Competitiveness (March 2014) prepared by the consultancy Castalia. That report case studied 15 high growth manufacturing companies in the context of New Zealand’s wider manufacturing sector and growth. It pointed out that manufacturing accounts for 14.6 per cent of GDP, is rich in skills, higher paid employment and R&D activity. The companies profiled all have success to report, some extravagantly, in complete disregard of the exchange rate penalty highlighted above. Clearly they are outperforming any challenge thrown up by the currency,

technical innovation in particular, is the key to the lift in productivity that leads to better standards of living. That’s how Singapore and Korea did it. New Zealand has been so slow to learn about this. Just as our leading manufacturers like F&P Healthcare, Orion and Gallagher demonstrate they can outperform the shackles of the exchange rate and its volatility, New Zealand as a whole can become far less a victim of the vagaries of the exchange rate by adopting an unrelenting focus on innovation and the R&D activity by which it thrives. In a word, the key to keep on increasing New Zealand’s standards of living is for us to develop a world beating innovation/R&D policy formula. • kim.campbell@ema.co.nz BusinessPlus

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NEWS

EMA re-organises EMAs’ chief executive Kim Campbell has just announced the outcome of organization changes to EMA to more accurately reflect the association’s advocacy and membership activities and profile. The restructure has resulted in three new senior appointments. David Lowe, LLB, takes up the role of General Manager, Advocacy and Government Relations. For the past nine years David has David Lowe been EMA’s Employment Services Manager, and prior to that held human resource roles in several corporate and government organizations. David is also EMA’s corporate secretary.

Mauro Barsi, LLM, BA, becomes General Manager, Strategy and Enterprises. Mauro was previously EMA’s Manager of Mauro Barsi Membership and Marketing for the past nine years, and is the association’s legal counsel, a role he retains. Mauro’s new role includes management of EMA AdviceLine, EMA Legal, as well as Membership and Marketing responsibilities. Paul Yeo, BE (Hons) is now Manager of EMA’s Administration (including finance) and Controller of IT. Paul was previously three years as EMA’s IT Manager. Before joining EMA, Paul held a range of senior IT consulting and analyst positions. Paul Yeo

David Foley remains Manager of EMA Learning. The re-organisation which has been the subject of work over the past five months has resulted in the redeployment of several other operational job positions. David Foley Long standing senior manager for EMA, Bruce Goldsworthy, is seeking to phase down his responsibilities so will retain the role of Manager of EMA’s Manufacturing and Exporting divisions. Bruce will complete 45 years of service to the organization in September. Bruce Goldsworthy

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2. Are you targeting or focused on growth? 3. Is IT important to the performance of your business? 4. Do you have an annual IT plan and budget? 5. Has the IT budget increased in comparison to the previous year? 6. Did you spend more on IT this year than was budgeted? 7. Do you have a dedicated head / resource for IT? 8. Do you contract / outsource IT? 9. Do you use Smartphones and tablets in your business? 10. Do you use cloud based services in your business? If you answered yes to five or more of these questions, it’s time to give Ricoh IT Services a call. If you’re already a Ricoh customer, simply get in touch with your Ricoh Business Advisor. If you’re new to Ricoh, we welcome your enquiry. Please contact us on 0800 RICOH IT (0800 742 644) or email RicohITServices@ricoh.co.nz

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NEWS

Tax pooling survey highlights tax payment patterns Over half of the respondents to a recent EMA poll on tax payment practices and tax pooling reported the January to March period was the toughest time of the year for them in terms of cashflow. Two thirds of respondents said they had no difficulties with how provisional tax dates are currently aligned with their business income cycles. But 14% said yes, they do sometimes struggle to make tax payments because of cash ostensibly due to cash flow issues.

The other 21% said they occasionally experienced payment problems as their income patterns were unpredictable. In response to the question whether they used finance products to build their business, about half said no, with 24% indicating such products were critical for their growth. The survey was conducted in association with Tax Management NZ Ltd and attracted 94 respondents.

At which time of the year is cash tightest for your organisation?

Do provisional tax dates align with your business income cycles?


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TAX TIPS Jo Doolan

Light entertainment and somewhere Major changes to the tax treatment of employee allowances and accommodation payments have received another shake up following the review by Parliament’s Finance and Expenditure Committee. Yes, most of these changes apply from 1 April 2015. However given you need to budget for any tax changes, and also negotiate salary and wage adjustments between now and then, it is time to get up to speed on what is happening. The story so far

Let’s recap on what has happened so far. Previously if an employer paid for accommodation when their employees were working away from their home then this was often treated as not taxable, because the employee was still incurring costs associated with maintaining their home base. If they rented out their home then the income earned would often be either paid to the employer as a reimbursement, or if the place they were working was more expensive than in New Zealand, then an adjustment would be made to work out the equivalent cost here. (The technical term for all this was the ‘net benefit approach’.) In December 2012 Inland Revenue sent shivers up the spine by saying this net benefit approach was not

acceptable, and the gross market value of the accommodation was to be taxable to the employee, except where the accommodation was overnight or represented a temporary stay. On top of this IRD said those who had not been making these tax payments needed to rock up to the tax confessional and make a voluntary disclosure. We then had a public consultation document and a draft bill which had some concessions but they did not go far enough. Latest developments

The latest developments of this drama follow the public submissions process and reflect the recommendations from the Finance and Expenditure Committee. It is tempting to think that making submissions on a bill is a waste of space, but this is not necessarily the case and organisations like the EMA have a great track record of bringing about major u turns on tax proposals (the car park tax is a prime example). The latest changes to the bill are

both practical and pragmatic and the Committee, the IRD and all those who made submissions are to be congratulated. The changes

So what has changed? There are some welcome changes to definitions that will make the legislation easier to apply. In addition four major exemptions for accommodation provided to employees who are located in mobile workplaces like ships, trucks and oil rigs, or working on a station in Antarctica, and also for lodgings provided to shift workers like fire fighters, ambulance staff and care givers who are periodically required to sleep at their workplace while working. Other exemptions are provided for people who are required to stay at remote locations like those who fly in and out of mining camps in Australia. Changes to the valuation provisions are recommended to allow for situations where the overseas market rental amount is higher than the rent that would apply in New Zealand. Another is for an apportionment where

Compulsory KiwiSaver supported 41% of adults feel they need to be compelled to save, according to a recent Horizon Poll covering 3060 respondents undertaken for the Financial Services Council. Other findings were: • 70% support for making KiwiSaver compulsory • 12% oppose a compulsory savings scheme The Chief executive of the FSC, Peter Neilson, said Kiwis believe overwhelmingly that they are not saving enough for retirement and that they won’t be able to live comfortably on the NZ Super pension alone. In a separate poll 48% support scrapping KiwiSaver tax credit and

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instead fund a tax cuts on savings

A Horizon Poll commissioned by the Financial Services Council shows KiwiSavers support removing the annual $521 members tax credit (MTC) to fund lower KiwiSaver fund tax rates. On October 2013, an Horizon Poll asked 2850 New Zealand adults “If KiwiSaver were to become compulsory, the current tax credit would no longer be needed to encourage people to join. The saving to the Government could be used to cut taxes on KiwiSaver investments to increase retirement incomes with lower contributions. How strongly would you support or oppose this?”

More than 49% of KiwiSavers supported such a change with 11.5% opposing it. The current effective tax rates on KiwiSaver funds are the highest the Financial Services Association said they could find on retirement savings anywhere in the world compared to investments in rental property. KiwiSavers see the long term benefits from cutting KiwiSaver fund tax rates. When tax removes 54.7% of your retirement nest egg after 40 years of saving compared with only 7.9% on rental property, KiwiSavers know something needs to be done, Mr Nielsen said.


TAX ADVICE TIPS

to sleep becomes less taxing employees share accommodation and one room is larger than the other, providing it is reasonable and agreed between the employees and the employer. (Previously this was to be allocated evenly, and no, I am not sure what happens if the employees end up sharing a room and one room remains unused.) Accommodation use

The previous bill required the accommodation to be used exclusively for work purposes; the latest changes allow for an apportionment where the area is used “wholly or mainly” for work purposes. There was a big outcry in the submissions on the treatment of accommodation at boarding schools, and the problems there were in valuing the accommodation provided to staff there. IRD is now issuing operational guidance on how these allowances should be valued, though how acceptable this is to both the schools

and the teachers remains to be seen. IRD will also be issuing guidance on the more general valuation of accommodation benefits. In another practical move they are putting into legislation the long standing practice of capping the taxable value of the church owned accommodation provided to ministers of religion at 10% of the minister’s remuneration. They are also broadening the definition of “minister of religion” to include ministers of non-Christian religions. In a reassuring move the new changes also allow for further regulations to be issued to exempt other types of accommodation allowances that have not been covered but should qualify. Taxing meals and snacks

The changes to meal payments or refreshments also provide for less taxing sustenance where there is a work related event, or where they are linked to work related travel of three months or less.

They have also clarified that light refreshments can include snack foods along with tea or coffee, and that these exemptions can also apply to part time employees. The Select Committee recommendations also making clear that the policy intention is for meals provided directly by an employer (that do not fall within the exemptions) are subject to fringe benefit tax, and to minimise the confusion, where employers have applied different tax treatments there is an option of applying the new rules retrospectively. This however would not allow anyone to get a refund if they have been adopting a cautious approach and taxing these payments when, from 1 April 2015, they would be exempt. Overall these changes are all positive and clearly reflect the benefits of parties working together to achieve more practical outcomes. Joanna Doolan is a Tax Partner with EY joanna.doolan@nz.ey.com

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EMPLOYMENT CHAT

Will you still love me when I’m 65? What Inappropriate touching… One of our employees will be 65 soon and has asked if we will continue to contribute to his KiwiSaver. Are we required to do so? - Jill Dear Jill The legal answer is no. Employer contributions are not compulsory when an employee is younger than 18 or 65 or older. The criteria is actually being ‘entitled to withdraw their funds as they have reached the age of entitlement for National Superannuation AND have been in KiwiSaver for five years or more’. KiwiSaver will have been around for seven years in July, so these withdrawals are now possible. It would be a good idea for employers to consider the issue though, and how they wish to deal with it, and to communicate their intentions with their employees. We found that 46% of employers pay contributions to employees who are under 18 or over 65 in the EMA End-of-Year Employment Round-up Survey in December last year. Another 29% said they didn’t and 25% hadn’t considered it.

“We found that 46% of employers pay contributions to employees who are under 18 or over 65” I just heard a rumour that our finance manager has a previous conviction charge for fraud. Now I’m really worried. How can I prove that, and if it’s true, is this grounds for termination? – Bob Dear Bob A conviction is a serious matter and you can talk to the employee about what you have heard. However you would need their consent to get a criminal history check to reassure yourself. What action you may be able to take will depend on the circumstance and a good place

to start would be reviewing your recruitment process. What did your recruitment checks tell you? Did you ask her, before her employment, whether she had any previous criminal convictions? Perhaps consider any ‘hidden clues’ and check those out, though you can’t go to referees without your employee’s consent (in the past or now). You could confront the finance manager and ask for her response to the allegations you have heard. During the discussion, be sure of what you are asking and how you will deal with the possible responses. However, watch out for a claim of unjustified dismissal if you overreact and short-circuit the process, or if you trump up the wrongdoing based on a rumour….

I’ve had reports from several employees (women) that a supervisor (also a woman) touched them inappropriately on the backside. Their cultural sensitivities were highly offended, to the

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10/06/13 12:42 PM


EMPLOYMENT CHAT

if someone has been convicted of fraud? point that they are quite low on morale and even thinking of leaving. Is this a case of instant dismissal if the events are true? – Grainger Dear Grainger This sounds like a case of sexual harassment, whatever genders are involved! Even without sexual gratification involved, unwanted touching is a case of harassment – and in my culture as well, touching someone on the rear is not normal, friendly social behaviour. You need to follow disciplinary investigation procedures, which include gathering evidence from as many ‘victims’ and witnesses as possible, putting these allegations to the ‘accused’ including saying who made them, and considering their response before then taking whatever action is required depending on the latter meeting. A warning may be a likely outcome to the supervisor, saying that if this happens again she is on a slippery slope to termination for misconduct. Make sure staff know what

“Touching someone on the rear is not normal, friendly social behaviour.”

behaviour is not acceptable, and what the procedure is when you receive complaints like this. However, you would want to protect the complainants and not divulge their statements to anyone other than the accused. Not even to each other. • By the EMA communications team in consultation with EMA Advice, and loosely based on real calls to EMA’s AdviceLine. All names are fictional. The information in this article is a guide only and not to be used as business advice without further consultation. EMA members can start with our

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IN THE LOBBY

Innovation lessons from manufacturing Businesses are looking for new ways to transform themselves to be successful in a fiercely competitive future. New research* shows successful New Zealand manufacturers are achieving advantage through innovation. There are insights for all business in this study of manufacturing success. Surveying the manufacturing sector and 15 high performing firms, our research highlights the critical part played by research and development and skills. New Zealand manufacturers share characteristics with those in other developed countries – their drivers of competitiveness are talent-driven innovation, the environment for business (the economic, trade, financial and tax system of the country in which they operate), cost and availability of materials, and the ability of their suppliers to innovate in products and services offered. Like successful manufacturers

elsewhere, they are showing a noticeable shift away from “Drivers of competitiveness pure manufacturing towards are talent-driven a bundling together of manufacturing and services, innovation, the and a blurring of the environment for business... boundary between products cost and availability of and services offered. A particular characteristic materials, and the ability of of the New Zealand their suppliers to innovate” manufacturing sector is its strong interdependence with other sectors of the Manufacturers tend to invest economy. significant funds into research and And a common feature of high development – much more so than other businesses. growth firms is their high degree of Although manufacturing makes vertical integration in both domestic up 11% of economic output, and offshore markets. manufacturing businesses account for An important characteristic of 68% of R&D spending. successful manufacturing firms is In the most recent survey of their propensity to engage in research, R&D expenditure, manufacturing design and provision of services.

Rebooting manufacturing in Australia Manufacturing is surviving in Australia but business generally is desperately pessimistic about where the country is at right now, Mark Goodsell, Director,NSW for the Australian Industry Group told an EMA Masterclass on Australia earlier this month. “We have been paying ourselves more than our productivity warranted,” he said. “Our industrial relations system is more arthritic, the clock has been wound back on labour flexibility, and we have an infrastructure deficit

such as in transport.” Their main issues are lack of Mining investment has peaked and customer demand, higher costs, now a rebalancing “Australia has become an expensive to do business” of the economy is needed, though construction is seeing a rebound. But businesses making less elaborately transformed goods are losing out to offshore suppliers due to their lower labour and energy costs, not just a loss to China competition from imports and Growth in real GDP and major industry sectors but even to the US. internet selling (though less than Australia has become last year), government regulatory an expensive place to burdens and much less flexibility in do business, 30-40% industrial relations. more expensive than But big opportunities are the US. perceived to be the growth of Asia’s Manufacturers middle class, from 600 million expect to see local to 3.1 billion people by 2030, on [domestic] demand Australia’s doorstep – but with problems continue, but different types of demands on not as bad as in 2013. manufacturing.

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BusinessPlus


Phil O’Reilly

businesses spent more than those in the primary and service industries. Approximately $1.2 billion was spent on R&D by New Zealand businesses in 2012, with $536 million of the total contributed by manufacturing. R&D success and the ability to achieve talent-driven innovation are highly dependent on having the right skills. Our research shows most manufacturing jobs in New Zealand are relatively skilled, and fast growing firms in particular have a highly skilled specialised workforce. Manufacturing generally employs

specific training as well as at least some training in technical skills, product design and development, basic or advanced computer skills, team and problem The firms in our survey were asked what changes they needed in the general environment for business. Their two big needs are for more skilled workers and more support for R&D. Despite New Zealand’s highly educated workforce, many manufacturing firms are finding it hard to get employees with the right skills, in particular engineering and industry specific skills. They want the education system to focus on providing more technical and “While successful trade skills applicable to manufacturers are innovating manufacturing, more through significant investment ‘work ready’ young people, and more in R&D, few have collaboration engineering graduates arrangements in place.” who want to work in New Zealand. They also want more a mix of high skill and low skill lenient work permits to attract foreign workers – the mix is important for workers to ease their skills shortage. providing avenues for on-job training They would like to see a more and advancement. focused form of R&D support. The high growth firms in our Comments in the survey included survey provide sector and product requests for more R&D funding

for late-stage development costs and for R&D incentives for manufacturing in areas that contribute strategically to New Zealand’s growth. One area where there could be fruitful development is in fostering collaboration with research institutions and companies internationally. While successful manufacturers are innovating through significant investment in R&D, few have collaboration arrangements in place. There is strong evidence showing industry collaboration networks can advance innovation and competitiveness through knowledge sharing, benchmarking and global partnering. The world is becoming a more fiercely competitive place to do business. Focusing on innovation will help our manufacturing and other businesses achieve the competitiveness they need. *NZ Manufacturing Sector: Its Dynamics and Competitiveness by Castalia Advisory Group is on www.ema.co.nz Phil O’Reilly is Chief Executive of BusinessNZ www.businessnz.org.nz.

Specialist Employment Lawyers Our legal team spend 100% of their time working solely with employers, to help build and shape New Zealand businesses. Come in, sit down and talk to us about what’s next for your business – if you’re ready to take the next step, we’re ready to make it happen.

Jo Douglas

Managing Solicitor Phone: +64 9 367 0917 Mobile: +64 27 683 7919 joanne.douglas@ema.co.nz Auckland

Call us toll free on

0800 300 362 130814 Training Directory.indd 1

Brandon Brown

Solicitor Phone: +64 9 367 0912 Mobile: +64 21 515 116 brandon.brown@ema.co.nz Auckland

Matthew Dearing

Solicitor Phone: +64 9 367 0931 Mobile: +64 27 284 4042 matthew.dearing@ema.co.nz

Auckland

Ani Bennett

Senior Associate Phone: +64 7 577 0488 Mobile: +64 27 706 4433 ani.bennett@ema.co.nz Bay of Plenty

Visit our website

www.ema.co.nz 23/09/13 1:21 PM

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Keep your nger on the pulse Your people are one of your biggest assets. To make sure your business is performing at its best you need to get their pay and benefits ‘just right’. That’s where we can help. Using our market intelligence you can keep your finger on the pulse of market trends and act with confidence. The National Employers Wage and Salary Survey covers 216 positions. Our comprehensive reports include splits by industry, location and revenue bands: Salary reports: Reflect Salary ranges by position, location, revenue bandings and industry. Beneets and Conditions reports: Position specific analysis of benefits and conditions. You’ll find sample reports as well as a full list of positions and descriptions on our website.

www.nzsalarysurvey.co.nz The

National Employers Wage and Salary Survey is a joint venture between


LEARNING REMUNERATION STRATEGY

By Lisa Goldsmith

Garbage in, garbage out We all know the saying there are lies, damned lies and statistics. It’s funny because it’s true. Every year we have access to unprecedented amounts of information but unfortunately this can also mean more misinformation and increased risks of misinterpretation. Also unfortunately this can apply to information, data, statistics and reports including market data, on wage and salary rates and remuneration benefits. So how do you know you can act with confidence when recruiting or otherwise considering pay rates that you are offering the appropriate level of salary? To do this well you need to have clear policies and core principles in place. You also need to ensure you have robust processes for analysing and applying salary data.

indication of the types of organisations way out of line with the real market represented in the sample. being entered, and with little or no Another area to be mindful of checking or validation processes in is the spread of the information. place. Quality surveys will provide figures But knowing that the information for lower quartile, you need median, upper to rely on quartile and the is being average and mean. sourced from “While it may be Understanding employers the definition of still doesn’t argued that guarantee its recruitment firms offer these statistics is also essential for an accuracy. the ‘freshest’ source of accurate analysis The method salary data, it is also of what the data of collection contains. of wage and likely to be skewed” salary survey data not Applying the data conducted by remuneration One of the most specialists can include significant faults. important things to remember when What is the source of your information? A recent example was in a survey applying results from salary surveys is that collected actual/pro-rata salaries As with any information, having an that there is no ‘going rate’ for any without collecting the numbers of understanding of where the data you role. hours worked. The results meant the want to apply comes from is important Survey results should be used data was inconsistent and, without before you can be sure of what it’s to determine only an appropriate knowing the hours of work involved, telling you. midpoint which can then be used to they could not be adjusted meaning A good example of where this establish a pay range. the errors would be reflected in the is particularly important is salary Ideally, this information should then results. It brings the well-known information provided by recruitment be combined with the pay levels for saying to mind – garbage in, garbage roles that are similar in size, including consultants. While it may be argued out. their complexity and accountability that recruitment firms offer the and so on, to form a salary grade or ‘freshest’ source of salary data, it is also likely to be skewed. Not only is it band. Interpreting results being supplied from a limited sample Another vital point to make sure of Once you are sure you are accessing of recent offers, is that your analysis and interpretation quality but recruitment of the data does not blur the lines remuneration consultancies between market comparisons, your information, there are geared budget and the performance of the is still the question “You need to be aware towards person performing the role. Pay ranges of understanding of how the data has sourcing top should be adjusted by comparing to and interpreting it. been collected. Some candidates and Key considerations market. The budget sets the available surveys collect for this include the funds for reviewing the salaries paid. securing higher information from sample size and And individual salaries should be salaries for individuals, not the participating them. reviewed by considering the current organisations You also level of pay and personal performance employers. This can involved in the need to be of the person under review for a lead to wildly data collection. aware of how particular role. inaccurate results” A good survey the data has will provide Lisa Goldsmith is EMA’s specialist been collected. Remuneration & Benefits information Some surveys Consultant. Contact her at relating to region/location, sector, collect information from individuals, lisa.goldsmith@ema.co.nz industry and revenue for each not employers. This can lead to wildly ph 021 252 8519 position reported. This provides an inaccurate results with information BusinessPlus

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Save 14% on a fixed term PowerFreeze electricity plan today.*

At Genesis Energy, we want to help EMA members get a great deal on their energy. That’s why we’re offering members a special 14% prompt payment discount on a fixed term PowerFreeze electricity plan.* We understand your energy needs and are committed to giving you better, simpler and smarter ways to manage them.

To switch and save call 0800 600 900

*This offer is only available to EMA Northern region members (EMA Members), who sign up to, or are currently signed up to, a fixed term PowerFreeze agreement with Genesis Energy for the supply of electricity. This offer excludes residential and time of use (TOU) customers, customers on standard electricity pricing plans, and customers of natural gas and LPG products. The Offer is a 14% prompt payment discount (PPD), provided their electricity account is paid in full by the due date. EMA members must contact Genesis Energy on 0800 600 900 and quote their membership number to receive this offer. Once the EMA membership is confirmed the 14% PPD will apply from the EMA member’s next electricity bill. Should the EMA member cancel their membership, the PPD will revert to Genesis Energy’s standard PPD. Genesis Energy reserves the right to change or revoke this offer at its discretion at any time. Eligibility criteria, early cancellation fee and Genesis Energy PowerFreeze terms and conditions apply.


LEARNING By Rosie Cairnes

Plugging the gap on leadership, through renowned leader Jack Welch Human Resources departments worldwide are under increased pressure to demonstrate return on investment on all learning and development initiatives. The Welch Way provides transparency to ensure leaders have an accurate measure of what has been learned and retained by employees. Furthermore human capital surveys consistently highlight ‘leadership’ as the number one major challenge for organisations. According to a Bersin by Deloitte survey* (2013) organisations are investing more in leadership development than ever before – upwards of $US6-7,000 for high potentials annually. However, the same survey found 75% of respondents believe their organisations’ leadership development programmes miss the mark in terms of effectiveness. Three quarters of the leadership teams surveyed failed to achieve business goals, and more than half of global executives cite a lack of leadership as a reason the company does not manage market changes effectively. Why the disconnect

Organisations typically focus their learning and development investments towards senior leaders, using primarily traditional classroom methods and resource intensive methods. The result is a significant drain on time and budget. Traditional methods of leadership development don’t cut it in today’s “overextended”, ever-changing work landscape. Leaders are under tremendous pressure from stakeholders, the board and shareholders to perform – and perform fast. They need to continuously develop skills and in short micro-bursts of training experiences; discretionary time is a luxury that no leader has.  In today’s dynamic economic environment, it’s vital to have a strong leadership pipeline to prepare for the emerging departure of Baby Boomers, who will soon start leaving the labour force - if they aren’t already. Successful organisations recognise the most productive leadership development will maximise on collective experiences (See www.skillsoft.com) to ensure leadership skills are acquired rapidly

throughout an individual’s natural career development. The Welch Way, a key differentiator to boost business outcomes

The Welch Way is a set of outcomebased programmes offering formalised and structured leadership development for employees at all leadership levels: high potentials (HiPOs), senior leaders and new managers alike. It was developed by former General Electric CEO Jack Welch, one of the first leaders to recognise the strong relationship between learning and development, and achieving business results. He once said ‘an organisation’s ability to learn and translate learning into action rapidly is its ultimate competitive advantage.’ There are four key elements to the Welch leadership development programme: 1. Immediate applicability to real-life situations

Skill integration is crucial to ensure learners see a direct relationship as to how learning and development initiatives synchronise into their workday. The Welch Way focuses on action-based learning, therefore maximising time effectiveness and reducing scrap learning. Skills can be put into action immediately to improve memory retention and make sure that what is learnt is applied directly to daily practice. 2. Encourages social learning

Social learning is a strategic tool in capturing tacit knowledge, in particular when intertwined with the daily flow of work. Social learning can open up the workplace learning environment and has the potential to improve engagement levels by providing a forum to collaborate, discuss and pinpoint areas of interest.

3. Greater control for business leaders

In many organisations, there is a disconnect between what learning and development programmes deliver and what business leaders see as the organisational priorities required from their employees. Through the Welch Way’s unique cloud platform, business leaders have full visibility on each individual’s progress, allowing them to guide and drive learning for employees and pinpoint areas that require additional focus. 4. Results easily measured

Using the Welch Way organisations can better tailor their leadership development programmes to their unique needs, through reflection of key efficiency metrics. Investing in dynamic leadership development programmes at all levels will provide a framework to help prepare an organisation’s current and potential leaders for the myriad of challenges resulting from an ever increasing competitive and global business environment. Those organisations that accept the challenge of developing skilled leaders today will have a better chance of business success tomorrow. *Five Trends in Leveraging Leadership Development to Drive a Competitive Advantage by Bersin by Deloitte (2013) Rosie Cairnes is Regional Director, Australia and New Zealand at Skillsoft Asia Pacific. Rosie joined Skillsoft in 1995 and has more than 20 years’ strategic account management experience including with Suncorp, Westpac, Optus and Deloitte. Rosie specialises in online learning and performance support solutions. www.skillsoft.com BusinessPlus

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NEWS By Mary MacKinven

“The best companies ask themselves ‘where will we be found out?’ …so they create systems of early warnings and raise issues before an incident” Gordon MacDonald, WorkSafe NZ CEO

She won’t be right, mate! OH&S conference covered The mission of the new Crown agency WorkSafe NZ set up last December to regulate occupational health and safety (OH&S) is encompassed in the following two statements: • One death and one injury is too many; and • Everyone has a role to play. In summary that was what Gordon MacDonald, chief executive of Worksafe NZ, had to say in his presentation at EMA’s 18th Annual Occupational Health and Safety Conference last month in Auckland. EMA members flocked from all regions to attend with Minister of Labour Simon Bridges among the guest presenters. Mr MacDonald said the Government’s approach to OH&S is not about shifting the goalposts but changing the mindset and culture in the workplace. A number of countries including New Zealand went from an overprotective legislative approach to an attitude of ‘everything will be fine’.

WorkSafe NZ inspectors come across some questionable safety practices

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“But how will you know everything will be fine?” he asked. “Is legislation sufficient to make a culture change? And is compliance the goal of this process? “Or is our role to influence, motivate, facilitate people to comply with the law? How will we intervene? Stakeholders want us to provide visible leadership, collaborative problemsolving and enforcement that is credible and proportionate to the risk [of the non-complying behaviour]. “It’s about outcomes for me: everyone comes home healthy and safe. Its about a numerical expression of that.” Key underlying principles of WorkSafe NZ’s approach are shared responsibility for safe and healthy workplaces among all parties including owners/operators who now will have clear accountability; and a responsive, context-specific approach, risk-based and targeted, rather than the view that one size fits all. Responses by inspectors will be proportionate and consistent. WorkSafe will be fair, just and impartial, transparent, outcome-focused, and cognisant of the wider public interest. Its delivery methods will include education and raising awareness, supporting compliance, facilitating and collaborating with business, incentivising (a star rating system is being investigated with ACC) and enforcing compliance through remedial or punitive action. “We have to be smart about reaching you. “But engagement and commitment has to come from within, not from the idea of saving a bit on your ACC levy.” WorkSafe NZ will undertake universal guidance and education, plus targeted and reactive activity: targeting our scarce inspection resources to agriculture, manufacturing, forestry and construction; and reacting when activity comes to our attention through complaints or accidents.

Communication is key Q&A Q. A modern regulator must assist, not just enforce. Will WorkSafe NZ do both? A. A regulator has one ‘unique selling point’ and that is enforcing the law. We have to use our powers to protect the person from harm – so we are a policeman. But to influence systemic and large scale cultural changes, that won’t be the way to do it. We have to do more than be the policeman. So we are both those things in different contexts. Q. If the paperwork looks good, will that be enough? A. How do you know you are safe? How sure can a director be that expectations in the boardroom are actually being transmitted throughout the shop? The best companies ask themselves ‘where will we be found out?’ They [know they] will fail and have weaknesses, so they create systems of early warnings and raising issues through the ranks before an incident, not live in a state of perpetual anxiety. The weak spots in the organisation will find you out; you don’t want a false sense of security. Q. We are all here today because we are interested in OH&S but not many here are from ethnic groups that can bring a different attitude and culture. What are you doing about them? A. That’s a real problem. The diverse nature of the workforce is a real challenge in conveying messages – not only in terms of language but a message issue. We don’t yet have these demographics or industries to start tailoring these messages but it’s work we need to do. You need to communicate differently to [different] staff…some people are more rules based, others respond to different information. Manuals and rules have a part to play but [this has] to resonate with people whose behaviour we are trying to change. Communication is at the heart of this programme.


Going global The exporter event of the year, EPIC Go Global, featured in Auckland early this month. Over 400 attended the conference to network and hear presentations from some of our leading business people.

Going Global with the NZ Story

Amongst them were those pictured here.

Professor Claire Robinson, Massey University

Danny Chan, Dep. Chair Academic Colleges Group “In Asia a hard sell approach will only diminish your chance of long term success…

Design is “The process of making or doing something new” (Quoting Heather Fraser) “Those businesses that invest in design are more profitable and successful than those that do not – they beat the S&P 500 by 208%”

“A brand is what people say about us, not what we say about ourselves. “If you said to a female official ‘catch you later’ it could land you in big trouble”

Paul Adams, CEO, Ever Edge IP

Philip Mills, CEO, Les Mills International (with 1000 master trainers taking 16,000 gym classes in 112 countries) “75% of health problems are based on our lifestyle” “You need to be very careful about choosing the right people as distributors”

Derek Handley, Co founder The Hyperfactory, and Snakk Media Asked the importance of rocketing into space with Virgin Galactic sometime next year Derek emphasized the importance of exploring the boundaries in every endeavour.

“Managers and directors can be directly liable for failing to manage the ‘freedom to operate risk’” “(Some people) will only pay for what they cannot steal – the bigger the opportunity, the bigger incentive to steal”

At EPIC Go Global NZTE’s Tim Green reported progress on the NZ Story initiative and how exporters and anyone else presenting themselves offshore can make use of the video, photo and other assets held on the website www. story.newzealand.com. You can make use of them too, to include in your marketing material to help tell your own business story. At no cost. Tim said the story sought to answer the question: “What is the quality New Zealand has that others don’t and that we love and world can love us for?” The answer is in 3 parts: • Integrity (Mana) – our reputation is that New Zealanders are down to earth and good to work with • Kaitiaki – the care we show for our place and people, • Resourcefulness – fresh, with an outward looking way of thinking, and our ingenuity From these foundation elements the NZ Story can be told in terms of: • Open spaces • Open hearts • Open minds You are invited to go to view video and images of how the NZ Story has been presented so far. At www.story.newzealand.com Sign up to access and download the free-to-use toolkit of images and other assets there.

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ADVOCACY

Letter from Australia from Marketing Specialist Bella Katz

B2B marketing: Same, same but different from B2C Just this last month I was in Auckland and presented a workshop with EMA on Marketing to Australia. As far as my Australian client list, I’m a bit of an industrial and manufacturing nerd so it was good to see a mini cross section of Auckland’s manufacturers represented at the workshop. It was equally great to meet other creative service and retail companies and I came away with (re)affirmation that New Zealand is in no danger of running out of clever business ideas. At the end of my presentation, one of the attendees came up and asked whether I was also familiar with B2B marketing. I’ve been asked this question in the past and, as primarily a B2B marketer, it makes me think there’s something missing from my own communications. B2B is my specialist area. A big chunk of my clients in Australia and New Zealand are doing business with a supply chain of partners and not – directly – end customers. But having now been asked this question on a few occasions, I realise I need to redress my own marketing. After all, it’s one thing to think

“Whether your customers are resellers, distributors, wholesalers – you still need to have a unique position with the end user”

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is more likely the case, they have failed to communicate it well. An Australian architectural hardware company I worked with completely lacked customer research of what home-owners were buying. So why would resellers,

that you’re communicating clearly, but when the market tells you something different, they’re right and you’re wrong. Every time. Part of the issue for me is that I don’t think B2B and “Even great customer service B2C marketing strategies are all and account management that different. can’t substitute for a lack of If anything, insight into buyer behaviour B2B companies need to think and preferences” about an additional set of customers: the ones at the end of the chain, as well even those they had a relationship as all those within it. with spanning decades, buy their You still need to follow all those products? Even great customer other steps that many traditional service and account management retail brands have been following can’t substitute for a lack of for decades: research, positioning, insight into buyer behaviour and market segmentation, and internal preferences. marketing before going external, To those of you in B2B, and I’d and so on. hazard a guess many EMA members Being in B2B doesn’t let you off are, I recommend taking a close the hook on planning how your look at the consumer brands you direct customers will sell your wares love, and what they do that works. to the person at the end. I think it You don’t need to spend millions makes you a far better business if on advertising, but you do need you constantly strive to understand to refine your message and brand the “end use” customer. positioning, and identify a very clear A consumer product brand market segment that you “talk” to might ask, “Why would and think about in terms who their someone buy our product or end-end customers are. service?” A business-to-business brand should ask, “Why would someone buy the product that includes our ingredient or our widget in it?” Whether your customers are resellers, distributors, wholesalers Bella Katz is an Australia-based – you still need to have a unique brand and marketing consultant, position with the end user and you and regularly advises New Zealand still need to segment your market. “Everyone” is not a market segment. companies on how best to position in Australia. She specialises in From past experience, businesses marketing for the manufacturing that struggle to win support in their and industrial sectors. channel, have an unclear benefit bella@bellakatz.com.au, LinkedIn to their end use customers. Or as


10 Commandments for China! Former Easiyo CEO Paul O’Brien presented his 10 commandments for China at a recent Export NZ Auckland Khybar. Here they are (though some probably deserve more explanation!) 1 Don’t rely on contracts

• They won’t honour them. • The negotiation starts when the contract is signed!! • Contracts may be valid that day (but not in a few months) • Almost impossible to enforce • MoU more useful -“ you do this, we do that”

2 Saving face

• Don’t believe anything from China • In China the family takes precedence • Relationships are important, but still family first • Lies are not really lies, just saving face • Protocol and etiquette are important

3 Cash in advance

• NZ $ transactions preferred over RMB • T T better than L/C. • Never give credit…..the Chinese don't. • If they can’t afford to pay up front be careful

4 Give retrospective rebates

• Give retrospective rebates instead of discounts, say 5% • Link them to their marketing spend • Watch receipts closely (get them translated ) • Its ok to give a rebate in stock, say 7.5% to 10% • Always visit retailers when in market.

5 Just one city

• Just one city is big enough eg Wuxi, Nanjing, Shenzhen, Qingdao, Hangzhou. • Tier 2 and 3 cities have great buying potential • Distributors are mostly regionally focused

6 Consumer research

• Consumer research very important (this is not NZ) • Route to market critical • Packaging changes may be needed • Do quantitative and qualitative research ideally

7 Multiple distributors

• Get multiple distributors with some exclusivity, NOT ONE DISTRIBUTOR. • Many will ask for whole China exclusive – they won’t be able to do it • Beijing and Shanghai are just so different from each other

• Keep distributor relationships competitive • Promote the best distributors. Stop supplying the worst ones • Review 6 monthly 8 Make your products premium

• Make your product or service PREMIUM - ‘We are expensive!’ • Chinese love showing off brands ( conspicuous consumption) eg phones, cars, handbags, clothes • The most expensive product in a sector is desired • Don’t discount, better to rebate later

9 Online

• On line can be better than retail eg Taobao • Get flagship position in on line mall • Courier transportation is cheap and efficient • Watch web site stealing and non approved sites • Auckland University IB Dept. can help

10 NZ Inc.

• NZ Inc is critical particularly for F&B • Build it around your USP. • Use NZT&E where possible, eg video links, photo’s • Subsidise trips for distributors to NZ to breathe our culture • Offer trips as incentives as part of the rebate

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MEMBER NOTICEBOARD

“Its a great way for companies to both treat their customers and promote their companies at the same time. Not to mention for their own staff as an activity for lunch times as well as after work or social club activities”

Pete Edmondson

Targeting the lunchroom Puma Darts have for over 40 years manufactured and exports darts, dartboards and accessories to over 72 countries under their own Shot! and Puma Darts brands. They also contract manufacture for many other global dart brands and can produce anything from a dart flight to a customised dart cabinet. They even have their own professional international players playing on the world stage.
Sales Manager Pete Edmondson says, ”With darts experiencing massive growth locally, fuelled by the extensive ongoing TV coverage, we are seeing

darts becoming a popular activity for trade staff in many branch office and workshop lunch rooms across the country. “Its a great way for companies to both treat their customers and promote their companies at the same time. Not to mention for their own staff as an activity for lunch times as well as after work or social club activities.” Puma Dart Products in Katikati finds its darts and dartboards are so popular in workplaces around the country that the company is

now making customised branded dartboard sets for customers, or can recommend a package to suit a particular companies needs. “We thought fellow EMA members could be interested in their own custom branded dartboard set or even a board in their own lunch room,” he said. 
 Contact: Pete Edmondson petere@ pumadarts.com or tel 021 456604

GET IN ON THE FUN

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and shipping. applies. Excludes GST or arranged. apply. *Minimum order quantity off production costs of $250 per colour 4 weeks. Artwork design can be supplied rd surrounds are available also. e from and one and dartboa Maximum 4 colours label option. Lead-tim darts, cabinet sets white carton inner, per set and custom Shipped in a standard from as little as $0.65c dart flights available Custom matching s Ltd Puma Dart Product PO Box 44Henry Road, Zealand Katikati 3166, New contact: For further details P: 07 549 0253 er Manag dson - Sales www.pumadarts.com

Pete Edmon P: 021 456 604 .co.nz E: petere@pumadarts

Vanilla company builds own premises Processing vanilla pods in Tauranga has Heilala Vanilla moving into new, purpose built premises.

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After two years in the planning, the company has moved into its new factory and offices – just next door, at

Newnham Park in Te Puna. Heilala grows its vanilla pods in a plantation in Tonga.


MEMBER NOTICEBOARD

“With this new way of thinking, construction will become more a matter of manufacturing than building”

Construction industry innovators The world’s steel framing innovators gathered in Auckland earlier this month for The Steel Frame Innovation Conference New Zealand. The event was wholly created by Howick Ltd based in Howick and which makes steel roll forming machines – the company’s third, international biennial conference (April 29-May 1). Managing director Bruce Coubray was expecting about 100 delegates from 13 countries including eight from the UK, others from Russia, the US, South Africa and Malaysia. Howick designs and manufactures quality machinery for steel frame construction worldwide. Coubray’s two sons Nick and Hamish are also involved in the business. The conference featured live demonstrations on Howick’s machines and networking with the company’s global team brought back from 11 offshore offices, site visits, and presentations from speakers including Sir Kenneth Stevens and professors from Auckland and Sydney universities. Visit www.innovationconference. co.nz for more detail. Another construction innovation meeting, ‘Buildoffsite Australasia’, has also just been held. Howick was one of three companies instigating the meeting with a replica meeting in Sydney to develop an Australasian version of the British membership organisation ‘Buildoffsite’. They brought the Buildoffsite UK chairman Richard Ogden and other members to present alongside Australasian companies and to

interact with other New Zealand and Australian construction businesses. As the name suggests, ‘Buildoffsite’ is an approach that aims to develop new processes and alliances to increase the prevalence for design of the manufacture

efficiency, overcoming some seasonal pressures and improved safety. One British company is known to have pre-assembled and dismantled a large building twice as a test run, before taking it to its final resting place.

from left: Bruce Coubray and sons Nick and Hamish

of building components offsite in a factory, then breaking them down into pieces to transport all over the world for delivery to the client’s site for assembly – into a shed, multi-storeyed block, hotel, stadium, bridge, tunnel or any other permanent structure made of steel, concrete, composites and wood; with electrical cables, windows fittings and more incorporated offsite. Advantages include the short time on site resulting in minimal disruption and pollution, cost

The meetings addressed local permitting issues, insurance, finance, tendering, product standards and more. Participant organisations included finance companies, councils, construction and engineering companies, component manufacturers, BRANZ and the Ministry of Business, Innovation and Employment. “With this new way of thinking, construction will become more a matter of manufacturing than building,” Coubray says. BusinessPlus

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How do you see your staff?

If your “human resources” are hardworking people who give their time and effort to make your company what it is, offering Southern Cross health insurance is the perfect way to reward them. But they’re not the only ones that benefit. Offering health insurance helps retain and maintain a productive workforce. Find out how some of New Zealand’s leading businesses see their staff at www.healthybusiness.co.nz


MEMBER NOTICEBOARD

The wonder of trees Scion’s breakthrough technology in fibre processing, combined with a new Italian business partnership, is creating global opportunities for using long wood fibres in plastic products. The technology is now commercialised and marketed as WoodForce™, an MDF wood fibre product developed by Scion and licenced to Sonae Industria, one of the world’s largest wood-based panel’s producer. WoodForce is used to increase the strength of plastics (eg substituting for fibre glass), among other attributes, while reducing the environmental footprint of these plastics. Recent scale-up extrusion trials in Europe of a new version of WoodForce demonstrated that high production speeds (nearly double the rate normally seen with natural fibres) could be achieved while maintaining good strength of the final composite. The production rates achieved exceeded expectations and confirmed the licencee’s belief in the WoodForce technology. Currently several major potential users of the technology (eg, for automotive parts) are in final or near final stage industrial trials. The agreement with Scion gives it an exclusive licence to commercialise the technology in Europe and create sustainable chemistry and engineering

Green Chemistry Market will grow from $2.8b in 2011 to $98.5b by 2020. Biobased polymers triple in production.

new markets for sustainably-produced wood fibres. In June 2013 that licence was extended to include North American markets.

product positioning

New innovation centre coming

Scion, the New Zealand forestry Crown Research Institute, is also planning a start on building a new innovation centre on site in Rotorua – expected to get underway in a year’s time, says Scion general manager of manufacturing and bioproducts, Elspeth MacRae. The Scion Innovation Centre will be a hub for research and development firms in the forestry and wood/ biomaterials sectors, adding to the 27 forestry-related tenants already on the Scion campus. Elspeth says, “The centre will complement existing businesses and facilities but will provide wider opportunities for industry collaboration and expansion by creating a cluster of like-minded businesses that will bring new capital, new expertise and technology into the Bay of Plenty.” The Centre will help the forest industry meet its goal to increase export earnings from around $5 billion to $12bn by 2022. With additional tree harvest due to come on stream over the next decade, addedvalue processing of logs could help create 4000 extra jobs for the Bay of Plenty region and increase export earnings by up to $1 billion. The hub will also include a Centre of Excellence for Freshwater Research being established with Waikato University. Funding for Scion’s Innovation Centre will also act as the catalyst for a three-stage project including a partnership

between Scion and Bay of Plenty Regional Council, one of four across the region provisionally allocated a total of up to $40.5m. Construction of the Innovations Centre’s 1000sq m building is expected to be completed by September/October next year. Scion is also home to many innovations under development such as: • Nanofibres of spun lignin, a waste chemical from processing wood, potentially for many applications. An Auckland company is making carbon fibre mats experimentally with this. • Biofoam has been created to replace polystyrene, by Biopolymer Network Ltd, a joint venture formed among Scion, Plant and Food Research, and AgResearch. • Waste biomass from processing wood and other produce have been global market growth

combined to make many products such as biodegradable teaspoons using kiwifruit waste. Bio-based product standards are being developed in Europe, eg, defining ‘bio’ and how much renewable content needs to be included and how this should be measured, Elspeth says. BusinessPlus

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BussinessPlus May 2014