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INSPIRING BUSINESS IN HAWKE'S BAY

AUGUST – NOVEMBER 2015

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THE ONE PROPOSITION HAWKE’S BAY GO GETTERS Survival of the fittest in our CBDs Business Hub – a look inside Pro Primary – growing organically


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CONTENTS INSPIRING BUSINESS IN HAWKE'S BAY

AUGUST – NOVEMBER 2015

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PRO FEATURES 8-11 12-13 14-15 16-17 20-21 24-27

Survival of the fittest in the CBD Merino business goes global Ian Crooks, success in the sun International students big business in the Bay Te Awa School gets tech savvy Business Hub – all together under one roof

THE ONE PROPOSITION HAWKE’S BAY GO GETTERS Survival of the Fittest in our CBDs Business Hub – a look inside Pro Primary: Growing organically

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PRO PRIMARY

Cover photo by Alphapix

30-31 Dairy Goats – a new industry for HB 32-35 Organically growing businesses

PRO EXPERTS 40-41 42 43 44 45 46 47 48

Pro Finance by Tobias Taylor Pro RMA by Cameron Drury Pro IT by Wray Wilson Pro Education by EIT Pro HR by Kimberly McKay Pro Legal by Edward Bostock Pro Property by Paul Harvey Pro Business by Cedric Knowles

24-27

PRO REGULARS 4-5 7

Pro HB – What’s happening in the Bay Pro Q & A with Mark Aspden

32-35

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EDITORIAL The End is Nigh By the time the next issue of The Profit is out, we will know the outcome of the referendum on the future council makeup in Hawke’s Bay. At this stage we know that it will either be five or one. I haven’t seen too much evidence of examples of how life will be on the other side of amalgamation but I’m going to give it a go and highlight some of the improvements we are likely to see. Improved council approval processes

Builders and other tradesman as well as property developers will see consistency in planning, by having one planning process for the entire region. It won’t matter whether you are building a home or commercial building in Hastings, Napier or Wairoa, you will fill out the same consent application form to the same authority. One economic development strategy – implemented by one entity

Editor Damon Harvey damon@theprofit.co.nz

Currently all five councils have their own economic development strategy, its own resources (people) and three of the five also fund Business Hawke’s Bay. The councils have be known to run off with their own initiatives/ideas and in some cases compete against each other for the relocation of the same business.

Going forward – there will be one pot of money, one group of skilled economic development experts and one very clear direction. More efficient consultation processes

I’ve recently made Long Term Plan submissions to all five councils. I had to read five sets of LTPs, find out what was similar, what was different and then make submissions accordingly. I also then had to go and make formal submissions to the councils. It would be much easier if there was one LTP document and you submitted and presented to one council. More motivated councillors

I’m not saying that the current crop are not motivated, but we would hope to see some fresh new energised people becoming community leaders. Councillors should not be able to sit in the seat for as long as they currently can. We have some that have been there for four-plus terms. We will also finally have a pathway to being a councillor, by having local boards and giving younger community leaders a taste of what it’s like to serve their community. Stronger lobbying to Government

Currently if we feel strongly about something we need

all five mayors to agree that it’s worth taking to central government. They then need to decide who takes the lead or do they all go. They then also need to commit to the end result and not waiver during the process. That’s pretty hard to do, so it will surely be much better if we have one strong leader backed by 160,000 people taking our case to Wellington. Innovative thinking

The council system is very old and traditional. It’s in dire need of a shake up. We need to look at it through new eyes and see how it can function much more relevantly than it currently does. It was interesting to go through the LTP formal presentations and the different approaches to taking on board submitters ideas. Regional community spirit

Each council does a great job of pulling its community together for a good cause. However I don’t think we do it well as a region. I’m not sure why? Perhaps its because they take turns at leading a regional campaign or perhaps it's because no entity actually takes the lead. Please make sure that you get out and vote. See you on the other side!

EDITOR/PUBLISHER: Damon Harvey 06 878 3196, 021 2886 772, damon@theprofit.co.nz, Twitter – @profithb

THE PROFIT is independently owned by Attn! Marketing PR and is published four times a year. Copyright ©2012: ATTN! Marketing PR

CONTRIBUTORS: Sarah Thornton, Vivienne Haldane, Wray Wilson, Cedric Knowles, Paul Harvey, Brent Paterson, Kimberly McKay, Catherine Wedd Edward Bostock, Cameron Drury, Alisha Neilson, Chris Bain & Anna Lorck.

All material appearing in THE PROFIT is copyright and cannot be reproduced without prior

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care and diligence has been taken to ensure accuracy, no responsibility will be taken by the

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Amalgamate.


PRO HB

STAPLES RODWAY CHALLENGE 21 NOV 2015 Participants might be pleased to know that this year’s river crossings in the Staples Rodway Challenge might not be as cold as last year. Due to the tides working in our favour, we are able to hold it a month later! This year’s challenge will be held on Saturday 21st November. The event is now regarded as one of the most popular sporting events in the region. It takes in some of the Bay’s most stunning landscapes on a course that is mainly on private land and includes windswept beaches, native forest, waterfalls, river gorges and stunning coastal farmland. The area includes

world renowned five-star lodge “The Farm”, Cape Kidnappers Wildlife Reserve and passes through the largest gannet colony in the world. The course is 32km with three legs forming a triangle along the two sides of Cape Kidnappers and back across the headland, starting and finishing at Clifton Bay Café. Staples Rodway Chartered Accountants and Business Advisors have been instrumental in establishing the Staples Rodway Challenge. The event has raised over $80,000 for local charities since its inception in 2009.

Charities such as ‘4 Friends Afterschool’ programme (run through Sport Hawkes Bay), U Turn Trust, Hayseed Trust, Surf Lifesaving Hawke’s Bay, Child Cancer, Cranford Hospice and the Hawke’s Bay Helicopter Rescue Trust have all benefited from this great community minded event. In 2015 the nominated charity is the Hawke’s Bay Branch of Cystic Fibrosis New Zealand.

www.staplesrodwaychallenge.nz

VET RECEIVES INDUSTRY AWARD

Photo courtesy of Phil Stewart

Vet Services Hawke’s Bay veterinarian Richard Hilson is the recipient of the prestigious Alan Baldry Award given out annually to a member of the Society of Sheep and Beef Cattle Veterinarians of the New Zealand Veterinarian Association. The award, a shepherd’s crook, (pictured with Richard) was presented at the Sheep and Beef Cattle veterinarians and Deer veterinarians’ conference in Queenstown recently. Richard was born and bred in Central Hawke’s Bay and has been with Vet Services Hawke’s Bay for 24 years. “I was pretty happy to receive it, as it is a significant award within production animal

vet circles and represents a lot of veterinary endeavour by many well-known vets across many aspects of our work.” The award was instigated in New Zealand in February 1989 in memory of Alan Baldry, a distinguished member of the British Sheep Veterinary Society who died in a car crash while in New Zealand. Vet Services Hawke’s Bay veterinarians Dave Quinlivan, Bert Middelberg and Richard Lee have also received the award before. Richard believes this is some sort of record and reflects how closely the practice is aligned to its sheep and beef clients.

Enviromental management and economic development go hand in hand. • Resource consent advice and planning • Transport planning • Water management • Biodiversity

REGIONAL COUNCIL

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• Online irrigation data • Land and soil science • Pollution control

06 835 9200 www.hbrc.govt.nz


PRO

Viewpoint

BEYOND AMALGAMATION A new beginning or hope lost?

Chris Bain

Whatever the outcome of September’s vote on local government amalgamation in Hawke’s Bay, the region will be granted a fresh regional leadership opportunity, whether or not it includes structural reform of the region’s five councils.

The amalgamation proposal has been a major regional distraction, driving virtually all local government matters. It has been extremely divisive. On the basis of media coverage, separate councils should remain. Accompanying messages say we’re “performing acceptably” or similar. By implication, long-term independence has ably advanced each local council. All Hawke’s Bay councils provide first-rate infrastructure. All our councils deliver their customers, the ratepayers, enhanced value. If so, how does one explain decades of Hawke’s Bay under-performance? There has unfortunately been a significant mismatch in the misleading words of some local body politicians and any objective analysis of our long term economic performance. In the early 1970’s, Hawke’s Bay was on the sheep’s back, so to speak. 40 years later we have a sinking regional economy, one which consistently underperforms compared to the majority of NZ regions. The reality of our daily life is that we live and work in a borderless community and not in unconnected cells. Interdependency across our region is the fabric that makes us unique, two complementary cities with reliance on our rural sector. Thousands of Napierites travel to work daily in Hastings (and vice versa). Many Hawke’s Bay residents view Napier as the region’s prime retail centre; most manufacturing/production activity is based in Hastings. The by-product of our longstanding regional dischord is observers - especially those from outside Hawke’s Bay - viewing us as highly dysfunctional. It has been indicated to me three times since March in Wellington government circles, that some NZ regions are able to effectively

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connect with central government. These regions also comprise separate councils, however they place importance on always being well dressed, organised and regionally cohesive when in a public setting. What goes on behind closed doors stays there. Their regional leadership is proactive and is said to be easy for central government to work with. It was clear that Hawke’s Bay certainly isn’t one of those regions. Like it or not, most of our region’s needs (by way of resources and infrastructure etc.) are dependent upon the government of the day and its policies. Although Hawke’s Bay is a reasonably important net contributor to the NZ economy - that is our (export dominant) earnings exceed total government expenditure in the region we get no Bank of Wellington 'credit '. Ever larger sums of government expenditure by-pass us, as Hawke’s Bay’s credits are increasingly moved into supporting metropolitan NZ, the ‘golden triangle’ (Auckland/Hamilton/Tauranga), Christchurch and Wellington. Who is going to begin contesting this and a number of other important issues confronting Hawke's Bay? It would be disappointing therefore if local body politicians post amalgamation return to their familiar, separate ways. We need to be ambitious and regain sustainable regional growth, as other regions are currently making progress at our expense. We can be far better, pro actively influencing our future instead of sometimes reacting on an issue by issue basis. Each Hawke’s Bay community has strengths and frailties. As these well-known lyrics state, it is high time we “… extentuate the positive and eliminate the negative”. We should

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embrace our strengths and be courageous by foregoing unnecessary and wasteful processes. We need to meaningfully re-engage with our key communities again, including the business sector. Adding value to ratepayers to my mind should be a regional mantra - it makes little sense having five sets of replicated council services. Regional development is a key example - I understand there are 19 staff employed on an “economic development” payroll region-wide. Governance of this activity is carried out by a staggering 70 councillors and directors (representing a population base of a mere 158,000 residents). Little wonder we struggle to be effective, especially when many other NZ regions have a single, focused and well funded economic development strategy and structure. Of note, Wellington is the latest region to recently establish a single structure, including tourism. There are acres of opportunities if the sustained political will is in place to objectively seek ongoing efficiencies and improved services. Savings produced by being savvy could potentially be pooled to allow increased regional investment. The most important part of the mix, councils’ customers - the region’s ratepayers - might again be seen as being traditionally silent on this matter. I sense however a high degree of pent up restlessness and frustration over the collective lack of leadership and performance by our councils. To all Hawke’s Bay’s political leaders, what are you going to do next - return to playing in your own backyard or turn the many wasted years of talkfests and inaction into creating a proud new regional legacy? Chris Bain is an independent business consultant, a board member of Business Hawke’s Bay and former COO of Napier Port.

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AUGUST - NOVEMBER 2015

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PRO Q&A

PRO Q&A

A HASTINGS EXERCISE BUSINESS IS CREATING HEALTHIER WHANAU AND FOSTERING SOCIAL CHANGE IN THE COMMUNITY. In a large shed on Orchard Road there’s a gym of a different kind. It doesn’t have mirrors, the workout gear consists of truck tyres and ropes and there’s a distinct lack of lycra. Patu Aotearoa is a gym designed for whanau and its unique approach to fitness is having a huge impact on the health of Maori and Pacific Island communities. Patu is the brainchild of Levi Armstrong and business partner Jackson Waerea. Levi has a degree in sport and recreation and was working at Sport Hawke’s Bay when he realised there was an opportunity to develop a gym specifically for Māori and Pacific people. The main driver of the business is addressing the increasing health issues faced by Māori, particularly type 2 diabetes, cardiovascular disease and obesity. The statistics are alarming: nearly half of all Māori and 60 percent of Pacific Island adults are obese and the numbers are increasing.* Patu’s programmes have been specifically designed to address these health issues and as well as operating gyms, the business has contracts to deliver exercise programmes for organisations including the Hawke’s Bay District Health Board and Te Puni Kokiri.

“Patu is a weapon used by Māori warriors to attack the enemy and to protect the whanau. In this new era, our Māori whanau need protection from different enemies that our ancestors never

faced: obesity and diabetes,” explains Levi.

HIT or High Intense Training underpins Patu’s exercise programmes. Skipping, body weight and team lifting exercises form the 31 classes run every week. Demand for classes has increased over the two and a half years Patu has been open, with more than 300 whanau now attending.

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to get the country’s best social enterprise ideas off the ground in just six months. It is an intensive accelerator for teams with big ideas who will benefit from support, coaching and training from a dedicated team of handpicked professionals and social enterprise experts.

Levi and Jackson are always looking for opportunities to take Patu further. Last year they launched a mobile Patu service, set up a gym in Wairoa and developed a smartphone app.

“Generally funding and support are not readily available for a commercial business, but more and more organisations are looking to support businesses that can bring a social return on investment.

“The app gives people the ability to work out at home. We also developed a ‘Patu Crate’ with Furnware, essentially a box with a skipping rope and barbell that you can use with the app at home. It removes any barriers for people to exercise. It’s really taking off,” says Levi.

Levi and Jackson are constantly looking at ways to get Patu to the people of NZ. The pair hopes to create NZQA accredited courses and build a national franchise model.

“We go to work places, schools, marae and community centres. Recently we held an exercise programme and weight loss challenge at Furnware, the staff really bought into it and the results were fantastic.

Recently Patu was awarded $20,000 in funding from Contact Energy through the Akina Foundation’s Launchpad programme.

The Akina Foundation, which was borne out of the former Todd and Tindall Foundations, is focused on growing social enterprise across New Zealand. Its Launchpad programme is designed

“The government is also looking at return on its investments not just in terms of money, but health and wellbeing. For example, decreasing the BMI of people by two or three percent can reduce the incidence of type 2 diabetes. This has major positive implications not only for the community but also the health system,” he says.

They are currently conducting a research project with EIT to find more measurable results of Patu’s effect on Māori.

“It’s not just about weight loss or fitness; it’s also looking at the positive mental and social benefits the programme delivers,” he says. www.patunz.com

REGISTER NOW 21st November 2015 - 32km individual or teams run/walk event Check out our website www.staplesrodwaychallenge.nz

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ATTN15PRO1607

Entries are now open for teams and individuals for the Staples Rodway Challenge


PRO

Q&A

A NEW Direction AT SPORT HB Mark was a partner in Auckland law firm Harrison Stone and has moved to the region with his wife and son. He says his passion for sport “and its importance for individuals and communities” drew him to pursue the chief executive

What’s your career background? I have mainly worked as a commercial lawyer which means that my focus has been on problem solving and making things happen. I have also been a coowner of a business, which provided home care for the elderly, and I was acting Chief Executive of New Zealand Football in 2013/14. What’s a career highlight? I really enjoyed my time at New Zealand Football. Sport has always been my passion and that role convinced me that working in sport was not only something that I could do but also something that I really wanted to do. What are your early observations of Hawke’s Bay? There is a real passion for sport in Hawke’s Bay that you perhaps don’t see quite as much in Auckland. Hawke’s Bay has two real advantages over Auckland – lots of space and a more settled climate. I think that means there is a tremendous environment for people to get involved in sport and by and large as a region I think we take advantage of that in terms of use of cycle ways and the like. How do you see health and wellbeing can be improved via workplaces? Workplaces are where we spend a lot of our waking hours. They are also where we

SPORT HAWKE’S BAY IS MOVING IN A NEW DIRECTION UNDER NEW CHIEF EXECUTIVE MARK ASPDEN.

role.“Hawke’s Bay is already a very strong sporting region and I am enjoying working with the team at Sport Hawke’s Bay and with other key stakeholders to continue to grow sport and recreation in the Bay.”

congregate. So if we are trying to inspire our community to be active and healthy then workplaces are good spots to target. What connections are there between sport and business? It is important to remember that sport is just that. However if you want to run a successful sports club or other sporting organisation then you need to apply some sound business practices, such as strategic planning, budgeting and having clearly defined roles for your staff and volunteers. Also a lot of sport simply wouldn’t happen without the financial support of the business community. We are certainly grateful to our commercial partners for the help they give us. How is Sport Hawke’s Bay funded? We have a mix of funders – for example Sport NZ, councils, sponsors, service contracts with the DHB and Health Hawke’s Bay, East Coast Community Trust and gaming trusts. Like most charitable trusts though we could always use more. How can you see Sport HB being funded in the future? One change we would be very keen to see would be for some part of activity to be funded by a regional rate. At the moment we receive funding from the councils in our region, but levels vary. A regional rate would give us long term certainty in

the provision of our services throughout Hawke’s Bay. What do you see Sport HB doing in the future that perhaps it doesn’t do now? I would like to see us taking more of a leadership position in getting our community active. While we have some fantastic athletes, we also have some very poor health stats. I believe that Sport HB can play a significant role in helping to address those, if we can just get a relatively small amount of additional funding. Do you have any business heroes/ mentors? I don’t have anyone specific, except perhaps Dilbert who probably doesn’t count. Almost without exception I have learned something from all the managers I have had, although in a couple of cases all I learned was that I didn’t want to be anything like him or her. What do you do in your spare time? Sport! I play football, golf, touch and run a bit. When I am not playing sport I like to watch sport – preferably live, but TV works nearly as well. Obviously family time is important too – I watch as much of my son’s sport as I can.

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AUGUST - NOVEMBER 2015

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Hastings CBD

Economy

SURVIVAL OF THE FITTEST IN CBD RETAIL SCENE By Sarah Thornton Retail occupancy rates are declining in both Hastings and Napier. Reasons for the slow demise of the CBD’s are no free parking, big box retailers situated elsewhere and the increase in online shopping. So what’s the fix?

retailers are experiencing a record-setting year, others are struggling to adapt to the changing retail environment. And it’s not helped by new developments such as The Park and the redevelopment of the K-mart Plaza, have had a negative effect on the CBD.

Retail in Hawke’s Bay is in pretty bad shape. The number of empty shops in Hastings’ CBD is at its highest since 2000, and Napier is faring only a little better.

“While the redevelopment of the K-mart Plaza and its heavy foot traffic and free parking are an asset to Hastings as a whole, their strength has further weakened the traditional small format retail spine of Heretaunga Street,” she says.

In the February 2015 Hawke’s Bay Retail Occupancy Survey*, rates have continued to decline over the past 12 months; in Hastings the occupancy rate has decreased by 8.7 percent to 85.9 percent, and in Napier by 5.7 percent to 87.8 percent. The highest occupancy level was reported in Havelock North, with 97.2 percent. Although the town still experienced a 0.3 percent drop from the same period last year, it appears to be bucking the trend. At the time of writing only two small retail premises were available for rent in its CBD. As to the reasons for the declining numbers, common themes and issues arise. Competition from new stores and ‘big box’ retailers away from main streets, low population growth and the increasing demand for online shopping are all negatively affecting our shopping precincts and it would appear the haemorrhaging of retailers from our CBDs is not likely to be stemmed any time soon. Hastings Hastings’ CBD is experiencing its lowest occupancy rate since 2000. Susan McDade is general manager of the Hastings City Business Association and says that while some of her 8

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There is a real concern in filling these spaces. The reality is we have an over capacity of retail stock that is undesirable by the few national retailers making enquiries. – Susan McDade

The Hastings Business Association is constantly exploring ways to fill the empty spaces and is encouraging developers and Council to look at ‘change of use’ to reduce the retail stock and attract more wages into the CBD, as seen when KiwiBank moved to the city. “We work hard to improve the vibrancy of the CBD and attract people into the city through events and improved amenities, which in turn improve ‘brand Hastings’ making it a more desirable choice. “The demolition of the Albert Hotel has brought new energy and attention to the east side of Hastings CBD. The first stage of development of the site consists of a multi-use green space giving the surrounding businesses a lovely outlook and focal point. A small container theatre will give another venue

Vacant spaces abound in the city including high profile sites previously tenanted by Postie Plus, Pagani, NZ Post and Whitcoulls, all of which have been vacant for over a year. “There is a real concern in filling these spaces. The reality is we have an over capacity of retail stock that is undesirable by the few national retailers making enquiries. Often this is due to the age and layout, earthquake strengthening issues or landlord expectations,” adds Susan. Registered valuer Paul Harvey from Williams Harvey agrees. “There is an on-going problem of a lack of demand for retail premises in Hastings. It’s an issue facing many provincial cities around New Zealand and one that is not looking at improving in the near future without a very creative solution.”

Susan McDade, General Manager Hastings City Business Association


PRO

Economy

Retailing success: Angus and Michael Thomson

for Hastings talent, community groups and events. The park will be ready by September 2015 in time for the Blossom Parade and aims to be an accessible space for the whole community. As a result of this new energy, the 200 east block is now fully tenanted,” she says. Retailers also have a part to play to ensure a vibrant and profitable CBD. “Retailers need to embrace the changing landscape of their industry by offering those values that cannot be found online, like great personalised customer experiences and service. Being flexible and available to their customers how

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and when they want to shop is vital,” says Susan. Thomson Suits has been selling menswear from its Heretaunga Street West store for nearly 60 years, and has seen retailers come and go. Angus Thomson says the formula to the store’s longevity is in the shopping experience it provides to customers. “Twenty-five years ago there were 21 menswear outlets in Hastings. Now five remain and that’s counting the Warehouse, Farmers and Hallensteins. Successful retailing is sticking to what you know and not wavering

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from that. We have always offered high quality menswear from well-respected labels and although we have increased our online presence through our website and online shopping, there is still demand for a truly personal shopping experience.” For an established business, keeping relevant to the younger market is crucial. “We have always had ‘generational customers’, mostly farming families, but now we are seeing more young professionals walk through the door. Yes, you can buy cheaper suits but you can’t go past quality, Italian fabrics, pure wool and

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Economy

Photo courtesy Tim Whittaker

exceptional tailoring. And that’s what you get in our store,” adds Angus. Susan echoes those thoughts. “Independent retailers have a real opportunity in these changing retail times. Personal service, points of difference and offering unique experiences for customers are more successful for independents than for chain stores,” she says. Both Angus and his father Michael Thomson are concerned at the current state of retail in Heretaunga Street. “At last count there were 13 empty shops in our block but they’re slowly getting filled. Parking is also an issue and one we are working through with Council as shoppers have to pay for parking in the main street but at K-mart and the big box stores it’s free.”

Susan says the night market attracted nearly 52,000 people over the 27 weeks it opened, compared to 29,000 last year. Although it improves the community’s view of the city, there are no direct benefits for traditional retailers. “It might bring people into the CBD but it’s not during the day when the shops are open and it’s not doing a thing for us,” says Michael. Susan says the rise of online shopping is also a challenge facing retailers from all areas. “Some of our members are under pressure from online competition while others use online tools as an integral part of their business. Others start out selling online and move to a bricks and mortar site as their customer base grows. Using the internet as a tool instead of the enemy is the key,” says Susan.

Most agree there are no quick fixes for the challenges facing Hastings. The size of the retail area, essentially from Stortford Lodge to the Opera House, is too big for the demand and our population base. But there is an increase in interest from developers and large employer businesses that may help address these challenges in the next few years. Napier Like Hastings, Napier retail is on a downward trend. The re-development of the Post Office and Farmers building in Hastings Street may have brought new energy to the city, but at the expense of lower Emerson Street. Napier Business Association manager Zoe Barnes is however “relatively positive”. “It’s the cycle of retail. As areas are re-developed, there is a desire to be in and around them. In the case of Hastings Street, we’ve seen

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Economy

Napier CBD

increased foot traffic and as result many current tenants in the western parts of town have sought to relocate to the upper end, therefore moving the retail centre of Napier away from the entire length of Emerson St. “Vacant shops are numerous in lower Emerson Street. As well as the shift in retail centre up towards the Marine Parade end of Emerson Street, earthquake standards have seen insurance premiums skyrocket in non-compliant buildings, which encourages tenants to move. There is simply not the money around there once was,” she says. In amongst this, Zoe sees an opportunity for lower Emerson Street retailers. “Now is the time to be creative and try to think through interesting ways to enliven that end of the street, to give it individualised character and to try and drive it in a new direction. “To be fair, at the moment it isn’t the most exciting looking of places so how do we add that colour and vibrancy to attract consumers down further?” Napier City Council is currently developing its ‘City Vision’, part of which is focussed on making blank spaces usable. Two examples are the urban chill-out space on Market Street and a children’s activity zone outside Mid City Plaza on Emerson Street.

“What the internet doesn’t provide is that personal touch or an experience,” says Zoe. “It’s ‘value add’ opportunities that retailers need to embrace. Customer service is vital to bricks and mortar retailing. Independent retailers, provided they are savvy and proactive, will survive provided they focus on customer service and quality.” “I also think we will start seeing more mixed retail spaces. For example the new BigSave store in Ahuriri that also contains a BMW dealership and a café. There are more reasons to stop and shop for the whole family.” Unlike Hastings, Napier’s CBD is compact and has got off “fairly lightly” from competition from big box retailers. “The fact that our big box stores are within walking distance of our independent retailers makes it a much more level playing field,” she says. Havelock North Although retail in Havelock North is relatively healthy with an occupancy rate of 97.2 percent, rates are still falling from the same time a year ago. Business Association president Sam Jackman issues a word of warning. “Retail success is restricted to those who actively promote themselves, especially to their own database and various social media platforms. Lazy retailers will always suffer and in winter months – the slow period – this will remain the same.” Currently under construction and predicted to be open by about September 2016 the Village Exchange Hotel complex is likely to bring commercial benefit to Havelock North.

“The hotel and shops will increase the size of the accommodation pie and also add a far superior retail product to the current mix. Any development such as this will be actively promoted which again is very good for the village overall. Even the lack of parking that we are currently experiencing will change with the hotel and its large underground car park,” says Sam. Independent retailers are the primary tenants in Havelock North. An assortment of boutiques, homeware stores, cafés and restaurants are the backbone of the shopping precinct. “We offer shoppers free parking, free Wi-Fi throughout the village, a great selections of eateries and a safe shopping environment with a good retail mix. Havelock North is seen as a destination.” Sam agrees that online shopping is a challenge for independent retailers, but has some advice. “Our members are feeling the squeeze with online shopping and the government must make a stand with regard to GST on imported goods. “However, some of our retailers are using the internet to their advantage and will offer a selection of goods not available in store to their online customers. A retailer like Advintage is embracing the online space and nearly all its business is now done electronically. It’s a very successful business.” While Hastings, Napier and Havelock North each have their own identity and trade on the qualities that set them apart, it is clear that no town is escaping the downward occupancy trend and challenges that face our retailers today. *Logan Stone Retail Occupancy Survey.

“I guess the answer is if we make these areas a more fun and interesting place to be, then consumers will spend more time in those areas and therefore those spaces become more attractive to potential retailers,” she adds. Zoe suggests retailers and the association need to think outside the square. “What if all first floors were converted into high spec apartments? Lowering the barriers to entry such as parking issues and creating vibrancy in the CBD will attract the people. People spend money and that attracts the retailers. It’s more of a grass roots approach really and focusses on simply getting more people into the city.” For retailers to remain relevant to their customers and survive competition from online shopping, the same guidelines apply for Napier as they do in Hastings. Sam Jackman, Havelock North Business Association AUGUST - NOVEMBER 2015

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PRO James and Amie Nilsson Feature

Go Getters Prove Bay is Best

By Alisha Neilson

Since the birth of their award-winning company Merino Kids, James and Amie Nilsson have worked tirelessly for their business, but a move home to Hawke’s Bay two years ago has ensured the business now well and truly, works for them. It’s a subtle yet significant ‘shift’ but one that proves geography is no longer considered the disadvantage it used to be, when it comes to business. Entrepreneurial couple James and Amie and many others like them, are helping revive the region’s economic performance levels; in doing so they are leading an emerging wave of skilled Bay ex-pats returning home to take advantage of the region’s growing opportunities. Arriving to interview the couple at the stunning Cape Estate property they now call home, it’s business as usual. Amie is wrapping up a Skype tutorial with the Lion Foundation Young Enterprise students, she helps mentor, and James is head down in the busy home office that’s become the nerve centre of the global distribution of Merino Kids. Sitting down with the pair, it’s easy to see why their partnership is such a successful one. Bright eyed, go-getting Amie with her artistic textile savvy meshed with James’s business nous is a formidable combination; both bringing different skill sets to the table and exploiting the other’s dynamism. Entering into business alongside 12

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your spouse is not a risk James and Amie took lightly, but they have a tip or two for those who are considering it. “The key is to have a strong friendship in the beginning, otherwise working together probably won’t work!” they both joke. “Right from the outset we set very clear definitions of our roles, which is really important. Recognition of skill sets is also key. I’m the details man and Amie’s the ideas wizard, one can’t function without the other,” explains James. “We focus on our different pastures,” quips Amie. “I ensure James doesn’t graze in my area and I don’t graze in his!” When the pair launched their bestselling ‘Go Go Bag’ back in 2003, they never dreamed the product would become the jewel in the company’s crown. In fact, the Merino Kids ‘Go Go Bag’ is so highly prized that four different Royal families including Kate and Wills and celebrities including Rod Stewart, ‘Brangelina’, Claudia Schiffer, Robbie Williams and Roger Federer are lining up to buy them. With 11 years in the global market and three iF International

Design awards, the brand now sells into 31 countries with revenue predominantly from North America, UK, Australia and New Zealand. The company has recorded an average growth of 20 percent year on year and potential for future growth seems imminent with awareness of merino wool fast expanding in Asia. For Amie, the brainchild behind the now globally renowned brand, it’s been a rocky but rewarding ride.

“I’M THE DETAILS MAN AND AMIE'S THE IDEAS WIZARD, ONE CAN’T FUNCTION WITHOUT THE OTHER.” – JAMES NILSSON

“We had a vision from the outset for Merino Kids to become a brand recognised as one which can make a positive difference to people’s lives, and we think we’re achieving that. The question we always ask is: how do we not only become a leader in this field, but how do we continue to do it


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better than anyone else while reducing our environmental impact… and encourage others to do the same.” Today the merits of merino as a clothing textile are well documented but that hasn’t always been the case. When the brand launched in 2003 the baby sleepwear market was saturated with synthetic fabrics that, while cheap and cheerful, failed to deliver the heat regulation benefits of merino. “We’re striving to educate and move people towards 100 percent natural sleep solutions that are innovative, sustainable, durable and functional. The science behind it is simple: babies cannot naturally regulate their own body temperature, they fluctuate hot and cold regardless of how constant the room temperature is. Merino fibre’s thermo-regulation properties wick moisture away to keep babies cool and in reverse, trap the air to keep the natural warmth in.” After five years of living and breathing the brand in the UK, James and Amie packed the family up and relocated back to Hawke’s Bay in 2013 and haven’t looked back. “We wanted to be closer to family and have our children’s influential years spent enjoying the kiwi lifestyle we grew up with. What helped us to do that was a board decision to change to a licensed distribution model. This allows us to work with local market distributors while focusing on our core competencies of product design and development, brand and IP protection and supply chain management for 11 distributors in various parts of the world – all from our offices in Te Awanga,” says James. By 2020, James and Amie aim to have Merino Kids triple its multi-million-dollar turnover in global sales and included in a portfolio of lifestyle brands by an international conglomerate.

Merino Kids products

A sizeable goal for a couple who started boxing their product out of their Auckland bungalow’s spare room. Enterprising by nature, the couple have engendered the same ‘give it a go’ attitude in their three children – Lily (12), George (11) and Scarlett (9). From a young age the trio have been encouraged to follow their business ideas through from concept to creation. Back in the UK at the age of 6, George successfully launched and sold his own homemade organic muesli to raise money in his school holidays. He’s now currently on contract to the local BP supplying pinecones off the farm for public sale, whilst Lily set up a crèche and Scarlett made and sold homemade cupcakes during the summer cricket matches that happen regularly at the farm’s recently re-established Clifton County Cricket Club. “There’s no rest for the Nilsson household,” laughs Amie. These guys are the future of New Zealand so the sooner you can start the kids doing business the better.” With more time for research and development, Merino Kids’ product range is rapidly expanding. The brand has teamed up with a large offshore company in setting up an R&D centre for innovation and design, meanwhile another wool based spin-off company has been formed. Diversifying seems to be the cornerstone on which the Nilsson family has capitalized on their iconic coastal property of Te Awanga Downs. The homestead, Cape Estate is fast establishing itself as a sought after venue for weddings and corporate events, whilst James’ brother Matt and wife Amy run the region’s leading outdoor activity company Outfoxed www.outfoxed.co.nz. Creating positive change is what drives and inspires James and Amie Nilsson and when you appreciate what they are achieving, you realise their success isn’t just about the ideas, but about making those ideas happen. “One day Hawke’s Bay could become the innovation hub of New Zealand. As a province we have so many exciting ideas, it’s now about how we export those to the world,” Amie said. www.merinokids.co.nz AUGUST - NOVEMBER 2015

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A golden chance takes Ian to the top By Damon Harvey

Ian Crooks

Not long after The Profit launched in 2011, we received an email from Ian Crooks in Australia. Ian had picked up a copy of The Profit and was impressed by the range of stories within the magazine. He wanted to become a subscriber. Since then we have kept in contact, via him continuing to subscribe. I recently received a press release about Ian’s business, Resort Brokers Australia, which was celebrating 30 years in operation. Until then I didn’t realise how successful Ian was. Fortunately I was heading over to Brisbane and I suggested we catch up. We met on the Gold Coast at his regular café hangout. It was one of the most enjoyable breakfast meetings I’ve had. He is a genuine nice guy, who is proud of his roots – Waipukurau and Hawke’s Bay. He’s also loving life in Australia, and as his career winds down, the business continues to grow from strength to strength. Asked for words to describe Ian Crooks, those who know him will almost always come up with ‘enthusiastic’ and ‘energetic’. These are the signature characteristics of a property industry veteran who hails from Waipukurau. Ian has revolutionised motel investment in Australia and built a market-leading agency dedicated to tourism and accommodation property, since moving across the ditch more than 30 years ago. Ian worked out early in his career in stock and station agencies in Hawke’s Bay and Gisborne that he was a dab hand at sales. Having established a successful motel brokerage, Chevron Real Estate based in Tauranga, as well as owning and operating a few motels with his wife Karin, he convinced her to give Australia a go. “Motel leasing was accepted practice in New Zealand,” Ian recalls. “In the eighties, lots of Kiwis were shifting to Australia for better opportunities and warmer weather. The two countries’ economies were the opposite then. Things in New Zealand were tight, while Australia was going great guns. “Just 12 months is what I was allowed and we’ve now been here for 30 years!” Australia was and still is in Ian’s view, a land of huge opportunity, for those that are prepared to work hard. “I think most people shift to Australia for the weather. Here we are in the middle of June and it’s 20 degrees (at 8am) and it will get up to 23 degrees today. 14

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“I think there are some who believe that although they haven’t done so well in New Zealand, they can move here and make it. But if you can’t make it in New Zealand you certainly won’t make it in Australia, as business is far more ruthless than in New Zealand. “You can still do business in New Zealand on a handshake, but you wouldn’t dare do business that way in Australia. It’s a more cut and thrust environment. Over-riding this though is the unbelievable opportunity that comes down to the bigger population. “A lot of New Zealanders have done well because we have a very strong work ethic.” For Ian, he had a huge appetite to work hard. Business went well, thanks to his relentless effort and discipline. A typical day would start at 4am with a one-hour run, then he’d record correspondence on a dictaphone, leave home at 6am, and drop the tapes at a typing service before hitting the road. In the evening, he’d pick up from the typists’ after-hours box and, after a quick dinner with the family, it was on to the phone. Every night from 7pm to 9pm, Sunday to Thursday without fail, non-stop calls, building his incredible network of contacts. “I remember looking at pages of motel ads in the newspaper and wondering how on earth I would break into the industry,” Ian says. What he did was drive 2000 kilometres a week, knocking on just about every motel door across Queensland and most of New South Wales. “I knew virtually every motel. Someone would mention a town and I could tell them all the motels there, how many rooms they had, how big the manager’s residence was. I gathered every bit of information I could and memorised it.” Ian’s exhaustive knowledge was one thing, but it wasn’t all that set him apart. He applied the same meticulous approach to his goal of introducing motel leases to Australia. “I HAVE ALWAYS MANAGED TO STAY OPTIMISTIC. IN BUSINESS, YOU ALWAYS HAVE SETBACKS, SO BEING ABLE TO RECOVER QUICKLY IS A VALUABLE SKILL. I ALWAYS TELL OUR NEW RECRUITS HOW IMPORTANT IT IS TO KEEP LOOKING FORWARD AND NOT TAKE THE KNOCKS TOO PERSONALLY.” — IAN CROOKS


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Being a Kiwi, Ian is passionate about “We had motel leases in New Zealand, but there were no formulas for setting rugby, he proudly supports the All them up and pegging values. Before Blacks and he attends every Bledisloe I came to Australia, I gathered all the Cup match on both sides of the ditch. motel Profit and losses I could lay my He’s also attended the last two World hands on. I studied and compared Cups, and he’ll be in England to hundreds of them to calculate some sort back the men in black at this year’s of industry average operating costs.” World Cup. He vividly remembers the first motel Resort Brokers is now a family lease he set up, the 17-unit Mary Ellen business, with Ian, close to 70 years, Motel, in Ipswich, just west of Brisbane. The Profit editor Damon Harvey was recently in Brisbane Today, thanks largely to Ian Crooks, more visiting family. While there, he met with Ian Crooks at his slowly passing over the reigns to his favourite café on the Gold Coast. children and their partners. than 70 per cent of Australia’s motels are split into active leasehold and passive “I couldn’t be happier to now have the freehold investment components. perfect business succession plan, with Trudy, Carla and her husband Now the nation’s acknowledged motel specialists, Resort Brokers was Alex, and Tim in key roles in the business. We have the strategies and soon in demand across the accommodation spectrum – management expertise to really take Resort Brokers forward and a clear vision of rights, hotels, caravan parks, B&Bs and backpackers too. When it was where we are headed.” suggested we sell management rights, I was initially unsure, given the After all, Ian says, accommodation properties remain very strong lower returns compared to motel leases,” Ian recalls. investments. “But we found a vast pool of people from New Zealand and Resort Brokers just sold the management rights to one of the Gold throughout Australia eager to take up opportunities and live between Coast’s most visible landmarks – the Soul complex along the front row Coolangatta and Noosa, where they were concentrated. Management rights were a real revelation to me and now they represent 50 percent of the Gold Coast, for an undisclosed amount, but which is reported to be over $20 million, a world record. of our business.” Now in its 30th year Resort Brokers Australia, is stronger than ever, “We’re now negotiating another which will surpass this. Ian says. But he does admit to a couple of “financial reversals” along “The motel business is still outstanding. If you were able to borrow 100 the way, thanks to some brutal market downturns. True to form, percent to buy one, you could pay it off in 10 years and still enjoy a very though, he bounced back. comfortable lifestyle along the way. Management rights are no different. “I have always managed to stay optimistic. In business, you always “That’s the essence of what we do – help people to enjoy a great lifestyle have setbacks, so being able to recover quickly is a valuable skill. and financial security through the accommodation industry. I always tell our new recruits how important it is to keep looking “I still get excited to get up every morning and give it a go, but I’m also forward and not take the knocks too personally.” ready to pass on to the kids now. Ian still puts great store in the qualities that have driven his entire working life: hard work, willingness to take a calculated risk, the ability “I’m keen to spend more time in Hawke’s Bay. I love going back and to learn from your mistakes, and think outside the box. “There’s I’ve probably had some of the best times in my life in Hawke’s Bay, going back and seeing the guys I haven’t seen since I was at Napier always more than one way to do a deal.” Boys’ High School,” Ian says.

IT’S TIME FOR YOUR BUSINESS TO TAKE OFF RELOCATE TO HAWKE’S BAY’S AIRPORT BUSINESS PARK • DESIGN BUILD OPTIONS TO SUIT

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Call Colliers to discuss the possibilities Danny Blair 021 826 496

Rob Nankervis 027 228 5291

AUGUST - NOVEMBER 2015

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International Students Big Business for Hawke’s Bay Education Providers By Catherine Wedd

A small ageing population and a growing economy are all factors driving a need to bring in skills and knowledge from offshore. Education leaders say the best way to do this is to educate international students; with a hope they will stay and meet the needs of our economy. International education is New Zealand’s fifth largest export industry.

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It contributes an estimated $2.6 billion to the economy annually. So how does the international education market stack up in the Bay and how does it help add value to our economy? We asked some local education providers why they were so motivated to attract students from abroad.

Taradale High School Students

International student numbers in Hawke’s Bay are growing, with 2014 enrolments up eight percent on 2013, to 1222 students, according to the latest International Education Snapshot report. The number of international students at the Eastern Institute of Technology (EIT) is at an all time high. Last year 450 students studied across its three campuses and International Director Philippa Jones says she expects the numbers this year will be much higher.


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“We have had an increase because we have relevant programmes to meet their needs, there are very good strategies in place and the New Zealand Government has been very supportive, helping us grow international student numbers.” “We believe that understanding more about the countries we visit and trade with is important for students going into the workforce. “Our international students also foster relationships and links to New Zealand and we hope this makes them think of New Zealand more when it comes to business.” Philippa uses the wine industry as a good example. EIT’s viticulture and wine science programmes are growing in popularity with international students, especially the Chinese.

“It’s more efficient to bring the world to our students, than send our students out to the world.” International students pay a lot more than domestic students. Their yearly fees can range from $12,000 at public schools to $30,000 at integrated schools. “Taradale High School is a high decile school, so funding is a challenge. The fees, which international students generate means we can afford more resources. “The money goes into general operations and isn’t identified as separate cash flow. We are substantially under funded and this extra money enables us to give more back to our domestic students.”

There are students from 41 different countries at EIT and strong marketing overseas is attracting students as far afield as Bhutan.

Click here to view a recent video produced for Hastings Girls High School.

“We are a collaborative model. Members come from schools, the Institute of Technology and Polytechnics (ITP) and Private Training Establishments (PTE) and we aim to work together as a group to promote the region on the world stage. Sun Weiting

Stephen says a New Zealand public high school student costs the government about $8000 per year to educate.

Marketing is a key focus for Philippa who spends 12-15 weeks a year travelling to promote EIT offshore. “We can’t cover all areas of the globe and we concentrate a lot of our efforts in China, India, Germany and the Philippines. We find that a lot of marketing comes through word of mouth and friends and family too.

“Not only is the money helping the school but the wider community. For every $1 paid to the school, the student will spend a further $2 in the community. Homestays benefit as well as local retailers and the economy.”

“It’s a very competitive environment in New Zealand. We are competing against the other education facilities to attract students to Hawke’s Bay. Each institution has a desire to grow, but our greatest competition is the UK, Canada, Australia and the USA.”

“It’s enormously positive for the school. It means our students are introduced to a wide range of cultures and different languages. Many of our students make lifelong friendships with overseas students which is great for when they travel.”

Schools Bring the World to their Classrooms Taradale High School is one of Hawke’s Bays largest host schools typically enrolling up to 40 students a year.

Hastings Girls High School’s international roll is also growing. It currently has 11 international students and is focusing attention on marketing.

Taradale High School Principal, Stephen Hensman said over 30 years ago the school saw a need for students to mix with international students, to open their eyes to cultures around the world.

Education providers have been using video as a way to promote their school and the surrounding Hawke’s Bay scenery.

Heading the group is Stephanie Kennard who started her role in January this year.

“Legislation dictates the minimum we can charge international students and schools determine their own fee structures beyond that. We are also charged by the government to host international students.”

The school has a long established history with most students coming from Japan, Korea and Germany.

Promoting Education Through Video Marketing

Collaborative Regional Approach To Attract International Dollar Education Hawke’s Bay was recently set up to unite the region’s efforts to attract international students.

“This gives opportunity to link more with the Chinese wine market, an area which Hawke’s Bay wine exporters would like to break into. When these students go back to China they will take a wealth of knowledge and connections with them and hopefully as a result we will see more wine going to China." There’s no doubt that profit is also a huge motivator for education providers when it comes to international students. They pay higher tuition fees and this provides extra cash flow for EIT to invest in facilities and equipment.

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International director, Jillian Frizzell says Germany is a strong market even though all the schools there are co-ed. “We have done a lot of marketing in Germany and now we have good word of mouth there. “Our international programme is great for the school. We have a good buddy system and it gives our girls a better overview of the world. It adds culture and diversity.”

“Our members are at different stages with their international attraction so we can add further value as a group by teaming up and focusing on what the region has to offer.” Stephanie says the value of an international student is $20,000 per year to the region. “Students spend on items outside of their tuition fees. For example they buy insurance, go to the supermarket, spend money at local retailers, take part in local tourism events amongst other things. In Hawke’s Bay international students may make up 5 percent of the school population whereas in Auckland they may be up at 10 percent. “Auckland is not for everyone and Hawke’s Bay definitely has so much to offer. Students do not only come to study, they are here to have an experience and there is just as much learning outside of the classroom as there is in.” With a new brand and website soon to be released, Education Hawke’s Bay is ready to raise the bar on marketing the regions education facilities to the world. Stephanie says the main goal is to double the value of international students to New Zealand by 2025 and in the short term increase the value by 25 percent from 2014 to mid 2016.

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BUSINESS PROFILE:

LOCAL PRESENCE GROWS FOR GHD When Tony Harrison moved into offices on the corner of Queen Street and Karamu Road in Hastings, he was unsure on how long it would take to establish a fully-fledged branch of global infrastructure and engineering consultancy firm GHD. Tony had been based in GHD’s Palmerston North branch, but was keen to set up in his home town. He had a wealth of contacts and a proven track record, having previously worked for the Hastings District Council. He has over 20 years experience in roading design, network maintenance contract management, contract management, project management and providing specialist transportation, traffic and road safety advice on local authority and state highway networks. “I could see a huge opportunity for GHD in Hawke’s Bay. We already had projects in the

Bay and it was about taking the next step to having a physical presence and reconfirming to our clients, our commitment to the area. “With GHD I could see that we had a different offering in the market than others. We had people like me on the ground here in Hawke’s Bay, but we could bring in national and global expertise when required for support. “GHD is a global network of specialists in water, energy, resources, environment, property and buildings as well as transport, which we could quickly access." Five years on Tony has firmly established the GHD office and he’s been joined by a multidisciplinary team of ten, a few of who are also returnees to Hawke’s Bay. When he reflects over the past five years it is particularly satisfying to see the team and client base grow. Tony says the profile of the local team has predominantly been related to transportation projects but over the last couple of years the team has expanded to include geotechnical, structural and water engineering services as well as general civil engineering. “The office has gone from co-locating with another business to being standalone. We’re now bursting at the seams and are expanding through to the offices next door and creating a larger meeting space to provide technical sessions for staff and clients. Tony says GHD has developed a strong client base primarily from the high level of ownership the local team has over project delivery.

Recent examples of non-transport and private sector projects delivered by the Hawke’s Bay Office are: • Site access redevelopment for Fonterra at Paraparaumu; • Scheme development for NZL for a container park; • Successful Ministry of Health subsidy application ($1.6m) and engineering for a new water reservoir for Wairoa District council; • Geotechnical investigations for Frimley Estate; • Earthquake prone building assessments for the Ministry of Education; • Travel plans for schools – with the aim of increasing non motorised transport modes; • Traffic impact assessments for land development; and • Heating, ventilation and air conditioning reviews. “While the local office often leverages off technical specialists from around NZ and sometimes GHD’s international team, the ownership remains with the local team who firmly believe their reputation is only as good as the last project delivered. “We have also developed strong working relationships with other local strategic partners, to ensure we deliver a ‘best for the job’ team” he says. An example of this is GHD’s relationship with Environmental Management Services Ltd (EMS) a local planning and environmental consultancy. While GHD has planners and environmental consultants throughout New Zealand who provide support to Hawke’s Bay, we also partner with EMS who bring the added benefit of local experience and has enabled the two firms to collaborate regularly. GHD uses EMS for planning services while EMS has utilised GHD’s engineering staff for services such as traffic engineering, geotechnical investigations, and water/ wastewater design.

GHD has extensive experience in property and buildings such as the LAV Hangers at Linton Army Camp.

“This approach provides national best practice delivery from a local team with projects such as the Whakatu Arterial for the Hastings District Council being leading edge in terms of the design by enquiry process which resulted in the Notice of Requirement being granted for the project to proceed to construction." The expansion of the team and services has led to delivery of a wider range of projects as well as delivery further up the east coast to Wairoa and Gisborne. www.ghd.com

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Why a Mortgage Advisor? There are many benefits to using a mortgage advisor/broker, but since the industry’s heady heights in the late 90s and early 2000s, they’ve become a best known secret.

I’ve been back in the mortgage advisory industry for 12 months, so I thought I was well qualified to make a few observations regarding how the market perceives my industry. The first stark observation is that the market has generally forgotten what a Mortgage Advisor (Broker) does. Therefore my first job has been to educate the market about what I do. I am an intermediary between you (the client) and the Lender therefore I work for you. However I’m remunerated by the lender, which means using my advisory service to arrange your finance, does not cost you. When you engage my services we agree on what I will do for you in regards to obtaining your finance based on your specific needs. Once we agree on the terms of engagement I will: • Agree on areas of advice requirements and establish our terms of our engagement • Get to know you and gather all necessary facts of your situation and identify your specific needs and objectives • Analyse and research your circumstances and develop strategies to meet your needs and objectives • Facilitate the application process for agreed products and services • Prepare and present a statement of advice outlining my recommendations and implement any such agreed recommendations • Monitor the implementation and review these strategies and actions • Provide an ongoing service of assisting you in managing the re-fixing of your mortgage facilities.

You may be thinking based on the above why don’t more people use the service where the sole focus is the client’s needs? The reason for this is that lenders prefer you to go directly to them, so that they can control the process. The reason why it can be so effective using an advisor is the banks know we have access to most of the other main lenders products in the market therefore if you don’t get what

you want from one lender I can approach another. Another observation I have made is lenders have introduced a whole raft of employee lending packages for their corporate, government and business client’s which has the desired effect of attracting those employees to those lenders to take advantage of the “special package.” It's human nature to be drawn to something that is supposedly treating you better than ‘Joe Public’ however how do you know you are getting the best deal regardless of the apparent benefits of the “special lending package.” This is where an advisor can be beneficial to use to negotiate the deal on your behalf. Advisors have partly filled the relationship gap which was once looked after by your local banker due to the banks decreasing branch staff numbers or replacing some of the old wise owls from their lending teams. This has left a relationship gap. So what does this mean? Recently I helped a lovely couple who have two businesses. They required finance to purchase a property to live and run their business from. They engaged my services with specific needs in regard to the loans they required. I approached three banks on their behalf, saving them their time and getting the desired result they needed to achieve their objective. As a matter of interest out of the three lenders I approached one declined the application, one approved it and the other was very interested to take the application further. Once again an illustration of the benefits of using a mortgage advisor. The other point of difference was the client was able to contact me in the evening and in most cases they got a response from me that night. Therefore the client knew I had their back and was available to discuss their application when they needed to within reason. Bridging finance needed Another client had to arrange bridging finance urgently as they had a deadline to meet their incumbent bank couldn’t come to the party however I was able to secure a loan offer for them from another lender.

“I am an intermediary between you (the client) and the Lender therefore I work for you.” – Darrin McCormack The point of difference is I have access to a number of Banks’ lending criteria, unlike a banker who can only work with the criteria of the bank they are employed by. By using a dmconsult advisor it’s all about you, we will not beat around the bush. We will call it as we see it, there is no point stringing a client along with an application that can’t be approved however we will not leave it at that we will inform you what needs to be done to help you attain your objective. It is our role to look outside the square for you but work within lenders’ criteria and the regulatory framework the whole industry must adhere too. Darrin McCormack has 30 years’ experience in the Banking, Broker, advisory industry. You can contact Darrin at www.dmconsult.co.nz or 027 476 3816 AUGUST - NOVEMBER 2015

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The Future of Education

By Damon Harvey

CODING, CREATIVITY, COLLABORATION AND BEING CRITICAL THINKERS ISN’T SOMETHING YOU WOULD USUALLY ASSOCIATE WITH PRIMARY SCHOOL STUDENTS. Well that’s until now and at Napier’s Te Awa Primary School, year 1 to year 6 students are not only learning to spell, read and count but also learn computer code to create their own digital games. Three years ago the school’s principal Tim Van Zyl decided that the school with 160 students would embrace new technology in a way that wouldn’t put too much financial pressure on parents. While other schools introduced ‘bring your own device’, Tim was unsure of what was going to be best for his decile 1 school, so he went and did a graduate diploma in ICT. “I decided to get the knowledge first before jumping on the bandwagon of any particular device. “A lot of research was pointing out that tablets are more for singular use devices and more suited to reviewing information rather than being a creating tool.

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He then talked to leading IT support company Computercare about installing Multipoint, which was then introduced in the junior school and Google’s chromebook computers and Google classroom software in the senior school. Multipoint is a small terminal device that connects the teacher to students. The teacher can view or take control of what’s on the student’s device. “We wanted devices that enabled students to get together and that’s what computers do, we could have three to four students to sit around a computer and be creative thinkers and problem solvers themselves. “Senior classes have one-to-one chrome books, using Google classroom and the rest of the school has multipoint, which is a more secure network. “The teacher has a server and a monitor giving them full control of what individual

students are doing. They can also display a student’s work onto a whiteboard screen,” he says. The decision has paid dividends and in 2012 seventy nine percent of its students were at or above the national average for reading, mathematics and writing in 2012 and was above other higher decile schools. In 2013 the school did even better, with the school reaching 84 percent, as reported on the Ministry of Education website. Tim’s wife Greta, a teacher at the school sees the benefits firsthand and says the software, which is preloaded into Chrome is accepted into the New Zealand education curriculum. “It’s a blended learning environment using computers as a tool, just like a pencil and calculator. “We use international numeracy and literacy programmes and enquiry learning,” Greta says.


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Programmes used include Mathletics, Lexia and Sunshine Online and there are “lots and lots” of free online programmes. Lexia provides personalised learning on fundamental reading skills, which accelerates reading skills development, predicts students’ end of year performance and provides teachers data driven action plans. “My classroom is split into three groups. One will have direct teaching with me, teaching strategies; another group is doing a follow up activity out of a text book and the other group is doing a set online activity, all of which is following the NZ curriculum. They then rotate around,” she says. Tim says teachers can see progress and gaps, which allows them to target specific learning needs. “With Lexia students progress through the questions and are marked as they go through. It shows specific areas within each strand that they need to work extra on. “Our students can actually challenge others from around the world. They do like challenges, they can ‘live’ challenges and they can do that with anyone that’s online at the same time wherever they are in the world. “There’s a world leader board, which we’ve topped and that’s their goal to be top class or top student."

Te Awa Principal Tim Van Zyl.

“We try to avoid too much of an emphasis on IT. We don’t know what kind of jobs our children are going to have. All we can do is give them a range of skills. It’s not about giving them the answer, we’re teaching them skills in order for them to go out and do whatever they choose to do.”

In a world experiencing rapid explosion of technology, Tim says all they hope for is that they are teaching students to become critical thinkers. “We try to avoid too much of an emphasis on IT. We don’t know what kind of jobs our children are going to have. All we can do is give them a range of skills. It’s not about giving them the answer, we’re teaching them skills in order for them to go out and do whatever they choose to do. “When we came out of school we had been taught to do particular skills that could done anywhere in the world such as write neatly, basic maths, grammar so that no matter where you went you would fit in. “The jobs that they’ll be doing aren’t even created today. “We are trying to teach kids to be creative, collaborative, have good communication skills, and be critical thinkers and if we can get that into our students then anything is possible,” Tim says.

– Tim Van Zyl

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BUSINESS PROFILE:

From left: Ian Jennings, Cameron Drury, Vicki Wilkins, Roger Wiffin & Joe Hallam.

YOU MAY HAVE SEEN THE “CHEAL” SIGNS ON PROPERTY DEVELOPMENTS AROUND HAWKE’S BAY RECENTLY AND WONDERED WHO WAS BEHIND THIS BUSINESS AND WHAT DO THEY DO. Well to set the record straight Cheal isn’t a new business. In fact it was established 75 years ago by Laurie Cheal in Taupo in 1940, and now has branches in Taupo, Taumaranui, Ohakune, Whakatane, Rotorua and Napier. Over the years the company has continued to develop its geographical reach as well as the services it provides. Cheal offers extensive expertise across the fields of engineering, surveying, planning and 3D laser scanning throughout the Central North Island. The Hawke’s Bay operation was established three years ago with local lad Cameron Drury at the helm. Cameron, has worked for the Hawke’s Bay Regional Council and the Napier City Council, as well as his own private practice. He could see scope for bringing like minded and skillful people together under the one umbrella of a multi-disciplined firm. He quickly developed a team of experienced planners and engineers with planner Roger Wiffin, design engineer Joe Hallam, geotechnical engineer Ian Jennings and operations support Vicki Wilkins. Like Cameron, Roger has worked as both a consultant and within council. He has a wealth of knowledge and experience as well as an impressive track record across commercial and land development activities. Joe Hallam is an experienced design engineer with key strengths in designing and constructing land development projects and stormwater management solutions. Ian, joined the team and provides a local Geotech resource to undertake and manage foundation investigations, water harvesting projects, subdivision developments, roading projects, land stability analysis and retaining wall design. Vicki focuses on operations and assisting with the growth and development of the Hawke’s Bay branch and wider company. “We’ve taken an innovative yet practical approach, problem solving abilities and professionalism and applied to these to the areas in which we work, and are proud of the projects that we’ve been involved in,” Cameron says.

Touching many sectors, the team is involved in land development projects, water allocation matters, commercial developments and municipal projects, and provides strategic advice from the feasibility stage of a project to its completion. Cheal already boasts an impressive portfolio of local success stories such as the East Pier Hotel redevelopment, the new retail complex on the corner of Georges Drive and Kennedy Road in Napier, the new carwash in Hastings, and the upgraded medical centre opposite Anderson Park. Cheal has also been instrumental in creating a global water consent for growers within the Twyford area. “This is a product of innovative thinking around how water resources are allocated and managed. Working well with key associates is of primary importance to the company, and Cameron and his team foster good relationships within the regions five Local Authorities. “We have great working relationships with all the councils and work hard at maintaining these. The better we can work with the councils the better we can work for our clients.” Cameron and his team are passionate about the growth of Hawke’s Bay. “We’re all local and we take our role in the development of the region very seriously. This is the mantra of the wider company which is focused on developing and supporting the regions. We are small enough to provide one on one service that we all like and expect, yet have the capacity to resource the demands of larger projects.” Talking to these guys you get the sense of a 'can do' attitude, but it’s the underlying strategic thought and innovative approach together with an indepth awareness of what’s going on in the region that makes these guys really interesting. With a desire to work alongside a growing network of colleagues providing complementary services, the team is well placed to contribute to the development of the region in what seems to be a fresh and exciting manner. www.cheal.co.nz

“WE’RE ALL LOCAL AND WE TAKE OUR ROLE IN THE DEVELOPMENT OF THE REGION VERY SERIOUSLY.” — CAMERON DRURY

Cheal was involved in the redevelopment of the East Pier Hotel complex.

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NEW KIDS ON THE (Sun) BLOCK BY SARAH THORNTON

Olly and Martha Van Arts are the brains behind Skinnies, a sun protection gel shaking up the sunscreen category in supermarkets and pharmacies around the country. The idea for Skinnies arrived on a hot Hawke’s Bay weekend when Olly and Martha were in their garden doing what most Kiwis do: mowing the lawn and enjoying the summer’s heat. “I was slathered with greasy sunscreen. It was greasy, sticky and I was sweating it off - it wasn’t pleasant,” says Olly. “As a family that spends a lot of time outside in the summer, we’re aware that we need to protect our skin from the sun’s harsh glare. But traditional sunscreens don’t deliver a very good experience. We knew there should be an alternative, something that felt good on your skin, that only needed to be applied once a day and still gave great protection.” After consulting with friends and colleagues, the pair realised a gap in the market existed for a new style of sun care and set about creating their brand, Skinnies. ‘Disrupting the market’ is ad-speak for launching a new product that shakes up its category, a product that makes consumers think and feel in a different way. Martha and Olly, who own an advertising agency, had the right credentials to create a brand that would stand out from the rest. Skinnies’ branding is tongue in cheek, a little irreverent. The name gives a nod to

its relationship to skin, but like Charlie’s, a name which has nothing to do with juice, Skinnies doesn’t explain itself completely and its advertising is punchy, modern and creative. The major difference between Skinnies and traditional sunscreen products is that Skinnies has no water in it. “Most brands have between 50 and 70 percent water in a 100ml bottle. Ours doesn’t have any. As an environmental engineer, Martha needed to ensure Skinnies’ formulation and its impact on the land was a positive one. “Skinnies is an efficient product – there’s no re-applying and when it washes off it doesn’t clog up the waterways. The formulation is made with the least ingredients possible, with no preservatives. It’s a gel in its most natural form.” “Sunscreen is a listed medicine so it has to work. We had to improve the formula to meet new standards and did this with the help of funding support from Callaghan Innovation. There is a lot of investment in R&D, testing and compliance and the funding has meant we can now produce a product that meets both New Zealand and international standards,” says Olly.

Olly and Martha Van Arts

In the early days the couple say they were “bright eyed and bushy tailed” selling Skinnies by cold-calling pharmacies and boutiques. The past four years have seen production increase from 1,000 units to between 10,000 and 15,000 units and to meet the growing demand for Skinnies in pharmacies and supermarkets, Martha and Olly recently enlisted an Auckland distribution company. “We’ve ramped up distribution and this year we’ll be stocked in 500 to 700 stores throughout New Zealand and Australia. Skinnies is also finding its way further afield, with an order recently exported to Switzerland. “Being a seasonal business, 80-90 percent of our sales occur between August to April. The Swiss licence enables Skinnies to be sold throughout Europe in our off-season.” Skinnies’ marketing is fun and positive with universal appeal. The company sponsors mountain bike champions, rowers and surfers. Cricketer Brendan McCullum uses Skinnies and it’s also the official supplier to NZ Hockey. Six new Skinnies products are currently in development. “We are working on a tanning gel, a tinted gel, a baby product and a gel for extreme athletes. The Callaghan Innovation grant is helping with our research and development of the range. It’s a very exciting phase in our business.” www.gotskinnies.com

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GROWING BUSINES

Blazing A Better Business Trail – Hawke’s Bay’s Business Hub Steams Ahead

The open plan entrance with cafe

By Alisha Neilson Good business leaders create a vision, articulate that vision, passionately own the vision and relentlessly drive it to completion. It seems without exception, Hawke’s Bay’s top business leaders epitomise that character and drive the result of which we can now all benefit from.

Hawke’s Bay’s Business Hub located in Ahuriri is attracting growing attention from central government since opening its doors in May, as a national first ‘one stop shop’ business support centre. What makes it unique is the range of development agencies working cohesively within a purpose-designed facility to support local business growth. It also

Jason Forbes, Managing Partner– BNZ East Coast

Chris Collins, Chief Executive – EIT

Collaborating EDA’s under one roof has similarities to our business model at BNZ. Seven years ago we took down our internal silos and introduced BNZ Partners. We represent 5 core segments (property, business, commercial, agribusiness, private banking) on a one to one relationship model. We are well designed to support customers at every stage of their growth path. Our mission is to be the bank FOR NZ by helping New Zealanders be good with money. We believe in a high achieving Hawke’s Bay, by enabling business growth. Supporting the Ahuriri Business Hub was therefore an easy decision for us.

EIT strongly supports strategies that are business friendly and support the advancement of business enterprise in Hawke’s Bay.

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provides an environment for collaborative projects. It has been the brainchild of Business Hawke’s Bay (BHB), that, back in 2012, identified the need for more – visible, accessible and coordinated business support services.

Hamish Whyte – Furnware

Tom Skerman, Economic Development Manager – HBRC

Over the past 15 years I have called upon the services of many agencies to assist me to grow my business. If I were to start my journey again That’s one reason why we supported and walk into one place with all the the temporary location of these resources and people I need, this agencies at EIT while the Business would be it. Hub facilities were being developed The Business Hub is a positive in Ahuriri. initiative for Hawke’s Bay. Without a Bringing key agencies together under doubt it will drive economic growth one roof in a business focused and all residents will benefit from environment is a great step forward, better resources and more jobs in our and EIT looks forward to continuing community.

Critical to the success of any strategy to lift the region’s economic performance is a well-resourced, coordinated and collaborative effort on behalf of the agencies devoted to growing and attracting business to Hawke’s Bay.

to work with the Hub and its agencies in supporting the businesses and business ventures in HB.

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By bringing central and local government agencies under one roof together with the likes of the Chamber of Commerce, Icehouse and the Food Innovation Network, Business Hawke’s Bay has set the platform for a step-change in the way we engage with existing and future businesses.


SS – GROWING THE REGION What was once seen as an ambitious initiative littered with obstacles has finally reached fruition, and while it is still early days, BHB chief executive Susan White says the feedback already from the business community is resoundingly positive. “The drum has started beating and with word of mouth so strong in our region, volume has been steadily building. Already we’re seeing our inter-agency relationships strengthen; we’re all under the one roof now, so it’s easy to tap someone on the shoulder to meet that business owner, clarify an issue or get something nailed down,” Susan says. The first thing that strikes people when they walk through the doors of the Business Hub (formerly the BigSave furniture store), is its welcoming feel. Whether it’s due to the café style entrance or the friendly staff, it is by no means intimidating.

Icehouse, and representatives from HBRC, HDC, and NCC, the Hub also provides ‘hotdesks’ and conference facilities for hire. It has played host to a series of Free Trade Agreement roadshows for Taiwan and South Korea, hosted workshops and training sessions, and more recently provided the venue for meetings between business groups and Jetstar delegates. Not to mention the networking events held by the individual members of the Hub themselves. The amount of business engagement is a good lead indicator for the success of the Business Hub. An example cited by Susan is the Better by Lean workshop, brought to the region through the joint efforts of NZTE and BHB during May, with the support of Callaghan Innovation. Of the 12

“Our self-help café area sets the tone; people can come in, have a chat and make connections on the fly or head to our adjoining conference and meeting rooms,” she says.

Business Hawke’s Bay provides connections and information to businesses and investors, lead specific projects, and support to initiatives led by others. We tap into local, national and international networks to identify sources of support and information to improve business productivity, capacity, capability and growth. Susan White susan@businesshawkesbay.co.nz Food Hawke’s Bay works with growers, manufacturers and the hospitality industry by create connections, and share knowledge. FHB also assists companies with compliance issues, marketing and finding new sales channels. It also organises annual events to promote the food and hospitality sectors. Patricia Small patricia@foodhawkesbay.co.nz www.foodhawkesbay.co.nz NZTE is always on the lookout for smart, forwardthinking companies with potential for international growth that will provide lasting benefits for New Zealand. We identify, plan for and act on a company’s biggest opportunities for international growth. We do this by boosting the company’s global reach and market knowledge, and building their capability to succeed internationally. Sue Greenwood sue.greenwood@nzte.govt.nz www.nzte.govt.nz The NZ Food Innovation Network (NZFIN) is an accessible, network of science and technology resources that has been developed to support the growth and development of food & beverage businesses. The focus is to provide access to the expertise required to take new food products from idea to commercial success. NZFIN has a Business Development Manager placed in Hawke’s Bay to work alongside companies situated on the East Coast of the North Island. Sally Gallagher sally.gallagher@foda.co.nz

As well as housing BHB, Business Central, Export NZ, Food Hawke’s Bay, NZ Food Innovation Network, HB Chamber of Commerce, New Zealand Trade and Enterprise, The

Duncan Wallace, Hawke’s Bay Technologies

Amanda Martin, Regional Manager – NZTE

Hawke’s Bay Technologies (HBT) provides the IT network infrastructure enabling Hub agencies to connect and communicate. The state of art wireless network provides access to internet cloud services and internal line of business applications.

The Hawke’s Bay Business Hub will help us collaborate regionally to ensure Hawke’s Bay companies succeed internationally.

In addition, HBT has provided full access to printing and scanning services via their Ricoh multifunctional printers, with users swiping security cards at the printer to retrieve print jobs on demand, securely and right on time. HBT is the go to IT services company for the Business Hub and Hawke’s Bay businesses.

Meet the agencies at the Business Hub

Craig Cameron, Economic Development Manager – Hastings District Council

Jeff Parker, Managing Director – Hurford Parker

Hastings District Council sees the Business Hub as the place that brings together key organisations whose role is to support and promote New Zealand Trade and Enterprise business growth in the Hawke’s Bay (NZTE) is proud to be part of this economy, because Great Things Grow Here. business-led vision. Our purpose is simple: to grow The Hub partners’ collective companies internationally - bigger, expertise and networks bring ideas better, faster - for the benefit of New and resources that any business Zealand. If your company is looking owner, manager or stakeholder can to internationalise come and visit us access to grow their business, in turn at the Business Hub for advice and growing the Hawke’s Bay economy and generating new jobs. support.

Hurford Parker is proud to support the HB Business hub. As a local business with national strength and global capability we see the importance of contributing to the wider Hawke’s Bay business community of which we are apart. The success in any business is around growth and efficiencies. The Hub is at the forefront of contributing to a strong local economy, which we all agree is necessary to future proof the Hawke’s Bay. Hurford Parker provides innovative tailored insurance solutions and risk management advice, ensuring competitive pricing to its established clientele.

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companies from Hawke’s Bay and beyond who participated, five have so far signed up to continue with a couple still considering. “That’s a solid conversion rate and means those businesses are planning to invest in improving their business performance through the application of lean principles,” explains Susan. Establishing the Business Hub took a huge commitment from the board of Business Hawke’s Bay and chairman Stuart McLauchlan estimates some members put in up to 300 voluntary man-hours, getting the Business Hub off the ground. “It’s not the end game - our commitment is for the long-term. We see the hub evolving over time with the potential for other agencies (who can contribute to the purpose of ‘unleashing business potential’), joining us to address gaps and add to the upside potential,” says Stuart. “What people need to realise is that this is not a commercial venture, far from it. It’s the work of a passionate group of people who want to see business development in Hawke’s Bay prosper because every one of us can see the wider benefits that come from working together.” It is thanks to the partners and supporters of the Business Hub, including businesses and local councils that the Business Hub has been established. Now it is up to local businesses to leverage off the facilities’ services.

Stuart McLauchlan, Partner – Langley Twigg

Langley Twigg supports and sponsors a number of business and community activities in Hawke’s Bay. Supporting Business Hawke’s Bay and the Business Hub has been a no brainer. Bringing these agencies together under one roof and working together to support business is fantastic. One of the biggest opportunities and gains we can make in the Bay is to take our existing businesses and grow them – take them to the next level, as we believe this will naturally lead to increased productivity, business activity and more jobs in the region. Langley Twigg is all about providing advice and services to take your business to the next level. 26

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Agency pods at the Hub

Businesses Share Their Experiences of The Hub Being proactive in business is fundamental to success and nobody knows that better than Jenni Giblin, director and founder of specialist consultants Giblin Group. Jenni’s company is fast becoming recognised as a national leader in facilitating large capital projects for local government via funding from central government coffers. With around 70 percent of the country’s smaller to mid-size councils now clients, Jenni saw the need to

James Rowe, Napier City Council

integrate systems to help ensure the company’s rapid growth remains sustainable. She applied for The Icehouse Owner Manager Programme Scholarship and to her delight, she was one of eight candidates accepted. “It was fantastic to win. Kate de Lautour at The Icehouse put a solid case together for me and was brilliant to deal with. As a selected business owner, I’m extremely appreciative of the benefits this course will deliver.”

Ken Sutherland, Chief Executive – Unison

Napier City Council strongly supports the Business Hub and local businesses. We are endeavouring to build a strong business culture that will support start-ups, high growth companies, investors and new businesses to the region.

The Unison Group is passionate about the Hawke’s Bay Hub. It showcases the power of collaboration, where a region’s business people and stakeholders can come together with a single vision to promote economic benefit and deliver a better future for Council plays a key part in a new Hawke’s Bay. regional collaborative approach to The Hub is a vital initiative for our business attraction and growth. We great region and one we are delighted work with the other partners at the to be part of. Hub to ensure that businesses in To see businesses reap success from the region have a go-to place to get this initiative, and help to keep support, help and advice, whatever the Hawke’s Bay economy strong, their challenges. reaffirms why we got behind the Hub

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for the greater benefit of the Bay.

Robert Darroch, Managing Director – Future Products Group

Future Products Group proudly supports Business Hawke’s Bay and has been actively involved with bringing the hub concept to reality. As a Hawke’s Bay-based business, we believe our region will benefit from this fantastic facility and more so from the capable and relevant team of agencies that are ready and willing to help grow the Bay . The establishment of the Hub has nailed home the fact that our region has some fantastic people helping many local businesses navigate the challenges of growth or sustainability.


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the Business Hub is invaluable. BHB is a really well run organisation whose board members have skin in the game. It goes without saying that having all our support agencies in one space enables the cross-pollination of ideas, which is really important.” As export manufacturers of premium quality meals and meal ingredients, GreenMount Foods based in Hastings’ Omahu Road is also reaping the benefits of the Business Hub. Technical sales manager for Australasia, Rebecca Klee believes that with the training and workshops the Hub provides, their company will achieve its goals faster. “The uniqueness of having all Hub agencies under one roof speeds up our progress exponentially. Processes that traditionally would have taken weeks, can now take a matter of minutes thanks to the agencies’ accessibility.” As manufacturers of 2000MT of vegetable products, soups, sauces, stocks and prepared meals bound for Australia, Singapore, Japan and Dubai, the importance of food innovation and ‘adding value’ is paramount for GreenMount Foods. Economic Development Minister Steven Joyce with Business HB CEO Susan White.

Giblin Group also regularly engages with other agencies within the Business Hub, namely NZTE (New Zealand Trade and Enterprise) and Business Hawke’s Bay. As a growing organisation, Jenni is proud to see a region like ours leading the pack. “For businesses that don’t know where to go to access information, getting linked up with

The company’s staff regularly attend BHB and The Icehouse run workshops along with Export HB meetings, while also working closely with NZTE, Food HB, the NZ Food Innovation Network and Callaghan Innovation. “As a small company like ours it’s critical we use the resources and information available to us. The Hub has everything we need the meeting room and break out facilities are first rate, right down to the coffee! Its location near the airport is fantastic and with a concierge to guide you, you instantly feel welcome.

Meet the agencies at the Business Hub (cont.) Callaghan Innovation is the government’s innovation agency. We give businesses access to specialist research, engineering and commercial expertise, and R&D grants they need to succeed. Jenny Brown jennyb@hbrc.govt.nz www.callaghaninnovation.govt.nz The HB Chamber of Commerce is the only independent business advocate in HB. It promotes ways to help council’s create an environment that makes doing business easier in HB. The Chamber offers; events for commercial connections, Business Mentors NZ, Regional Business Partner and the youth YES, to stimulate commercial literacy in HB. Wayne Walford ceo@hawkesbaychamber.co.nz www.hawkesbaychamber.co.nz Business Central is an HR and employment relations specialist providing advisory, legal, training and advocacy services to help Hawke’s Bay and Gisborne businesses stay safe, remain successful and get ahead. Anne Rocard anne.rocard@businesscentral.org.nz www.businesscentral.org.nz ExportNZ is a membership organisation that works alongside businesses to support and helps them grow. It is a national network that has strong links with government agencies and non-government organisations. Through the network we provide knowledge, information, contacts, training and support services. Amanda Liddle amanda@exportnz.org.nz www.exportnz.org.nz New Zealand Food Innovation Network provides food and beverage companies from SME to large corporates that have export potential, to access food and beverage technical specialists in added-value processed foods. We facilitate links through internal and external networks (Universities and CRIs) in food innovation. www.foodinnovationnetwork.co.nz

“We feel like we’re on the fast-track now… with resources like this, why not tap into them.”

Hamish White, Chief Executive – NOW

The decision to get behind and support a business hub for Hawke’s Bay was an easy one. Hawke’s Bay’s future is dependent on supporting and growing our existing businesses and nurturing new businesses. So enabling ‘doing business in Hawke’s Bay’ to be as easy as possible by having a business hub where all of the business support agencies are physically based together and fully collaborating cuts straight to the heart of this.

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Empowering Business in the Central Region

an

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Hadley Brown

Synergies opening doors for Colliers Rural and Agribusiness Farming in New Zealand has moved on significantly in recent times and while the traditional family farm is still a cornerstone in the rural sector, a trend has developed towards investment in agriculture and horticulture industries as investors look to diversify and grow their portfolios. With this trend has come a whole new market of buyers and more prominent than ever is the synergy developing between the investment and the rural worlds. One company that is noticing this synergy is the recently established Colliers Rural and Agribusiness, a division of Colliers International. Managing Director Hadley Brown says that move to establish a rural division of the business was a ‘no brainer’. “The cross-over we are seeing with the commercial division is significant. Two out of the three farms we have sold in the last month have been successfully concluded with existing commercial clients.” Hadley says that in all his years in real estate, the momentum the company has experienced since launching in February has been like nothing he has seen. While the Real Estate Institute of NZ (REINZ) reported fewer farms for the three months ended May 2015 than for the three 28

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months ended May 2014, Hadley says the demand has been unprecedented and he attributes this to the many doors that are opening through the Colliers commercial networks. Since the company’s launch, Hadley and his fellow colleague Mike Heard have sold over $10 million worth of farms, with Ruawai farm on Dartmoor Road and Seven Oaks farm on Glengarry Road selling significantly over valuation for $5 million and $2.6 million respectively, with numerous parties presenting multiple offers to the vendors. “There were 46 viewings of the Dartmoor Road property and the tenders that we received were in the double figures. “We are in an enviable position with the commercial arm of the business accounting for 80 percent of the Hawke’s Bay market share, giving us access to large databases of qualified buyers. We are able to really maximise the opportunities we have working closely with the commercial team as well as the existing networks Colliers have throughout New Zealand and Australia and that has been evident in the sales of Ruawai and Seven Oaks,” he says. While Hadley agrees that traditional transactions between those in the industry are still the key to rural real estate, he says that the team is having to increasingly look outside this for other more suitable

Seven Oaks on Glengarry Road sold recently for $2.6m.

“There were 46 viewings of the Dartmoor Road property and the tenders that we received were in the double figures.” – Hadley Brown

structures to meet investors’ needs. The firm has been involved in some large portfolio opportunities, coming up with equity fund scenarios to restructure existing models. “There is a lot of optimism out there and professionals who love the idea of having ownership in a farm but they don’t want anything to do with running it, are investing in the sector by partnering with a young farmer, that has all the skills and knowledge but limited capital.” He says that with some of the deals they are doing, there may not even be a transaction in terms of land. The original landowner may stay on but the farmer wants to release some equity and new capital is introduced. Hadley says that the nature and scale of some of the transactions they are dealing with are akin to large commercial transactions as


Ruawai on Dartmoor Road sold for $2m over valuation for $5m.

groups with large portfolios look to spread their investments over sheep, beef, dairy, horticulture and viticulture sectors across Australasia. “We have been working closely with our Australia offices to satisfy these buyer requirements and when their buyers are looking into the New Zealand market, Hawke’s Bay is often top of the pecking

order with prime land suitable for the primary sector.” He says that the Hawke’s Bay horticulture sector is particularly looking ripe for investment as the apple industry is experiencing good returns and driving optimism with land being re-developed back into apples.

Hadley believes that the relationship between investment and the rural sector will only continue to grow, “the synergy we see between the investment and rural sectors translates well into the Colliers International Hawke’s Bay business. It’s an exciting time to be in rural real estate and we look forward to seeing the business grow alongside the industry.”

WE WILL WORK THE LAND AS HARD AS YOU DO. FARMS • HORTICULTURE • VITICULTURE • LIFESTYLE

Hadley Brown 027 442 3539 Mike Heard 027 641 9007 Colliers International New Zealand Ltd Real Estate Agent REAA 2008

RURAL & AGRIBUSINESS

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Dairy goat farm takes off, in Hawkes Bay By Vivienne Haldane

As they launch their new dairy goat venture, Tuki Tuki Dairy Goats, father-daughter team, David Phillips and Lydia Baty are feeling very positive. Their happiness was apparent the day they showed The Profit around their brand new, state of the art, milking facility. “It’s purpose built and as good as you can possibly get,” says David. The family, who has farmed in the area for three generations, recently converted 41 hectares of sheep and beef farm to a goat farm and plan to be milking around 650 goats this spring. They are perfectly poised to take advantage of new developments in the goat milk infant formula market that has the potential to boost the region’s economy over the next 10 years to the tune of $360 million. David estimates the net returns per hectare will be four times that of sheep and beef farming – an attractive proposition for the next generation of farmers. “This move is really about succession planning. Our children can’t afford to buy this land and we’d like the farm to stay in the family, so we had to find some way of farming with a profit.” Adds Lydia, “We are really proud of what we’ve achieved so far. It’s been a hard slog and there have been lots of hurdles to go through what with contending with the mud, resource consents and contractors.” With the completion of a covered shed that has a holding capacity of 1000 goats and kids, production is about to begin. The internal rotary shed has been set up to handle milking goats for ease and efficiency. It can be operated by two people and will be fully automated when technology allows. “Every single goat and its details will be tracked via computer. We won’t have to wait for the milk to go to the factory to work out the grades and how much volume of milk has been produced,” says David. Lydia, who manages the farm along with her husband Sean, graduated from Lincoln University with a Bachelor of Commerce majoring in Agricultural Management and Rural Valuation before working as a rural bank manager in Waikato. That’s when she first became interested in dairy goats. She visited a few farms and came back home and told her father, ‘this is what we are going to do on our farm.’ The temperate, sunny climate in Hawke’s Bay is ideal for farming goats. Goats are easier on the environment too – Lydia estimates their impact is 10 percent of that of a dairy farm. Goat manure – typically small, hard pellets – does not pose the same nutrient leaching problem cow manure does.

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The establishment and operation of the industry and the associated value chain could generate

$1.5 billion in gross revenue for the region cumulatively over the next 10 years and

CREATE 178 JOBS, according to research commissioned by regional economic development agency Business Hawke’s Bay (BHB). Over the coming decade, a goat milk formula industry could contribute $364m to the region’s GDP. In 2024 alone, the contribution to GDP could reach $62.38m – nine percent of the agriculture sector’s current GDP. Source: Business Hawke’s Bay. Lydia Baty and David Phillips

Having worked as a share-milker in Waikato for the past year, Lydia was able to gain valuable skills before starting her own venture. It also gave her time to do her research and find a processing facility and a market.

In July, Gregg Wycherley, founder of Fresco Nutrition Ltd, told attendees at the Infant Formula Industry for Hawke’s Bay Conference conference, 'When we build, we will build here.'

“We have a 5-year contract with our main supplier Fresco Nutrition – our milk is taken to Hamilton where it is turned into infant formula and other milk products.

Fresco Nutrition plans to invest up to $30million in a spray dryer and canning facility in Hawke's Bay. It is estimated the facility will provide around 40 jobs.

INFANT FORMULA SUCCESS

Gregg described Hawke’s Bay as being an ideal region in which to locate his operation in terms of its climate, land prices, Napier Port, transport infrastructure, water and trade waste systems and supportive local government.

The infant formula industry is set to establish itself in Hawke’s Bay with two different investors making plans to build facilities here over the next two years.

NZDP’s estimated $80million project includes a large scale farming operation for both dairy goats and sheep. Company managing director, Chris Berryman said such scale would enable NZDP to control quality from farm to finished product­ – an important factor for access to some Asian markets.

Chris estimated the new factory­ – to be built in 18 months – and farm would provide a boost to the local economy with up to 70 new jobs. The new plant will also manufacture Shegoa™ Infant formula that is made from a combination of goat milk and sheep milk. It is hoped that the first stage of development will give NZDP the capacity to produce up to 15 million tins of goat milk and Shegoa™ Infant formula, for export to over 24 countries. Business Hawke’s Bay food and beverage programme manager, Catherine Rusby said, “To have both these businesses commit to Hawke’s Bay is tremendous. “It signals that Hawke's Bay is a serious place for growing and manufacturing nonbovine dairy products.” ATTN13PRO1407

Fresco Nutrition Ltd, a dairy goat infant formula manufacturer and New Zealand Dairy Products Ltd (NZDP, a sheep and goat milk infant formula manufacturer, plan to capture the rising demand for infant milk formula and other nutritional powder.

Milk will also be sourced from other local goat and sheep farmers.

Caring for your large and small animals right across the bay

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Waipukurau - 43 Takapau Road, 06 858 9060 Dannevirke - 193-195 High Street, 06 374 7021

www.vshb.co.nz AUGUST - NOVEMBER 2015

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Scott Lawson

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DEMAND FOR ORGANIC DRIVES BUSINESS

By Vivienne Haldane and Catherine Wedd

A growing number of consumers would rather pay more for food, beverages, textiles, health and hygiene products they know and trust to be certified organic, according to the latest statistics. Organic food sales have risen 8–12 percent in New Zealand during the past two years. The developing organic market is regarded as an opportunity not to be missed. According to Organics Aotearoa New Zealand (OANZ) chair Brendan Hoare, “world

demand for organic products far exceeds world supply in most categories.” However, just over one percent of New Zealand’s farmland is farmed organically, compared to three percent in Australia and much higher percentages in most European countries. The Profit spoke to three Hawke’s Bay certified organic producers to find out more about how they have grown their businesses.

LAWSON’S TRUE EARTH™ CERTIFIED ORGANIC FARM Scott Lawson of Lawson’s True Earth™ Organics thinks food production is the most important job in the world. It’s the reason he begins each day with such enthusiasm. “You have to have a passion to make it work because food production is hard at the best of times and organic food production is even harder,” he says. Scott and his partner, Vicki Meech, grow blueberries, potatoes, onions, carrots, potatoes and barley lucerne on their 65 hectare property near the Gimblett Gravels, east of Hastings. They’ve been organic since they began in 1992, became certified in 1994 and launched Lawson’s True Earth™ brand in 1999. They are one of the largest producers of certified organic berry fruit and vegetables in New Zealand with outlets in niche market stores and supermarkets all over the country. Scott chose organic farming over conventional farming because he’d seen market opportunities, prior to 1992, with many people wanting good, safe food. “We started looking at food production systems and thought that organics sat well with our ethics, so that’s why we went into it.”

That integrity is of utmost importance when it comes to building a brand. “The True Earth™ mantra is that we produce good, healthy, nutritious, certified organic food from our family to your family. “It is hard to quantify how important that brand is. As with any branding, you work hard at building one and hope it adds value and gives you credibility, but you have to walk the talk as well. We back up our integrity by being BioGro certified. There’s a lot of green washing of brands that goes on and people do get taken to task over it.” He notes that organics in New Zealand have had nowhere near the growth enjoyed by organics in the United States, United Kingdom or European markets. “It could be that a lot of people in New Zealand think we are green and clean anyway. I see a wasted opportunity here – we have a really strong educated farmer and producer base and a strong post-harvest, packhouse export base, as well as innovative food processors, there’s no reason why we can’t do more value-adding right through that whole food production chain.”

True Earth™ customers come from all sectors. “We’ve got the younger generation with no kids buying our food, those in the 30–40 age group who are really precious about what their children consume, as well as the baby boomers who have more time to focus on what their grandchildren are eating. We also have people who struggle to make ends meet each week but will choose to buy certified organic products because that’s their belief system. In most parts of the world, organic products can be bought alongside other retail items and while this is happening to some extent in New Zealand, it’s not that common yet. “We don’t want organics being sold separately. You should be able to go to, say, a wine shop and be able to easily find certified organic wine. In supermarkets, if certified organic is placed in a special section, perhaps buried in the lowturnover areas of a store, it doesn’t sell very well. Customers can’t find it and staff tend not to rotate the stocks properly. However, when you start to offer it, you can grow sales. We’ve had success with some supermarkets doing that; it’s all down to how good that retailer is and how committed they are.” www.trueearth.co.nz

Source: Better Business Better Future Report, Colmar Brunton (2014).

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Ben Bostock

BOSTOCK’S ORGANIC FREE RANGE CHICKEN Bostock’s Organic Free Range Chicken is another success story on the Hawke’s Bay organics scene. In less than a year in business, poultry farmer Ben Bostock has doubled production to 3,000 chickens a week to meet increased demand across the country. Word has it that customers can’t get enough of the organically fed and optimally raised chicken. The certified organic producer can vouch that his chickens are GMO-free, antibiotic-free and chlorine and chemical-free with no growth hormones. Ben says he started out with small orders but business has grown substantially due to his steady and targeted marketing approach. “We made cold calls and focused on building strong direct supplier relationships. While I

believe our organic free-range chicken would become popular, ultimately it’s the consumers who make the choice. Bostock’s Organic Free Range Chicken is making its mark in Remuera New World, which was one of the first to sell the product. Butchery manager Grant Harvey says, “the chickens are flying off the shelf. Customers are coming back and asking for more; they are telling us the chicken tastes like chicken, the meat has flavour and the bones are strong, not brittle. It’s always fresh and reliable.” Sam Orton, owner of Orton Tailored Cuisine, says he is seeing an increasing demand for organic free-range products. “It’s a premium product, which suits our reputation and the prestige that we want to carry through our business. It’s delivered a result for us that we were looking for.”

Bostock’s Organic Free Range Chicken has nationwide distribution into all the main regions through a selection of specialty food stores, supermarkets and even service stations. The wider organic industry is pushing for the Ministry for Primary Industries (MPI) and the Ministry of Business, Innovation and Employment (MBIE) to regulate the term organic. “It’s a term that can be used loosely and it is watered down all the time,” says Ben. “We believe the term should be regulated because consumers need to know. It’s frustrating for those of us who have put a lot of effort and cost into being organically certified and are doing it properly.” www.bostocksorganic.co.nz

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PRIMARY SECTOR RECRUITMENT 06 871 0450

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BOSTOCK NEW ZEALAND Pioneer of organic apple growing in New Zealand, John Bostock says international demand for organic produce is at an alltime high. “This year we have exported record volumes of organic apples. Our production base has grown with the addition of more organic orchards. We are exporting to more customers in more countries throughout the world than ever before. “The demand for organic apples has driven major growth and helped create more permanent jobs, with plans to plant more trees each year for the next five years and introduce more organic apple varieties as part of our orchard redevelopment programme.” John’s company has just launched a new corporate name and brand to reflect the positive growth. The Bostock Group’s three main brands, JB Organics, JM Bostock Ltd and DM Palmer, will all now become part of Bostock New Zealand. The change of name heralds exciting new opportunities for the company but John says Bostock New Zealand’s core values won’t change. “Growing healthy, superior tasting produce is the priority for Bostock New Zealand, which

John Bostock

Video is a strong visual way to promote the organic story to international markets. Click here to see how Bostock New Zealand portrays its natural growing practices in a clean, pure environment.

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has a proud history of sustainable production. We believe in educating the wider population about the benefits of eating well. We are all about clean and pure, working together as a community to protect our land for future generations,” said John. John’s latest venture is also aimed at getting more people eating organic, healthy food. He opened the Bostock Organic Kitchen in June. The purpose-built kitchen has been designed as a place for Bostock New Zealand staff and the public to enjoy premium organic meals. Bostock New Zealand employs up to 500 people in the height of the season and staff are welcome to partake of the wholesome meals cooked by a top chef. All meals are subsidized and on occasions, free. “We are strongly committed to the wellbeing of all our staff. We are a country that has major issues with poor diet, obesity and sugar, but we can change this by giving people opportunities to learn new, exciting and interesting ways to eat healthily. “By taking away the cost barrier, we hope we will start changing eating habits,” says John. The initiative backs his philosophy, ‘we are what we eat,’ and getting more people eating well. www.bostock.nz

Plating up at Bostock Organic Kitchen


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Andy Tait Jamieson and Sophie Siers

THE ORGANIC FARM BUTCHERY TI KOUKA FARM Andy Tait Jamieson made the decision to farm organically because the amount of chemicals used in conventional farming bothered him. “I didn’t want to eat anything that had a whole lot of chemicals in it and on a farm you see that all the time,” he says. He was brought up on a dairy farm in Waikato and in those days, chemical use was minimal. Andy, his wife Sophie Siers farm South Devon cattle and Wiltshire sheep on 750 acres at Waimarama. “Our philosophy is to produce ethical, sustainable, free-range, grass-fed meat so people who want that can have it and know exactly what they are buying,” says Sophie. The couple also owns the Organic Farm Butchery in Hastings. This standalone business, which is 80 percent wholesale, has seen a consistent 10 percent growth rate for the past three to four years.

The butchery is a popular and recognised brand that supplies pre-packaged meat to supermarkets, cafés, restaurants and retailers throughout the country. They also sell at the Hawke’s Bay Farmers’ Market and have regular customers who buy their organically raised meats. When Sophie talks about farming organically she has a big-picture view. For her, it is not about short-term gain. “Profit to us is not about how much money we make. More importantly, it’s working a system that has long-term gain and wins on many levels. “It’s about sustainable, long-term production that has lots of profits, so you haven’t compromised the land or people. You haven’t used cheap Chinese labour, for instance. These are costs to all of us at the end of the day. ”

One of the best things about being certified organic they say is that it gives people confidence in what they are buying. And they are coming to it for a variety of reasons, according to Sophie. “Some buy our meat because they think it must be better for the waterways. They are not convinced about health or organic but they can make a difference to erosion or water quality. Sophie believes that “if anybody wants anything to change in the food world, consumers have to be prepared to pay for food that comes from reputable sources so they are actually backing their own rhetoric. “You have to go out and say, I’ve found a farmer who is doing something about it, like Scott and Vicki, the Bostocks and us. When people come to our stall and say, ‘pigs in crates, isn’t it disgusting? The government should do something.’ I say, the government doesn’t need to do anything. Just stop buying it!” www.theorganicfarm.co.nz

Sustainable, healthy and pure Bostock New Zealand grows packs and markets high quality squash, onions, grain and organic apples. We are committed to sustainable growing practices, protecting our land and rivers for future generations. Our apple orchards are 100% organic, free of synthetic pesticides and artificial substances. We believe in having GE-Free land, fertile soils and clean water supplies to produce premium products. If you have cropping land to lease please contact us: www.bostock.co.nz

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Unison’s Smart Network Driving Efficiencies Unison has again delivered a strong performance for its customers, achieving network performance well below regulatory limits, and reporting an increased dividend pay-out to its beneficial owner, the Hawke’s Bay Power Consumers’ Trust. Unison has continued to deliver reliability of supply to customers, due in part to the continued roll-out of its Smart Network.

Unison Chairman, Kevin Atkinson has reported the consumer-owned Company achieved a major milestone in the last financial year, completing the implementation phase of its vision to establish a Smart Network across its three regions of Hawke’s Bay, Taupo and Rotorua.

“The Smart Network utilises some of the most advanced technology in the globe, integrated to create an innovative solution that anticipates our future environment. Completing the implementation phase positions the Company to deliver cost savings and enhanced performance to its 110,000 customers.”

The next stage of the project involves extracting the full benefits from these technologies, together with completing the integration of the Advanced Distribution Management System (ADMS) – a world-leading automated network control system and key enabler of the overall Smart Network initiative. “Once fully integrated, Unison will have the ability to capture and analyse detailed real-time

data from its smart assets, which will ultimately provide benefits to customers through sustained reductions in expenditure on assets over the longer term.” Whilst researching and deploying cutting-edge electricity distribution technology, Unison has also been focused on better understanding future technologies that will impact how its consumers use electricity.

With solar generation trending towards becoming economically viable in the next decade or so, the Company is trialling solar and battery storage solutions within a small housing development in Hastings. Over time this will provide Unison with first-hand experience of the operation, performance and potential impact this technology may have for customers, and on the Network. “The knowledge gained from this trial will help inform Unison’s network design and investment strategies, as well as position us to help customers understand the technology and make informed decisions when it comes to energy services.”

Unison Chief Executive Officer, Ken Sutherland, said that as solar panels become cheaper and more efficient and battery storage becomes viable for

“Far from fearing a future

where technologies such as solar generation disrupt our conventional business model, Unison is seeking to embrace the challenge of transitioning to a world where customers have much greater options to meet their energy needs.”

– Unison Chief Executive Officer, Ken Sutherland

Unison Chairman, Kevin Atkinson with Richard & Heather Morrish - residents participating in Unison’s solar energy and battery trials in Hastings.

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Line Mechanic, Leslie Setu, guides an elderly resident past a worksite on Kennedy Road, Napier. Unison completed this major project with the Hawke’s Bay Power Consumers’ Trust to replace the overhead network with underground cables as part of a record year in terms of delivering on its capital and customer projects programme of works.

consumers, traditional business models associated with building additional conventional electricity generation and transport infrastructure to meet consumers’ demands would come under threat. “Far from fearing a future where technologies such as solar generation disrupt our conventional business model, Unison is seeking to embrace the challenge of transitioning to a world where customers have much greater options to meet their energy needs.

“Our Smart Network Strategy positions us to meet these future challenges, and will improve our capability to manage our assets through improved utilisation and deferring, if not avoiding, significant upgrades which will provide long-term benefits to our customers.”

Unison’s Performance Results Financial Performance • Group Revenue $210.5m • Net Profit After Tax $27.5m • Capital Expenditure $49.5m • Equity/Total Assets 49% • Dividend $9.550m

Network Performance SAIDI 115 mins – on average, this is the total number of minutes a customer was without power over the 2014/15 year. SAIFI 2.0 – on average, this is the number of times a customer was without power over the 2014/15 year.

Subsidiaries The Unison Group has performed strongly in 2014/15, with subsidiary ETEL delivering a strong result for the year. Unison Fibre Ltd has continued to grow the number of customers connected to its network, with about 1000 customers enjoying the benefits of ultrafast fibre.

Control Room Operator, Ian Newton, utilising the new Advanced Distribution Management System (ADMS) during a power outage event.

Unison Contracting Services Ltd delivered a record year in terms of completing its capital and customer work programme, whilst helping maintain the performance of the network.

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Photo courtesy Hawke's Bay Today

The Hawke's Bay A&P Bayleys Wine Awards now in its 15th year is the oldest regional wine awards competition in New Zealand has been launched. The awards dinner on October 20 at the Showgrounds is a must attend event! Make sure you book your tickets go to www.showgrounds.co.nz

At last! Hawke’s Bay has its own arts festival: a myriad of topclass entertainment from international and New Zealand performers in a venue worthy of its own show. The Famous Spiegeltent was built in 1920 and has spent a lifetime at festivals and fairgrounds throughout Europe and beyond. Now it's coming to Hawke’s Bay to play host to cabaret, theatre, comedy, music and more.

hbaf.co.nz Havelock North Village Green 27 Oct – 8 Nov 2015

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HAWKE’S BAY – why it attracts agri-people By Brent Paterson | Rural Directions

What’s it got going for it anyway? Is it the people, the land, the beaches, the climate, the port, the processing capacity, the schooling, the wineries, the fruit or the Ranfurly Shield? Probably a combination of many of the above but tailored to the individual’s specifications. I couldn’t suggest many places in NZ have this menu of benefits to offer agri-people or any people for that matter. Add the Dam to this and we have a whole new industry in itself. Come on the Bay!! When you are in the market 365 you get a pretty good understanding of the benefits and desired intangibles that make that role the one to really target. HB is full of quality tangibles (above) and many desirable intangibles. Historically Hawke’s Bay has always been a great place to visit, people come and experience the great weather, concerts and events such as Art Deco Weekend and FAWC, (just to name a few). These great events are firmly engraved on calendars hanging on the walls of fun seekers throughout the country. We want to make this place a destination

Brent Paterson is the founder and managing director of Rural Directions- Primary Sector Recruitment & HR. His rural credentials are impressive from running a sheep stud and beef operation in Patoka, through to his involvement in Rural Directions subsidiary company, Primary Industry Management. To contact Brent, email – brent@ruraldirections.co.nz.

not just a holiday and when roles come up and we get the opportunity to get it out to the market we get real attention from the candidate market. Our business is involved in many agrimanagement roles and this seems to be the demographic particularly attracted to the Bay. There is a large emphasis placed on schooling (just so happens that people looking a these roles often have children in their teens) and we are spoilt for choice, outstanding boys and girls options throughout the region. There is an element of families re locating to the Bay in anticipation of great things to come, they understand that “agri-business is brewing” and that this is a well positioned region. We get calls from people asking about our opinion on what opportunities might arise if the Dam goes ahead, the business of ‘spec homes’ has been about for years, people are now discussing the options of ‘spec careers’... So my summary is that it’s the diversity of the Bay that attracts, it is as I have mentioned a combination of all of the above, it’s the attitude of the people and the attitude of

“Hawke’s Bay is full of quality tangibles and many desirable intangibles”

the business, it’s the proactive manner with which we drive business, we give things a go, we are early adopters, now is the time to build from this momentum. I’m not a physicist but a good example to me of the value of momentum is like when you are watching the fuel gauge in a boat as you are bringing it up onto the plane, hard work, heavy lifting energy sapping but the relief for the engine when you reach the plane makes it all worth it. The boat is suddenly efficient, the wake is smaller and you can maintain speed with less rev’s and less fuel. Let’s keep Hawke’s Bay agribusiness up on the plane. The NZ (and global) agribusiness candidate market see Hawke’s Bay as an attractive proposition, applications rates are high for roles here, there is a belief in the candidate community that we deliver quality. Sell the benefits and the desirable intangibles to the market every chance you get, if you get the best people working in your businesses because of them they quickly turn into tangibles.

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Three Steps to Security Secure your retirement against these 3 hidden vulnerabilities.

By Tobias Taylor | Spicers Portfolio Management

As we get older we are likely to be confronted with a number of hidden financial vulnerabilities, or some especially difficult, personal challenges, that go beyond just maintaining a steady income from our retirement savings and investments.

As a financial adviser, I have the privilege of working with a large number of retired clients, and as a result I have seen firsthand the problems that many older Kiwis have to wrestle with. Three of the most common problems elderly retired face are: 1. One partner is responsible for all the finances (the money manager) and when that person dies, the surviving partner is vulnerable because they don’t know what’s going on with the money; 2. Historical financial structures which have become redundant; and 3. Financial exploitation of the elderly. 1. The sole money manager

In my experience, particularly with the older generation, the wife or female partner is

usually happy to leave the management of the couple’s financial affairs to the husband or male partner. The exception to this rule is often the retired rural family where running the family farm or orchard was very much a collaborative exercise, often with the wife or female partner also being the financial controller. This of course is a demographic that is changing with time. Unfortunately, what happens in most other instances however, is that the husband passes away first, leaving his wife unprepared to take over management of the finances – very often she has no idea of what their financial position is. To avoid this problem, both partners should participate in the financial management of their affairs, including attending all meetings with their financial advisers. At the very least, have a checklist, which summarises your current situation and what needs to be done. This should be kept with other important papers like your annual accounts.

2. Redundant historic structures

Another potential problem faced by some people in retirement is that the financial structures that were set-up in the past – particularly some trusts – have not been future proofed. It is always a wise idea to discuss contingency and succession planning with your professional or independent trustee. This is especially common in rural areas. Clients set-up these structures and once ‘everything is in place’, forget about them. An annual review of your financial position, including your financial structures, is absolutely essential. Just like your farm or business, a succession plan is vital to your ownership structures. Part of the difficulty is that many older people do not like talking about money. They are private, but also very trusting. For that reason, I cannot over-emphasise the importance of having a reliable, independent support person on hand to offer advice, particularly when making big financial decisions. Another area where a support person is important is in helping you to work

SHAPING THE FUTURE OF BUSINESS Hawke’s Bay Office 86 Station Street Napier T: 06 835 3364 E: napier@bdo.co.nz

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Manawatu Office 32 Amesbury Street Palmerston North T: 06 358 4163 E: manawatu@bdo.co.nz

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• Tax Specialists • Business Advisory • Audit and Assurance • Information Systems / IT • Insolvency and Business Recovery • Business and Succsession Planning • Human Resources David Pearson Glenn Fan-Robertson Heather Hallam Lisa Townshend Ross Hadwin

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through, and understand, complex financial documents. 3. Financial exploitation

Financial exploitation of retired people is too common a problem that the elderly face. It is a problem because, while you may want to help people who are in need, you risk eroding your only means to support yourself into old age. Louise Collins, who co-ordinates Age Concern’s efforts to fight elderly abuse, believes that financial abuse of the elderly is a very big and on-going problem, which is fuelled by the attitude that older people don’t need the money – that they are sitting on a nest egg that the younger person has more of a need for, or is more deserving. “More than 75 per cent of those that financially abuse older people are family members, that we see. The problem is, elderly people have no means of generating an income after they’ve given the money away. As a result we see them unable to afford to replace things like their spectacles or hearing aides (which are not subsidised), because they’ve given their money away. “We are supportive of older people being able to make decisions to give money to their children. The problem comes when they are forced to do it through threats or bullying,” Ms Collins said. One solution is to require the signature of an independent, professional support person, like a lawyer or accountant. That person, being aware of the financial situation, is likely to know the risks and vulnerabilities you face, and this provides an extra layer of protection for those who may find it difficult to say ‘no’, ask ’why?’ or at least discuss the rationale behind unplanned activity. In my opinion, the support person should certainly not be the person’s manager of funds. Separation of duties and responsibilities when managing client funds is essential. When I manage a client’s funds, I believe that I should

not have a say in providing permission for the distribution of that money, other than giving written and researched advice in line with my agreed scope of service. The so-called ‘trigger signature’ or ‘second signature’ for a transaction should not sit with the financial adviser who manages the client funds. This is why I respectfully decline to be a trustee on client portfolios. A financial plan is the best answer

A good start towards overcoming challenges like the death of a spouse, financial exploitation and historic structures that have not been future proofed, is to have a financial plan in place from the beginning – it’s a way to roadmap your retirement so that every phase, and eventuality, is considered and planned for. A good financial plan is a visual, step-by-step big picture both partners can understand. It should also have precautions built in; such as annual financial reviews to ensure goals and portfolio are kept current. With a plan, you can exercise a measured approach to your income that is related to the various stages of ageing that you will

experience. It also oversees the releasing of funds in a planned and structured manner – it gives your funds a sustainable lifecycle. A trust that is properly set-up to ensure longevity is one more protection for people in retirement. However, a trust is not for everyone and legal and estate advice should be sought before making any changes to one’s ownership structure. Having a financial plan is also a structure that protects your money because protecting your capital is a financial goal in itself. Finally, a plan is also better able to deal with things like a conflict between maintaining your income and protecting your capital.

Tobias Taylor is a Certified Financial Planner (CFP) and Authorised Financial Adviser (AFA). Tobias is an Investment Specialist and is the Managing Principal of the Spicers Hawkes Bay & East Coast office, which is a Spicers Franchise and thus proudly a Hawkes Bay and East Coast owned business. For more information on Spicers see www.spicers.co.nz. This article contains information of a general nature only and is no substitute for personalised advice. If you would like advice that takes into account your particular financial situation or goals, please contact your financial adviser. A disclosure statement is available from your adviser, upon request, and free of charge.

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PRO RMA

What challenges do we face in Hawke's Bay? Ministerial briefing paper outlines key challenges By Cameron Drury | Cheal Consultants

In 2014 the New Zealand Planning Institute released a briefing paper for incoming Ministers that outlined key challenges over the coming years. These included demographic changes, transport, housing affordability, infrastructure, energy, freshwater, and RMA reforms. So are these regional as well as national issues? They are certainly are big topics, but let’s briefly traverse them and see how Hawke's Bay may be placed.

Demographic Changes Our aging population is an on-going challenge. Similarly, we are experiencing increasing cultural diversity and the needs and interests of different social-economic groups continue to be diverse. We need to understand the issues and expectations of the various players in our communities so that the facilities or solutions we provide are functional and capable of delivering. Transport We are gradually improving our traffic networks and connecting key areas with key infrastructure. The cycleway projects have been hugely successful, but now we need to make the best of this resource. Managing our rural roads and links to Wairoa and Gisborne will continue to be challenging, but what we really need to do is resolve the issue of access to the Port of Napier. The Port is our doorway to national and international markets and we need to make sure it is wide open. Although there are challenges with existing corridors and development, we need to confront these, and there needs to be regionally integrated approach. Housing Affordability Housing affordability is influenced by a range of factors. On a national scale, perhaps the regions can offer a solution. Land and development is less expensive in the regions, and improved and affordable national transport links could support people living in Hawke's Bay and commuting to the main centres. Maybe air travel has a greater role to play than we realise. Imagine if we invested a small proportion of the millions earmarked to support growth in Auckland in travel between the regions and main centres. Better

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Solar power is part of the future in Hawke’s Bay

still, bring business here, and let’s be honest, affordable housing isn’t $350,000 plus.

Infrastructure Our thinking needs to be long term, but we need to maintain momentum. We need clear priorities but must be nimble enough to make the right decisions. Our plans and strategies need to be aligned and integrated, and while our solutions need to be resilient, we must welcome innovation. Take urban growth; have we accepted that regional CBD’s may be too large? Is this not what Christchurch has discovered? Could the periphery be better used, after all, this is where infrastructure is available. Let’s not forget about telecommunications either as we need the best possible resources to attract business options. Energy The economic appetite for energy expansion projects is probably limited, especially if nationally significant users decline. Over the long term however, wind maybe an option for Hawke's Bay, and with our level of sunlight hours we could certainly be part of the solar power industry. Delivering secure and diverse supplies of energy is still the key objective, and any option over oil that may arise must still surely be considered. Freshwater Most of the region is familiar with the Tukituki Plan Change and Ruataniwha storage scheme. Regardless of views, what is clear is that the future development of our region is dependent on how freshwater

resources are managed. We need to keep these issues in context however, and have the confidence to try new ideas. Strategies and provisions can be put in place to reassess and respond, and while potential risks need to be balanced, the worst thing we can do is allow ourselves to miss out on opportunities; as the consequences for the wider community could be considerable.

RMA Reforms Like it or not, the issues confronting us will be played out in the resource management sector. Yes the direction of the RMA probably needs to be made clearer, but while it’s likely to be criticised, words on paper are implemented by people, and if we’re really honest, it’s actually people who participate in these processes and make decisions. Regardless of ideas around reform, we need to get excited and approach new ideas with a ‘yes’, and then follow with questions to confirm or refine. Starting with a no will not take us forward. These are big topics and warrant far more consideration than a few observations. What is clear however is that Hawkes Bay is in the thick of it. Yes, we have challenges to resolve, but fortunately we have a lot of solutions as well. Cameron Drury is a Full Member of the New Zealand Planning Institute and a Senior Planner with Cheal Consultants with the role of Regional Manager of the Hawkes Bay operation. Email Cameron at cameron@ cheal.co.nz. Cheal provides expert services in the fields of Planning, Surveying and Civil, Geotechnical and Traffic Engineering. Offices are located in Hawke's Bay, Taupo, Ohakune, Taumaranui and Rotorua.


PRO IT

The Internet of Things & You We all know about the internet but do you know anything about the ‘internet of things”? By Wray Wilson | Need a Nerd

Unless you live in a cave somewhere very isolated (like CHB perhaps) you will no doubt have heard of the internet. But you may not have heard of the ‘Internet of Things’, which is going to be one of the next ‘big things’ over the coming decade. The Internet of Things (IoT) is the network of physical objects (things) embedded with some electronics that allow transmission or reception of information or data. Each ‘thing’ is uniquely identifiable and is able to communicate with a variety of users be they you, an operator, a manufacturer or other devices via the internet. An example might be a new air conditioning unit that you can operate from outside your home via a mobile device. It is estimated that the IoT will consist of up to 50 billion devices world wide by 2020.

That’s a big number you say, but what’s the impact on me? Like any new technology there are perceived risks and benefits – this list is by no means exhaustive. Risks include: Privacy concerns – the IoT has the ability to capture huge amounts of data about individuals and groups with little control over the use of that data. The significance of privacy is constantly shifting and attitudes towards it are often naive at best – think of the way in which today’s youth use social media with no thought of the future impact it may have on them. Security – the IoT will open the door ever wider to cyberattack. Your office fridge might not attack you, but if it auto-orders your milk when it runs out, it may be vulnerable to releasing your credit card details.

Environmental – the proliferation of devices that could potentially be replaced (for example light switches) and the electronicsheavy nature of new IoT devices could have a significant impact on the environment. We already live in a society that replaces things because they are perceived to be obsolescent rather than actually being broken (gotta have that new iPhone!) and IoT will only accelerate this. Loss of employment – As more and more devices connect to the internet, there will be a corresponding decrease in the employment prospects of less educated workers. For instance, people who check inventory can be replaced by a system that reports information directly to the owner no matter where the inventory is.

And on the flipside, some of the benefits are:

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Cost savings – collecting data across your business can save you money, for instance; reducing your inventory, less downtime for unscheduled maintenance and shorter times to market. Improved asset tracking and utilization can also drive savings. Process efficiency – Using real time insights can lead to better business decision making and reduce operating costs. New revenue streams – The IoT opens up opportunities for new product ranges and services and to develop existing ranges further.

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Customer information – The mirror of the risk to compromised privacy is the ability to track consumer data. This could allow you to provide a more ‘personalised’ service that could increase sales. Lastly, one of the big issues that the IoT will bring is complexity. This is already evident through a lack of a universal coding language or protocol – in essence, not all products can talk to each other. And how might this affect you? How many remote controls do you currently own? Want a few more? I didn’t think so.

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Wray Wilson is the chief executive of Need a Nerd. Need a Nerd is a nationwide technical sales and support business to the SME and residential market. Email wwilson@needanerd.co.nz AUGUST - NOVEMBER 2015

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PRO Ed

EIT Appoints New Head of Business School As she settles into her new job as head of EIT’s School of Business, Rebekah Dinwoodie feels like she is returning to her roots. Rebekah worked in various roles at EIT over a period of ten years. Originally employed in 2002 as a programme coordinator for equine studies, she was seconded to the academic quality team and then later appointed as programme leader in the School of Applied Science. Seeking more external experience, Rebekah left in 2012 to take up the position of Hawke’s Bay manager for an agricultural training centre. She was soon made responsible for all the educator’s regional sites, managing campuses in Northland, the Waikato, the Manawatu, Taranaki, Auckland and Invercargill as well as Hawke’s Bay. Throughout that time, she maintained links with EIT – not only was she based on EIT’s Hawke’s Bay campus, she also continued to chair EIT’s animal ethics committee. At 36, she agrees she is young to be heading the business school but says she has always had bold aspirations – “I’m just very motivated I think.”

Rebekah relaxes with a Briard named Ted.

When she was in her 20s, Rebekah successfully battled Hodgkin’s lymphoma and says having cancer heightened her awareness of life’s fragility and made her more determined about attaining her goals. “The support of the New Zealand health system was amazing. I am also grateful for the support I had from EIT, particularly as my own family are back in England.”

EIT THINK TANK In the Journal of Financial Regulation and Compliance, Accounting Lecturer Noel Yahanpath and M. Islam published a refereed article on Evaluation of post-GFC policy response of New Zealand: Non-banking perspective.

EIT’s degree and post-graduate programmes are underpinned by lecturer research activity, directly linking to their teaching. Ranked in the top two polytechnics/institutes of technology in New Zealand, independently assessed EIT academic staff research performance is held in high regard nationally.* *Official ranking of The Performance Based Research Fund (PBRF) audit by the Tertiary Education Commission every six years.

0800 22 55 348 | research.eit.ac.nz

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Growing up in Surrey, Rebekah trained as a secondary school teacher and met her kiwi partner Tim Forster when he was on OE in the UK. The couple returned to Hawke’s Bay and have two children, Zoe (2) and Kate (5). “I think New Zealand and particularly Hawke’s Bay is a great place to raise children,” she says. “I am an outdoors person and enjoy running, walking and horses.” The family live on a 4ha block at Bridge Pa, where they provide grazing for horses. “I probably want to see how the job pans out but I think it’s likely the next purchase will be ponies for the girls,” she laughs. Rebekah is working on a self-reflective business project as her final paper for a Master in Management degree, which she will complete this year. She considers it an interesting time to be heading a school of business. “EIT’s business programmes will be very much affected by the NZQA review of qualifications which will likely result in a new suite of business qualifications in the school. My responsibilities also include overseeing the business qualifications offered at EIT’s Tairawhiti campus in Gisborne and EIT’s Auckland campus, where all our students are internationals.” While she doesn’t believe in a pre-ordained destiny, Rebekah believes that working towards her goals has taken her to where she wanted to be. “When I left EIT all those years ago, I told staff I would be back,” she says with a smile. “I was always hopeful that would be the case.”


PRO HR

Find the Right Digital Balance Are devices and apps ruling your life and distracting you from what really matters? By Kimberly McKay | BDO Central

I’m not tech savvy. I can operate the systems I need to for business and personal life but I’m not an early adopter or super-user by any means. I recognise the power of technology to connect us, process volumes of data, and automate routine tasks. The explosive rate of development of new mobile phone apps will soon mean the smartphone will be an accepted part of many daily activities. When considering the people aspects of business this concerns me. Most businesses rely on people power and while technology can support good people management, it can’t do it for you. There are lots of HR processes we now do electronically. To name just a few: • We post jobs on-line • Applicants mostly search for jobs on-line and apply on-line • Employers do pre-screening and applicant testing on-line • Large organisations have on-line induction • Often training is delivered through webinars or self-paced e-learning • We have on-line appraisal tools – some managers are disappointed to discover that these systems still require a meeting with the employee and discussion • Employee engagement and other staff surveys are on-line • We have electronic suggestion boxes

In many instances these tools and processes allow us to automate form filling, collect and manage data, and connect people cost effectively across locations. They save time, paper, and sometimes money. These are real benefits and the way of the future – we just need to balance them with real human interaction. There is a good reason for that desperate feeling of wanting to talk to a real person when you have phoned Spark, or similar organisations (as I recently did), and conversed with their computers and selected options from endless menus or you may have gone on-line to their website and tried but failed to find what you want. When you have

a problem you want to speak to a real person who will listen to the whole story, including allowing you to vent some feelings (instead of describing your problem in 3 words to a computer), someone who will show some empathy and sort it out for you. For stuff that matters, in particular important HR stuff, we need personal communication. We all do a lot of business communication electronically, for obvious reasons – it’s fast, inexpensive and has great reach. Large organisations have company intranet to keep staff informed. We can email, text or instant message instead of picking up the phone or walking up the stairs and missed calls go to voicemail instead of being picked up by someone else. We video-conference because it’s cheaper and requires less time than bringing people together physically. Technology has its place but the key is choosing the appropriate method of communication and getting the right balance between digital and personal. Electronic communication is great for sending information but it’s no substitute for conversation to develop relationships and it’s not appropriate for anything sensitive. And by sensitive I don’t just mean bad news, handling conflict or critical feedback. Appreciation, good news and celebrating success also have far more impact delivered in person. When we bring people together as a group we are reminded they are real people with families, problems and a sense of humour. Building relationships improves understanding, creates connections and means people are more likely to go out of their way for us when we or the organisation need them to. That’s why we do team building, team meetings and networking in person – it’s all about relationships.

The other mixed blessing of digital communication that’s accessible anywhere, anytime, is that we never leave work behind. Digital overload can be a stress-inducing hazard and is a new dimension to the challenge of work-life balance. We compound the problem at home – not only does the TV stifle conversation but we now watch it while using our portable devices. It’s important to allow people to have down time and to learn to manage 24/7 connectivity in a healthy way. According to a 2014 Canadian poll (on-line of course), those who owned a smartphone – around half the country – said they spend 86 per cent of their time staring at one screen or another. So mixed in with your digital information sharing organise some gatherings (with a purpose of course), pick up the phone instead of emailing and throw in a bit of ‘management by walking around’ occasionally to surprise people. Use your electronic devices for transactions and make meaningful connections in person. According to psychologist Daniel Goleman, author of Focus: the Hidden Driver of Excellence, “We have been seduced by distraction. We are being pulled away from paying attention to the things that enrich our lives.” Let’s ban tablets and cell phones from the meeting room, the training room, the dinner table, and the lounge. When people are physically together make the most of it.

Kimberly McKay is a Human Resource Consultant at BDO Central (NI) Limited. She has extensive experience assisting both small and large employers with all aspects of their HR needs. BDO Central (NI) Limited are Chartered Accountants and Business Advisors, with offices in Napier and Palmerston North. They are able to support clients with a comprehensive suite of accounting, information systems and HR services. AUGUST - NOVEMBER 2015

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PRO Legal

Greater safety net when building your home Early this year some important changes we made to residential building contracts. We take a look at what this means for those building a new house. By Edward Bostock | Bramwell Grossman Lawyers

At some time or other most of us will use (or at least consider using) a builder on a residential property and with that in mind we thought it worth highlighting some changes affecting residential building contracts entered into after 1 January 2015. The Building (Residential Consumer Rights and Remedies) Regulations 2014, which came into force on 1 January 2015, inserted new requirements into the Building Act 2004 regarding residential building contracts valued at $30,000.00 or more. The main changes regard information that the builder is obliged to provide to their client and to prescribe minimum requirements for the building contracts. Firstly a builder must give their client a prescribed checklist (copy can be obtained from Ministry of Business, Innovation and Employment) which informs them of the steps to consider before entering into a contract. For example: n Advising

how to ensure the builder you hire is competent; and

n Advising

how to compare, consider and agree the price and the payments.

Secondly a builder must now ‘disclose’ certain information about themselves to their clients prior to entering into the building contract.

n what

insurance policies the builder holds or intends to take out to cover risks associated with the build.

The requirement to provide the checklist and the relevant disclosure only kicks in if the building contract is valued at over $30,000.00 however it is important to note that they must also be provided (no matter the size of the job) if requested by the client. Builders should therefore have procedures in place to ensure that these elements can be met with a minimum of fuss. Finally, and most significantly, the Regulations provide that residential building contracts (over $30,000.00) must be (a) in writing, (b) dated and (c) comply with the minimum requirements prescribed. It is not appropriate to list all of the prescribed content however below are some of the items that must now be included: n Each

party’s contact details (physical address, postal address, address for service, phone numbers and email address);

n Description

of work to be undertaken and materials to be used (if known);

n Names

of the person(s) who will carry out the work and who will be supervising the work;

n The

expected start and completion dates;

The Regulations detail the information that is n Contract price and number (& frequency) to be disclosed and includes: Vehicle Graphics of payments; and n The skills, qualifications, Building and licensing n Mechanisms / Shop Fronts for negotiating and agreeing status of the person undertaking the work; variations. Footpath Signs n Information about any guarantees and We would expect that most builders currently warranties being offered by the builder; and use a standard form contract or have

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developed their own over time and as such it will be important for these to be reviewed - a builder could be fined for not complying with the Regulations. The Building Act 2004 previously included warranties that were implied into every residential building contract such as the work must be n Carried

manner;

out in a proper and competent

n In

accordance with all laws and legal requirements; and

n Carried

out with reasonable care and skill.

However the Building Act 2004 (as amended by the Building Amendment Act 2013) now specifies remedies for breaching these warranties. The remedies differ depending on whether the work is capable of being remedied but they include the ability for the client to require the builder to remedy the breach and to obtain damages for any loss suffered as a result of the breach (loss must be reasonably foreseeable). It is worth noting that these remedies will only apply to contracts entered into on or after 1 January 2015. These changes should create more consistency for clients across the building trade but will (at least at the outset) require builders to undertake some ‘housekeeping’ to ensure that their procedures and documentation comply with the new regulations. Edward Bostock is a solicitor at Bramwell Grossman Lawyers in Hastings. He has Bachelor of Laws from the University of Sheffield in the UK. To contact Edward, email edward@bglegal.co.nz


PRO

Property

Take time to value property The residential sales market appears to be more buoyant and there has been a much publicised increase in the volume of house sales in Hawke’s Bay. By Paul Harvey | Williams’ Harvey Registered Valuers

Certainly our office has seen the number of residential valuation reports for Mortgage Security purposes dramatically pick up since March. Furthermore YTD we have seen nearly a 14% increase in the number of residential sales as compared to the same time last year. Value levels have also increased YTD showing a 1.3% increase in Napier and 1.8% in Hastings. The upturn in sales activity could be attributed to a number of factors such as: • Lifting of the LVR to 15% (outside Auckland) • Lower interest rates and softer lending constraints • Homestart subsidy and larger Kiwisaver withdrawals for first time home buyers • Investors from outside Hawke’s Bay looking for more affordably priced homes With Spring and Summer approaching, a prime time for buying and selling, we are likely to see an increased demand on an already limited housing stock and our office has already seen an increasing amount of instructions being given with impracticable expectations with regard to turnaround. If you require mortgage security the main trading banks will require a valuation report from a Registered Valuer and they now operate through valuer panels such as Property IQ or Valocity. Urgency fees can and are applied to jobs that need a quick turnaround. However, this could often be avoided with some knowledge of what is involved in getting a valuation report. It is advised to be as organised as possible and give instructions with realistic turnaround times so that you do not compromise a prospective deal or incur unnecessary fees. Vendors and buyers alike need to educate themselves to the marketplace and understand the difference between a perceived value an Appraisal, a Government Valuation (GV) and a current market value (CMV) by a Registered Valuer. Appraisals are only intended as a guide to pricing and can be requested from real estate salespeople. Appraisals are estimated by knowledge of the local area and recent sale prices and should only ever be used as an

estimate of price. They are not definitive and have no legal standing. It is rare to charge a fee for appraisals and they are generally only requested by potential vendors to get a ‘feel’ for the local market. The market value of your property can be very different to the insurance reinstatement value too. CMV indicates “the most probable price that would be achieved in a hypothetical exchange in a free and open market transaction”. As building improvements get older they can depreciate and become obsolete. This may reduce their market value. Reinstatement Value for insurance purposes is distinctly different, as this refers to the cost to replace your asset today, to the same size and scale, taking into account modern equivalent technologies, materials and services. Cost does not always equal value and if you have an older premises, cost to recreate may well be above the asset’s CMV.

What does a Registered Valuer do? • Inspects both the interior and exterior of the property • Takes detailed notes on construction materials, fixtures and fittings and their condition • Searches property title and researches any interests that may potentially affect the value such as caveats or encumbrances • Measures and calculates floor area of all the improvements • Views (from the road) and analyses comparable market sales

A Government Valuation (GV) and/ or a Rating Valuation (RV) are valuation conclusions based on mass appraisal techniques only revised triennially and are used primarily for assessing the local authority rates. In many cases the subject property has not been inspected in assessing this value. They do not include chattels and, in our opinion, should not be relied upon to set the CMV of your property. If you do require the best indication of price, engage the services of a Registered Valuer so that you can be sure of the true value of your property. A formal valuation can only be conducted by a Registered Valuer. Valuing is a complex task and will take some time to complete. A formal valuation will take into account factors such as the property’s location, building structure, materials, fittings and their condition, features of the home, local Council zoning and any additional features of the property (particularly relevant in high value property) Depending on the type of valuation, the Valuer will use two or three of the most appropriate methods of valuation and then provide an appropriate written report to the client identifying the property’s CMV meeting the requirements of NZIV & PINZ reporting standards, practice standards and guidance notes. A full valuation report is then compiled. This is a considered, professional written assessment of how much your property is worth. As you can appreciate there is a timeframe in which a realistic turn around of a valuation report can take place in order to receive the best advice. Also valuers will have jobs they have been instructed to do prior and will also be working towards those deadlines. Commercial properties are often even more complex and can take even more time. Therefore when dealing with one of your most expensive assets, it is best to be organised. Give timely instructions to the Valuer to do a good job and yourself enough time to decide what is the most prudent course of action when making your property decisions.

Paul Harvey is the Director of Williams’ Harvey Registered Valuers. He has a diverse and broad knowledge of the HB property market. To contact Paul, email: paulharvey@williamsharvey.co.nz AUGUST - NOVEMBER 2015

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Business

Business

Now for the Financial News Is it all doom and gloom or is there some positive? A candid view.

By Cedric Knowles | KNOWLedge Accountants

Dairy Prices Continue to slide

The first international milk powder auction in July saw a further fall in prices and a Fonterra payout likely to be at its lowest for at least six years. An Auckland accountant, who admitted having little industry knowledge, nevertheless suggested that dairy prices had to drop at some stage, as they were to be found on almost every street corner and were simply not competitive with supermarkets and petrol stations. Economic Crisis in Greece

Over the weekend, Greece was voting in an historic referendum concerning demands for further austerity measures from their foreign creditors. The fallout is likely to be felt globally, as it may mean Greece exits the Euro. A government spokesman was quoted as saying “Greece exiting the Euro is no great concern, as it is still available on Netflix, and anyway, John Travolta and Olivia NewtonJohn have moved on to bigger and better things.” Economists Predict further cuts to Official Cash Rate

The governor of the reserve bank announced a 25 point cut to the Official Cash Rate on 11 June 2015. Economists are now suggesting that the governor might reduce the rate by a further 75 points over the coming months, following hard on the heels of their recent predictions that the OCR might rise later in the year. As this accountant knows, an economist can have his or her head in an oven, and feet in a freezer, and declare that on average they are quite comfortable. This explains why, on average, they are now predicting that rates will rise, fall or stay the same. Auckland Property Prices spilling over into other centres

During Winter, Auckland delivered its first $2million average house price suburb, and agency Barfoot’s Auckland-wide average nudged past $826,000. Auckland investors are now seeking better value in other cities and provincial areas, including Hawke’s Bay. Local real estate identity Simon Tremain was apparently overheard commenting: “I recently got a ridiculously good price from 48

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an Aucklander for a two storey house – one story before the sale and a different story afterwards!” Mushroom Farm creates a stink in Havelock North

Residents have been complaining about the smell sometimes emanating from Te Mata Mushrooms, established in 1967 when the nearest houses were kilometers away. Prosecution and restrictions by the HB Regional Council could result in closure and the loss of up to 120 jobs. Owner Michael Whittaker apparently commented: “Hey, it would be great if the Nimby’s realised that I’m just a fun-guy!” Amalgamation of Hawke's Bay Councils expected to save millions

The proposed amalgamation of Hawke’s Bay’s 5 councils is expected to save $59million over its first 8 years, according to the McGredy Winder & Co report released in 2013. A big part of the cost savings will be centralising the region’s main council office in Napier, and mothballing the Hastings Council head office. The proposal goes to the vote in September and Napier Mayor Bill Dalton has already suggested that “if the “eyes” have it, I’ll arrange for the “nostrils” off the Hastings Council building to be placed at the “mouth” of the Ngaruroro River – that’ll be an about “face” for Lawrence!

Jetstar is Considering Hawke’s Bay for new Flight Routes

Budget airline Jetstar has been investigating operating flights in and out of Hawke’s Bay Airport, a competitive move that will bring significant benefits to the Hawke’s Bay economy. One local councilor, always vocal on airport matters was quick to criticise: “it is ridiculous that there will still only be two airlines servicing Hawke’s Bay, when Heathrow has eighty – something must be done.”

Cedric Knowles is a director of KNOWLedge Accountants, Hawke’s Bay. He has worked as an accountant in the Bay since 1987. Contact Cedric by email: cedric.knowles@knowles.net.nz


tickets on sale now JOIN US FOR

AN EVENING OF RECOGNITION & ELEGANCE

Taste winning wines that will accompany a sensational four course meal prepared by four of Hawke’s Bay’s leading chefs… Nathan Beilby Vidals | Tasting plate

A S W E C E L E B R AT E F I N E W I N E & PRESTIGIOUS AWARDS

Daniel Pistone Black Barn Restaurant | Entrée

D A T E 20 October 2015

Lucinda Sherrat & Ben Cruse Little Black Bird | Dessert

T I m E 6pm V E N u E Waikoko Gardens, Showgrounds Hawke’s Bay Kenilworth Road, Hastings m A S T E R O F C E R E m O N I E S Jeremy Corbett D R E S S Formal Attire

EIT Culinary Arts Team EIT | Main

Be there for the announcement of this year’s C h A m P I O N W I N E O F S h O W award as judged by our national and international judges. Gold medal and trophy winners will be announced on the night.

T I C k E T S $195 (incl GST)

Tickets are limited, so be quick! | Freephone 0508 946 329 RSVP 9 October 2015

Pre-dinner drinks 6–6.30pm | Awards Ceremony commences 6.45pm

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Profile for The Profit

Profit 22 Winter 2015  

The One PROPposition for HB Survival of the fittest in our CBDs

Profit 22 Winter 2015  

The One PROPposition for HB Survival of the fittest in our CBDs

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