Exporter Issue 15

ISSUE 15 JUNE QUARTER 2010

ISSUE 15 JUNE QUARTER 2010

EXPORT OPPORTUNITIES ON EVERY PAGE

Storm brewing Rising freight rates

• Something wicked this way comes: QR codes • Exporting to high risk countries • Aussie, Aussie, Aussie! Path to Market • Tame the yuan or NZ dollar?

Our lending criteria applies to all loans. The National Bank of New Zealand, part of ANZ National Bank Limited.

I HAD AN IDEA ABOUT

BEEHIVES THE NATIONAL BANK HELPED ME GET THE BUSINESS HUMMING.

He didn’t have a concrete business plan, he had no proven business model. But what he did have was a vision, and a taste for honey.

In the summer of 1998 22-year old Darren Clifford walked off the street into The National Bank and asked to borrow money to set up a beehive business. After being rejected by two other banks his expectations were low, but a Business Banker at The National Bank spent some time with Darren to try and understand his vision.

Together they worked through a plan and the decision was made to go for it.

The National Bank backed Darren and twelve years on his business, The Honey Company of Blenheim is exporting bulk products into the EU and UK and more recently, his Sweet Nature pack products have been sold into the Asian and the New Zealand markets.

Darren suffered through some unusual circumstances. During the recession in 2009 severe rain wiped out his crop and drastically lowered his

income. But together Darren and The National Bank found a way through what was “a very trying time.”

Today Darren owns his own home, a large block of land and his business.

The National Bank has backed him all the way. “What’s really helped has been the service: the quality of the people and their total willingness to support me.”

IT’S THIS TRUE SPIRIT OF PARTNERSHIP THAT SETS THE NATIONAL BANK BUSINESS BANKERS APART FROM THE REST. “From start-up, business planning and ongoing support, it’s this true spirit of partnership that sets The National Bank Business Bankers apart from the rest.” Darren discovered this when he walked into the bank with nothing but a vision.

Find out how a great relationship with a National Bank Business Banking Manager can benefit your business.

Call us today on 0800 62 22 02.

nationalbank.co.nz/business

EXPORTER 1

Logistics challenge?

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ISSUE 15 JUNE QUARTER 2010

COVER STORY FREIGHT Planning for freight space Scramble for space

06

FEATURES

REGULARS

INSURANCE Trading with high-risk economies Proper risk information

PUBLISHER’S VIEW / SAY IT LIKE IT IS Mike Taillie Once in a lifetime opportunity for exporters – Yep blatant self promotion

10

MARKETING Smart applications on mobile phones as a way of life Way to your customer’s heart

14

EYE ON GOVERNMENT First-timers in Aussie market need more hand-holding Life across the ditch

04

PROFILES For he’s a jolly good fellow Obituary

16

25

Don’t create foreign exchange risk, manage it Custom House NZ Ltd

18

MARKETING The viral potential of QR Code for product marketing The best thing since email?

22

EXPORTER EDUCATION Choose your mentors well Mentor hunting

27

TELECOMMUNICATION On the trail of cheaper phone calls Time to swap providers?

30

PROFILE Tide turning but global trade still risky business Atradius Credit Insurance

33

I.P.

36

Weighing risk against the cost of guarding IP Value of proper agreements

VIEWPOINT Catherine Beard NZ competitiveness stunted by low productivity

34 52

John Blackham Lifting NZ’s weightless exports

PRODUCTS Exporters’ Toolkit Products & services you should know about

58 55

Global Stage Innovative NZ products seeking a worldwide audience

61

Export Opportunities New contacts from the New Zeland Trade Centre

DIRECTORY Useful Websites Information for travellers and exporters

62

Cover photography: Istock

EDITOR: Yoke Har Lee, (E) yokeharlee@exportermagazine.co.nz

INSURANCE Trade Credit Insurance: Not all beer and skittles Mood still cautious

40

RECRUITMENT The slippery slope of managing migrants in your workforce Managing diversity

45

COST MANAGEMENT Have you cashed your energy cheque yet?

Energy concerns

48

CURRENCY Yuan appreciation to be token gesture Yawn of yuan appreciation

52

COPY EDITOR: Anthony Doesburg ADVERTISING: Rosie Payne (M) 021-683-432 email: rosie@exportermagazine.co.nz P.O. Box 7070, Wellesley Street, Auckland, New Zealand (T) 09.366.6879 (F) 09.366.6838 www.exportermagazine.co.nz DESIGN: Craig Haythornthwaite / URBAN_i, Phone: +64.9.631.1400 PUBLISHER: PEOPLE PUBLISHING, www.peoplepublishing.co.nz Ground Floor, 26 Albert Street, Auckland, New Zealand.

P.O.Box 7070, Wellesley Street, Auckland, New Zealand.

(T) +64.9.366.6879 (F) +64.9.366.6838 Copyright©exporter

ISSUE 30

Member of the Audit Bureau of Circulations (ABC) New Zealand.

Audit period January – June 2009: 3994 – per issue

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EXPORTER 3

Say it like it is MIKE TAILLIE EXPORTER MAGAZINE / publisher@exportermagazine.co.nz

NZPA

Once in a lifetime opportunity for exporters – Yep blatant self promotion

I

t is said that some opportunities only come once in a lifetime.

The Rugby World cup being held in New Zealand next year is one of those for New Zealand as a country.

While it is about rugby first, it is also one awesome opportunity to showcase New Zealand to one of the largest audiences ever watching a sporting event in New Zealand.

While international television viewership is important and huge, I would like to focus on the estimated 60,000-plus international visitors that are making a trip to our shores primarily to watch rugby. There are two aspects to the visitors that are coming to New Zealand that need to be highlighted. Firstly in most countries, the game of rugby is played by more white-collar workers, that is those with a tertiary education and a bit of money; and secondly they tend to be men. Whether we like it or not these are two factors that present opportunities that we as a nation need to capitalise on.

The fact is that men still dominate the boardrooms of most businesses in many countries. It is these men that

4 EXPORTER

we want leaving New Zealand with an impression. The impression we want to imprint should include the following, at least: • That New Zealand was a spectacular place to come to • That they will want to return, and tell their friends too, to come • That New Zealand is a country worth considering doing business with.

On the social and hospitality front, we should also have it well-covered.

Men generally enjoy a beer. They are here for sport so the ability to jump on a golf course, head out fishing, or for a sail within 10 minutes of CBD Auckland will blow many of them away.

From a business aspect we can showcase our relative sophistication with respect to ports, customs service, telecommunications, banking and the legal system.

What we really need to make an effort to showcase is what we have to offer in terms of exportable products and services. This will not be easily available to see at the rugby grounds, golf course and pubs and restaurants. In fact even walking down Lambton Quay or Queen street will not showcase this much at all.

So the question is how do we do it?

How do we show off our exporters, our fantastically innovative sectors?

I HAVE THE ANSWER: The New Zealand Trade Centre in Albert Street. Auckland needs to turn on its head to reflect a New Zealand export and innovation showcase.

We must have a printed and online showcase of the best of New Zealand’s product offerings.

The printed version needs to be unashamedly available at rugby games and other key locations.

Printed material available at airports, such as Auckland and Christchurch, needs to focus on promoting business and trade. If just a few leave our shores as cheerleaders of New Zealand we will see exponential return to New Zealand Inc. This is a once in a lifetime opportunity for me to blatantly self promote the fact that I own the New Zealand Trade Centre, a directory/ catalogue of New Zealand exporters, and of course the country’s largest magazine (Arrival) picked up at Auckland Airport by arriving international visitors. [END]

In a perfect world, foreign markets wouldn’t be so foreign.

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anz.co.nz In New Zealand, ANZ is part of ANZ National Bank Limited, elsewhere ANZ is Australia and New Zealand banking Group Limited and its affiliates.

ANZ0201EXB

Planning for freight space New Zealand meat shippers are worried about the impact of slow steaming on refrigeration as well as the time to market of their produce. Freight rates have been recovering and are seen creeping higher.

6 EXPORTER

BY M ARY MacK I NV E N

C

argo space on ships leaving New Zealand is inadequate and the future holds no promise of improvement, says Export New Zealand executive director Catherine Beard.

“Big contractual exporters are more likely to be getting goods on board but those reliant on the spot market and that export low value cargo – hoping for surplus capacity and a return to the lower rates available before the global financial crisis - will have to become more strategic and book ahead.”

New Zealand’s meat industry, representing 15% of the country’s exports, is not so concerned about capacity. “There are more vessels but they go slower,” says Meat Industry Association of New Zealand chief executive Tim Ritchie.

The practice of slow steaming, whereby ships go five knots slower than before the financial crisis to reduce fuel costs and carbon emissions, adds risk to the delivery of perishables, especially from Asia to Europe and the US. Slow steaming, reportedly introduced on 19 of the 23 services from Asia to North Europe in the past six to nine months, adds about five days to the transit time, he says.

Of even greater concern is the potential introduction of super-slow steaming – down to 14 knots. “Talk of such sends

KEY TAKEAWAYS > Slow steaming is here to stay. > Shipping rates are going up this year. > Locking in a contract and rates now can benefit both shippers and exporters. Booking ahead is recommended. > Space eases up on outgoing ships from mid-July to midDecember. > Container numbers have fallen.

shivers down our spines. At that point the whole chilled lamb business model doesn’t work,” says Ritchie.

The meat industry is also concerned about the potential shortage and ageing of refrigerated containers, as virtually none were built during the financial crisis.

“The shelf-life of product is absolutely dependent on these containers working efficiently and maintaining a very strict temperature regime.”

Maersk New Zealand managing director Julian Bevis says slow steaming tends to add only one to two days per trip. For the time being slow steaming will not be introduced for the New Zealand to Southeast Asia sector.

The line is introducing a “priority product” concept, which allows shippers to obtain space when supply is tight at an upgrade price. “By mandating stronger commitments

from our customers to honouring their bookings, we are working towards increasing certainty for all shippers.

“But if we can put prices up we will – we have to run a sustainable business.”

Naturally, long-term contracts (probably one year) are preferred.

“Locking in is mutually beneficial – there are all sorts of arrangements you can put in your contracts.

“But we keep talking to customers to make sure we know their demands.

When you use an intermediary like a freight forwarder messages can get confused.”

BOOK AHEAD, PREPARE FOR PRICE INCREASES The global prediction is that shipping line losses will continue to be large in the short term, says Noel Thompson, managing director of Cargo Coordinators.

“If you are moving scrap, shipping lines won’t take it if there are higherrated cargoes to move … they are concerned to get routes and loads up, and costs down.”

He recommends booking ahead to secure space.

Swire Shipping NZ is looking to reduce costs; for example, by introducing slow steaming, says regional general manager Randy Selvaratnam. “But we will endeavour to structure our services so slower ships don’t impact on the frequency of sailings too much. For example, adding more vessels is a possible scenario.

EXPORTER 7

Exporter magazine asked exporters: What plans do you have to deal with rising freight rates as global shipping demand increases with the better economy?

• There is no panic – some exporters are keeping an eye out, comparing prices and beginning to plan for freight increases, but others are taking no action.

• A number are resigned to putting up prices, feeling they have no control over freight rates.

• Others are happy their freight forwarders achieve bargains for them.

• Those who don’t lock-in constantly seek competitive quotes; some try to join forces with other exporters to get bulk discount rates.

• Sometimes exporters’ buyers prefer to do the freight negotiating.

TALK OF SUCH [SLOWING DOWN SPEED OF CONTAINER SHIPS] SENDS SHIVERS DOWN OUR SPINES. AT THAT POINT THE WHOLE CHILLED LAMB BUSINESS MODEL DOESN’T WORK.” T I M RI TC H I E, C H I EF E XEC U T IVE ME AT IND U ST RY A S S OC IAT ION OF NE W ZEALAND

“But the port mix may change in the future,” he says.

“Demand for space has become quite critical and I expect with this economy looking up it will continue that way because of the tonnage reductions and slow steaming.”

However, the chief executive of Mediterranean Shipping Company New Zealand (MSC), Mark Godfrey, doesn’t think exporters will have too much trouble finding space from

maerskline.com

mid-July to mid-October. In October to mid-December all lines will be fairly full with exports. And prices on freight to Asia will be fairly stable, he says. “Lines want to retain market share and will chase cargo so it’s good for exporters.”

Godfrey says non-regular customers will only have to wait about a week from booking until goods leave port, compared to three to four weeks in peak export times. About 45% of MSC shipments are on contracts.

“Lines are bringing idle ships back on to runs because of the pick-up in China and Asia but there is a shortage of containers,” he says.

HIKES ARE HERE Freight price hikes are definitely here and that’s reasonable, says Ulf Barnard, managing director of Schenker New Zealand. “Shipping lines are on a rate restoration path.

Rates have been up as much as 50% in March to May on last year’s doldrums and will continue upwards to a lesser extent throughout the year.”

Despite the warnings, Covertex, which exports about 50% of the technical fabric products it makes, is not overly concerned about freight changes.

Says general manager Matthew Bouzaid: “Freight is just a part of doing any project that you cost in.” The volatile dollar is a far bigger concern for him. He’s happy his freight forwarders “shop around to keep freight companies honest”. [END] MARY MacKINVEN / WRITER Mary has reported news for 20 years including as sole writer and editor of Business to Business monthly newspaper in Auckland, NZ, for six years. Now she combines freelance journalism with part-time writing at a business association in Auckland.

Creating opportunities in Global commerce Wherever you can find an opportuni , chances are that Maersk Line can take you there.

With 500 ships, 46,000 ports of call, and 35,000 dedicated people in more than 125 countries, we provide you with a second-to-none global service network; just so you can take the best of New Zealand to the world.

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Trading with high-risk economies High-risk countries can be a nightmare for exporters shifting goods. You won’t find cover for trading with Afghanistan or Somalia but some trades are still worth pursuing provided you have good credit, political and economic risk information.

BY LOU I S E B LO C K L E Y

“I

n 2008-2009, governments rescued the economy: In 2010 and beyond, will the people rescue their governments?” This discussion topic, from an upcoming Moody’s sovereign conference, reflects today’s tumultuous worldwide political and economic conditions.

High-risk countries can be potential nightmares for exporters shifting goods.

In a world slowly sinking under the weight of information-overload, where do you turn for credible advice? And what kind of risks are you up against?

For the New Zealand Export Credit Office (NZECO), which has a “greater appetite for underwriting political risk” than private insurers, there are certain no-go countries. Unsurprisingly, enquiries about cover in Afghanistan and Somalia have received a firm no, according to its head of business origination, Chris Chapman.

However, it is supporting clients facing political and economic risk in Fiji.

“That’s where they [exporters] have buyers that want to pay 30 or 60 days after receiving the goods and that is where the New Zealand company is worried, ‘well, what if I send it up there and then something politically happens and my buyer is unable to pay?’,” explains Chapman.

According to the NZECO, political risk relates to a country’s lack of foreign exchange – and therefore its

10 EXPORTER

KEY TAKEAWAYS > Weekly risk reports are a valuable source of information on politically and economically high-risk countries. > Credible news sources, newswires and clipping agencies such as the Economist intelligence Unit have in-depth analysis of high-risk countries. > NZTE and other government agencies have networks that can access country risk information. > The ECO website has OECD political-risk ratings. > For country risk and ratings information, go to: www.standardandpoors.com, www.mooodys.com, www.dnb.co.nz, www.nzeco.govt.nz, www.nzte.govt.nz, www.eulerhermes.com, www.marsh.co.nz, http://countryanalysis.eiu.com/.

ability to service its external debt – as well as the risks of losses arising from war, civil war, currency inconvertibility and import or export prohibition.

Andrew Baker, managing principal of insurance broker and risk management consultant Marsh, says it is possible to have a bad market with really good customers. “In Argentina, when the government restricted the flow of funds out of the country, there were still some really good payers that were able to pay — it was just that the government wasn’t letting them.”

Chapman cites a current example where the NZECO is underwriting political risk for a New Zealand exporter to Venezuela. All payments must go through the central bank and as the US dollar is often scarce in Venezuela, the government will limit what US dollar transactions the bank can approve.

International credit and insurance agencies analyse a country’s political and economic risk and apply risk ratings akin to individual or corporate ratings. There are different measures to assess different types of risk.

SOVEREIGN RATING One measure which relates to the Venezuelan and Argentinean examples is a sovereign rating. Standard and Poors (S&P) says its rating service “currently rates 126 sovereign governments and has established transfer and convertibility assessments for each country with a rated sovereign. A T&C assessment is the rating associated with the likelihood of the sovereign restricting non-sovereign access to foreign exchange needed for debt service”.

These ratings have several rungs starting at AAA through to D. Recovery ratings are S&Ps’ opinion

EXPORTER 11

on the extent to which a sovereign government will be able and willing to repay non-official foreign currency debt holders post-default.

RECOVERY RATING Dun & Bradstreet New Zealand general manager John Scott says his agency’s country ratings are different to sovereign ratings. The D&B country ratings analyse the wider issues of political, economic, external risk, commercial risk and the trade environment of a country – how people are paying their customers.

“We don’t do the sovereign rating type of thing … So our scores are very much focused on where do these people sit in terms of relativity, what is our view? In many ways there is more granularity than the triple A, double A-down scores.

“Effectively our information is an adjunct. We don’t make recommendations. What we do is give information to people who can then make an informed decision and our report will be one part of a wider decision. The key thing they are taking is independent, unbiased, reputable information from a third party.”

With 16 D&B country ratings

downgraded (and five upgraded) in 2010’s first quarter, Scott says current economic recovery is “patchy or asymmetric”.

The NZECO uses OECD Country Risk Ratings from 0-7. A 0 rating represents low risk. These measures also relate to the level of cover available for each country. For example, Algeria, with a risk rating of 3, is “on cover” (green); American Samoa, 5, “limited cover” (orange); and Afghanistan, 7, “normally off cover” (brown).

COUNTRY INTELLIGENCE Baker says the underwriters provide their own country intelligence using a rating system from A to E, where E means uninsurable and A is low to no risk. You get less indemnity cover the lower the country’s grading. For political cover, credit insurers find most situations right themselves over time.

An A-grade market might have a cover waiting period of 120 days whereas a D-grade might have a waiting period of 360 days.

At what point should exporters avoid trading with a particular country?

Baker says that comes down to an exporter’s appetite for risk. If a large deal is at stake, they may still want to

trade with a D-grade market. But he recommends they should tighten up on terms of payment with confirmed letters of credit to rule out commercial risk. Chapman agrees that a confirmed L/C is the way to go and, in certain countries, insuring for political risk, assuming you can get cover, is also prudent.

There can be a time lag between an event that affects a country’s rating and the rating being downgraded – if it is serious enough to cause a downgrade. To keep abreast of factors influencing the eventual downgrading of a country rating, many agencies and risk management companies have weekly risk bulletins and instant alerts.

Other sources of information include credible news agencies – the NZECO uses the Economist Intelligence Unit.

Government agencies such as NZTE or other exporters who are in that market are also valuable informants. [END] LOUISE BLOCKLEY / WRITER Louise is an Auckland-based freelance writer who has recently completed an AUT Bachelor of Communication Studies in journalism. She has worked in the travel industry and for publications such as The New Zealand Herald and New Zealand News UK, London, in advertising sales.

Trading locally or overseas?

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12 EXPORTER

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Smart applications on mobile phones as a way of life Smartphones and the applications written for them will give exporters new ways of leveraging their brand as well as win customers.

BY A N T H O NY DO E S B U R G

KEY TAKEAWAYS

W

ith smartphones such as Apple’s iPhone selling by the millions, marketers have a new way of getting word out to potential customers. But there’s a shift in thinking required to get the most from the new devices, which are much more capable than merely providing internet access to people on the move.

The iPhone and rivals such as handsets based on Android, the Google operating system, and the widely used Blackberry range should be thought of as pocket computers, since thousands — in the Apple device’s case hundreds of thousands — of applications have been written to run on them.

This opens up new possibilities for marketers, particularly exporters, for

14 EXPORTER

> Smartphones such as the iPhone, Blackberry and Google Android-based devices are selling in their tens of millions. > Companies including Coca-Cola and Nike are creating branded applications for smartphones as part of their marketing efforts. > Advertising agencies see smartphones as being an important new feature of digital marketing campaigns. > An exporter might expect to pay a five-figure sum for a mobile application. > Smartphones can also be used by travelling exporters as presentation devices.

whom smartphones can be a new bridge to customers in distant parts of the world.

MINDSET SHIFT The shift required is not just to see smartphones as another means of delivering product or service information but as a way of engaging people that gets them to pay attention to your brand.

Kate Handley, of Wellington interactive advertising agency Salted Herring, says super-brands such as Coca-Cola and Nike have already latched on to the idea. “All the big brands are doing a lot in that area.”

Coca-Cola has several iPhone apps that don’t make a direct sales pitch but attach its brand to youth-orientated games, such as a variation on spin the bottle called — appropriately enough — Spin the Coke.

Similarly, among a handful of Nikebranded iPhone apps are one that delivers tips for aspiring footballers and another that has a series of drills for women wanting to get fit.

Handley says smartphone marketing is about using social media to carry a unique brand message, which is most effectively done through integration with online promotional activity.

NOT CHEAP It doesn’t come cheap — an application can be expected to cost a five-figure amount — and the starting point is to have a “good brand story”.

“I think with all new media — social media, iPads, whatever — it all comes down to ideas. They’re all just tools, and in the end it’s all about doing quality work that’s right for a brand, is unique and creates a fantastic user experience.

“We’ve always felt that world-class digital marketing is absolutely key for New Zealand exporters,” Handley says.

That’s also the way Wishbone Design, a small Wellington exporter of children’s running — or pedal-less — bikes thinks.

Co-founder and co-director Jenny McIver says the two-year-old business, 90% of whose sales are overseas, doesn’t have a mobile application in the works, but she sees their potential.

“We realise that social networking is going to be a big deal for companies like ours,” McIver says. It’s the equivalent of a word-of-mouth recommendation, but with vastly greater reach.

REINFORCING BUSINESS PHILOSOPHY Sustainability is a key Wishbone value so tapping into a community that shares that outlook is central to how it does business. Its website — created by Salted Herring — has a strong community feel, and any mobile application development it undertook would be designed to reinforce that, she says.

“What we’re really clear about is our own value sets and that we want to create products that suit certain lifestyles and, if we can get people to connect with one another through

WISHBONE, MAKER OF KIDS BIKES, SEES POTENTIAL IN A MOBILE APPLICATION THAT COMBINES PRODUCT INFORMATION — SUCH AS HOW TO ASSEMBLE THE BIKE — WITH A TOOL FOR SHARING IMAGES WITH THE WISHBONE COMMUNITY

those lifestyle values, then they will tell their friends about us.”

Selling a product for kids gives Wishbone a natural advantage in the social networking stakes because parents love sharing news of the milestones their children have achieved, such as riding a bike for the first time.

McIver says if Wishbone were to create a mobile application, it might be a mix of product information — such as how to assemble the bike — with a tool for sharing images with the Wishbone community.

Exporters can get marketing value from smartphones without having to create their own applications, however.

Rod Drury, head of Wellington company Xero, which sells accounting software as a service with a strong emphasis on overseas customers, says an iPhone can be a powerful presentation device for an exporter on the road.

APPS FOR PRESENTATION “Nobody likes to be PowerPointed to death but being able to show a

high-quality presentation either on an iPhone or an iPad is a much more intimate experience. Over a coffee, it’s more social, much more a one-to-one thing. It changes the dynamic of doing presentations.

“You’re not opening a laptop and waiting for it to boot up. You can just quickly say, ‘look at this’, and within 10 or 15 seconds you’ve engaged them in the presentation,” Drury says.

The devices can be used to store and display an interactive product catalogue, for instance, or to access presentation material that is kept in an online store such as Dropbox.

What’s certain is that smartphones will find their way into many more people’s hands in the next few years.

Apple alone is expected to sell about 50 million iPhones this year, making them a digital marketing platform exporters won’t want to ignore, says Salted Herring’s Handley.

“We feel strongly there is a lot of opportunity for New Zealand exporters to do more in this area.” [END] ANTHONY DOESBURG / WRITER

COCA-COLA HAS SEVERAL IPHONE APPS THAT DON’T MAKE A DIRECT SALES PITCH BUT ATTACH ITS BRAND TO YOUTH-ORIENTATED GAMES, SUCH AS A VARIATION ON SPIN THE BOTTLE CALLED — APPROPRIATELY ENOUGH

Anthony Doesburg is an Auckland-based freelance journalist who specialises in technology.

— SPIN THE COKE.

EXPORTER 15

For he’s a jolly good fellow

Greg Hall in Ghana – November 2006.

I

n the week after Thermakraft’s export man Greg Hall passed away on May 25, many people were already missing him, says his widow Teresa Hall.

Auckland’s exporting community will miss a good champion.

Greg began life as a builder and worked at Fletchers then NZ Fibreglass, before heading overseas for a period of travel.

When he returned to New Zealand in 2002 he got a job at Thermakraft Industries NZ Ltd, initially selling insulation and packaging materials throughout New Zealand then

16 EXPORTER

spearheading the development of export markets. He wasn’t afraid of unfamiliar environments, Teresa says.

Starting out in Papua New Guinea and Fiji, it wasn’t long before he was tripping to the Solomon Islands, Samoa, Singapore, Thailand and the Philippines, then African nations.

Greg had some great stories to tell – like the time in Africa where he was bustled into a car with men hanging out the doors waving guns and driving into an ambush.

“He was great at meeting people, eating their food; he fitted in like one of them.

“And he knew how to work a room!”

Despite the past few years of ill health, Greg worked until he was hospitalised in early May. After 18 years together the couple married in hospital, romantically, but sadly the day before he died.

Greg was still talking about work despite all the morphine. The next day he was due to head off to the Pacific on a trade mission.

Teresa says: “He touched most people’s lives; he always made time for people and got to know them.”

Greg is survived by Teresa and his adult children, Mervyn and Kirsty. [END]

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18 EXPORTER

First-timers in Aussie market need more hand-holding There is no defined budget for NZTE’s path-to-market programme yet participants rave about the benefits they get from learning about how to tackle the diverse Australian market.

BY LO U I S E B LO C K L E Y

KEY TAKEAWAYS

“M

ind-blowing” is Luke Nicholas’ eloquent description of an 11-course, beermatched degustation (tasting) dinner he recently attended in Melbourne. Nicholas, Epic Brewing Company’s general manager, was with a craft brewer group on an NZTE path-to-market programme. The dinner was a collaborative effort and guests included key Australian industry contacts and media.

“The cool part was that each beer you had with the food had a different brewer so you had 11 individuals telling their story. I would love to go to that anywhere, even in New Zealand, and just listen to all those cool individuals talking about their passion in what they are creating,” says Nicholas.

INFORMATION SHARING Sharing stories is a common highlight for participants of the programme which started in 2006. Mainly for new and emerging exporters, the programme includes New Zealand-based workshops and seminars, a dragon’s den-style presentation with detailed feedback and in-market visits and events.

Jo Keall and Jo Bond, creators of

> The path-to-market programme is a framework NZTE uses to bundle together a range of existing services with expertise from the private sector to help business develop a robust export strategy. > It includes export training and advice, feedback on sales pitches and marketing material and a programme of in-market activity helping exporters meet new business contacts and industry experts. > There is no specific path-to-market budget as it is largely delivered “in-house”. Participants pay their own travel expenses. > Current capacity is three to four courses a year with no expansion plans in 2011. Courses are run based on resource availability. > Most programmes have focused on Australia – one natural products group travelled to Hong Kong. > NZTE says it may opt to run similar programmes for more established exporters and/or to different markets in future. > Exporters who have been through the programme have found it to be highly useful.

baby accessory company Mum 2 Mum, were unsure how to tackle the Australian market when they did the course last year. Neat Feat Products presented its experience to the group and Jo Keall says it was valuable to hear other exporters’ stories about the right and wrong way to do things.

Undecided about using a distributor, as they do in countries where they already export, or going it alone in Australia, it was the NZTE programme that helped them see they should do it themselves.

Founders of Mum2Mum: Jo Keall (left) and Jo Bond.

EXPORTER 19

In early talks with a major Australian retailer just before the course, they marched into a face-to-face sales pitch – armed with confidence from the dragon’s den grilling – and got a “yes” on the spot. They launch with that retailer in August 2010 and are now using a course trainer as a business mentor and have employed the Australian accountant introduced on the course.

Paul Johnston, LHF’s distribution and supply chain manager, was also impressed with the programme when preparing the Bean Supreme brand for Australia in 2008. “They were a very, very motivated bunch of presenters that NZTE had – I thought they did a fantastic job.”

GOING IN BLIND In fact, Johnston believes several of his business acquaintances, who haven’t done the course, have fronted-up blind

to Australian buyers. He thinks their business has suffered from not being well prepared and not having a bigger picture of the market and how it’s broken down.

He cites the rigour of having someone going through each aspect of being an exporter as really useful. For example, he was unaware of differences in the structure of distribution costing and retail margins across the Tasman.

Bean Supreme’s Australian sales now equal LHF’s total sales in New Zealand and Johnston reckons the company has tapped only about a quarter of its potential Australian market. LHF’s Naked Organics range looks set to sell there soon.

“When you have matured in the New Zealand market Australia is certainly the opportunity manufacturers should look for. It is very easy – just the proximity means it is easy to manage. You can have product there in two days.”

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MORE GOVERNMENT FOCUS Given Australia’s proximity, its large market and stable economy this programme is important to exporter success. Yet there is no specific NZTE budget allocated to it; it is just a framework to bundle existing services with private sector expertise.

Businesses pay their own travel expenses. The course only runs if there are resources available and NZTE identifies a like-minded cluster of companies that will benefit.

The agency has money for three to four courses a year with no plans to increase the amount in 2011. NZTE told Exporter that “ensuring businesses are well prepared for the markets they are entering is an important part of NZTE’s role”.

Nicholas participated in the pilot food and beverage industry programme in 2006, which he found valuable but perhaps a little premature. He was surprised but delighted that NZTE supported the recent craft brewers’ contingent and believes it was triggered by the formation of the New Zealand Brewers’ Guild.

“When they [NZTE] could see the craft beer industry had got itself a body to help organise and promote itself they wanted to facilitate helping us into that market, which is great, because we didn’t think there were any funds available.

But they have thrown several thousand dollars at us and helped facilitate all this – which kind of shocked me.

“Going to other markets I can get a grant, and that really helps. NZTE put me in contact with people in London and LA and I have people to talk to there. But in Australia it’s always been, well, it’s the west island and you go over there and do it yourself.”

DIFFERENT TO NEW ZEALAND Keall and Bond discovered just how different the New Zealand and Australian markets were. “I guess after doing the course we realised it is more different than we initially thought. We kind of thought it was just a bigger New Zealand – five times the size. But no, they do things quite differently,” says Keall. [END] LOUISE BLOCKLEY / WRITER Louise is an Auckland-based freelance writer who has recently completed an AUT Bachelor of Communication Studies in journalism. She has worked in the travel industry and for publications such as The New Zealand Herald and New Zealand News UK, London, in advertising sales.

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The viral potential of QR Code for product marketing The Japanese have been going gaga over the QR code but Kiwis have been slow to embrace this technology which some enthusiasts reckon is as potent as viral marketing with its untapped potential to raise brand and consumer interest.

22 EXPORTER

BY ANT H O NY DO E S B URG

R

ic Thorpe thinks he knows the same excitement that would have gripped a pioneering New Zealand user of email — here’s a new technology with enormous potential that’s about to go viral.

Thorpe’s enthusiasm is for QR codes.

The Christchurch mobile marketer is convinced the two-dimensional “quick response” bar codes are going to go the same way as email.

Only the codes, that can be used to embed a web address, phone number or text message, have already been in existence a decade-and-a-half but have barely penetrated the popular mind — in New Zealand, at any rate.

KEY TAKEAWAYS > QR or quick response codes have been in existence for more than 15 years and are widely used in Japan. > QR Code use is spreading as mobile phones with QR code readers become more common. > QR codes have a number of possible export applications. > They can be used to provide retail customers with product information at the point of sale. > Wine exporter Giesen is about to start printing QR codes on its bottle labels.

IN JAPAN, FOR INSTANCE, WHERE THE CODES WERE DREAMED UP BY CAR PARTS MAKER DENSO-WAVE IN 1994 AS AN INVENTORY TRACKING METHOD, THEY’RE UBIQUITOUS. THEY CAN BE SEEN ON EVERYTHING FROM FASTFOOD PACKAGING TO MAGAZINES TO BILLBOARDS.

Elsewhere in the world it’s different, according to Thorpe and other QR code advocates. They believe the QR code is something exporters should sit up and take notice of.

EVERYWHERE IN JAPAN In Japan, for instance, where the codes were dreamed up by car parts maker Denso-Wave in 1994 as an inventory tracking method, they’re ubiquitous.

They can be seen on everything from fast-food packaging to magazines to billboards.

“Places where it really takes off are where mobile phone internet use is a reasonable price,” Thorpe says.

The connection with mobiles may not be obvious, but the spread of QR codes is totally tied up with growth in smartphone use. Nokia was first to

for web address, phone number, text or sms codes, and there is no licensing cost, Flett says.

QR code boosters keep coming back to the wine industry as a potential application of the tagging system.

Thorpe says a New Zealand wine maker who exports to Europe, say, can expect the well-heeled buyers of its products to be smartphone users.

HAND-IN-HAND WITH SMARTPHONES With a QR code on a bottle label, the smartphone-carrying shopper at the point of sale can scan the code, be whisked off to the wine maker’s website and read about the drink’s pedigree.

Codes on wine bottles make sense in a different setting, too, says Aaron Shurmer, director of web developer Red Paris.

WINE MAKER GIESEN WHICH SHIPS ABOUT 500,000 CASES OVERSEAS EACH YEAR IS TRYING OUT QR CODES ON THE BACK LABELS OF ITS BOTTLES.

build a QR code reader into one of its handsets, but now most phones with a camera can be used to scan the codes.

If the phone is also able to connect to the internet, the codes’ full potential can be seen: scan a QR code that contains a web address, and a device such as Apple’s iPhone will automatically open that web page.

The possibilities for exporters are obvious — and enormous — says Thorpe.

Jonathan Flett, operations manager of Christchurch packaging and printing company Pakworld, is equally enthusiastic. A food exporter Flett is working with but isn’t prepared to name, plans to put QR codes on its packaging that will link buyers to product information that the package itself can’t accommodate.

Language need not be a barrier: for products destined for France, say, the QR code would link to a web page in French; for buyers in Japan, the same information could be found on a Japanese page.

Outputting codes is simple. A number of websites — qrcode.kaywa.com is one — have code generators with options

24 EXPORTER

In a restaurant or bar, a wine drinker might be enjoying a particular drop and, whereas in normal circumstances he could struggle later to remember what it was, he could scan the QR code for future reference.

“Most people get drunk and forget,” Shurmer says.

Thorpe says it’s an opportunity for the wine maker to not only describe the QR-coded wine, but to market its brand.

“They can’t really promote direct sales, because that will annoy the importers and supermarkets, but they can promote themselves as a brand.

They can get buyers on to their website where they can invite feedback or involve them in games or competitions that develop brand loyalty.”

That potential has persuaded wine maker Giesen to try out QR codes on the back labels of its bottles. Kyle Skene, export sales manager at the company, which ships 500,000 cases overseas each year, says the cost is negligible for “so much upside”.

“It sounds almost too good to be true,” Skene says.

PRACTICAL ISSUES There are a number of practical issues to be aware of, which Thorpe and Flett have discovered in the course of experimenting with QR codes. If the code contains a web address that is automatically loaded once scanned, the target web pages need to be designed with mobile devices in mind.

Thorpe says that doesn’t mean an exporter’s entire site would have to be reworked. “The crucial thing is not to replicate the site because that’s full of information people will access from a computer with a big screen at home or at work. What you actually want to consider is the information someone wants right there and then.”

Converting parts of a site to a mobile format reached via a QR code could be done for about $2,000, Thorpe says.

Flett says the smallest size a code can be condensed to is about 1cm square.

The more information they contain, the denser the coding becomes and the larger they have to be.

But they can scale to an enormous size. QR codes have been plastered on billboards, for example, enabling scanning from thousands of metres away.

Thorpe acknowledges QR codes have some way to go before taking off to the extent of email. Awareness of them is similar to the early days of the web.

“People who knew about the web and what it was capable of before it became totally mainstream would see a web address and go, ‘I’ll have a look at that’, out of curiosity, and QR codes are a bit the same at present.”

Thorpe’s enthusiasm has found practical expression in the creation of a website, qrcodes.co.nz, where he describes what the codes are, and which has a couple of hundred visitors a month.

His mobile marketing company, Vertize, will be sharing a stand with Pakworld at the Foodtech Packtech trade show in Auckland in October, where they will be singing the praises of QR codes.

Combined with wider use of smartphones and more affordable mobile internet access, the virus looks sure to take hold. [END] ANTHONY DOESBURG / WRITER Anthony Doesburg is an Auckland-based freelance journalist who specialises in technology.

Don’t create foreign exchange risk, manage it

BY CHRIS HUNTER / Corporate Dealer, Custom House (NZ) Ltd

T

he world of foreign exchange (FX) has changed significantly in recent years.

Market movements that used to evolve during a period of years now take days, and this volatility has made risk management a top priority for businesses with international operations. Consider how the financial state of European countries such as Greece have affected currencies world wide, and it becomes clear how critical FX risk is for exporters.

For almost twenty years Custom House, a Western Union Company has been assisting businesses in a broad range of industries with currency exchange, and global payments and receivables.

According to Chris Hunter, Corporate Dealer at Custom House, 2010 in particular has seen companies increase their focus on FX management.

“Businesses are really counting their cents at the moment, with more and more focus on risk management strategies to avoid being hit by large swings in currency. Management has learnt that without a solid strategy in place their bottom line is open to negative impact from the market.

“Many of these businesses have never implemented a hedging strategy before, and can end up inadvertently increasing their risk exposure. Hedging is about managing risk, not creating it.”

The realm of foreign exchange is

complicated, and with a large portion of exporters being small businesses not every company has spare resources they can dedicate to its management.

Along with including an FX provider in the development of risk strategies, Chris says there are a few simple guidelines that businesses should keep in mind.

“The market is ever changing and it’s important that strategies are constantly revised to reflect this. What worked last quarter might not be applicable this quarter. Also, it sounds obvious but before negotiating with your buyer you should determine what exchange rate you want to trade at, and then evaluate the outcome of that trade to refine your strategy moving forward.

“If you’re an exporter that anticipates to be paid for a sale in 90 days time and you haven’t hedged that receivable, a downshift in your payer’s currency could eat into a significant chunk of your profit. In a situation like this, the smaller your profit margins for foreign

sales the more of your sales you should hedge. Of course, this depends on the goals and budgets of each individual company, but it’s a critical consideration for companies with high international receivables,” added Chris.

Custom House was acquired by Fortune 500 company Western Union in late 2009, and is now their business-to-business arm.

With Western Union behind it, Custom House is well positioned to assist local businesses with their increasing focus on FX management strategies. [END]

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EXPORTER 25

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Choose your mentors well Business mentors can help ask the tough questions that will shape up your business, but can also lead you down the wrong path in your quest for improvement.

BY MARY MACKINVE N

T

he company directors were made to focus and stop messing around when a mentor was appointed by Streat Automation engineering consultancy.

Says Ieuan Attewell, general manager and co-owner: “We were at a point where we realised we had to adapt and change. “Things weren’t going brilliantly and we were thinking, have we just got a job? We wanted to take it further and feel we were getting something back for the risks of being in business.”

About four years ago the company, which writes and implements software, including for overseas projects, undertook a government-funded high-tech

KEY TAKEAWAYS > Mentoring can provide peace of mind, inspiration or a sounding board for ideas. > For small companies with owners wanting to feel in control and not reporting to a board, an advisory board could fit well. > For SME governance systems visit www.iod.org.nz and go to ”Fresh Thinking: First Boards”. > Ask for a mentor to be appointed or headhunt your own. > Brief the mentoring agency about your requirements to ensure a good fit.

EXPORTER 27

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development programme that included a mentor being appointed for several months.

Attewell says: “But the mentor focused on a narrow aspect of the business - a product we were developing - when in reality 99% of what we do is services. Perhaps because of his background that’s what he did … but it was frustrating, following his own agenda instead of taking an overall approach to the business.

“But the other directors found it more useful. “If we did it again, we would headhunt the mentor and want a bit more control over who they were.

“We want an independent director, maybe, not a mentor, for a wee while. We have no one outside working on the business.

I think we would identify a person with different skills — we are all engineers, not marketers or accountants — and ask them about mentoring or coming on to the board.”

An outsider could ask the hard questions, but they often charge a fortune.

RIGHT BRIEF Shamrock Industries did the same programme four years ago and ended up forming an advisory board to follow through on its strategic plan. The mentor was appointed to this board alongside a new external member, managing director Pat Fogerty and his co-owner.

When the original mentor moved out of town the company looked for a replacement. It talked to the Institute of Directors and

28 EXPORTER

Canterbury Development Corporation, which suggested parties to approach.

Fogarty says: “We met them as for a job interview; it’s a pretty important role for them and us.

“We had to be informative and open about our aspirations and past journey so they understood and knew what the role entailed. “It’s like a consultant so the person might work in the business or help you work on it, depending on the brief you give them.”

The monthly advisory board meetings have an agenda, minutes and chair. “It’s structured but we are small so there’s a fair degree of informality.

The members are not directors so we have the discretion to follow their advice or not.”

And has it helped? “We have definitely improved. If the board did nothing else than provide time to work on the business, it would have contributed a lot.”

But other advantages are providing support and confirmation. “It’s a fairly lonely role at the top of an enterprise.”

Fogarty suggests exporters ask Business Mentors New Zealand (BMNZ) to find a mentor. The online application form tests their export capability or readiness.

Exporters who engage a mentor tend to use the service for longer than other businesses because their needs can be more complex, says Ray Schofield, chief executive of BMNZ. The mentoring might last for years, depending on the case.

BMNZ has a specialist group of 170 export mentors nationwide.

Exporter magazine asked exporters: Would you use a mentor to help make major decisions about your strategy/company direction? If you have used a mentor, how difficult has it been working with an outsider?

The replies: • “In fact we all accepted outside advice at times, if not formal mentoring.”

• “Great for annual ’audits’, bouncing ideas with an outsider – used with moderate to great success.”

• Two had disastrous experiences with mentors not turning up, or not understanding their niche businesses.

• For some there is an issue of trust in the person’s expertise, but generally it was a positive experience. One even ended up hiring their mentor.

• “Used independent financial director or accountant or communicated regularly with an industry group.”

MENTOR’S NETWORK Schofield says: “These mentors know procedures and easy approaches because they have been there, done that. Doors can open based on relationships built over many years.

“Going into exporting or expanding overseas markets can put the business at risk and a mentor can ensure the New Zealand firm would not be adversely impacted by exporting.

Payment processes in export are more challenging, for example.” He says if a mentor is the wrong fit, don’t give up. “If the first mentor lacks the knowledge you need, you can seek input from others.”

BMNZ is setting up a mentoring scheme in 11 Pacific Island nations, funded by New Zealand’s International Aid and Development Agency (NZ AID).

Choosing a mentor boils down to what the business wants help with, says research and policy manager at the Institute of Directors, William Whittaker. “I would say to succeed in business your chances are heightened by having appropriate governance structures in place – not necessarily a large board with six to eight people.

SMEs throw their hands up in horror but the point is, it’s a framework, a system, a discipline.

“Develop a structure that suits your circumstances and aspirations,” Whittaker says. [END] MARY MacKINVEN / WRITER Mary has reported news for 20 years including as sole writer and editor of Business to Business monthly newspaper in Auckland, NZ, for six years. Now she combines freelance journalism with part-time writing at a business association in Auckland.

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30 EXPORTER

On the trail of cheaper phone calls Telcos are competing head-on with cheaper mobile calls, expanded coverage, no-commitment contracts and hassle-free set ups to grab a greater slice of the pie in the telecommunications market.

BY SANGE E TA A N A N D

V

odafone NZ users visiting Australia can now use data at $2/MB – a 93% reduction over the company’s current charge of $30/MB. Vodafone’s GM of Products, Services and Internet, Kursten Shalfoon, says Vodafone sees a huge opportunity in the explosion of smartphones in the market.

Similarly, Telecom XT customers en-route to select countries can make outward mobile calls from the aircraft at $13 a minute, and pay $1 a minute for inward calls. Mobile broadband is $40/ MB. “Although this service is priced at a premium, it’s more affordable than the cost of using an on-craft telephone,” says Niki Chave, head of Telecom’s Mobile Roaming.

Warming up the market, 2degrees has reduced its data rate to $6 for 50MB (12c a megabyte). Vodafone charges $10 for 100MB a month (prepay) and Telecom XT customers pay $6 for 20MB a month.

“Our low calling rates to nations such as China, Hong Kong, India, Taiwan, South Korea, Australia, Japan, the UK and the US will be of interest as well,” says Bryony Hilless, head of corporate communications for 2degrees.

COMPETITION Want more? Vodafone offers a special plan - Vodafone Traveller is a zonebased roaming plan. “It’s designed to simplify roaming costs and give you price certainty so that you always know

KEY TAKEAWAYS > Factors to weigh in choosing your provider include call duration, frequency, hours of operation, quality of voice/service, downtime, contractual obligation and hidden costs among others. > VoIP have some noted drawbacks which can include quality of voice, downtime, power-dependency, bandwidth-dependency, security (identity theft, viruses, phishing etc). > When VoIP works for you: When you have a high speed internet connection, need flexibility to add/remove users, need number portability, need the convenience of taking the phone number while traveling, and when you don’t have a big in-house IT support team. what you’re paying,” says Michelle Baguley, external communications manager for Vodafone.

But it’s not just prices that the telcos are competing on. Some offer no-contract plans, others offer no set-up options, and compete on quality of calls, network and coverage.

How do you choose? No two exporters have the same needs, and no one telco supplier is better than the next. First define your needs, and then go shopping.

While competition is bringing prices down, technological advances too are lowering costs. Broadband speeds are improving and with it the quality and price of internet-based phone calls or VoIP as they are known. Of course, our traditional phoning system (copper or analog) is tried and tested, and hence

more relied upon; the VoIP phone calls are comparatively newer, but offer a cheaper option.

PHONE OVER INTERNET These VoIP phone calls use SIP (Session Initiation Protocol) trunking to travel over the internet, and Compass is one of the providers of these services. SIP is a protocol that allows phone calls to be connected via the internet.

“This product allows staff to be contactable at all times,” says Paul Woodhams, general manager of Compass’ commercial division. “Each IP extension can have up to eight paired extensions, meaning that you can now have your cellphone called, home office called etc, at the same time your office phone is ringing. Couple this with unified messaging and you have a great offering.”

THE MAJOR TELCOS SIMPLY HAVE MARKET DOMINANCE; SO PEOPLE BELIEVE THAT THE PRICES THEY CHARGE ARE WHAT ONE HAS TO PAY.” M AR K SAYER , DIR ECTO R O F SALES FO R VO ICEPIPES – A VO IP PR OV IDER THAT PR O M ISES UP TO 8 0% S AV IN GS .

EXPORTER 31

Compass’ IP extensions start at $19.95 plus GST. “This cost includes the phone, SIP Trunk (telephone line) and full installation,” Woodhams says.

Compass’ international rates are 8c a minute to 40 countries. However, the company’s IP Centrix/PABX products prices are based on a 36-month term contract. With call rates falling regularly, a long-term contract is not very attractive.

Orcon offers similar SIP trunking products with no contract. “We have a range of plans designed to provide budgeting certainty,” says Scott Bartlett, Orcon’s chief executive. “That means the CFO can budget with confidence, enabling cost savings across administration and servicing.”

QUALITY However such SIP trunking can be prone to issues of voice quality, downtime, lack of privacy, virus attacks and phishing. “There’s a big difference between a carrier-quality voice-calling service that happens to use VoIP technology to transmit a call with guaranteed quality of service, and something like Skype that uses the public internet,” says Carly Morris, a spokesperson for Telecom Retail.

Why hasn’t Telecom ventured into the VoIP area? “Our long term view on how and when we use VoIP technology

Gobbledygook • Caught by the jargon? Your traditional phone system is known as analog or PSTN (Public Switched Telephone Network).

• VoIP - a phone network using the internet is the new, cheaper alternative.

• ITSP - Internet Telephone Service Provider - the company that provides VoIP connectivity.

• SIP (Session Initiation Protocol) Trunk - A service offered by an ITSP that permits businesses that have a PBX to use the internet for calls.

is still being worked through. Where exporters need to rely on a quality international service, with high levels of availability and clear voice, traditional methods of calling are best at this stage,” says Morris.

While the jury is still out about VoIP’s usefulness, the cost of traditional phones remains prohibitory.

From 1 June, Telecom increased phone rentals by 1.9% on average, and off-peak calling charges for some fixedline plans by 26%.

“The major telcos simply have market dominance; so people believe that the

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prices they charge are what one has to pay,” says Mark Sayer, director of sales for VoicePipes - a VoIP provider that promises up to 80% savings.

“In reality, options have been available for several years and are of equal or better quality. Most alternate providers offer calling rates that are lower than domestic calling where the interconnection is controlled mostly by Telecom.”

While dominant players keep prices high locally, international players do the same on overseas calls. Explains Sayer: “New Zealand is only different in that our calls have to go a longer distance to get to our markets. The cost of placing an international call is dependant on the competitiveness of the market into which you are calling. For example: a call from New Zealand to the US costs the same as a call from Canada to the US or from India to the US. Calls to Fiji cost more because that local market is small and completely controlled by a single carrier.”

Will VoIP then work as a great equaliser? It already is. [END] SANGEETA ANAND / WRITER Sangeeta Anand, is an international writer specialising in business, supply-chain and technology. She has written for several publications in New Zealand and overseas.

Tide turning but global trade still risky business

BY DAVID HUEY / Managing Director, Atradius Credit Insurance – Australia & New Zealand

A

fter a challenging year, New Zealand businesses would be forgiven for quietly breathing a sigh of relief with the signs of local and global economic recovery.

However as company insolvencies and buyer defaults continue to soar, exporters need to be meticulous in their dealings and continue to ensure that they have sufficient cover in place to prevent significant damage to their business.

A continued deterioration of payment terms in Australia, New Zealand’s biggest trade partner, highlights the need for exporters to continue to keep a close watch on their buyers’ payment patterns as this can help pick up on early warning signs. In fact, since the beginning of this year Australia has seen an increase in insolvencies and companies going into administration, so vigilance continues to be of the upmost importance.

These worrying trends have led to changes in the types of businesses taking up credit insurance. Some companies take the view that because they have survived the worst of the financial crisis they are strong enough to turn to self insurance. On the other hand, some businesses have seen the deterioration experienced by their own suppliers and buyers and have taken up credit insurance to ensure that they will be protected in the event of insolvency or payment default.

Smaller customers continue to

Atradius Credit Insurance managing director, David Huey.

rely heavily on credit insurance to gain improved access to funding and this is something that won’t change. In addition, Atradius is also seeing more medium and larger companies consider credit insurance for the first time. These companies are from industries that were relatively unaffected by the crisis but experienced a significant bad debt for the first time and now realise the importance of being covered in case things take a turn for the worst again.

The other change Atradius is noticing is that some companies that have found it difficult to obtain credit insurance or previously found it too expensive, are considering options where they take a greater share of the risk. As the market hardened last year, this was a good option for some companies and was definitely better than trading without a safety net of some kind.

Another option for businesses that

found it hard to get cover from the private sector was the New Zealand Export Credit Office (NZECO) short term trade credit guarantee. This scheme, which was implemented in February of last year and is set to continue through to the end of June 2011, provides a safety net for many New Zealand exporters. Over the last 18 months, the NZECO has issued policies for 129 short term trade credit transactions in 40 countries. These policies were put in place across a number of diverse sectors and ranged in size from as little as NZ$14,000 to US$8.8 million.

The demand for this scheme is expected to change however as Carmen Moana, Manager, NZECO, explains. “There are signs that the capacity of trade credit insurers has improved, particularly in the last six months. On this basis, you would expect that demand for NZECO’s scheme would vary over time.”

With this improvement in the availability of credit insurance for New Zealand exporters, businesses can continue to trade with confidence while keeping their cash flow and company stabilised. [END]

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EXPORTER EXPORTER 33 33

Viewpoint CATHERINE BEARD EXECUTIVE DIRECTOR, EXPORT NEW ZEALAND

NZ competitiveness stunted by low productivity New Zealand’s global competitiveness is on a downward slide. A weak capital market, poor management skills and poor export performance are our biggest limitations.

A

ccording to the IMD World Competitiveness Index, New Zealand has slipped to 20th (from 15th) place, while Australia has jumped from seventh to fifth as the most competitive venue for commercial activity.

Our ranking as an exporter of goods, at 50 out of 54 countries, is about as bad as it can get.

So why is Australia going forwards while New Zealand is in reverse?

What do we need to do to turn the ship around?

The IMD report cited our weak capital markets, management skills and export performance as the biggest factors behind our slide. I will come back to those three points.

On the positive side, as noted by the International Monetary Fund (IMF) and the IMD Index, the New Zealand economy rode out

34 EXPORTER

the global financial crisis better than most advanced economies. They put this down to strong demand from fast-growing Asian markets and the robust Australian economy; a flexible exchange rate; the absence of a banking crisis; and significant and effective policy easing.

So back to our lacklustre exporting.

What is the cause and what can we do about it?

PRODUCTIVITY PARADOX A considerable amount of intellectual effort has gone into analysing this problem. Philip McCann of Waikato University calls it the “productivity paradox”. The macroeconomic and institutional characteristics of our economy rate relatively well in the OECD, as shown by our controlled inflation, relatively low unemployment rate, strong property rights, flexible labour market

and transparent institutional system, among other things. However, our productivity has fallen behind other countries’ since 1985.

McCann concludes that geographical isolation accounts for half of the 21 per cent gap between New Zealand and the OECD average when it comes to productivity. The major advantage more highly populated countries have is the widespread existence of economies of scale, assisted by large domestic markets and larger more diverse cities. The OECD suggests Australia’s scale more than compensates for the adverse effects of distance.

In addition, while New Zealand is very open to inward foreign direct investment (FDI), we have the lowest levels of outward FDI of any advanced economy. While New Zealand

succeeded economically in the past as an exporting nation (the UK wanted all our agricultural exports), globalisation has meant the world has changed since those halcyon days and we have seen three super-regional areas of economic integration built around enormous internal markets and free trade areas, namely, the EU single economic market, NAFTA and developments in Southeast Asia).

POWER IN SIZE The research tends to suggest that countries with large diverse cities allow firms of scale to be built.

These countries also have higher productivity, better management and are able to attract and keep the best and brightest employees. As an example of this, Auckland has the highest productivity and wages in New Zealand, due to its scale and connectivity, but on a global scale it is not even among the largest 70 urban agglomerations within the OECD. New Zealand is a highly entrepreneurial society and the IMD World Competitiveness report found we were ranked sixth for patent

A NEW ZEALAND TRADE AND ENTERPRISE PAPER CALLED “PLAYING TO OUR STRENGTHS” POSTULATES THAT MANY OF NEW ZEALAND’S WEALTH CREATORS ARE HAPPY NOT TO KEEP GROWING A BUSINESS ONCE THEY HAVE THE BOAT, BACH AND BMW NAILED DOWN. CATHER INE BEAR D – EX ECUTIV E DIR ECTO R , EX PO RT NEW ZEALAND

registration. But we fail to commercialise those ideas and turn them into large exporting businesses. This is in part due to lack of scale, distance from market and due to a lack of capital investment available to New Zealand firms.

Some would say it is also down to the New Zealand psyche – a New Zealand Trade and Enterprise paper called “Playing to our Strengths” postulates that many of New Zealand’s wealth creators are happy not to keep growing a business once they have the boat, bach and BMW nailed down. This paper says we also tend to be fiercely self-reliant, which is one way to keep a firm small, are too conservative when it comes to taking risks, and that we undervalue our intellectual assets.

So there are plenty of things we need to work on as a country to lift our exports and our productivity.

One of the challenges is building firms of scale in the absence of a large domestic market. Large firms have better management, better productivity and are better equipped to venture on to world markets.

Given our lack of large companies and weak capital market, it makes a lot of sense for the government not to own so many state-owned companies if we are looking for a way to leapfrog ahead. What is the rationale for the government owning farms, coal mines and electricity generators? The rest of the world is moving onwards at full speed and New Zealand can not afford to miss the opportunity for a full or partial float of these firms to give us a larger cohort of companies with the scale and capacity to become global enterprises. [END]

Editor’s note: The views expressed above may not necessarily reflect the view of this magazine but we are happy to provide the space for gutsy opinion.

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EXPORTER 35

Weighing risk against the cost of guarding IP A good rule of thumb before spending mega bucks on IP protection in a foreign market is to consider how big a deal the market is to your business.

BY YO K E H A R L E E

W

ill your potential distributors turn around to steal your brand or business? The principle of protecting your intellectual property before going offshore is a good basic rule to follow although the initial cost can be steep.

Beyond affordability issues, one of the biggest considerations in deciding what protection to put in place is how important a particular market is to the success or growth of the company.

Earl Gray, Simpson Grierson partner and co-head of the law firm’s intellectual property group, says the decision to seek IP protection should be governed by a company’s appetite for risk weighed against the cost of the entire undertaking.

RISKS V BUDGET “In China, for instance, if China’s going to be your market – and if you think you

36 EXPORTER

KEY T TAKEAWAYS > Before you head offshore, consider if you should register a brand or trademark in a foreign land. > Weigh up the costs of getting IP protection against how much a market is going to be worth to your company. > Due diligence is everything when appointing a distributor offshore. > For a company with many products, it may be impractical to patent the range. > Consider the limitations of awarding an exclusive distributorship.

will want to cover other jurisdictions – you will be spending some real money.

If your only focus is one country, and you have decided it will be China, yes.

“In theory it is sensible to protect your IP before venturing into new markets. It is also something sensible to do in any number of jurisdictions.

But it is all a question of weighing up your appetite for risk, weighing your budget.” IP protection may not be the best course, Gray says.

“In many cases, it may be more about

managing your relationships, ensuring your relationships are right or it may end up undervaluing your IP, and you end up getting bitten. It is also about knowing how far your development plans are.

“If a business knows its risks, seeking IP protection is a legitimate decision.

In some places or cases, not having a contract may also be a legitimate decision. I would be researching the marketplace before seeking IP protection.”

During preliminary discussions, Gray says, it might be sensible to have a brand protected given that protecting a brand is not the same as protecting a technology.

Once IP issues are sorted, sealing a proper distributorship agreement offshore can add value to a business, especially when the business is up for sale.

INFORMAL ARRANGEMENTS Without formal distribution arrangements, says Duncan Cotterill partner Scott Moran, potential buyers may not consider a business worth what the seller wants for it.

“When proper [distributorship] contracts are not in place, there is a chance no value will be placed on that,” Moran says.

The same goes for negotiating with bigger companies, particularly those with the tendency to bully smaller companies they represent, he says.

Having proper intellectual property protection in place first will give companies more confidence to either register interest in operating in a new place, or in negotiating with someone with more clout in the market.

Warwick Lightbourne, founder of Clinical Technology, a company which produces a range of health and sports medicine products, has navigated through a series of agreements in his company’s aspirations to go global.

While his product isn’t necessarily that easy for copycats to replicate, he selects his distributors with great care.

For a company with many products, it may also not be practical, he says, to try and patent every bit of intellectual property created.

TRACK RECORD Lightbourne says one of the most important details to establish when assessing a future distributor is if the company has a record of having successfully distributed other products.

“There are a lot of fly-by-night distributors who want to run with your products, and then put them at the bottom of the list soon after. It is really important to establish if the distributor has a previous history in terms of distributorship.”

He always looks for a distributor with experience and tries to avoid the “entrepreneur-type distributor”, unless they can demonstrate they have the networks and contacts to deliver the sales needed.

38 EXPORTER

Been ripped off?

Exporters we surveyed have different tales to tell.

• “We trusted a distributor and our goods were stolen. We couldn’t locate the distributor. He had not paid his taxes and ran off leaving many in loss.”

• “You need to register your logos and trade names. Yes, (you) need restriction of trade signed even though it’s hard to take to court later if there is a default, but it is an excellent indicator of the type of person they are if they won’t sign.”

• “Ripped off by supplier cutting us out and going direct, (you) need agreements in place with both supplier and agent before proceeding into China.”

• “Yes, been ripped off in China (Nanjing) and only got the money back by threatening to tell the PRC government.”

• “Yes, have been badly hurt by an agent and former employee. This resulted in a costly ongoing legal battle. We are less trustful now.”

• “No, but you need to forget about IP protection. The Chinese don’t worry about it so why bother with the costs. You just have to learn to move faster.”

• “Yes. Long story. Steep learning curve. Global branding costly and difficult to protect IP. I have put it on hold. Counterfeiting a huge problem.”

“It is a good idea to have a trial period. We would also stipulate or have a commitment from them on what they can sell.”

Hans van der Voorn, executive chairman of Izon Science, says companies with technical products need to be on the ground doing sales.

In cases where the company needs to appoint distributors, a close working relationship is crucial.

(left to right: Anne Barnette from Izon Science; Patrick Haley, BridgePath’s chief executive; Hans van der Voon, Izon Science’s chief executive).

“We know that we have to work with distributors to get them to understand the market and how our technology fits in,” van der Voorn says.

He prefers not to have distributorships sealed too exclusively and likes the option of being able to sell directly to clients as well, especially for consumables used with the company’s nano particle analysis equipment.

“A feature of our product is the on-going sale of consumables, which can be easily ordered over the internet,

so we have an arrangement where if we sell consumables direct to a customer of the distributor, we give them [distributors] an agreed percentage of the sale.

“We have one arrangement which is exclusive but the distributor hasn’t sold anything, whereas we can go to a territory and normally pick up sales on the first or second visit. The vast majority of our sales to date have been direct, not through distributors,” van der Voorn says.

One advantage for Izon is the portability of the company’s equipment, meaning sales staff can carry them to trade show and explain directly to clients what the technology can do, he says.

Recently, Izon signed a distributorship with a Singapore-based company which has been given coverage of Singapore, Malaysia, Thailand, Vietnam and Indonesia. Izon has also awarded non-exclusive distribution rights to a US company, BridgePath Scientific.

For now Izon has stayed clear of complex markets such as India and China where the potential for growth is huge.

Although the company’s products would be hard to copy, Izon has spent GBP300,000 (about NZ$644,000) on two key patents to protect itself in markets it thinks will be important, including China. [END] YOKE HAR LEE / WRITER Yoke Har was formerly a senior Reuters correspondent, a Business Herald writer, and personal finance editor for a regional media company. Most recently she managed internet and intranet content for a global US consultancy.

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Trade Credit Insurance: Not all beer and skittles Some small exporters continue to struggle to get trade credit cover but insurers are back in the market and premiums have stabilised.

BY YO K E H A R L E E

T

rade credit insurance companies have relaxed their tight grip on underwriting credit insurance policies, signalling a return to market normality. Hefty premiums being slapped on by underwriters have also abated somewhat.

But as the world economy recovers, the temptation for some exporters to trim costs by cancelling trade credit insurance is the opposite of what the doctor has ordered.

QBE Insurance trade credit manager Mike Kayes says: “There is feeling that the worst is over but I am not so sure.

What we are trying to get people to do is to get through their renewal rather than cancelling (their policies).

“Exporters who have taken on policies and have made no claims are probably thinking why bother.”

NO MORE CHAOS Tony Redwood, director of Wellingtonbased Redwood Credit Insurance, agrees: “It is still not all beer and skittles. The situation is better than it was last year, which was complete chaos. 2010 is looking relatively straightforward compared to last year when premium rates across the board were hard to determine.”

Redwood says exporters might be tempted to abandon hefty premiums

40 EXPORTER

KEY TAKEAWAYS > The economy may be recovering but don’t risk not insuring your trade receivables in case of defaults. > For smallish exporters, check out NZECO’s products in valid deals where private insurers can’t or won’t cover you. > Make sure you have absolutely immaculate information of your claims so the underwriter won’t have a reason not to pay out. > Trade credit insurance companies have more appetite for risk than last year.

but the nature of insurance hasn’t changed over the past 40 years.

There’s certainly a need now. It is probably more crucial than ever.”

All it takes, Redwood says, is for one big client to default to cripple an exporting business’ fortunes.

GAP IN MARKET Smaller exporters continue to struggle to find trade credit insurance or can ill-afford to pay the premiums required to gain the security they need, Redwood says.

The New Zealand Export Credit Office (NZECO) has been doing a good job meeting the gap left by private trade credit insurers when it comes to smaller trades, as well as for sectors deemed too risky.

Over the past 18 months, with additional government funding of $200

million announced in November 2009, NZECO has supported $387 million of exports using short-term trade credit guarantees and $172 million of exports across 21 bond guarantees, according to Carmen Moana, NZECO’s manager.

“It is useful to note that during this period a number of these policies have been renewed and/or expired – so NZECO’s current exposure with these products is below the $200 million in additional funding provided [by the government],” she says.

NZECO has provided support for 117 short-term trade credit transactions in 37 countries, across a range of industries including wool and textiles, timber, wine, meat, fruit, honey, processed food, furniture, engineering and agritech. The policies range in size from as little as $14,000 to $13 million.

Underwriters, meanwhile, had been sharply unwinding their exposure to risky sectors and protecting themselves with higher premiums. Sectors such as wool, textiles and construction have found it difficult to get trade credit insurance.

Underwriters have also reduced the level of cover they’re prepared to provide from about 90% to 85%.

QBE Insurance trade credit manager Mike Kayes (left) and NZECO’s manager Carmen Moana.

EXPORTER 41

SMALL EXPORTERS HARD HIT As part of an effort to plug the trade credit insurance gap in the market, NZECO has been working with private trade credit insurers to provide co-cover.

One such agreement is with Euler Hermes (Allianz), under which NZECO steps in to provide either a top-up amount for the exporter when Euler has reached its risk limit or in cases where Euler has fully or partially withdrawn from providing cover for the exporter.

of sectors and this is unlikely to change in the short-medium term.

“Secondly, when the buyers are located in perceived higher-risk countries. For example, approximately 21% of NZECO’s transactions are currently on-risk support trade between NZ exporters and buyers in Fiji, where private sector insurers have been unable to provide support.”

Redwood says NZECO has a critical role to play in supporting small

THERE IS A FEELING THAT THE WORST IS OVER BUT I AM NOT

particularly in the last six months,” Moana says.

Premium levels have stabilised, QBE’s Kayes says, adding that increases that are going through are small.

Claims on trade credit insurance policies are still coming through. “In some cases, we are seeing claims for deals done in 2007 and 2008. Policies are still responding to the time lag,” Kayes says. [END]

The NZ Export Credit Office can help exporters with the following:

SO SURE. WHAT WE ARE TRYING TO GET PEOPLE TO DO IS TO GET THROUGH THEIR RENEWAL RATHER THAN CANCELLING POLICIES.

• Short-term trade credit guarantee

EXPORTERS WHO HAVE TAKEN ON POLICIES AND HAVE MADE NO CLAIMS

• US surety bond guarantee

ARE PROBABLY THINKING WHY BOTHER.”

• Contract bond guarantee • Short-term working capital guarantee

MI KE KAY ES , QB E I NS U RA NC E MA NAG E R (T RA D E C RE D IT )

Access to trade credit insurance is still very dependent on the quality and size of an exporter’s portfolio, Moana says. “What we have observed over the past 18 months is that it is challenging for exporters to access private-sector trade credit insurance in two key aspects. Firstly, if an exporter is new or small and has a small portfolio with a limited number of buyers.

“NZECO has been providing a greater level of support directly to these smaller exporters across a range

exporters who cannot get private trade credit insurance because of the low value of the business they do.

There are also signs that trade credit insurers are returning to the market, hence NZECO may see some taperingoff of demand. “In terms of our experience, we have been re-issuing our guarantees for the majority of exporters that we have supported over the past 12 months. There are, however, some signs that the capacity of trade credit insurers has improved,

• Pre-credit guarantee • Supplier credit • Financing credit • Buyer credit • Project finance

YOKE HAR LEE / WRITER Yoke Har was formerly a senior Reuters correspondent, a Business Herald writer, and personal finance editor for a regional media company. Most recently she managed internet and intranet content for a global US consultancy.

INCREASE YOUR EXPORT SALES AND

MINIMISE YOUR RISKS The Export Credit Office works closely with exporters and financiers to assist them to manage risk and capitalise on trade opportunities. Its guarantee products are:

N EW Z EALAND E XPORT C REDIT O FFICE

Export credit guarantee (for Įnance terms beyond 1 year)

Short term trade credit guarantee

US surety bond guarantee

General contract bond guarantee

Short-term working capital guarantee

For more informaƟonHTTP://WWW.CLIN-TECH.COM/ or applicaƟon forms visit: www.nzeco.govt.nz | 04-917-6060

The New Zealand Export Credit Office (NZECO) provides financial guarantee products for New Zealand exporters. Our products help these exporters manage risk and capitalise on trade opportunities around the globe. As well as working directly with exporters, we work closely with commercial financiers in New Zealand and offshore to support and improve the competitiveness of exporters. NZECO is currently located in the Treasury and obligations to third parties are guaranteed by the New Zealand Government.

42 EXPORTER

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44 EXPORTER

The slippery slope of managing migrants in your workforce A multicultural workforce presents challenges to Kiwi employers who need to learn how to manage diversity and tap into the opportunities that come with migrants who don’t necessarily see the world through Kiwi eyes.

BY VAL L E V E S O N

D

avid Morritt, chief executive of Integration Technologies, knows it is hard employing a diverse workforce. It takes real effort.

“We encourage applicants from different countries,” Morritt says. “Our diverse workforce complements our offering. “It can be hard sometimes but it’s certainly worth the effort.”

Palmerston North-based Integration Technologies employs 11 people but

KEY TAKEAWAYS > Having someone on board who knows the language and understands the culture of your target market can be extremely helpful. > A diverse workforce can bring innovation to your organisation. > There are challenges if cross-cultural issues are not managed properly. > It can be difficult to communicate with people of diverse cultures – and communication can break down completely. > Merely employing people of different cultures doesn’t hack it – good management and planning are required.

EXPORTER 45

it exports to 45 countries. “It’s a huge advantage having employees from different cultural backgrounds and languages, particularly when it comes to understanding our clients.”

Morritt says in the company’s day-today business it’s easy to forget how diverse its customers are.

The company relies on its website for business. “Most of our customers interact with the website. We’ve had to design it in such a way that it easily carries across to different cultures. We need to make sure that someone in Russia, or Chile, can pick up what we’re saying even if they have poor English skills.

NON-NATIVE ENGLISH SPEAKERS “By employing people who are not English speaking, we see on a daily basis how they struggle. Internally we have to be careful of how we communicate things – if someone in Argentina, say, contacts us, we have to replicate the information we have

“Another issue we have found is that, particularly if the employee is first generation, they can move on quickly to another job and we have to start the cycle over again. This is something we just have to accept.”

BENEFITS OF DIVERSITY Regardless of the drawbacks, employing immigrants has been beneficial for the company, Morritt says.

“Employees from other countries can bring as much as New Zealanders and more – their culture and language.”

His team includes Kiwis, English, Chinese and Filipinos. In the past there have been Brazilians and Indians as well.

He said “culture clash” was too strong a word to describe problems he had experienced. “It’s just about getting some people to open up as we would like them to. Kiwis are very open. We want our staff to engage at that level.”

He says his company encourages employees’ spouses and children to

MANAGERS NEED TO BE MINDFUL OF DIFFERENT CULTURAL NEEDS AND SOCIAL PECKING ORDERS IN OTHER CULTURES. THEY ALSO NEED TO BE AWARE THAT WHAT THEY SEE AS UNETHICAL MAY BE A CULTURAL NORM FOR ANOTHER CULTURE. THEY NEED TO MANAGE THESE THINGS.” J OH N S ECCOMB E – AQUA HORT

and make it easy to understand. We’re aware that long, involved, complicated sentences don’t work.”

Another exporter, John Seccombe of Aquahort, says he’s travelled for business a lot and found that there are lots of difficulties with working across cultures. “Culturally there are different ways of thinking and doing business and things are open to severe communication problems.

“Managers need to be mindful of different cultural needs and social pecking orders in other cultures. They also need to be aware that what they see as unethical may be a cultural norm for another culture. They need to manage these things.”

Morritt says there are drawbacks to employing immigrants. “It can be difficult to communicate with people of diverse cultures. We find that initially it can be really hard to draw someone out and get them to interact.

“We’re a small team and can’t afford communication problems. So we take our time in sitting with these employees and draw them into conversation, getting them used to the company culture.

46 EXPORTER

visit the office and feel a connection to Dad or Mum’s work. “We encourage family values – this is important to us.”

When selecting candidates, he says all go through the same process. “We take applications from anyone and look for a rounded package — skills, education, fit — and we see an added benefit in cultural knowledge and language ability. These are things we can use to the company’s advantage.”

Omega is an organisation which is keen to tap into the skills migrants contribute to the workforce in the Auckland region. The company helps place migrants in the workforce.

Director Justin Treagus says: “It just makes sense to employ immigrants.

There are huge benefits. For example, if you’re launching in China, having people in your employ who understand the market and the culture can save you from many pitfalls.”

CULTURE DOESN’T MEAN CAPACITY Treagus says the question is how do you build this capacity into your business; merely employing people of different cultures doesn’t hack it.

“Thinking companies have stepped up in this area. Global companies have well-developed expat models.

BY EMPLOYING PEOPLE WHO ARE NOT ENGLISH-SPEAKING, WE SEE ON A DAILY BASIS HOW THEY STRUGGLE. INTERNALLY WE HAVE TO BE CAREFUL HOW WE COMMUNICATE THINGS – IF SOMEONE IN ARGENTINA CONTACTS US, SAY, WE HAVE TO REPLICATE THE INFORMATION WE HAVE AND MAKE IT EASY TO UNDERSTAND. WE’RE AWARE THAT LONG, INVOLVED, COMPLICATED SENTENCES DON’T WORK.” DAV ID M O R R ITT, CHIEF EX ECUTIV E, INTEGR ATIO N TECHNO LO GIES

FOR EXAMPLE, IF YOU ARE EYEING CHINA AS A MARKET, LOOK INTO BRINGING IN CHINESE EMPLOYEES NOW. MAKE SURE THAT WHEN YOU MOVE INTO THE MARKET YOU HAVE PEOPLE IN PLACE WHO YOU TRUST AND WHO UNDERSTAND THE VALUES/CULTURE OF YOUR ORGANISATION.” J U ST I N T REAG U S – D IREC TOR OF OMEG A

Chinese employees now. Make sure that when you move into the market you have people in place who you trust and who understand the values/culture of your organisation.”

He says diversity is not turned on like a tap. “There are no instantly diverse

VAL LEVESON / WRITER Val is an Auckland-land based sub-editor and freelance writer who covers career issues, technology and business trends.

She has worked at the Northern Advocate in Whangarei, the Manawatu Evening Standard in Palmerston North and The New Zealand Herald in Auckland.

G G '%%%-

“They see it as having cultural intelligence. However, there are challenges in employing immigrants and it has to be managed well.”

Treagus says it’s about long-term vision. “For example, if you are eyeing China as a market, look into bringing in

teams — they take time to develop, they grow organically. You need to think of the different dynamic that’s created and how it needs to be managed.

“Otherwise things can be quite catastrophic. You don’t want culture failure in your organisation.

This is breakdown of teams where staff members are not connecting or communicating and there is a breakdown of trust.”

Omega has programmes to help skilled immigrants enter the New Zealand workforce.

“Mentoring is a tangible way of supporting skilled immigrants, and helps business people get to know more about how diversity can work for them,” Treagus says.

“Why not mentor someone? It gives you exposure and the opportunity to really have a conversation with someone and talk about workplace culture. You can take on an intern for a three-month contract. It’s a learning curve for you and the employee.” [END]

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EXPORTER 47

Have you cashed your energy cheque yet?

Companies willing to fork out money to engage experts can potentially shave between 10 and 30% off their energy bills.

BY SA N GE E TA ANAND

W

hen diesel prices threatened to touch the $2 a litre mark a couple of years ago, The New Zealand Wine Company (NZWC) got worried. The owner of Grove Mill winery, a participant in

48 EXPORTER

KEY TAKEAWAYS > An average business can cut 19% off its annual energy bill with a payback of capital costs of less than three years. In some cases, savings can reach 30%. > Consultants follow a three-step process: energy audit, implementation of savings projects and cost-savings verification. > Don’t overlook potential savings from such things as using low-cost energy sources, reducing electricity load during peak times and optimising operation of air-handling units. > The Energy Efficiency and Conservation Authority provides funding and financial assistance to help businesses introduce or switch to renewable energy. For details visit the EECA website: www.eeca.govt.nz

Grove Mill Winery’s prototype tractor.

STOPPING HEAT WASTE The winemaker also captures waste heat in its cool cellar. “Waste heat from refrigeration is captured and used in the warm cellar for warming wine for bottling. The cool cellar is also passively cooled during the evening,” says Fowles. In fact, heat waste is one of the main areas of improvement in making energy savings.

Energy savings opportunities vary from site to site and industry to industry, says Dave Taylor, energy engineer for Enercon. “But typically large savings can

be found in utilising waste heat streams more effectively, utilising low-cost energy sources and reducing electricity load during peak times.”

AUDITS Specialist consultants like Enercon offer complete energy management services from energy audits to tariff reviews, sustainable design studies and greenhouse gas emission assessments.

These services can reduce the price paid for energy and ensure efficient energy use, cutting energy bills.

G G '%%%-

Landcare Research’s carboNZero programme, began to explore ways to lower its energy bill.

With the help of consultant Vine Gas, the winemaker built a $15,000 prototype that uses vine prunings to make gas to fuel the vineyard’s four tractors.

With the Marlborough vineyard producing about 200 tonnes of burnable wood a year, the trial showed the potential for the business to reduce diesel use by 75%, cutting carbon emissions in the process.

The project was ruled out as not immediately viable, but it sits within the winemaker’s mission of building a business using environmentally sustainable practices. NZWC exports mainly to the United Kingdom, the US and Australia.

“We implement an annual emission reduction plan,” says Craig Fowles, the winemaker’s sustainability and compliance co-ordinator.

Such projects will become more relevant from July when the emissions trading scheme will push up petrol prices by 3c a litre and power prices from Mercury and Contact Energy by about 3%. Petrol prices will go up by a further 7c from October when GST and fuel tax increase, according to the AA.

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EXPORTER 49

The capital cost of energy saving measures may look daunting initially, but it pays off. “On average our audits have identified savings of 19% of annual energy costs with a payback of less than three years,” says Taylor.

Enercon saved $1.3 million at a large wood processing facility by installing variable speed electric motors, using waste heat, optimising air flow and fitting lighting controls.

“Increasing insulation and installing variable speed drives on a large fishing boat resulted in savings of $170,000 a year,” says Taylor. And optimising air-handling unit operation and fuel selection has saved $400,000 at a large Christchurch facility.

So far, Enercon has performed 89 energy audits throughout New Zealand in a wide range of industries resulting in savings totalling $11.6 million a year with a three-year investment payback. Its largest customer had an annual energy spend of $15 million, which Enercon pruned by $1.4 million.

GUARANTEES On the face of it the consultants’ fees appear to be money well spent. Some go as far as putting their money where their mouth is.

“We are willing to guarantee that the

savings from our projects [at paybacks under three years] will exceed our costs, or we refund the difference,” says Rob Bishop, technical director of Energy Solutions.

“We believe most businesses can save 20% to 30% of their present use, at paybacks under three years [over 30% return on investment]. Many of our clients have saved this much, with some getting over 50% savings.”

One of Bishop’s clients, the Reserve Bank, invited Energy Solutions to perform an energy audit, and hired the company to help implement a programme of heating, ventilation and air-conditioning (HVAC) optimisation —to “tweak” control settings — for energy savings.

“The result was another 22% saving and improved comfort. We verified those savings, and are projecting another 20% saving this year from three more projects, all estimated at under one-year payback.”

But how complicated is the process for first-time clients? It’s a threestep approach which requires strong commitment at every step.

“The first step is an energy audit, to analyse energy usage and identify cost-effective areas where savings can be made. Then we help implement

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the chosen savings projects. Finally, we monitor energy use after the projects are complete to verify that the expected savings have been made,” says Bishop.

And for those short on funds, assistance is available. The government’s Energy Efficiency and Conservation Authority provides, among other things, funding and financial assistance to help New Zealand businesses invest in more efficient products, or switch to renewable energy.

EECA helped the New Zealand pork industry, a major source of exports, to trim its energy spending. An EECAfunded project investigating the feasibility of using pig manure to make biogas has been nominated for a Green Ribbon Award.

New Zealand Pork’s chief executive, Sam McIvor, says the feasibility study shows that biogas technology can work in a range of New Zealand farming situations. [END] SANGEETA ANAND / WRITER Sangeeta Anand, is an international writer specialising in business, supply-chain and technology. She has written for several publications in New Zealand and overseas.

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EXPORTER 51

Yuan appreciation to be token gesture A yuan appreciation is likely to be unspectacular and have have minimal impact on NZ exporters who struggle daily to manage volatile kiwi-US dollar swings.

52 EXPORTER

BY B O B E DLIN

KEY TAKEAWAYS

I

gnore the noise hovering around Chinaâ&#x20AC;&#x2122;s pending appreciation of its currency the yuan. Focus instead on having a good strategy to manage kiwi-US dollar swings.

An appreciation of the yuan, should it happen, will be small in quantum.

In terms of currency moves, what is scarier is the pendulous swing of the kiwi against the Us dollar Bancorp Treasury advisor Cliff Brown expects a revaluation around

> Chinaâ&#x20AC;&#x2122;s revaluation is likely to be small and gradual. > Pay more attention to production and transport costs than to the yuan. > Have a good strategy to cover for US dollar shifts. > Yuan appreciation will be an issue only if China exporters sell less.

1% – “something token just to keep the overseas markets happy.”

Then it would be a slow tightly managed crawling peg, as it was between 2005 and 2008.

Further to that, exporters to China are not directly exposed to the Chinese currency at the moment as they trade in US currency due to China’s exchange controls.

“At the moment we just have to treat it as a US dollar exposure and manage it accordingly,” Brown said (although in some cases the Chinese deal in euros).

Hence any revaluation of the yuan would have only an indirect effect. On June 19th, China announced that it will “enhance its exchange rate flexibility” which to foreign exchange markets says nothing about what its intentions are.

NZ-China Direct caters to the top end of Shanghai’s market in the hotel restaurant business. It does not try to compete with domestic Chinese product (“the volumes would be good, but ew Zealand would struggle to compete on pricing” says general manager Mark Wilson When Exporter talked with him about a revaluation of the yuan, he had just been talking with one of the company’s principals in China on that very ssue.

GRADUAL MOVES But the currency for him is only a general risk, insofar as his company competes against other imported products rather than domestic products. “Everyone is sort of in a similar boat.”

Because the trade is in US dollars, it is also a double currency risk. The company does some hedging, “but we are still relatively new. As volumes build, we will undertake more and more hedging.”

The company’s views on a revaluation had changed in recent weeks – “it looked like there would be a bigger step than a gradual approach. But now we are thinking whatever happens will be more gradual.”

There is no doubt China is becoming a critical market for New Zealand.

Bilateral trade with China has burgeoned in recent years, growing 28% to $3.9 billion in the year to 30 April. China supplanted the US as our second-biggest customer.

In May, the ANZ led a tour of 27 New Zealand exporters there, to help them identify growth opportunities and gain a deeper understanding of the Chinese

market. Two more tours are scheduled for later in the year.

A group of Wellington-region business leaders left for China on 5 June in a delegation led by Wellington mayor Kerry Prendergast.

China’s major trading partners are pressuring it to revalue its exportfriendly (and import-unfriendly) currency to boost domestic consumption.

MONSTER IS KIWI-US MOVES Bank of New Zealand chief economist Tony Alexander highlights these three points: nobody knows when a revaluation will happen; nobody knows what the extent the appreciation will be (but it is likely to be small), and the amount of the change will pale into insignificance beside the weekly

free trade agreement happened, says managing director Philip Bird. “As soon as we signed, phyto issues became a big problem.”

China accordingly is not a major customer. The prospect of a revaluation of the yuan is not an issue for Bird. He is not planning for it, nor bracing for it.

EQUAL FOOTING “When you sell in US dollars to countries like that, you don’t always consider their native currency and its exchange rate versus the US dollar.”

When the yuan is revalued, all Integrow’s competitors in countries like Chile and Peru would be similarly affected, Bird contends. “You can argue it will be equal for everyone…”

He does have a forex strategy for the US dollar. “It’s critical.”

BY THE TIME THEY GET AROUND TO IT, WE WILL HAVE SEEN GREATER MOVEMENTS OF THE NZ AGAINST THE YUAN BECAUSE OF OUR MOVEMENT AGAINST THE GREENBACK THAN THE ACTUAL CHANGE GENERATED BY CHINESE AUTHORITIES.” TO NY ALEXANDER – CHIEF ECO NO M IST, BANK O F NEW ZEALAND

percentage movements of the NZ dollar against the US dollar.

“By the time they get around to it, we will have seen greater movements of the NZ against the yuan because of our movement against the greenback than the actual change generated by Chinese authorities,” he says.

Alexander’s advice is “don’t worry too much about it.”

Other changes – production costs, transport costs – are likely to be more significant.

Harrier Exports trades in premium beef, lamb, venison, seafood and produce.

China takes around 15% of its business. This is increasingly “significantly and rapidly”, said managing director Richard King.

A revaluation would raise issues around how much money Chinese customers would have to pay for imported products. But “I don’t think it would be of huge consequence to us”.

Integrow Marketing Ltd, which exports fruit and vegetables, finds phytosanitary barriers are a greater problem than the exchange rate.

New Zealand apples are favoured more in North China than Beijing, but Integrow can’t send fruit there directly.

“China’s pretty hard going since the

Last year, like a lot of exporters, Integrow was hurt when the dollar moved 40% against it through the export season. “My leaning is to cover a lot more than I have in the past.”

This year the currency has been comparatively stable. “I welcome that.”

Craigpine Timber Ltd supplies branded pine, mostly to Vietnam (about 70% of production) and China (its next biggest customer with around 26%).

Chief financial officer John Price said any impact from a revaluation would be indirect and not likely to be a major issue. But it might affect his business if his Chinese customers were not selling their goods as much into their export markets. “If they are not receiving as much, it would affect the pricing we would get.”

The prospect of a yuan revaluation nevertheless was not causing concerns around the boardroom. “Movements in the US dollar do, though.”

Craigpine has a currency policy in place for the US currency and takes forward cover on its sales. [END] BOB EDLIN / WRITER Bob, a journalist for more than 40 years, writes about trade, agri-business and the economy. He has been editor of NZ Truth, and managing editor of the National Business Review.

EXPORTER 53

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Easi Yo

Percutane

LEN LIGHT, the inventor of the EasiYo System, knows how to make a good yogurt. He was making fresh yogurt for his family of eight children and decided he had to find a better way of making this staple food. He came up with an innovative way to produce yogurt perfect, everytime.

In 1982 Len and his wife Kathy launched EasiYo Products Limited.

Their simple 3 step EasiYo System is now exported to over 20 countries around the world making EasiYo world leaders in this field! The company exports about $23 million worth of products.

The system is made up of the EasiYo yogurt maker, a jar, sachets of real yogurt base and real fruit squirts. The yogurt bases are made from the finest quality New Zealand milk powder.

EasiYo is today owned by Westland-based dairy co-operative Westland Milk Products, which bought the company a few months ago.

The company recently opened its new $4 million processing plant in Albany on Auckland’s North Shore. EasiYo is owned by Westland-based dairy co-operative Westland Milk Products, which bought it three months ago.

In another recent development, the UK Royal College of Obstetrics has chosen EasiYo to be their preferred yogurt brand in a medical promotion to increase the calcium intake of 500,000 pregnant women over the next 12 months.

WARWICK LIGHTBOURNE started his business years ago mixing small batches of his powerful sports treatment formula at home. Today, Clinical Technology’s products sold under the Percutane® brand are found in 10 countries.

Percutane is an effective, fast acting natural cream clinically developed for muscular and joint mobility, flexibility and pain. This year, the company introduced two new products -- Percutane Sports Action and Percutane Joints Action.

Lightbourne is an injury consultant and founder of the Cornwall Injury Clinic (est. 1982).

Clinical Technology specialises in developing high quality natural healthcare products for sports medicine, injury, arthritis, pain relief, rehabilitation and ergonomics.

The company’s products are clinically developed and thoroughly tested prior to market release. Its products have the endorsements from international elite sport individuals and teams.

The products are now exported to 10 different countries.

Its other range of products, sold under the Thermastrap® brand, are designed for improving injury treatment, recovery or prevention, for post operative support or occupational health, arthritis and fibromyalgia, muscle or joint stiffness and pain.

MORE INFO: HTTP://WWW.EASIYO.COM/ABOUTUS/

Terrasaw™ THE TERRASAW™ PORTABLE POWER TRENCHER digs trenches up to 30 times faster than conventional methods.

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The winner of National Fieldays Awards in 2000, 2001 and 2002, this Kiwi invention has created a whole new category of digging tool.

The company believes it has a truly remarkable tool that may be the world’s most portable and versatile power trencher.

The impressive digging speed and sheer convenience of a totally portable machine you can carry with one hand means that large time and cost saving are possible on many projects. The Terrasaw™ is ideal for: cable, pipe and utility contractors (for laying electric and other cable, pipe, telecom services, gas and irrigation lines etc.); farmers and fencing contractors (for laying water pipe, especially to troughs, laying electric fence undergate cable, digging strainer stay blocks); plumbers and drain layers (for supply lines, sewerage and drainage); builders, irrigation installers; gardeners and landscapers.

MORE INFO: HTTP://WWW.CLIN-TECH.COM/

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EXPORTER 55

NZPA/ROSS SETFORD

Budget short of ideas to lift exports The May Budget might have offered some respite for general business but is still short of ideas on how to arrest New Zealand’s decline in global competitiveness or fast-track export growth.

BY B O B E DL I N

T

he 2010 Budget was replete with rhetoric in favour of exporting, but export-sector leaders welcomed it for its boost to business generally – especially business tax cuts – rather than for specific export-encouraging measures The Treasury’s forecasts were encouraging for exporters with expectations of improved market prospects.

Export growth, nevertheless, is forecast to be outpaced by import growth for the next three years (see table).

Catherine Beard, chief executive of Export New Zealand, says the Budget was positive overall for exporters, thanks to the lower company tax rate and incentives for research and development (R&D).

The Budget allocates $321 million for a range of R&D incentives, lifting total spending to $750 million a year. This includes R&D grants and assistance to firms to access new ideas

56 EXPORTER

KEY TAKEAWAYS > Tax cuts lift business sentiment > Opinions differ on R&D incentives > Rules for loss attributing qualifying companies are revised > Accelerated depreciation loading for plant and equipment is removed > Focus is on opening markets for exporters and for stronger commercialisation within Crown research institutes and universities.

DEMAND FOR AGRICULTURE Larger firms with good R&D track records will have greater certainty to invest with a three-year programme while smaller firms without an in-house R&D capability will be co-funded to undertake projects with research organisations.

But Beard told Exporter that in many ways demand from Asia for agricultural products and logs had a stronger bearing on the export sector than anything the Government does in the Budget, “given we have a reasonably good regulatory environment and our fiscal and monetary policy frameworks have served us well through the economic crisis”.

Export New Zealand is hoping for continuing reform and an increased focus on productivity and regulatory responsibility.

Beard notes the Institute for Management Development’s (IMD) latest rankings on competitiveness places New Zealand 50th out of 54 on the export of goods.

This reflected the relatively small size of our exporters (with a few exceptions) and our distance from markets, she says. (For more on this, refer to Viewpoint on page 34) “We … need to build up the size of our non-agricultural exporters to spread our country risk. Difficulty in accessing capital for growth has been identified

NZPA/ROSS SETFORD

as a limiting factor for New Zealand companies and we are keen to work with the government on solutions to this problem.”

New Zealand Manufacturers and Exports Association chief executive John Walley says the Budget did little to turn around the IMD’s competitiveness rankings and New Zealand’s continuing slide due to poor export performance and weak capital markets.

Walley welcomes the reduction in corporate tax and changes to the rules for loss attributing qualifying companies as they apply to property investors.

“But more needs to be done.”

He was disappointed by the Budget’s removal of accelerated depreciation loading for plant and equipment, saying that would be detrimental to business investment, along with “watered down” R&D provisions, leaving firms with less incentive to invest in productivity growth and jobs. Treasury forecasts steady growth (of around 3 %) over each of the next four years.

MARKET ACCESS Finance Minister Bill English’s speech on exporting highlights efforts being put into negotiating trade agreements to improve New Zealand exporters’ access to world markets.

He notes that China had recently become our second-largest trading partner; trade with Asia and the Pacific Rim is increasingly important. Free trade agreements (FTAs) have been signed with Hong Kong and Malaysia.

New Zealand is negotiating FTAs with Korea and India.

Treasury forecasts Annual average % change MARCH YEARS GDP (production) Employment Exports Imports Merchandise terms of trade Current account (% of GDP) TWI

2010

2011

2012

2013

2014

-0.3 -1.5 2.8 -9.9 -6.3 -2.6 65.3

3.2 0.2 1.6 9.0 4.9 -4.4 65.2

3.1 2.0 4.7 8.9 0.6 -6.1 63.5

2.9 2.1 3.5 5.0 1.7 -7.0 58.5

3.0 2.1 3.3 1.5 1.0 -7.3 54.0

The agreement with the 10 ASEAN countries recently came into force while the government is working with the Trans-Pacific Partnership regional grouping, including the United States, to open further markets and opportunities for exporters.

To make the most of these and other initiatives, the Productivity Commission has been established to look into productivity-related matters.

The accompanying Treasury analysis says the forecast recovery is driven by stimulatory monetary conditions, a stronger global economy, an associated rise in export volumes and prices, and high confidence levels.

The economy is forecast to be boosted by significant tax reform in Budget 2010, including the lower corporate tax rate.

Growth in export volumes is forecast to rise as trading partner growth strengthens and the Rugby World Cup in late 2011 temporarily lifts services exports. Continued strong export growth reflects an assumed gradual

depreciation of the New Zealand dollar.

But export volume growth won’t be greater than import growth until 201314 and the balance of payments current account deficit worsens in each of the next four years to -7.3% in 2013-14.

Changes in tax policy, which shift resources to the tradable sector, are assumed to boost non-commodity exports “slightly”.

Our top-12 trading partners’ economies are expected to grow by a relatively strong 3.7% in each of 2010 and 2011, and an average of 3.5% in each of the subsequent three years.

China’s high growth is expected to remain a crucial driver of the global economy while weaker prospects are expected in Europe, Japan and the United Kingdom. [END] BOB EDLIN / WRITER Bob, a journalist for more than 40 years, writes about trade, agri-business and the economy. He has been editor of NZ Truth, and managing editor of the National Business Review.

EXPORTER 57

TOOLKIT

E X P O R T E R ’S

USE USE FUL TOO LS EXP ORT ERS CAN LOU ISE BLO CKL EY LOO KS AT

Deloitte Fast 50

NZ Export Credit Office joins Berne Union Prague Club

IN 2001 DELOITTE established the Deloitte Fast 50, a New Zealand’s index that identifies and celebrates the fastest growing businesses in the country.

As fast-growing companies are the drivers of our economy, the Fast 50 seeks to recognise the innovation and commitment of these small, medium and large businesses.

Now in its 10th year, the index still profiles a diverse range of New Zealand’s fast-growing businesses. Registrations for the 2010 Fast 50 will open on 21 June 2010 and close on 6 August 2010 The winners will be announced on 27 October 2010 at five regional awards across New Zealand.

For more information check out: http://www.deloitte.com/view/en_NZ/nz/ top-of-mind/deloitte-fast-50/2010-deloitte-fast-50/index.htm

THE PRAGUE CLUB is an international group of export credit and investment insurance organisations that helps members to develop their export credit and investment insurance schemes and provides a forum for sharing expertise and information.

“Joining this group gives us access to trade finance information and intelligence that we would otherwise be unlikely to hear about,” NZECO Manager Carmen Moana said.

NZECO is located in the Treasury and its obligations are guaranteed by the New Zealand government.

“For New Zealand’s economic growth to be truly sustainable, our export sector must build extensive and enduring connections with buyers overseas,” Treasury deputy chief executive Gabriel Makhlouf says.

“International connections and information are vital for exporters.

By linking with similar agencies, NZECO is now better placed to help New Zealand exporters become more competitive.”

AN INNOVATIVE ON-LINE SYSTEM has just been launched to help exporters better manage certificates of origin. Independent Verification Services (IVS), a New Zealand Customs designated body for the issue of certificates of origin, has released a unique web-based product for New Zealand exporters.

“Exporting products to a country of 1.3 billion people without having your profits eroded by tariffs is an exciting prospect for any New Zealand business,” says chief executive Peter Webb. “Under the China-NZ Free Trade Agreement (CFTA) and ASEANAustralia-NZ Free Trade Agreement (AANZFTA), exporters can take full advantage of the benefits on offer, including tariff reductions, enhanced regulatory co-operation and, in the case of the CFTA, preferential customs clearance.”

The website is split into three areas – one relating to CFTA, one for AANZFTA and one for non-preferential certificates. Exporters can import and save their product lines along with all consignee and exporter details.

The system not only allows exporters to manage their own certificates, but enables agents, such as freight forwarders and customs brokers, to provide an improved level of service by managing certificates on their client’s behalf.

More info: www.nzeco.govt.nz

More info: www.ivslimited.co.nz or phone 0800 021 169 (+64 7 857 0881).

58 EXPORTER

Certificate of Origin Online System Launched

Air New Zealand inflight mobile text and email AIR NEW ZEALAND will be enabling its new Boeing 777-300 aircraft with mobile phone and data capability, with the first aircraft due for delivery in November this year. Travellers will be able to use their iPhone, Blackberry and GSM mobiles to safely send and receive emails and text messages during flights.

The new service will also enable customers to use Netbooks or laptops used in conjunction with their mobile broadband connection (e.g. Telecom’s T-Stick and Vodafone’s Vodem) to access their emails and internet.

Air New Zealand does not currently plan to enable voice calls onboard and passengers will also be requested to keep their phones on ‘silent’ mode.

Customers will be billed by their own mobile service provider, as with any other international roaming plan.

The new mobile text and data service is subject to regulatory approval.

More info: http://www.airnewzealand.co.nz/pressrelease-2010-air-new-zealand-to-offer-mobile-textand-email-services-inflight

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EXPORT OPPORTUNITIES Below are a number of opportunities from recent visitors to the New Zealand Trade Centre. All of the opportunities are available for $200 + GST each. If you are a paying client and display your products at the New Zealand Trade Centre, ALL opportunities are available at no charge.

www.nzexporter.co.nz

All $200+GST each or free to Trade Centre Exhibitors

Bottled water for Bangladesh PHILLIPINES

MEXICO

Laurie Witham | Jun 30, 2010 | Comments 0 Merino clothing and textile products

Vegetables, honey and chocolate

A recent business woman visiting the Trade Centre from Mexico Trade Centre is looking to import innovative New Zealand products to her home country. This lady has been in NZ for the last ten months to both explore our beautiful country and improve her English.

Currently in Mexico her company operates in various different markets which are not limited too but include residential construction, chemicals, paper, energy as well as water treatment and bottled water.

A Trade Centre visitor from the Philippines is looking for food products to import. This visitor shares his time between NZ and the Philippines and is part of a business involved with the importing and distribution of various types of food products. Of particular interest to this gentleman is honey and associated products, Whittaker’s chocolate and Watties food products.

I haven’t met with this man personally but I have spoken with him on the phone so I’m confident that you will find him both professional and easy to work with.

CHINA

KUWAIT

Raw ingredients for cosmetics required

Natural food products

Trade Centre contact looking for bottled water.

We have been contacted by a business in Bangladesh looking for New Zealand bottled water to import. This company is looking for a high quality product that they can introduce into the local market.

NZTC Visitor Profile

This particular visitor to the Trade Centre is the General Manager of a company that operates actively between New Zealand and China. The business interests of this gentleman are as well organized as they are diverse and range from health products through to wine and electronic components.

The connections / partners in China that this company is associated with have 22 separate agents distributing into 22 different provinces. Needless to say this is a huge opportunity for any New Zealand exporter looking for new markets.

A recent visitor to the Trade Centre from Kuwait is looking to grow his import business.

This visitor is looking to NZ for various products ranging from honey and bottled water through to various types of food products such as Mumm’s sauces.

I met with this man personally and he was very pleasant although communication in the first instance via email, (because of English) may be the best option.

JAPAN

DUBAI

Japanese businessman looking for clothing and jewellery

Gourmet food

This businessman from Japan is looking for accessories which include clothing made from items ranging from, wool, felt and silk. As well as clothing and associated accessories this company is also interested in hand-crafted jewellery made from wood, tree sap, bone and other natural products. It is the intention of this gentleman to visit NZ in the near future and meet with potential suppliers / producers, he intends to visit, Auckland, Tauranga, Whakatane, Christchurch and Queenstown.

We had many dealing before with this particular business man and have always found him to be very proactive and professional and can assure you that you will find it to be no different.

We have been contacted at the Trade Centre by a company operating out of Dubai that imports and distributes gourmet foods throughout the UAE and Singapore. This company has been in this business for a number of years and is now looking to NZ as potential supplier. They are interested in bigger suppliers as well as some of the smaller companies such as Fiona’s Gourmet Foods.

All my dealings with this company so far have been via email but I have found them to be quick to respond to any questions I forward to them and am confidant that any dealing you may have will prove to be no different.

MALAYSIA

TAIWAN

Sugar-free Jams and preserves

Business opportunities

This visitor, from Malaysia is looking for natural sugar-free jams and preserves to export and sees the potential for sugar-free products produced here in New Zealand as a healthy alternative to the other products available. He believes with the rising arte of Diabetes these types of products will sell well. He is keen to talk to both cottage type industries as well as the bigger players in this field.

I personally met with this gentleman and found him to be both friendly and professional, since his return to Malaysia he has also contacted us to try and establish a relationship with a producer.

A Trade Centre visitor from Taiwan looking for multiple products to import. This visitor from Taiwan has been the owner operator of a trading company for the past 25 years and is looking to expand on the range of products he already imports from NZ. This gentleman showed interest in a wide variety of products ranging from bottled water from NZ Premium though to Absolute Aromatherapy and Netherfield Lavender. In-fact he was interested in pretty much any type of natural cosmetics that may be available here in NZ. I met with this visitor myself and found him to be very knowledgeable and easy to communicate with, having a great command of English.

For more information or a personal introduction, please email, laurie@nztc.co.nz or call (09) 366 6879

EXPORTER 61

Useful Websites for Exporters GOVERNMENT-RELATED SITES www.mfat.govt.nz Ministry of Foreign Affairs and Trade website. Trade and economic relations information. www.nzte.govt.nz New Zealand Trade and Enterprise (NZTE) is the Government’s national economic development agency. Our job is to lift New Zealand’s economic performance by helping businesses to grown and compete internationally. www.maf.govt.nz Ministry of Agriculture and Forestry. www.customs.govt.nz/exporters Useful information and advice for exporters. www.nzeco.govt.nz /info@nzeco.govt.nz The New Zealand Export Credit Office (NZECO) provides financial guarantee products for New Zealand exporters and banks. Our products help exporters manage risk and capitalise on trade opportunities around the globe.

NEW ZEALAND / INTERNATIONAL ASSOCIATIONS www.aucklandchamber.co.nz The Auckland Chamber of Commerce encourages and supports sustainable, profitable business growth. The Chamber does this by positively influencing the environment in which businesses operate and through training, advisory services and international trade support. www.uktradeinvest.gov.uk UKTI is able to help companies interested in setting up in the UK by introducing them to agencies and support programmes designed to assist them. www.germantrade.co.nz/services/index.asp NZGBA: German Chamber representative office provides support services to NZ exporters for participation at German trade fairs and/or providing important contacts when setting up business in Germany. www.cilt.co.nz THE CHARTERED INSTITUTE OF LOGISTICS AND TRANSPORT IN NEW ZEALAND INCORPORATED In the 50 years since CILT NZ was formed, which now has an active membership of over 1,000 focusing on improving the quality of Transport & Logistics (Supply Chain). Members obtain industry knowledge though courses, conferences & meetings to benefit and advance our membership and Industry. www.cbaff.org.nz The Customs Brokers and Freight Forwarders Federation of NZ Inc is a national organisation which promotes the interests of all members; assists member companies and individuals working professionally and participating in customs broking and freight forwarding, and is affiliated with the wider transport industry. CBAFF is organised independently of Government by a management executive and initiates discussions with relevant bodies, seeking to develop an environment favourable to our members.

RECRUITMENT www.logisticsrecruit.co.nz Logistics Recruitment are the specialist recruiter for the Import / Export / Freight sector in New Zealand. We have an extensive database of high calibre candidates that will add value to your company. Our rates are competitive and all placements are guaranteed for 90 days. www.teamrecruitment.co.nz Team Recruitment specialise in the logistics & supply chain areas, supplying top quality people from the operational level through to project & senior management for importers, exporters, shipping, international & domestic freight forwarders. “Quality candidates quickly” – this is our purpose & our goal is to deliver this to you wrapped up in outstanding service. Having specialised in this market for 15 years, we have considerable knowledge of the people in these industries, and can add valuable people to your team as your needs arise.

62 EXPORTER

EDUCATION AND TRAINING www.export.ac.nz New Zealand School of Export is the only provider in New Zealand to offer the internationally accredited Diploma of International Trade. Highly practical and delivered entirely by distance learning with one-on-one personal tutoring – we work with you and your business to raise your game.

Course participants have access to our unique online Export Library & Information Service (ELIS) and we offer a range of scholarships – check us out: www.export.ac.nz scm.massey.ac.nz We provide programmes for postgraduate levels and graduate levels. In addition we can provide consultancy and in-house programmes in Logistics and SCM. www.getexporting.co.nz WHK provides expert and practical advice to new and existing exporters and importers. Their specialised export team add insights and value in areas ranging from market entry strategy and planning to budgeting and tax structure. www.ema.co.nz / www.exportnz.org.nz New Zealand’s premier exporting partnership brings you a series of targeted, contemporary, and practical export and international business courses. EMA Learning and Export New Zealand offer workshops in areas such as trade documentation, trade shows, foreign markets and international marketing, plus the Diploma of International Trade (in conjunction with the New Zealand School of Export). www.shortcourses.ac.nz The University of Auckland Business School offers over 200 2-day practical business and management Short Courses each year to provide business and professional people from all walks of life opportunities to up-skill and re-skill. Short Courses also deliver an ever-growing number of in-house courses which are delivered specifically for an organisation, when they want and where they want, with the option to have the courses tailored specifically for that organisation. 0800 800 875. www.LTG.co.nz LTG provides applied, distance qualifications.

Prior learning/experience are recognised.

LTG specialise in bridging qualifications including the CILT(UK) Certificate and Professional Diploma in Logistics & Transport. www.theicehouse.co.nz/ownermanaged The ICEHOUSE Business Growth Centre, Auckland Join business owners and entrepreneurs becoming globally capable with ICEHOUSE knowledge, tools and contacts. www.nzlogistics.co.nz Manukau Institute of Technology’s New Zealand Maritime School is the premier provider of logistics, shipping and freight training in New Zealand. www.learningpost.ac.nz Learning Post – Study at Your Own Pace at Your own Home.

Fit education around your work and family commitments Contact us today for more information 0800895895.

CUSTOMS TARIFF AND FREIGHT CONSULTANTS www.aironaut.co.nz Aironaut Customs is a highly motivated, privately owned, independant customs broker.

WEBSITE DESIGN Zeald.com Zeald.com is one of the fastest growing website design and e-business consulting companies in New Zealand. Our vision is to help small to medium sized companies generate amazing results online using a website and other methods of electronic marketing.

Visit www.zeald.com to book your FREE Audit or Consultation www.bka.co.nz When you’re talking to the world, you need a world class website.

At bka interactive, that’s what we build. We help our clients connect with the world through their websites.

Contact us – www.bka.co.nz

TRADE SERVICES

TRAVEL CONSULTANTS www.chinatravel.co.nz Asia’s 1-stop travel shop China wholesaler.

www.jacanna.co.nz International Logistics Company www.tollpriority.co.nz International Express Courier Nationwide Courier Door to Door Airfreight International. Airport to Airport Airfreight International Domestic Air cargo via Pacific Blue. www.jonesfee.com Pauline Barratt of Jones Fee solicitors, specialises in maritime, admiralty and marine insurance law including: • The international carriage and sales of goods • The law relating to freight forwarders. www.tmnz.co.nz Tax Management NZ is NZ’s original tax payment intermediary dealing with most of the top 200 companies, all of the largest trading banks, and the top four chartered accountancy firms.

We can help you too. www.tabak.co.nz Selling businesses is all Tabak does, which allows it to be fully committed to their clients throughout the sales process – from bringing buyers and sellers together and to achieving to a satisfactory.

www.apx.co.nz Atlantic Pacific American Express (APX) offer a comprehensive corporate travel management service to large corporates and SME’s. APX are an American Express Business Travel Partner, offering innovative business travel solutions to increase savings and control over your travel program, including reporting, online booking tools and access to AMEX global corporate hotel rates. www.chinatravel.co.nz The China travel specialists since 1928 China’s 1-stop travel shop with hundreds of offices to provide local support and service on a 24/7 basis .Phone: 0800 CTS 888

MATERIALS HANDLING www.secureaload.co.nz Cargo care products to protect your exports and now the BIG Red Flexitank for bulk liquid. www.liftrucks.co.nz Liftrucks NZ Ltd: Forklift sales and rental from 1 tonne to 50 tonnes.

Petrol/LPGas, Diesel, Electric. Warehouse equipment to Container handling. Brands: Komatsu, Still, Hoist. Tel 0800 62606

FREIGHT FORWARDERS

INSURANCE www.chartisinsurance.co.nz As a world leader in insurance, Chartis has been helping New Zealand exporters navigate the ever-changing landscape of risk and confidently pursue their goals since 1970. Our unrivalled global network, across 160 countries and jurisdictions, means we can respond whenever, and wherever you need us.

INTELLECTUAL PROPERTY www.baldwins.com Turn ideas into profit through sound IP management. Whether you’re looking to commercialise, develop, protect or enforce your IP rights call 0800 Baldwins. Mention ‘Exporter’ when you call to receive a free consultation with our experts. www.ajpark.com A J Park are the clear leaders in IP. They provide a full range of IP services, including trade mark, patent, and design protection, copyright advice, commercialisation and litigation. www.everedgip.com EverEdge IP provides a comprehensive range of intellectual property related services to corporations, research institutions, individuals and investors with the objective of assisting organisations and individuals to generate and maximise the value of their intellectual property. www.piperpat.com If you need to protect your brand or create a brand, or if you need to know whether you can export your products freely without infringing other protected products or brands, PIPERS might well be your first stop and not your last hope. www.jaws.co.nz James & Wells Intellectual Property is New Zealand’s most dynamic firm of patent attorneys, trade mark specialists and intellectual property lawyers. Our clever thinking sets us apart in assisting clients to develop and grow their businesses.

www.tnlintl.co.nz TNL International provides seamless, door to door services to meet our customers’ individual requirements. We specialise in offering importers and exporters tailored solutions and not a one size fits all approach, often taken by our competitors

TRADE CREDIT www.atradius.co.nz Company description: Atradius provides trade credit insurance and collections services worldwide with a presence in 42 countries. Its products help protect companies from payment risks associated with selling products and services on credit. www.redwoodcredit.co.nz Specialist trade credit insurance (cover against the failure of a buyer to pay) Broker and consultant.

SHIPPING COMPANIES www.swireshipping.co.nz/web/index.jsp Swire Shipping is New Zealand’s leading multi-purpose liner service connecting New Zealand with Australia, Papua New Guinea, East and South East Asia, North Asia, Noumea and West Coast USA. Services provide extensive port coverage catering for breakbulk, containerised and project cargos

INDUSTRY TRAINING ORGANISATIONS (ITOS) www.tranzqual.org.nz Tranzqual is the Industry Training Organisation (ITO) responsible for setting world-class training standards for the commercial road transport and logistics industry sectors.

PORTS www.lpc.co.nz LPC is the trade gateway to the South Island and a world-class supplier of port services. LPC offers a full array of shipping services to exporters and importers, 24 hours a day, 365 days a year.

exporter is not responsible for the contents or reliability of the websites listed above and does not necessarily endorse the views expressed within them.

For more information regarding these listings please contact the listings directly.

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Using your overdraft for international trading?

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If you’re a small business trading overseas, you’ll know that managing your cashflow can be tricky at times. And if you’ve been paying for goods using your overdraft, now’s the time to look at a better option. Because with Westpac’s trade finance solutions, we can help you: Ú

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Westpac’s current lending criteria apply to all applications for finance. No member of the Westpac group accepts liability for the losses suffered as a result of it converting currencies and any exchange risks from the conversion of currencies is the responsibility of the account/deposit holder. Some services may be provided by Westpac New Zealand Limited. Westpac Banking Corporation ABN 33 007 457 141, incorporated in Australia (New Zealand division).