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u p d a t in g a n d in f o rmin g t h e Gre a t e r E a st Ta ma ki b usin e ss co mmu n it y

ON CONSTRUCTION

SPRING 2015

4 SPECIALISATION CREATES OPPORTUNITIES 8 BUILDING ON GOOD TIMES 13 DOWNSIDE OF THE BUILDING BOOM 18 FINDING, GROWING AND KEEPING GREAT STAFF 21 CYBER THREATS 27 HIGHBROOK DEVELOPMENT GROWTH


Editor: Jane Tongatule E gm@getba.org.nz Advertising: Charlotte Haxaire E events@getba.org.nz

From the Chair

PO Box 58 260 Botany Auckland 2163 P 09 273 6274

getba.org.nz

In this issue we highlight the importance of construction to the New Zealand economy, being the sixth largest business sector and a key driver for economic growth. $200 billion of construction activity is forecast over the next six years, much of this in Auckland. Both residential and commercial construction in Auckland is booming and there are several large infrastructure projects in progress with others due to start soon. We have a number of member companies involved across many aspects of construction including building compliance, building materials manufacture, distribution, civil works and building construction and you will see some of these profiled in this issue. GETBA’s AGM was held on the 22nd of September. The 2014/2015 Annual Report and audited Financial Statements were presented and adopted, as were the 2015/2016 Business Plan and Budget. Our General Manager outlined the association key achievements over the past year paying particular attention to the return on investment as it is most important that you, our members get value for money. The GETBA Committee remains in place with the seven existing members re-elected. I would like to thank the committee for their efforts in steering the Association over the past year. I am pleased to announce that we now have 10 Association sponsors and it is only with their contribution that we are able to continue with all the services to members, including crime prevention initiatives, following the end of the Ministry of Justice grant. Our sponsors are profiled on page 19. It is hard to believe that we are back into daylight saving already, and into the last quarter of 2015 with Christmas just around the corner.

Upcoming events 20 October Technology Seminar: The top ten things every CEO must know about their IT 29 October Waste Minimisation Forum 25 November Breakfast

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On behalf of GETBA and your committee, I trust you will enjoy reading our latest Focus magazine and as always, don’t forget to visit the GETBA website regularly to keep up to date with happenings in East Tamaki… and the website is now mobile friendly. RICHARD POOLE, CHAIRMAN, GETBA

GETBA SPONSORS


CONSTRUCTION BUILDING

ECONOMY

CONSTRUCTION IS NEW ZEALAND’S SIXTH LARGEST BUSINESS SECTOR, EMPLOYING 8% OF THE WORKFORCE AND CONTRIBUTING 5.5% OF GROSS DOMESTIC PRODUCT. The National Construction Pipeline report released by Building and Housing Minister Dr Nick Smith in July projected the total value of building and construction activity in New Zealand to top $200 billion over the next six years – much of this driven by Auckland. The report forecast 80,000 new homes will be built in Auckland in the six years to 2020. The construction sector has been booming over the past few years, even propping up other parts of the economy in recent times. Growth in Christchurch appears to be close to peaking but it is anticipated that construction activity will continue to be high for some time, especially in Auckland, where new dwelling permit numbers are soaring. Building consent data released by Statistics New Zealand in July show that new dwelling permits were 24% higher in July 2015 than they were a year earlier. This was led by apartments and units but there was also growth in permits for standard housing, with 1116 homes consented in Auckland in July, the first time in a decade that the monthly total has been over 1000. A total of 25,696 new dwelling unit authorisations were issued in the year ended July 2015, the highest number since November 2007. The downside of the current building boom in Auckland is the accompanying shortage of resources, both in terms of personnel and materials. Recent research undertaken by BRANZ on Auckland building projects highlighted over-stretched construction supervisors and council inspection staff. There have also been instances of imported building materials being non-compliant. The Building Industries Federation which represents the supply chain of the building industry, is involved in advocating for compliance with standards. There is still a shortage of skilled builders and associated tradespeople.

The Building and Construction Industry Training Organisation (BCITO), the largest provider of building and construction trade apprenticeships, has a record number of apprentices registered with them, but is actively seeking more, recently promoting the trades to young people through initiatives such as ‘Got a Trade? Got it Made!’ week and the Big Construction Tour. We have seen the re-emergence of government subsidised trades training schemes, including those targeted at young Ma¯ori and Pasifika. The Government is putting $43 million towards helping Ma¯ori and Pasifika trades training initiatives across New Zealand, but the support of employers is also vital in these programmes. Both local and central government are working to free up land for housing supply, and central government are also working on initiatives to constrain building material costs, rein in development contributions, cut compliance costs and improve sector productivity. There has been robust debate on the recent recommendation by the Government’s Rules Reduction Taskforce for builders with ‘certain levels of qualification’ to be able to certify their own work. Those affected by the leaky building crisis are understandably apprehensive, while those keen to see increased productivity are more willing to consider a structured approach to this proposal.

Auckland Council has recently appointed a full time council investigator to lay complaints with professional licensing bodies, due to Council’s concern about some shoddy building work. On 24 September the New Zealand Herald reported Auckland Council building control chief Ian McCormick saying his staff had laid 22 complaints over the past year with a government board empowered to fine or suspend licensed practitioners such as designers, carpenters, roofers or foundation specialists, and another 39 complaints were being finalised. As a result he had also appointed in the past two months, a quality assurance auditor to streamline the process as well as a two-member elite building inspection team to advise on how to remedy seriously faulty work. However he said that the problems emanated from just a small proportion of the industry, and there may be a case for some self-certification subject to strong auditing procedures and liability insurance to give the community confidence in builders signing off non-critical work. He also said the council supported much of the report issued by the Government’s Rules Reduction Taskforce. “We’re not talking about reducing the quality of the work, but certainly think there are opportunities to make it easier for customers to get building consents and engage with us.” S P R I N G 2 0 1 5 FOCUS ON CONSTRUCTION

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WILSON GROUP

SPECIALISATION CREATES OPPORTUNITIES How does a company go from manufacturing small underground concrete chambers to providing 36-metre long precast beams for major infrastructure projects? The Wilson Group believes the answer lies in specialisation and a great team of people. The group was originally founded in 1995 as Telecrete, a small Takanini company providing small precast concrete items for telecommunications. The firm has since established two other successful entities: Wilson Precast and Wilson Tunnelling. Wilson Precast was created in 1997 to move into commercial property development, and produces almost anything concrete (walls, stairs, beams,

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floors, balconies, etc.). After the 1998 power crisis in Auckland, the company provided 9 kilometres of tunnel segments to Mercury Energy to lay down new underground cables in the CBD, replacing the damaged lines which had caused a five-week long power outage. “We started the first specialised segmentally-lined tunnels in New Zealand, and then decided to take

advantage of that specialisation”, says Dan Wilson, Business Manager. This is how Wilson Tunnelling, the latest branch of the group, was founded in 2007. The group’s specialty is the manufacture of precast concrete items. Concrete is batched, formed and cured in Wilson’s 18,000 square metre manufacturing facility in East Tamaki. Each item, ranging from 1 to 100 tonne, is then brought to site in purpose-built trailers. This procedure allows a better control of the concrete and a more regular finished product, as Dan explains. “In our facility, everything is under cover; we’re able to control atmospheric conditions, placing


conditions, and curing conditions. You can’t have the same level of control on site, because you have to deal with wind, rain, and unspecialised people pouring the product.” Time is also an essential factor: “Making panels on site takes up time and resources. Here, we can build a whole 10,000 square metre warehouse building, and deliver it to site over three days.” Wilson Group companies use 100% ready-mixed concrete, pulling materials from local quarries. Dan has also noticed an increase in demand for recycled materials in the past few years. “More and more developers and builders are looking for Green Star-rated materials, so we sometimes use recycled aggregate through concrete millings coming off pavements, etc. We’re always keen on innovation, and being able to reuse resources makes sense economically as well as ecologically. Developers, engineers and architects are all heading towards that point, so we want to go down this path as well.” Wilson Precast and Wilson Tunnelling specialise in commercial and civil infrastructure projects. The group operates mainly in Auckland and Waikato. Past projects include the Hobson Bay sewer line in Orakei, the Rosedale outfall project on the North Shore, and the new St Lukes Bridge layout in Western Springs. But the biggest project both branches are

currently working on is the supply of over 24,000 precast segments, 290 Super Tee Beams and 2,400 Invert Tunnel Culverts to the Waterview Connection project, which aims to expand the Western motorway between Mount Roskill and Point Chevalier. This massive project is due for completion in early 2017. In total, Wilson Tunnelling will have delivered 115,000 cubic metres of concrete over the 66-month duration of the project. “We currently have 155 employees, with an 80/20 split between Precast and Tunnelling at the moment, since the Waterview project is slowing down”, says Dan. Most of the employees working on the Waterview Connection have been redirected to other projects. “We took in 50 people for the Waterview project, and managed to retain 48. The advantage of our group is that, when these big jobs slow down, we’re able to redeploy employees within the standard operations of Wilson Precast.” Staff is a major asset to the Wilson Group: “As a family business, it’s always been important to us to have a good idea of everybody on the ground – making sure we know exactly who we employ, right down to the person who just walked through the door yesterday.” The company’s entire labour force comes from the East TamakiOtara area. Dan expects their workforce to grow close to 200 workers within the next year. “We took the opportunity with

Waterview to grow the business to that next step, and because of the way the current market is, we’ve managed to keep this growth.” In association with BCITO, the group has also taken on four apprentices in precast concrete. The entire training process takes roughly three years, which the company is happy to provide. “Having apprentices upskills our workforce, and costs are minimal since most of the training is in-house. It’s a great opportunity for both parties really.” The future is certainly bright in the construction industry, and the Wilson Group is no exception. With future projects both in commercial (a large proportion of the new Westgate facilities in Massey) and infrastructure (the Southern Corridor widening project), the firm has reason to be optimistic. “From our side, the birds are chirping in the trees!”, states Dan. “The general outlook on the construction market is very good at the moment. You hear these media reports about China and the issues they’ve got over there, but within the business unit, we can’t see that hitting us within the next 24 months.” The group is forecasting good workloads through the upcoming year. Their next priority will be developing their resources to take on more jobs: an encouraging piece of news for construction workers looking for a job in East Tamaki.

The company’s entire labour force comes from the East Tamaki-Otara area. They expect their workforce to grow close to 200 workers within the next year. S P R I N G 2 0 1 5 FOCUS ON CONSTRUCTION

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LATHAM CONSTRUCTION

REALISING A VISION FOR CLIENTS Latham Construction is a medium-sized building company, the likes of which can seemingly be found everywhere in Auckland. So what sets them apart? It’s certainly not their flashy locale. Operating from a small office on Kerwyn Avenue, you could drive past their building every day and not notice it. But Latham Construction does not rely on being seen to get business, their clients know where to find them. 6

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This is truly the core of Latham Construction’s development. Established since 1985, the company has specialised in commercial and high-end residential projects, with an emphasis on customer service. “Our main focus is to make sure our clients are happy with their end product”, says Brad Gartside, Project Manager. “If they’re happy, they will tell others, and those people will come to us. We rely almost exclusively on word of mouth, and so far, it seems to be working really well.” Previous jobs in the company’s portfolio include vastly different projects, from

commercial warehouses to traditional baches, and even unique designs such as a fully-automated holiday house – complete with futuristic doors receding into the walls as you walk through. This diversity comes mostly from clients, as Brad explains: “We’re focussed solely on commercial at the moment, but if a client comes up to us with a big residential project for themselves, of course we’ll do it.” When a customer approaches Latham Construction with a vision, their process to make it happen is simple: “We make sure we understand what they want, then we study what can be achieved, and finally we lay out a list of options detailing the best ways of going about it. But the most important thing to us is to satisfy their wishes”. Latham Construction is ready to go the extra mile for their clients – quite literally. One of their latest challenges involved going as far North as Kaitaia to work on site for the Warehouse, one of their major customers. “We had to work with local companies to be our main suppliers. It wasn’t feasible to bring guys in from Auckland”, says Brad. “That was quite challenging in the beginning, but we’ve managed to work well with the local community. We are now three quarters of the way through with that job and haven’t had any issues.” Going away from Auckland to work on construction sites is


something the company routinely does. “We’ve done work in Whitianga, Omaha… we work everywhere in the North Island, really. For one-off clients, that’s a risk we probably wouldn’t take, but once we form a relationship with the customer, we do our best to supply a good service at all times”. That trademark loyalty also extends to Latham Construction’s network of suppliers. Over the years, they have established a project control group made up of a variety of sub-contractors, engineers, architects and suppliers. Brad refers to this wide but close-knit group of people as their ‘construction family’. “We work with them on all our projects, which helps keep it all as easy as it could be. For instance, if we’re asked to use a new product or material, we’ll ask them where we can find more information about it, and use this as the basis of our research before we take it to the client. We rely very heavily on our network in all our activities.” Latham Construction’s current agenda is quite busy – as is anyone’s in the construction sector nowadays. “I haven’t heard of anybody who’s had slow business in the last two or three years”, says Brad. “Everyone wants to buy land and build commercial at the moment, and this is great for us”. The company operates with 20 staff, bringing in sub-contractors as needed. “Our staff is our other main strength. We have good quality workers, and, since we’ve worked with a number of sub-contractors over the years, we are now able to pick the best of the bunch.” Finding and keeping good staff is a major issue when business is going well, since many qualified workers prefer establishing their own companies rather than working for someone else. Fortunately, Latham’s practice to cultivate

loyalty within their network helps them find the right staff, even in challenging times. “Working with the same people on all our projects is a win-win situation, really. They are happy with getting repetitive work, and we are happy to get a better service and to keep prices stable”. Latham Construction’s latest projects in the area include a new Buddhist temple in Takanini and a big extension for Airworks’ helicopter hangar and offices in Ardmore

Airport. The company gained seven new major clients in the past ten years, with Project Managers normally running four to five jobs simultaneously. With their customer-focused approach, and the building boom currently still going strong in Auckland, it’s a safe bet to assume that Latham Construction will maintain a steady activity for the years to come.  lathamconstruction.co.nz

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Building on good times The building boom in Auckland and Christchurch has provided a sustained upturn for the construction sector, but highlighted the risks that come with rapid growth, new ANZ research reveals.

The annual ANZ Privately Owned Business Barometer survey (in the first half of 2015) found the sector was generally optimistic and participants were taking a range of approaches to lay the foundations for sustainable growth, regardless of demand.

Key findings from the ANZ Privately-Owned Business Barometer construction survey

But despite a significant increase in work and revenues, some construction businesses were failing or finding profitability stayed the same as in more difficult times.

• Only 16% have boards compared to the Barometer average for all businesses of 25%.

Respondents said maintaining reasonable margins on every job – and not chasing volume at the expense of profitability – was essential for a strong business in good times and bad. Careful cash management and building strong relationships were also key. Common issues that led to problems when businesses got busy include: - jobs not being priced, - invoices not being issued in a timely manner creating cashflow problems, - too much focus on certain clients leaving the business overly exposed, and - taking on a too-large project for the business owner’s equity meaning losses can’t be absorbed. In a sector whose fortunes are heavily impacted by the ups and downs of the wider economy, ANZ believes the number of firms building resilience is a positive development. Growth comes with challenges and, without strong business and financial disciplines, businesses run the risk of becoming victims of their own success. 8

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• The building boom has brought the sector’s staffing issues into sharper focus. 30% of Construction sector respondents said that a lack of staff has definitely impacted their business, compared with 18% of all survey respondents.

• When it comes to benchmarking against similar businesses, 15% said they do this annually while 28% said they never benchmark. • Around 30% of survey respondents said mobile technologies had totally changed their business, 20% of respondents reported that it had made little to no real change to their business. Almost a quarter of large companies reported increased staff satisfaction as a benefit of mobile technology, compared to just 5% of small companies. • 20% of construction respondents said environmental considerations bring significant extra costs (compared to an average of 9% for all businesses). Environmental regulations were just one part of what focus group participants saw as the increasingly large regulatory burden they had to meet. • Compliance with new health and safety legislation was one of the top five biggest challenges mentioned by survey respondents.

Construction is New Zealand’s sixth largest business sector, employing 8% of the workforce and contributing 5.5% of Gross Domestic Product. A total of 314 Construction sector businesses – varying in size, location and structure – completed the 2015 survey

which was followed up by focus groups throughout New Zealand. The ANZ Privately-Owned Business Barometer is New Zealand’s most comprehensive annual survey of business sentiment, taking in commercial, farming and Maori businesses.

 Find out more about the Construction Sector Insights 2015 report here: anz.co.nz/barometer Or, to talk to local Commercial Banker, call ANZ’s Guy Bullivant, 027 270 6349


BCITO’s Big Construction Tour On Thursday, 27 August, more than 800 secondary school students from around the country were given a close-up look at New Zealand’s building and construction industry as they joined BCITO’s Big Construction Tour. The Building and Construction Industry Training Organisation (BCITO) took chosen career seekers on a whirlwind tour of the building and construction industry, which continues to be short of young people to work in a wide range of areas. BCITO Chief Executive Ruma Karaitiana says, “The building and construction industry is still going through a period of rapid growth. Our country needs more young people to learn the practical skills that are in such high demand.” “The tours across the country showed career seekers just some of the opportunities available in the industry. School leavers who decide they want to start an apprenticeship can be confident they won’t struggle to get work, there are so many great opportunities available.” BCITO’s Big Construction Tour happened in Central, West, and South Auckland, Christchurch, Gisborne, Hamilton, Hawkes Bay, Palmerston North, Nelson,

New Plymouth, Tauranga, Wellington, Whangarei, Dunedin, Central Otago, and Invercargill.

“We want to showcase the different opportunities and trades that are available in the construction industry.”

In the East Tamaki area, students from Howick College, Tangaroa College and Botany Downs College attended the BCITO Big Construction Tour.

“The day also provides an opportunity for employers to meet some real career seekers they may wish to interview and take on,” he says.

With sixteen separate tours around the country and more than 800 hi-vis vests involved, career seekers visited some of the country’s biggest construction sites and developments.

BCITO’s Big Construction Tour was held as a part of Got a Trade? Got it Made! Week, Friday 21 August to Friday 28 August. Got a Trade Week is a focused week celebrating the talent, skills and value of apprentices and trainees across New Zealand. Its aim is to increase the understanding, status, and demand for practical and vocational learning.

“The event is a structured one-day tour of building-related sites. We are aiming to make this an annual event and capture the breadth and diversity of the industry,” says Ruma Karaitiana.

 bcito.org.nz

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SUPERIOR SCAFFOLDS

TACKLING STAFF SHORTAGES

Finding and retaining good employees is always a challenge, but in the construction sector, it can become a serious issue, especially when business is booming. Superior Scaffolds, a medium-sized East Tamaki business, is well aware of this scarcity.

one of the reasons why we are not taking trainees under the age of 18. We don’t feel it’s safe to have younger people than that around scaffolds.” Cadets must all wear personal protective equipment at all times – even on sites where it is not legally required.

Scaffolding is not an easy job, and this can deter new recruits, according to John Murray, Operations Manager of Superior Scaffolds: “We’ve had young people coming in during the summer, staying for six months, and then leaving as soon as the weather started getting bad. They didn’t want to work outside during winter.”

Cadets split their time between scaffolding jobs and a block course programme at Tai Poutini Polytechnic. After a one to two year training period, they are ready to get their Elementary National Certificate in Scaffolding. Once they obtain this certificate, they can start building scaffolds themselves, although John prefers to focus on upskilling. “We try as much as possible to encourage cadets to go through all the stages and get their Intermediate and Advanced Certificates. It takes more time, but you learn to do more advanced things, like swinging scaffolds, building on bridges… things that you cannot do with an Elementary Certificate, because it only allows you to build from the ground up”, he says.

Another issue encountered is getting workers to pass the regulatory drug tests. “Many companies say they do drug tests, but don’t implement them strictly, because there is such a shortage of skilled labourers at the moment, and they don’t want to lose the ones they have. But we do implement them, and that’s one of the reasons why we have trouble finding skilled staff”, says John. 10

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The solution, as John has found, is training their own employees. The company is currently employing fifteen workers, three of which are coming from their in-house cadet programme. This programme, run in association with Tai Poutini Polytechnic, trains young people aged 18 to 25 and takes them through the process of obtaining their National Certificate in Scaffolding. Cadets are run through basic training for the first few months, getting familiarised with components, trained in basic health and safety measures, and taught how to carry equipment. Only after a few months do they start working on site under a qualified scaffolder. “Construction sites are dangerous places”, says John. “That is


The entire process to get the Advanced Certificate takes about five years, a commitment few young people are willing to make, as John explains. “We have such a shortage of scaffolders in New Zealand that, as soon as they get their basic certificate, they get hunted by companies promising them the world. The problem is a lot of these companies are just interested in getting their men in the field; they don’t care about these young people’s development.” And there is a large potential for growth in this sector. Tai Poutini, for instance, offers scaffolding management courses for workers holding an Advanced Certificate. Superior Scaffolds has been running the cadet programme for three years, and has worked with six apprentices, four of whom have obtained their Elementary Certificate. That is great news for the company, as they need as many hands on deck as they can get. “In construction, there’s never really a bad period”, says John, “and especially not in scaffolding, where we do a lot of maintenance work as well as new buildings”.

A hand up for the next generation of builders ¯ORI AND PASIFIKA TRADES TRAINING MA Building and construction employers are being encouraged to take on Ma¯ori and Pasifika trades trainees for workplace experience, as part of a new initiative to help meet an expected boom in Auckland’s building industry. The Ma¯ori and Pasifika Trades Training (MPTT) offers scholarships to young Pasifika people to study trades at the Manukau Institute of Technology (MIT), and helps them develop the work-ready skills employers want. MIT delivers the largest MPTT programme in New Zealand, and over the next year more than 470 Ma¯ori and Pasifika trades trainees will be entering the workforce equipped with all the skills they need to get stuck in.

Moreover, the recent changes in the building code have already started to impact their business. Scaffolding and roof edge protections are now installed on single-storied buildings, where people previously worked with ladders only. (This development occurred after investigations by the Ministry of Business revealing that more than 50% of falls are from less than three metres, and approximately 70% of falls are from ladders and roofs.)

Dr Stuart Middleton, MIT Director External Relations and Chair of the Auckland Ma¯ori and Pasifika Trades Training initiative, urges employers to become involved.

John is preparing for the added work load brought about by these legislative changes by recruiting on two fronts: training young people from the ground up, and recruiting internationally. “We are one of the few scaffolding companies accredited with Immigration New Zealand. We can hire qualified people from overseas and help them obtain their residence visa quicker”.

“The students are given significant support that will help them become productive new employees and good team members from day one on the job.”

Superior Scaffolds certainly has enough to keep busy. On average, the company runs between fifty and sixty jobs a month, currently working on projects for North Power in Whangarei, for Arrow Construction in the redevelopment of Northern Glen Innes, or for the High Court in the CBD. They are keen to develop the cadet programme further. “We’re always looking for future scaffolders – the younger the better”, says John. “If they’re young, they don’t have any bad work habits; it makes training easier for us and for them”. To sum up, putting your efforts into the next generation could very well be the solution to staffing shortage.  superiorscaffolds.co.nz

“Not only are our trainees prepared as builders, plumbers, electricians, and in a wide range of other fields,” says Dr Middleton, “but they’ve also had additional training that will ensure that they are workready and have the personal and social skills an employer is seeking.”

Ma¯ori and Pasifika community groups, specialist training organisations, and Industry Training Organisations have worked with the students to provide support in employment skills.

MPTT student building a career with Mitre 10 At 20 years old, Manukau Institute of Technology (MIT) carpentry student Arai Simi dreams of one day owning his own business. He currently splits his time between studying three days per week, and gaining practical experience the remaining four days by working at Mitre 10 MEGA, in a position made possible by the MPTT training programme. Arai believes that working at Mitre 10 will help him break into the construction industry. “I got the job through MIT; I might not have got it otherwise,” he says. “Because of my job here, I’ve learnt how to talk to a lot of different people in the industry.”

“The final part is work experience,” says Dr Middleton. “This is where employers have such a central and important role to play.”

Kobus Badenhorst, Trade Manager of Mitre 10 MEGA Manukau, says the relationship with MIT is mutually beneficial.

“All employers can be involved, not just those who are seeking to employ people. Providing an opportunity for a young person to gain work experience will lead them into getting a great job. Work experience is an important contribution to the preparation of the trainee for employment.”

“It works both ways. The MIT students come with a good background about materials and products, plus have the practical building skills that they can apply. Gaining work experience at Mitre 10 helps fill the gap between studying and a building apprenticeship,” says Kobus.

“The whole MPTT initiative is based on the collective impact of everyone working together,” he says.

“Now if a building customer asks if we know of any building apprentices, we put them in touch with MIT”.

 If your business would like to employ a work-ready MIT MPTT student, please contact Sina Aiolupotea-Aiono, MIT MPTT Relationship Manager on maoripasifikatrades@manukau.ac.nz or on 09 968 8642. S P R I N G 2 0 1 5 FOCUS ON CONSTRUCTION

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GOVERNANCE in times of growth Auckland’s building and construction industry is experiencing a golden era but how well equipped are businesses to leverage it? The industry challenge – particularly for private and family owned companies in the building sector – is to ensure there is effective governance and leadership, a prerequisite for success particularly when times are busy. In the midst of a surge in construction projects, my concern is that many businesses are not implementing sound corporate governance practices because of demands of, and an overemphasis on, operational matters.

Responsibilities A core responsibility of any board of directors, or for a smaller company, the sole director, is to ensure the sustainable future of the business enterprise. There’s also the need to recognise and manage risk, establishing a sound system for identifying, over-seeing, managing and internally controlling risk. That is not feasible without taking time out to think strategically about the longer-term, the challenges, risks and opportunities.

Create a properly functioning board of directors Even where an owner-run/family business operator believes they have all the skills required, an external, non-family and non-executive director or advisor will provide access to a broader base of skills or experience and a fresh perspective – as well as becoming ambassadors for the business across new networks of influence. A good external director or advisor will start thinking and planning in a multitude of areas you had not previously considered. Because they are external to the daily operations of the business, they will be particularly useful in the identification of risks to your business, then assisting devise appropriate strategies to deal with those risks. Once you have found the appropriate person they need to be properly briefed and given

sufficient material to properly understand your business, your part of the industry and the market environment. In the current surging construction environment, companies need to take extra steps to ensure they have the capability and competence to complete projects and manage risks. The likely starting point will be the three most common current risks: 1. Are the balance sheet and cashflow sufficiently robust to cope during this period of greater activity? Is there a sufficient buffer or a Plan B in the event of a delayed receipt, cost over-run or similar threat to financial strength. 2. Is the organisation adequately resourced in terms of numbers and calibre of people to have both capability and competence to complete all contracts? Are margins too thin for difficulties on projects? 3. Are you attracting and retaining top talent? Do you have strategies to ensure this? Many sectors in the industry already face staff shortages and difficulty filling positions and focus on these issues is critical.

 About the Author: James MacQueen is a Partner in the BDO East Tamaki office, an independent member firm of the BDO network of chartered accountants and advisors. He has a particular interest and specialisation in the building and construction industry and heads the construction specialisation in BDO in New Zealand. For further information call James on 09 272 0860 or email james.macqueen@bdo.co.nz

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DOWN SIDE OF THE BUILDING The other area impacted by the boom is material supply In the New Zealand construction sector, all products used are subject to compliance with relevant New Zealand or overseas endorsed standards. Confirmation of compliance is generally by way of displaying the Standards New Zealand logo, or by supporting documentation such as BRANZ appraisals, or technical reports or code mark certification.

One of the downsides of the current building boom in the Auckland region that is not widely publicised, is the shortage of resources, both in terms of professional services, skilled labour and materials. We hear plenty about land supply shortages but little about these critical factors. The current labour shortage across all sectors of the industry from design professionals to tradesmen has resulted in a supply and demand scenario where over commitment results in time delay, cost increases and unfortunately a reduction in quality of work standard. This was one of the systemic failures identified in the Leaky Building Crisis. It is important for consumers to be aware that, when choosing professionals and tradesmen, there are some statutory requirements such as occupation licencing which can give some surety and protection. The most significant of these is the Building Act controls for Restricted Building Work (RBW) currently only applicable to the residential sector, but with the potential

Get rid of: ■ Old building supplies ■ End-of-line stock ■ Demolition materials

to cover all construction, which requires most work from design to construction to be undertaken and supervised by people who are Licenced Building Practitioners. In addition the specialist trades of electrical, plumbing, drainlaying and gasfitting also require the work to be undertaken by licenced tradesmen (further information can be obtained from the mbie.govt.nz site under Occupational Licencing). So the simple test before engaging any building practitioner is to ask for confirmation of their current licencing status. In addition to this statutory requirement there are also voluntary occupational associations such as the Registered Master Builders Association and Certified Builders Association of New Zealand who endorse the work of their members again giving some consumer protection.

With the current boom the supply and demand situation has led to a proliferation of imported building materials being used, some with appropriate approvals and standards compliance, others unfortunately without any approved certification. These products range from glass, cladding material and coatings to reinforcing steel. Their compliance is only challenged once they have been installed, at which stage confirmation and acceptance can be a costly, time consuming process. The consumer needs to be aware that not all products are compliant and should be asking the question of both their builders and suppliers for evidence and assurance that the products being supplied are compliant and fit for purpose. The old saying the ‘’cheapest and quickest method is not always the best in the end” is very true.  More information can be obtained from the mbie.govt.nz website or contact the author, Maurice Hinton, Compass Building Consultants Ltd on 09 272 2269.

And support the store that builds homes and hope. 8 Ormiston Road, Otara • Free pickup call 09 271 3357

S P R I N G 2 0 1 5 FOCUS ON CONSTRUCTION

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BAYLEYS BUSINESS SHOWCASE AND MARKET UPDATE

MICROSOFT TECHNOLOGY PRESENTATION

Photographs by Grant Southam, grant@southam.co.nz

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BUSINESS OWNERS FORUM - AUGUST

BREAKFAST WITH DAVID WARBURTON, CEO, AUCKLAND TRANSPORT

BREAKFAST WITH LT CDR DAVE CASEY, NZDF

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Challenges in Auckland’s Residential Construction Sector

There are a number of challenges facing the building industry in Auckland, around scale, quality, efficiency and price. Scaling up the building sector raises questions: What are the crowd-out risks for other sectors in Auckland, as the building sector tries to outbid them for labour and materials? How can public policy better support industry to meet various sectors’ needs? Policy makers have a number of initiatives to help gear up industry for major expansion, including the ‘Building and Construction Productivity Partnership’ (since ceased), MBIE’s National Construction Pipeline Report (July 2015) and workforce skills “roadmap” for Auckland construction to support skills sector growth. Recent analysis commissioned by the Council suggests house prices are high because of anticipation of redevelopment opportunities enabled by the Proposed

Unitary Plan once it becomes operative. Builders and tradespeople may move from Christchurch to Auckland as the rebuild ramps down, but capacity challenges will remain.

Productivity There has been little, if any, measured productivity growth in New Zealand’s construction industry for over 30 years. One problem is measuring the quality improvements that result from productivity growth.

The cost (excluding land) to build the average 200m2 house is not far off $400,000 – about five multiples of Auckland’s median household annual income (of approximately $80,000). Contrast this with the ideal ratio of three to one, including land. The Productivity Commission in its 2012 Housing Affordability inquiry attributes low productivity growth performance in the residential construction industry to the industry’s small scale and lack of scale economies, fragmented industry structure requiring a myriad of subcontractors and informal contracting, skills issues, low levels of innovation, ‘bespoke’ (tailored) nature of our homes, inferior management skills and practice (e.g. project management), councils (as building consent authorities) being excessively risk averse and stymieing innovation in design, materials and construction techniques.

THE SELLING AND LEASING EXPERTS IN EAST TAMAKI

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Jesh Jaskiewicz

David Mayson

027 4989 777

027 535 4961


Poor retention and attraction of workers New Zealand has an issue with attracting and retaining builders and tradespeople internationally. Builders advise that this is caused not by barriers to entry, but because, in this country, it is an unattractive field to be in. Construction workers receive low wages (due to low productivity), have punitive liability rules – 10-year personal liability, joint and several liability instead of proportional liability – and enjoy too little initiative – building inspectors do not give builders much leeway to use initiative and deviate from plans because of concerns about quality assurance.

Poor project management and quality assurance Work that I co-led last year for the Productivity Partnership found that project management was generally poor (but with pockets of excellence), not seen by builders as being particularly useful, and while desired by buyers, they didn’t really know how to express their demand for it. Project managing a house build is tough – some 20-25 subbies are required each build (with a high level of specialisation of trades), plus multiple visits from building inspectors. Better project management can reduce the risk of the highly networked sector coming to a slow grind during peak demand periods. Also if project management is poor, then don’t hold out much hope that quality assurance management processes will be any better. Builders will often default to ‘if you want a job done properly, then do it yourself’. Auckland Council building control staff struggle with significant industry quality issues, with 25%-40% of all building inspections failing. A council’s role ought to be limited to compliance (e.g. auditing quality assurance processes), but inspectors often find that quality assurance isn’t being done at all. So councils fill the vacuum. That’s because they are liable for potentially all the harm caused by others (because of the government’s joint and several liability rule) and because they have a legally defined ‘duty of care’ to consumers. So they effectively start micromanaging builders, which in turn repels builders.

Move to proportional liability The government needs to think more carefully about replacing the ‘joint and several liability’ rule with ‘proportional liability’ (like Australia). People and organisations including councils should be

liable only for the losses they contribute, not for losses out of all proportion to what they caused. At the moment building firms are incentivised by the joint and several rule to be extremely small for two reasons. One, so that they can personally supervise build quality (rather than delegate). The other, so they can disappear from plaintiffs, and liquidate (or ring-fence assets) so that they are not left carrying all the liability caused by other people. This change would reduce the incentives for firms to be extremely small, and will help them to achieve efficiencies of scope (i.e. different trades and skills in-house) and scale (i.e. more work). Larger firms can support more management overheads to undertake project management, quality assurance, and investment in staff. Inspectors would likely cut builders some more slack, which will improve efficiencies and help address key issues about attracting and retaining staff in the industry. The Productivity Commission raised their concerns that current liability rules exacerbate the cottage industry structure, and thus its conduct and poor performance in its 2012 housing affordability inquiry. It asked the Law Commission to consider the impact on industry structure, conduct, and performance when advising the government on whether to keep or change the ‘joint and several liability’ rule. The Law Commission didn’t. So the advice to retain the rule that the government has received is incomplete.

Other changes needed Other opportunities for improvement and continued development include: • supporting large scale residential development • investment in new production technologies, such as offsite prefabrication and Building Information Modelling (BIM) • opening up new supply chains to mitigate any market power in the current industry (such as importing material from the USA) • developing new avenues for product approval as per the Building Code, including adopting overseas product testing

• creating new housing typologies and design formats (e.g. modular housing and attached dwellings, which may also bring non-residential construction (i.e. commercial) techniques into the residential sector) • developing new effective project management approaches and quality assurance • developing new processes for building compliance, including private accreditation systems and private sector insurance to help protect consumers from risk • supporting skills training (both new recruits/apprentices and more senior skills such as project management, business management etc). I am also sounding out interest from other local/central government departments to co-commission analysis to assess: • where will the resources be drawn from, and which industries might be at risk of crowd-out from an expanding construction industry[1] • what support those industries may need for Auckland’s longer term prosperity • where emphasis should be placed on improving the quality of construction sector regulation.

Outlook There has been a lot of focus on how land use regulation affects Auckland’s house prices. But that may be largely overcome once Auckland Council’s Proposed Unitary Plan is updated and becomes operative, possibly by late 2016. Challenges in the residential construction sector, though, will need to be addressed if housing supply is to increase fast enough to meet demand.

[1] This may involve CGE (computable general equilibrium) modelling. The work could also build upon the following publication: Department of Labour (2011) Labour Market Adjustment in the Construction Industry, 2001–2009 Article originally published for AUT Briefing Papers

 About the Author: Chris Parker, Chief Economist at Auckland Council. Prior to joining the council at the beginning of the year he was a consultant. Chris specialises in economic appraisal of policy, regulation and investments. He has undertaken industry studies in residential construction, civil construction, and he specialises in cost-benefit analysis of major infrastructure projects that change the evolution of cities.

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EVENTS

Finding, growing and keeping

GREAT STAFF By focusing on your culture and your employment brand in your vacancy advertisement when recruiting, chances are you will be more likely to attract those who resonate with your culture and values. A good advert will weed out those that won’t fit your team through the process of ‘self-de-selection.’ Though just in case, be sure to check each candidate’s alignment to these factors as part of your interviews.

Many candidates are seeking flexible working arrangements, be this due to the multitude of pressures in modern life, or simply juggling conflicting priorities. By offering flexible working arrangements, you will lessen your chance of losing that stellar candidate. This benefit can further support having positive and engaged people in the workplace, meaning you will spend less time on disruptive matters such as absence management, misconduct, poor performance and high turnover.

Growing capability With ‘difficulty finding quality staff nearby’ being identified as the second most important issue for local businesses in GETBA’s recent member survey, we focused August’s Business Owners Forum on this topic. We asked Forum panellist Sharn Rayner of Pod Consulting to outline her main points.

Growing capability links closely with acknowledging an individual’s work performance. It’s about getting the best out of your people through performance whilst ensuring that the capability within the business matches the needs of the company now and in the future.

there is understanding and clarity in terms of what each person should be doing; and the Position Description can be a focus for discussions on learning / development opportunities and if needed, for addressing performance issues. Development opportunities are not only about bridging the gap to address a shortfall in skill, it is also key to employee engagement, and we all want to keep high performing, productive staff on board.

Keeping great staff Retention of staff is an area that can be easily overlooked. While a robust and carefully prepared recruitment process is a great start towards ensuring incoming team members integrate with the existing team, it’s about what happens once staff are on board. Job satisfaction goes beyond the initial terms and conditions of employment at the offer stage. Turning your attention to issues that arise promptly, measuring and supporting staff engagement and keeping connected are among many factors that can assist with holding onto those high performing, valued team members.

Attracting team members who are the right fit for your business is crucial to achieving and maintaining the right culture within the workplace. The ideal culture results in high performance, productivity and profitability – now, what business owner wouldn’t want this?

Growing capability starts with communicating your business plan – outlining where you are heading, what you want to achieve and how you are going to get there. The ‘how’ of the business plan should be reflected in the Position Descriptions for every single role within your business.

Knowing what your company stands for – your culture, your value proposition and your employment brand (perception in the job market) – are all key factors to ensuring that you attract people who not only have the skills, knowledge and experience that you require to do a role / function, but who also are the right ‘fit’ for your business, your team and your clients.

It is the Position Description that forms the basis for providing the guidance to your staff on how they will support the business objectives and how they personally contribute to the strategic goals – everyone wants to know how they are personally making a difference.

Ensure that you are finding out what motivates your team – why are they with you? This information can be a catalyst to understanding how to engage your team. Make sure that you are supporting each team member’s personal career development plans where these align with your business plans. Meet regularly with each team member and give constructive feedback and coaching. Empower your team and encourage them to take accountability – this will prevent you being a bottleneck within your business as well as further growing capability. Lastly, be a courageous leader and do an engagement survey or business improvement survey to understand what your team are thinking and feeling… we spend a lot of time inducting, training and coaching team members to perform effectively, so losing them because we didn’t keep them engaged is a costly exercise.

Having current Positon Descriptions in place for all team members ensures that

 podconsulting.net.nz

Start with attraction

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Growing the capability of your people need not be complicated, and so long as you apply the overarching principles of ‘clarity and communication’ – you have a good foundation to build upon.


Our Sponsors We’re delighted to present ten Association sponsors for 2015-2016. This new initiative compensates for reduced crime prevention funding, while contributing to members’ business development. The sponsors’ additional financial contribution demonstrates their commitment to the East Tamaki business precinct. We encourage you to show your reciprocal support by giving them the opportunity to be involved in your business should the need arise.

Every day ANZ’s team of more than forty banking specialists in the greater East Tamaki area help local businesses plan and achieve their goals. ANZ offers expertise in business and commercial banking, agri business, asset finance, transactional banking and trade. ANZ also has a full service branch and a network of mobile mortgage managers in the area. The ANZ team is proud to be part of the thriving East Tamaki community and to support local events and associations such as GETBA.

With the largest local presence of any broking company in New Zealand, Crombie Lockwood is entrusted with the protection of thousands of businesses throughout the Country. Their focus – “To protect your business and all it provides to you, your family, your staff and their families.” For more information, please contact James Townsend on 021 451499 or email James.Townsend@crombielockwood.co.nz

 crombielockwood.co.nz

 anz.co.nz

Bayleys Real Estate is New Zealand’s largest full service real estate company and has enjoyed a long standing relationship with GETBA. Based in East Tamaki for nearly two decades, they have provided real estate and property services to this high performing industrial precinct and look forward to continuing this into the future.

 bayleys.co.nz

Goodman is an established business with a premium property portfolio and quality customer base. With property assets of over $2.2 billion, it is New Zealand’s leading industrial and business space provider. With substantial estates, including Highbrook Business Park, M20 Business Park, Savill Link and Westney Industry Park, located throughout South Auckland, it’s a portfolio that offers a range of property solutions for its customers.

 nz.goodman.com

Matrix Security is a business founded on protecting the people, buildings and communities they inhabit, developing solutions tailored specifically to meet the needs of their clients. “For our commercial customers, our security solutions focus on supporting the proper functioning of the business, ensuring business premises, infrastructure and staff have continuity. For residential customers, security extends to ensuring their family, home and assets are safe and secure,” says Scott Carter from Matrix Security. For more information, please call Ravina Ram on 09 579 1567.

 matrixsecurity.co.nz

Monteck Carter is a trusted advisory and chartered accounting firm, based in East Tamaki. Effective and professional relationships are based on mutual trust, support and integrity. So they get to understand your needs, tailor unique business solutions that fit you and build a firm platform for future success.Their success is driven by their vision, their values, their culture and their position in the market.

 mc2ca.co.nz

RSM Prince Chartered Accountants enjoy a close association with GETBA. Auckland based for 70 years, with offices in Highbrook and Albany, they are committed to working with their clients to provide real value, innovative practical solutions, and to exceed expectations in everything they do. Above all, they are here to inspire and help their clients grow their business. The full range of services they offer can be found on their website.

 rsmprince.co.nz

BNZ Partners is committed to helping East Tamaki business people be good with money, which is why they open up their innovative Partners Centre for educational GETBA events and business owner forums. Their local, experienced bankers are dedicated to providing businesses with tailored banking solutions and can put you in touch with their network of finance and industry specialists. For more information, please contact Aaron Jones on 09 924 9492 or email Aaron_Jones@bnz.co.nz

Six time NZ winner and 2013 global winner of Microsofts’ Small Business Partner of the Year award, Kinetics have won more Microsoft awards and certifications than any other IT company supporting medium sized business. Making IT work for you, Kinetics delivers practical IT to improve business performance, taking pride in delivering to promise, on time and on budget.

Wynyard Wood is proud to have 20+ years involvement in the Greater East Tamaki business community. With their main office in the Highbrook Business Park, they are literally next door. Wynyard Wood has the expertise to provide a full range of legal assistance, including corporate, commercial, property, family, dispute resolution and notarial. To find out more about their services, please contact Henry Jansen on 09 969 0126.

 bnz.co.nz

 kinetics.co.nz

 wynyardwood.co.nz S P R I N G 2 0 1 5 FOCUS ON CONSTRUCTION

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TECHNOLOGY

Supporting small business BringIt is a newly released express courier online service specifically targeted at tradespeople who often need supplies delivered at short notice.

After trialling the service for a month, New Zealand Post in late August launched a new web-based service that lets customers book urgent parcel deliveries from their smart phones. New Zealand Post General Manager for BringIt Michael Stewart says the newest addition to Courier Post’s express courier service is about saving small businesses time and money. “Our BringIt couriers do the legwork so project managers and their teams don’t have to lay down their tools and head off site every time an urgent supply issue arises. To make an order customers key in a few basic details. This includes pick up and drop off points and their preferred speed of service, which determines the cost,” Michael Stewart says. PLS Consulting Project Manager Phil Stewart has been using BringIt to get plans and urgent supplies to each of his sites. He says it’s easy and convenient to use. “Rather than sending one of my guys offsite I use BringIt. It means supply issues

don’t have to disrupt our day, and the team is on the job, in front of the client all day. I’ve added all my regular suppliers to the service and they’re impressed with the speed and efficiency of the service. I’ve recommended it to other builders and my architect is on board as well,” Phil Stewart said. New Zealand Post developed BringIt with small businesses in mind. “We know that there are around 28,000 trade businesses across the country, more than half of which employ fewer than five staff. These teams don’t always have access to printers and personal assistants so it was about designing a service that delivers supplies urgently, without a ton of administration.

What makes the service different is: • no address required and no label or barcode required • no prepaid bags • no need for a credit account.  For more information on how BringIt works visit bringit.co.nz

PayClip® is an affordable mobile payment solution that

accepts EFTPOS, Visa and MasterCard credit and debit cards. Connecting to your Apple or Android smartphone via Bluetooth, PayClip is portable, direct and cashless so you can get paid where you do the work. There’s no fixed term contract and PayClip can remove the need to chase unpaid invoices when you get payment on the spot and have the money in your account as early as the next business day. BNZ’s Head of Small Business, Harry Ferreira says “It can speed up processes, reduce time and sometimes the need for dedicated resources, particularly administration, and help with managing cash flow”.  For more information on how BNZ PayClip works visit: bnz.co.nz/business-banking/payments/payclip Subject to credit criteria, merchant service terms and conditions. Data connection needed. EFTPOS, Visa and MasterCard credit and debit cards only. Terms and fees apply. Compatible with iPhone and smartphones with Android, subject to minimum operating system requirements. iPhone and Apple are trademarks of Apple Inc., registered in the U.S. and other countries. Android is a registered trademark of Google Inc.

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CYBER THREATS THE DOWNSIDE OF TECHNOLOGY

There’s a tonne of horror stories around the world of IT about data security. We’re hearing about Crypto-locker locking businesses out of their files, people accidentally emailing confidential information to the wrong people, and almost every business is concerned about protecting their intellectual property particularly when staff leave their employment. The simple reality is that businesses are more dependent on IT than ever before – there are more records being accessed from more locations at any time. So it’s no surprise that businesses feel more at risk than ever before. The good news is that keeping your information safe is achievable. There is no end of acronyms that security experts will quote you, and there is certainly no limit to the money you can invest around data security, but as always the law of diminishing returns applies. The challenge is to find a practical answer to keeping your business data safe.

Data locations It’s amazing how much data is in insecure locations, like copied to PC hard drives. Often senior management are the worst offenders, simply because they are busy. In today’s cloud world, there is no need for this. Tools like OneDrive for Business make it easy to keep a local copy of files but have these sync to the cloud where they are backed-up – and where they are available to the user from their other devices, e.g. their iPad. But the local copy still needs to be locked down, so we often encrypt the hard disks of the executives’ laptops so that even if left in a taxi etc, content can’t be stolen.

The cloud Finally, no commentary on data security would be complete without considering the cloud. Not all clouds are equal, but the main operators all offer very good core security – better than your own in-house server. Some cloud tools, such as Microsoft Office 365, let you securely share files with more abilities than ever before – for example the ability to share a file but not let the recipient on-share it, email it, or even print it (if that’s what you want). You can even stop them using copy/ paste or have a document ‘expire’ after a certain date. In summary, data security is a huge topic but need not be hard. The principles of data security are the same as ever. As a business, you need good visibility that these points are covered in your IT support and they should be reviewed with your IT provider on a regular, ongoing basis.

Mobiles Mobiles now are as powerful as many PCs, and are used much more often. Most business users mobiles have at the least email on them, which can contain confidential information, so the ability to track mobiles, to require secure passwords, and to wipe them, has never been more important. We call these Mobile Device Management (MDM) and good solutions like ‘KARE for Mobile’ also cover situations like ‘BYOD’ – staff or contractors using their own phones, and managing apps on phones.

back you want to go – 15 mins? An hour? Last night? RTO means Recovery Time Objective – how quickly does it need to be recovered? Shorter timeframes increase the costs.

 kinetics.co.nz

Passwords Annoying as they are, passwords are your primary tool to keep people out. There are all sorts of passwords, from PIN codes on mobile devices to windows logins to VPN codes. The key principles are to make your passwords are sufficiently complex so that they are hard to guess and are changed regularly. Some of our clients have invested in ‘2-factor authentication’ which is a system of rapidly changing passwords in additional to your regular password using a token (often a phone-app) that generates a password every few minutes.

SAVE THE DATE

Backups

Tuesday 20 October

The common mistakes we see with backups are key content missed, no daily checks, poor reporting or not enough testing – these are fundamental. It is vital you back-up everything that’s important, taking an inventory on how long you need to keep content for. There are two issues you need to consider – RPO and RTO. Recovery Point Objective is how far

Top ten things every CEO must know about their IT After this 45 minute free seminar, you will know what should (and shouldn’t) keep you awake at night and what to do about it.

8.15am for an 8.30am start

Where: BNZ Partners Business Centre, 86 Highbrook Drive Tea and coffee on arrival.  Register by emailing events@getba.org.nz

S P R I N G 2 0 1 5 FOCUS ON CONSTRUCTION

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WASTE MINIMISATION

WORLD’S FIRST GUIDE TO ‘CIRCULAR’ OFFICE LAUNCHED Office refurbishment in New Zealand is set to undergo a shake up with the launch of the world’s first guide to creating an office using ‘circular’ principles – minimising waste and maximising the life of all materials. The guide, which has been produced by a cross-industry collaboration of nine organisations, was launched in Auckland on 7 July 2015. The authors are now looking for a New Zealand office in need of refurbishment to become the world’s first Circular Economy Model Office. James Griffin, Transformation Leader Mega Efficiency at the Sustainable Business Network, says he hopes the Circular Economy Model Office Guide will be the first step in revolutionising the office refurbishment industry. “At present, half of all waste generated in New Zealand is estimated to come from construction and demolition,” he says. “There is therefore enormous scope to reduce waste in this sector and this guide is a practical tool aimed at helping all players involved in the office refurbishment industry to do so. “Creating a circular economy office is a straightforward and pragmatic process, essentially following the principles of making the most use of materials offices already have. It will save companies money, as well as having both environmental and social benefits. What business wouldn’t want to do that?” The aim of the Circular Economy Model Office Guide is to minimise waste created by the refurbishment and build of offices by using the principles of a ‘circular economy’: a system that operates in a closed loop with no waste, where the lifecycle of materials is maximised, usage optimised and at the end of life all materials are re-used. 22

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The circular economy is a viable and more efficient alternative to the prevailing linear model – ‘take-make-waste’ – where tonnes of needless waste from office refurbishments and builds end up in landfill sites around the country. The Guide, which is aimed at architects, designers, project managers and construction managers, outlines simple principles, provides ‘how to’ information and shares practical knowledge. It explains how businesses can make their office refurbishment more circular through five stages: cataloguing and analysis of existing materials, design, build, soft fit-out / furniture, and review and evaluation. All companies taking part have the opportunity to produce a self-declaration at the end, specifying the percentage of materials that were reused, new materials with an end of life solution or product stewardship scheme, recycled content in new materials and materials diverted from landfill. James says the circular economy offers New Zealand a tremendous opportunity for sustainable growth – growth that does not rely on using more resources but optimises the utilisation of resources already in circulation. “The next step is to put the guide into practice in an office undergoing refurbishment, so we’re on the look-out for a business that wants to become the world’s first Circular Economy Model Office or CEMO.” Gordon Wiffen, General Manager of Philips Lighting NZ, says that reducing the new resources we use is simply the right thing to do, which is why the company has got involved in the CEMO project.

“From an economic point of view, embedding the circular economy concept promises additional value creation potential across Philips’ value chains,” he says. “A more effective use of materials brings cost savings and helps us develop new markets as well as growing existing ones.” Robb Donzé, Managing Director of INZIDE Commercial, says the CEMO project resounded with him because it’s a great way of raising the profile of product stewardship. “There has been a lot of attention given to ‘green-style’ buildings but stuff from offices is still ending up in landfill,” he says. “Most products used to fit out offices in New Zealand are imported from overseas. In many cases, there are end of life options that can keep them from becoming landfill but it’s not yet in people’s consciousness. We need to make product suppliers responsible for whole life cycle of their products.” Organisations contributing to the CEMO Guide include Auckland Council, Creative Spaces, EnviroSpec, INZIDE Commercial, Jasmax/Johansson Group, MasterSpec, New Zealand Green Building Council, Sustainable Business Network and Warren & Mahoney.  For further information about the project or if you are interested in putting your office forward to be the world’s first CEMO, please contact James Griffin: james@sustainable.org.nz


MDF Pilot ready for take off Our pilot to recycle MDF dust is set to take off this month for a 24 week experimental trial, after which we might have a completely new way to recycle this problematic waste by-product. There are numerous businesses in East Tamaki that produce MDF dust waste during their manufacturing process, with an estimated 1000+ tonnes per year going to landfill. If successful this initiative has the potential to make a significant impact on the amount of waste diverted from landfill from the manufacturing industry. Keep an eye out for the results of this pilot in our next magazine (summer 2016).  For more information about this project please contact our Project Manager, Troy Greenfield project@getba.org.nz – 09 273 6274

PASS IT ON

RECYCLING DIRECTORY

Finding a new life for used items

a practical directory to help you find where to dispose of recyclable waste

getba.org.nz/pass-it-on >

getba.org.nz/ waste-minimisationrecycling-directory >

SAVE THE DATE

Waste Minimisation Forum Hear from two local businesses, and two industry experts, on how to minimise waste in your business, and what you should know when re-negotiating waste contracts.

Thurs. 29 October 4.30-6.00pm Venue Waipuna Conference Suites Highbrook 60 Highbrook Drive East Tamaki

Drinks and nibbles provided

 Register by emailing events@getba.org.nz

You forecast it. We source it. We qualify it. We buy it. We move it. We deliver it. You get it.

4PL4U.COM

ftis.com.sg

Hassle-free supply chain management since 1989

SINGAPORE AUSTRALIA THAILAND CHINA NEW ZEALAND S P R I N G 2 0 1 5 FOCUS ON CONSTRUCTION 23


CRIME PREVENTION

Secure your

supplied by MATRIX SECURITY GROUP LTD

YARDS AND TRUCKS The recent focus of local criminal offending in East Tamaki on businesses with large sites is a concern. Trucks have been targeted with theft of their batteries, as well as tools. These large sites are often exposed with the enclosures normally consisting of ordinary wire mesh fencing that are inadequate on their own in preventing this type of offending. Some mitigating measures: • Point to Point beams that can be situated onsite to ensure maximum coverage (see more detail in box). These beams run along the fence line and are designed to be triggered by human movement as opposed to animal creatures such as stray cats or birds. • Batteries to be clearly and visibly marked (eg neon spray paint) with company name. Such markings will make it difficult for the offender to sell these batteries

Point to point beams

to any scrap metal dealer as Police have already engaged with these dealers warning them of these thefts. • Special truck battery cages can be custom made by any engineering company. These cages will make it very difficult for the offender to get hold of the batteries. • Park trucks side by side, as close as possible, but facing opposite ends to each other. This configuration will make access to the batteries very difficult and that the only way possible is to crawl under the vehicles. • Private vehicles left on premises should all be locked, wheel clamped or fitted with a steering lock.

As the name suggests these beam set devices provide detection between two line of sight points. They can be combined with other beam sets to provide cover in yard, carpark and other open spaces. Point to Point beams are what is known as “active” in that there is a transmitter unit and a matching receiver unit. When the transmitted beam – invisible infra red – is broken by someone/ something passing between the two units, the receiver activates a zone on an alarm panel the same way as standard sensors. These beam sets are usually twin beams which must be broken simultaneously to cause an activation preventing birds, dead leaves etc from causing activations. Some beam sets have more than two beams for greater or taller protection. The alarm system must have spare zones to cater for the beams which should always be on their own area so that if the beams are damaged or obstructed for any reason then the main alarm can still be set and left in full operation. While there are wireless versions available, the wired versions with a constant power supply are considered superior and more reliable. The beam sets require cable to both receiver and transmitter although there are a number of reflector beams now available that are cabled to one end only. These are on the shorter range <30m versions.  For more information contact Ray Robertson, Operations Controller – Technology Solutions Ph 09 579 1567

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ANPR traffic cameras The ANPR traffic camera pilot has proved beneficial in identifying stolen vehicles and the number of cameras has been extended with the assistance of Nautech Electronics.

The security impact of changing from analogue to digital phone systems Tom Bricklebank, Security Consultant with Sure Communications Limited, advises any business who has changed or is considering changing their phone systems to digital should consult with their security monitoring company. You should also ask your telecommunications provider what sort of impact that the change to a new

digital service will have on the monitoring of your alarm system.

The initiative has been effective both as a deterrent and in facilitating the apprehension of offenders. Police apprehended seven offenders in recent months. We regularly review the location of these cameras with local Police to maximise their usefulness in reducing criminal offending.

Tom explains, “An increasing number of companies who have changed their phone systems to digital do not realise that they lose their monitoring signals. These companies are left exposed and at risk and often find out about the problem after the event”.

CYBER SECURITY There has been a well-publicised increase in cyber security attacks on business in recent months. Cyber-crime is a constant threat and scams are becoming more sophisticated. The increasingly digital nature of today’s business environment means that there is a responsibility on business owners to understand the risks for their business and how to keep the business cyber secure.  For more information refer to the article by Kinetics Group on page 21, and visit the ConnectSmart website connectsmart.govt.nz/businesses/

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S P R I N G 2 0 1 5 FOCUS ON CONSTRUCTION

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PROPERTY UPDATE

Squeeze on industrial space encourages expansion Bayleys hosted GETBA members at a Business Showcase in September. Ian Little, Manager of Bayleys Property Research Division has provided excerpts from his Market Update. Vacancy rates across Auckland’s leading industrial precincts are lower than at any time in the last twenty years, forcing up rental and land values and strengthening the argument for the release of more industrially zoned land around Auckland’s periphery. In its last vacancy survey Bayleys Research found vacancy across all precincts which it monitors to average just 3.6%. Agency reports strongly suggest that these conditions have tightened further since then. While consent data issued by Statistics New Zealand shows that development of industrial space is increasing, developers are hampered by a lack of land. There is

very little land available within established precincts and this scarcity has driven up land values to a level whereby industrial development is increasingly unviable. The East Tamaki precinct offers a good example of prevailing trends. At the time of the last Bayleys Research survey the vacancy rate was 3.9%. Again agency reports suggest that when updated the next survey will show this figure to have fallen, as at the upper end of the quality scale there is little to no vacant space across all size brackets. Land values have increased to $400+ per m2 making industrial development all but financially unviable.

There is no doubt that new industrial precincts will emerge over the short term future with land being opened up to the north, west and south of the region. To the south of Auckland, Drury South looks set to be a major hub as resource consent for development over 223 hectares has been granted. Significant investment in the Region’s roading infrastructure has been made to support this growth. Of particular significance will be the improvements to the Southern corridor between Manukau and Drury which, at its most northerly point will link with the new western ring route. The current tight market conditions have been good news for investors according to the latest index figures released by MSCI. Increasing rents and a tightening of yields has seen total returns generated by East Tamaki located industrial property reaching 12.7% including capital growth of 4.8% in the year to June.  bayleys.co.nz/information/ research/industrial

IT’S AHEAD OF THE COMPETITION. ARE YOU? Bayleys’ Total Property is the place that smart investors look when it comes to commercial property. Released to subscribers before its properties are marketed anywhere else, Total Property gives you an advantage because you are able to see these opportunities first. Published more frequently and containing around three times the amount of stock compared to competing products, each issue of Total Property is crammed with great opportunities and market insight, including: • Over 80 of the best commercial properties for sale • Recent sales from around NZ to give you a sense of the market • A Bayleys market update plus three fascinating articles giving valuable insights into the sector

MAKE SURE YOU ARE ALWAYS THE FIRST TO SEE THE LATEST AND BEST COMMERCIAL OPPORTUNITIES BY SUBSCRIBING TO TOTAL PROPERTY - CALL 0800 BAYLEYS OR VISIT WWW.BAYLEYS.CO.NZ/TOTALPROPERTY Licensed under the REA Act 2008

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FOCUS ON CONSTRUCTION S P R I N G 2 0 1 5


Highbrook development growth Situated on the Waiouru peninsula in Auckland’s East Tamaki, Highbrook is firmly established as New Zealand’s premier business park. It’s a world class development that provides its customers with purpose built property facilities designed to meet the specific operational requirements of their businesses. Bordered by the picturesque Tamaki River, the 150 hectare estate has developed rapidly over the last decade with key infrastructure, including direct access to SH1, facilitating its transformation from a successful horse stud into an award winning business destination. Surrounded by 40 hectares of parklands and esplanade reserves, and with a range of amenities to support its commercial function, Highbrook offers an exceptional working environment for the 70 companies that have already chosen to locate there. These businesses, which represent a diverse range of industries, support a daily workforce of around 5,000 people. “Around two thirds of the way through its planned development,” Goodman CEO John Dakin said, “Highbrook has set the benchmark for new business accommodation.” With more than 40 prime industrial and commercial buildings already developed, and a combined value in excess of $850 million, it’s a substantial estate that is continuing to attract strong levels of enquiry. John Dakin said “Sustained customer demand is supporting a heightened level of development activity with eight new projects, totalling over $100 million, announced

33 Business Parade North

FOR LEASE

3,047 sqm Jarrod MacGregor – Portfolio Manager 021 452 895 or jarrod.macgregor@goodman.com

or

Metro Performance Glass received the excellence award for industrial buildings at the Property Council of New Zealand Awards in June 2015

in the last 18 months. It’s a substantial workbook that reflects the unique attraction of this award winning estate.”

developments will provide much needed capacity and are available to lease now ahead of completion in 2016.

With limited vacancy in prime space throughout Auckland, the strategic location and quality of Highbrook means it presents a compelling business case for customers seeking design-built property solutions.

Metro Performance Glass Wins Excellence

Steel & Tube and Ford are two substantial businesses to have had facilities developed in the last 6 months with new 7,770 sqm and 10,150 sqm warehouses developed since the completion of the Metro Performance Glass premises in February. Existing customer relationships have also generated new development commitments from Big Chill, Machinery House and Viridian with 22,500 sqm of projects underway for these businesses. John Dakin said “These are the latest customers to extend their property requirements with us and we are extremely pleased to be facilitating their business growth.” With Highbrook fully occupied Goodman is also undertaking three new developments to meet demand. The new facilities include two warehouses of 3,047 sqm and 6,300 sqm on Business Parade North and a new 3 level 3,482 sqm commercial office building at The Crossing. The new

31 Business Parade North

A sustainable development philosophy is reflected in the innovative property solutions that Goodman is delivering for its customers. These developments feature the latest in energy saving technology, building systems and materials. Metro Performance Glass is a business that recently chose to relocate to purpose built premises at Highbrook Business Park. Completed in February 2015 the new 16,700 sqm office, manufacturing and distribution facility received the excellence award for industrial buildings at the Property Council of New Zealand Awards in June 2015. The best in category award acknowledges the scale and success of the development, assessing its merits across a broad range of criteria including investment returns, customer satisfaction, energy efficiency and sustainability. It’s another award for a development programme where the focus remains on converting the Trust’s strategic land holdings into high quality income producing assets.

Looking for warehouse space? Built to a consistent design that is setting the standard for business space these new facilities will feature:

6,300 sqm

• • • • • •

Warehouse plus office, canopy and yard High-stud and large canopies with secure yard areas Attractive office spaces with excellent exposure Well-presented landscaped premises Generous on-site car parking Available March 2016 highbrook.co.nz

Bruno Warren – Development Manager 021 506 010 or bruno.warren@goodman.com

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Commercial & industrial growth

Employment growth

East Tamaki is the largest industrial precinct in Auckland with 2000 businesses and a growth rate higher than the regional average.

Economic output

Crime rate

getba.org.nz

FOCUS Spring 2015  
FOCUS Spring 2015  
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