issue 11 JUNE quaRter 2009
export opportunitIes on every page
Banks slow to budge 60% of exporters surveyed still paying the same old rates despite OCR plunge
• • Dry spell hits trade credit insurance seekers • • Lessons on selling to the Indians • • Recession and its impact on your IP • • Stubborn NZ dollar riding on risk takers’ fancy
The New Zealand International Business Awards recognise success. Just another way we help New Zealand exporters.
Businesses are working harder than ever to do well in the current global environment. So ANZ is proud to be the Strategic Partner of the New Zealand International Business Awards organised by New Zealand Trade & Enterprise. These awards celebrate the international success of New Zealand businesses and recognise professional excellence and innovative practice. And as New Zealand’s leader in Trade Services*, we think that makes sense. If you would like to see how access to our global network could help your business, visit anz.co.nz or phone Iain Leech on 09 374 4934. Build your export or importing network faster by using ours.
* ANZ National Bank Limited was rated No.1 provider of Quality of Trade Services Advice; No.1 provider of International Payments Processing; No. 1 provider of Trade Services and No. 1 provider of Foreign Exchange in the Peter Lee Associates Large Corporate and Institutional Relationships New Zealand Survey, 2008. Conducted from April to May 2008. ANZ, part of ANZ National Bank Limited.
AZA0267
issue 11 JUNE quaRter 2009
COVER STORY Banking/Finance Banks slow to budge: 60% of exporters surveyed still paying the same old rates despite OCR plunge
04
FEATURES LOGISTICS The freight challenge MANAGEMENT A few good men Eye on Government The morphing of NZTE’s funding mechanism LOGISTICS Control your goods AWARDS Enter the kiwi dragon: Our companies succeeding in China
10 13
LOGISTICS Moving an envelope, moving a 40-footer
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TELECOMMUNICATIONS On the road to nirvana with mobile broadband?
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HARDWARE Laptops: Spoilt for choice
60
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CURRENCY NZ currency riding on risk takers’ fancy CURRENCY A game of averages Profile e-Biz Watch: Website assessment for exporters
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REGULARS Publisher’s view / say it like it is Mike Taillie Line by line, page by page
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Viewpoint Dr Ganesh Nana Exports are important – yeah right!
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Jon Mayson 49 The task of creating mega exporters PRODUCTS Stage 48 Global Innovative NZ products seeking a
worldwide audience
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Exporters’ Toolkit Products & services you should know about
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TRAVEL WISE Travel tips for the roving exporter Directory Useful Websites: Information for travellers and exporters
Eye on Government Little cheer for export sector from National LOGISTICS Tossed in a sea of red Intellectual Property When it’s not okay to use your kiwi name offshore
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INSURANCE The trade credit risk vortex EXPORTER EDUCATION The passage to India Profile Contract Logistics: Warehouse and distribution options into the Australian market
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COST MANAGEMENT Have experts will travel
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PROFILE A J Park: The weightless way to export credit management Collecting my overdues
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Editor: Yoke Har Lee, (E) yokeharlee@exportermagazine.co.nz 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 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 Printed by: RED_i, Phone: +64.9.631.1410, www.red-i.co.nz Copyright©exporter
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EXPORTER 1
> PUBLISHER’S VIEW
Say it like it is mike taillie EXPORTER MAGAZINE / publisher@exportermagazine.co.nz
Line by line, page by page
T
he economy may be suffering but there are businesses out there that are still doing very well. Lego had a record result. Apple, McDonald’s, Wal-Mart have also beaten the odds. Closer to home, I have been talking to a bunch of exporters who still have demand that exceeds supply. But for many of us we need to take a serious look at our businesses if we are to survive the onslaught of this recession. I am often asked how I cope. What I am doing is a no brainer. I simply follow the old cliché — to look at my business line by line. This expression comes from the accounting world where one takes a close look at every line of revenue and every line of expense to see what can be changed for the better. It’s not until we take the time to do this that we find some serious potential savings. I have also taken a step back from the detail and asked myself: ‘are there businesses, suppliers or customers that I can talk with that would present appealing strategic alliances that did not seem necessary during normal times?’
2 EXPORTER
By strategic alliances, I mean, opportunities to split delivery and payments, asking a supplier to store goods rather than pay warehousing, joint purchasing, and sharing of premises among others. Currently I am having great conversations with companies willing to come to table to discuss ideas that I am sure 12 moths ago would have been brushed off. So pick up the phone – you will be surprised. Now for examples of how ‘line by line’ can help. A line-by-line review takes a look at both revenues and expenses. You will be shocked at how much you can save on your phone bills. Compass Communications has a fantastic package out for businesses at the moment – it appears to beat all others from what I can see. Sheet feed printers are quiet at the moment so make sure you always get at least three quotes. Design of packaging should be reviewed. Someone told me DB Breweries saved a fortune when they reduced the number of colours used on beer cartons – and no one even noticed. Huge savings can be made by going from four colours to two colours. We have had timers installed on some of our air conditioning units. I have
joined barter card and been surprised by what I can purchase and sell using trade dollars. This is great for staff bonuses as well. I know of one business that almost converted all of its advertising to barter – this is close to $1 million. It’s sort of like a large contra club. It works as long as you don’t waste the dollars. With the property market pretty soft you should be taking full advantage of any new leases you are about to sign. You should certainly be looking for longer rent-free periods, better rent review clauses and even getting paid key money for signing up a longer lease. My big one, as I have written about before, is talking to your bank. If your business debt is secured against a house then insist on the home loan rate not a business rate. The risk to the bank is a home loan risk not a business risk. To wrap it up, ask all members of your team how they feel you can make some savings — you will be surprised what you do not see yourself. All the best and I like you, are hoping that these “green shoots” are real! [END]
Exporting with New Zealand Post is much more than just sending letters, parcels and packages. We can send your exports by courier services or by freight – express, air and sea. We can help you with all the infinite little details like duty drawback and customs clearance. We can even help you with any imports that you need for your exports. It doesn’t matter what you export, where you export, how big or how small it is, New Zealand Post can make it happen. To find out how, call us on 0800 276 7848 or visit www.nzpost.co.nz/export
R+R 20008
You can export the hard way. You can export the easy way. Which would you prefer?
4 EXPORTER
> BANKING/FINANCE
Banks slow to budge Banks have been slow in passing on lower rates to businesses despite the breathtakingly low official cash rates currently seen in New Zealand. by V irginia Mc Millan
“O Photo: istockphoto
ur rates haven’t come down” is the message from more than half the Exporter magazine readers who answered an email poll last month. Sixty per cent of the 214 respondents to our opt-in survey (not a representative sample) have not yet seen a fall in their business interest rate. Twenty-eight per cent report they’re on a lower rate. Most of these say their rates are down by one to four percentage points, with some enjoying larger reductions – for example, one had seen a gradual fall from 12% to 6%. For those recently obtaining new loans, rates mainly hover between 6% and 10%.A cluster appears around 12%-14% and a handful of respondents are paying either side of 5%. Some outliers are paying excess on their overdrafts at high rates (15.95% and 26% are cited) and one is
KEY TAKEAWAYS >> Banks have been slow to move lending rates as their wholesale cost of funds may be still high. >> Some 60% of those who responded to Exporter’s survey have yet to see lower rates. >> Most businesses appear to be paying between 12 and 14% with some paying on either side of 5%. >> Banks are now less flexible in their lending compared to 12 months ago.
using factoring-style facilities at 16% (“ouch”, he comments). Banks are seen as cautious. “Sympathetic, but not obliging,” says one reader. Another has had bank lending pulled and gone elsewhere at a higher rate. Our respondents are contending with all this amidst a global recession and
when the official cash rate (OCR) is breathtakingly low compared with two years ago. The OCR is at 2.5% as against July 2007’s 8.25%, and down 2.5 percentage points since December 2008. Many exporters want a share of the upside and are annoyed when banks show added caution (“this really grates,” writes one respondent). These concerns have been picked up by the Reserve Bank, which last month reminded banks they should continue to lend to creditworthy borrowers and avoid excessive tightening of credit conditions. Deputy governor Grant Spencer said the OCR had had some impact on business rates, noting many of these were down but adding the bank was “disappointed with the response to date”. But he said banks also had to keep up their capital buffer against further international deterioration. Banks say they are competing strongly for money themselves – in particular, for term deposits from Kiwi mums and dads.
EXPORTER 5
Are the banks creaming it?
Twenty-eight per cent of exporters surveyed say their bank rates have moved lower. Most of these say their rates are down by between one and four percentage points, with some enjoying larger reductions – for example, one had seen a
Reserve Bank adds up latest revenues, profits and other financials of the main trading banks in New Zealand. Go to:
gradual fall from 12% to 6%.
Source of funds Westpac sources two thirds of its borrowings from the domestic retail market and is paying 4.5% on some of this money. Ian Blair, general manager business banking, says Westpac’s term-deposit business “costs us money” but it’s generally still cheaper to raise funds at home than offshore. “The other issue is [scarcer] availability of offshore funds.” ASB says its net interest margin is under pressure and reducing. Banks are making good profits – albeit, down 20% year on year in the case of ASB, as head of relationship banking James Mitchell points out. The obligation remains to produce a return for shareholders, he says. But why not cut some slack to businesses hurting in this recession? Exporter magazine asked. Mitchell says: “To keep operating in the market, we need our financial strength to have the capacity to raise capital to continue to lend money.” In the United Kingdom, inability to raise capital led to government stakes in some banks – a cost taxpayers must bear. “You don’t want your banks to be other than sound,” says Mitchell.
Rates need to fall Economic Development Minister Gerry Brownlee agrees. He says he has not been given advice on banks’ margins but would hope they recognise the government has taken measures to back them, “on the basis that we expect them to back the New Zealand economy”. Brownlee says the Reserve Bank governor has been clear he wants rates to fall: “The banks need to respond to that.” On credit availability to businesses, he says banks are applying longestablished criteria, but a little less flexibly than 12 months ago. Interest-rate commentator Bernard Hickey is critical of the banks for the contraction in their lending to businesses this calendar year. He points out the total is down $1.777 billion or 2.2% to $78.493 billion in April. Lending to households is more than twice that quantum, and is growing,
http://www.rbnz.govt.nz/statistics/ banksys/g3/data.html (or the short link: http://bit.ly/jjBA)
Bank rates to business vs banks’ right to profit What are New Zealand banks charging business? Financial news website interest. co.nz updates rates regularly. Go to: http://www.interest.co.nz/businessbase-rates.asp (or the short link: http://bit.ly/5HFHW)
but it supports an unproductive sector, Hickey says. About 80% of bank lending to small business is housing-secured, homes being seen as good security. As house values fall, particularly in Auckland,
Some outliers are paying excess on their overdrafts at high rates (15.95% and 26% are cited) and one is using factoringstyle facilities at 16% (“ouch”, he comments).
90-day rates 8%
7%
Official cash rate (OCR) 90 day bank bill rate
6%
5%
4%
3%
2%
2008M10
2008M11
2008M12
2009M1
2009M2
2009M3
2009M4 Source: www.treasury.govt.nz
6 EXPORTER
Interest-rate commentator Bernard Hickey is critical of the banks for the contraction in their lending to businesses this calendar year. He points out the total is down $1.777 billion or 2.2% to $78.493 billion in April.
this may become more problematic for companies seeking to expand. The amount of equity required will be more critical, Ian Blair suggests. But, with the downturn affecting sales, businesses unable to show strong interest cover “aren’t coming to the table”, he adds. Non-banking financial institutions fill a gap for some but, as Hickey points out, they commonly seek security in plant and equipment. Starved of cash? Is New Zealand business being starved of cash? Blair says he hasn’t seen it. The Reserve Bank and Minister Brownlee both note anecdotal evidence of difficulties obtaining credit. Brownlee reckons when he has taken such matters to the banks, they are prepared to have a look. Blair says. “We are still seeing opportunities, which is great, and we’re
still funding them. But people are more conservative and that is a rational response [to the recession].” How typical are the businesspeople, like some in our survey, with rates at a scary 12% or 13%? ASB’s Mitchell says: “They would be those who had fixed and were still to roll over, but they would be unusual.” He reckons about 3% of small business clients would be paying that much. Most small- and medium-sized enterprises with ASB are fixing now for a year at 6.5% and 7% if secured by property. If secured by cashflow or a deed over the company, the pricing would be higher. Blair says 75% of Westpac’s business customers are on fixed rates. Rolling over now would give dramatic reductions. “We have reduced our variable rate by 3.5 basis points since rate-easing started occurring in July last year.”
Kiwibank says its base rate for businesses is 9.45%. The rate is riskadjusted for some, but 70% of business clients are on it (secured by residential property). “Our rates have been coming down about two percentage points in the past three to four months,” says Kiwibank external relations manager Bruce Thompson. “New business lending would depend on the nature of the business – it would be the base rate-plus.” As to the future, and whether a further OCR cut will stimulate rates reductions, Brownlee says that’s not clear, as many factors are involved. A tiny light at the end of the tunnel might perhaps be discerned in a comment by Reserve Bank economist Bernard Hodgetts last month. He says a “pipeline” effect – from the OCR cuts already made – is still to come through in mortgage and business rates. [END] VIRGINIA McMILLAN / writer Virginia is a freelance journalist specialising in business and health stories. She has worked as a reporter, sub-editor and editor and as assistant editor at The Independent.
Rule the world.
ASA4532\TBWA
At ASB, we want to arm you with the right finance and risk management tools to help you hit the biggest market there is – the world. We know this is important for your business, so with the backing of a global banking network, our team can help tailor export banking solutions to suit your needs. Talk to an International Trade Services specialist on 0800 487 272 and take on the world. www.asb.co.nz ASB International Trade Services opening and lending criteria and terms and conditions for each specific product apply and are available from any ASB branch.
EXPORTER 7
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.nztc.co.nz
All $200+GST each or free to Trade Centre Exhibitors
Tahiti
NEW ZEALAND
Seeking wide range of New Zealand products
Wanting to export fruit, wine, honey and other products
This visitor is opening a third retail store in downtown Papeete (Tahiti) and is seeking a wider range of products from New Zealand. They expressed a strong interest in a number of products on display and also women’s clothing, handbags, shoes, kids clothing, home decoration etc.
Newly set up an export and distribution company wishing to export New Zealand wines, Manuka Honey, fresh fruit, seafood and meat to overseas markets targeting the Middle East, South Asia, India and Europe.
Reference 2424
Reference 2428
USA
India
Seeking New Zealand cheddar cheese
Herbal clinic after New Zealand products
This gentleman from the USA is interested in NZ Cheddar cheese (20kg blocks) for Trinidad. He has contacted Fonterra but found it a nightmare and is looking for alternatives.
This visitor is the Director of a large and successful herbal clinic in India. He is extremely keen to discuss the many opportunities of exporting your product to his herbal clinic.
Reference 2425
Reference 10308
Saudi Arabia
China
Looking for a wide range of products
Variety of products wanted
This visitor is a broker and general manager of several companies and his colleagues are also looking for products to export. He is looking for cement, wheat, dairy, steel, coal and gold. His colleague is looking for fruit, vegetables, fresh beef and live goats.
This visitor is keen and very motivated to export your product to China. He is Managing Director of an investment company and is looking for New Zealand red wine and other wine, olive oil and aluminum.
Reference 2426
Reference 10081
USA
NETHERLANDS
New Zealand merino wanted
Organic produce wanted
This marketing manager at an American company with New Zealand offices is looking for pure New Zealand merino to make baby garments in New Zealand then export and distribute throughout America. A good contact for the American and European market.
This visitor is the Director of a large international organic company with offices in Germany, Holland, Italy, and France. He is currently looking for New Zealand organic produce.
Reference 2427
8 EXPORTER
Reference 9890
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For more information talk to our international services team on 0800 222 490 or visit our website. Kiwibank’s Disclosure Statement is available e from your local Kiwibank or at www.kiwibank.co.nz. Kiwibank Limited.
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Soar through a shaky world The Bank For Our Times
> LO G I ST I C S
The freight challenge Exporters are not seeing sustained savings in transportation costs despite some downtrend seen in sea and air freight charges while trucking costs have headed north. By M ary M ackinven
K
iwi exporters are enjoying freight rates that are as good as they have been for a long while, says Agility Logistics chief executive Anthony Browne. Lower freight rates are due to reduced fuel surcharges in all transport modes and increased competition in recent months, coupled with the more favourable exchange rate. “However, there may be challenges ahead if services are reduced to New Zealand,” Browne says. On the domestic front, Browne adds there is still no change to a business’ considerations for using road, rail, air or sea to get goods to ports or international airlines. “For example, there is still a long way to go before the rail service is brought into the new century. It’s good for bulk (large quantity) items such as coal,
10 EXPORTER
KEY TAKEAWAYS >> Freight rates have dipped due to favourable exchange rates, reduced fuel surcharges in all transport modes and increased competition in recent months. >> Trucking costs have gone up by an average of 6% from 15 months ago. >> Fuel prices are not necessarily a driver of costs in international trade. >> Airfreight charges which have seen huge drops are starting to level off.
dairy or timber, but not containerised manufactured items unless the exporter has a long lead-time and long distances to freight the goods - then rail can come into its own.”
Coastal shipping currently offers limited competition to road and rail freight even for long distances, he says. On the roads, the economic downturn and road user charge data shows the amount of freight moving has fallen, says Tony Friedlander, chief executive of the Road Transport Forum of New Zealand. Receipts for road user charges (truck trips) decreased by 7% from March 2008 to 2009. But people are not moving to other modes, just slowing down [their operations], he says. The Forum is responding to a welcome review of road user and transport charges, which are at least 30% higher than in Australia. “Clients pay for this. While fuel prices have danced around and come down a bit, other costs such as replacing vehicles, tyres and batteries have gone up at least 6% on average on about 15 months ago.”
Find a truck The downturn has lead to a new web-based freight service, Findatruckload, setting up to link empty trucks with businesses wanting competitive quotes to move their goods. When the exporter or transporter agrees on a price, a success fee of 6% is paid by the seller, the person offering a service/ item for sale, as on TradeMe. The person advertising to ask for help (in this case to provide their empty truck to move goods), pays the fee. Managing director Andrew Bishop, who has a transport background but does not own any trucks, says the idea works overseas and aims to eliminate empty truck running therefore reduce costs and vehicle emissions. AIRFREIGHT MORE AFFORDABLE Airfreight is starting to pick up for DHL Express after a “savage drop” in the last few months, says Gary Edstein, senior vice president of DHL Express Oceania, based in Sydney. “Exporters have been consolidating [their shipments] more and looking at alternative transport, for example, moving from express to air or air to ocean.” The fuel surcharge dropped dramatically in the past 12 months, from 21% in May 2008 to 8% this May. “So the cost has come down for everyone,” Edstein says. Don Braid, managing director of
Findatruckload managing director Andrew Bishop.
Mainfreight Group agrees the time is ripe for exporters to negotiate prices with freight forwarders. “It’s a tough market; shipping space is very competitive and where there’s an abundance of space [we are working] to get the right price.” Shipping lines under pressure Container rates have fallen to unsustainable levels leading to ships being laid up, services combined and stopped. “Worldwide operators are having extremely poor results; some observers talk about failures, says Maersk New Zealand country manager, Julian Bevis. “It’s a bleak picture, though it varies from market to market. Asia to Europe especially is taking steps to reduce costs and increase freight rates [to customers]. In New Zealand’s past few months, peak season exports such as dairy, fruit (apples) and meat have held up pretty well. Maersk provided four to five extra loaders (vessels) to cope. “This is a very important market for Maersk Line because of robust volumes here and very important, big customers [in meat and dairy]. ”Fluctuating oil prices have been a problem in the past but the company is now in a position to properly reflect that [with a pricing mechanism], Bevis says. But fuel prices are not necessarily a driver of costs in international trade, according to Geoff Popham, export business development manager at Burnard International. “It affects the price of shipping and we see some reductions [in freight charges] around the world in some areas but not in others because of competitive elements. For example, shipping companies have reduced their capacity by taking ships out of services to maintain demand and keep prices up.” Other transport risk factors include ever-changing supplier charges, exchange rates, congestion at certain ports, freight forwarders folding up and canal charges escalating [at Suez and Panama]. “The freight market is very unstable so exporters should examine their own supplier costs and ensure the best deal, as they have to do all the time,” Popham says. [END] MARY MacKINVEN / writer
Don Braid, Mainfreight Group managing director.
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.
Q&A Q. Has the recent drop in fuel prices changed your freight costs? A. Most of the 214 exporters in Exporter’s survey said they have not enjoyed any cost savings from lower fuel prices. Others said reliability and other factors over-rode cost.
• “Freight prices have not dropped anywhere near as much as fuel prices – no changes for any services we use as barely any freight costs have changed.” • “No, we have not had any drop in prices passed on.” However, the following comments indicate some are benefiting from the changes, especially in regard to airfreight. • “Generally no, however, we are now showing more interest in some of the smaller deals that would require airfreight. In the past airfreight was not practical because of price.” • “We have changed companies and also now can airfreight if required.” • “We use airfreight more to Pacific Island destinations; airfreight can be cheaper than sea freight; yes, marginal shipments by sea now go by air.” • “All [freight providers] are very competitive now.” • “There’s certainly more interest from [some providers] to quote.” • “Has not caused any changes, however, it’s certainly applying pressure on freight forwarders to pass on the benefits.” • “We have just sent our latest shipment to Sydney via Tauranga instead of Auckland, saving in freight and port charges.” • “The carrier adjusted their fees for fuel then we can adjust for the clients.”
EXPORTER 11
> M A N AG E M E N T
A few good men Good export managers with great experience can still command healthy compensation in a recessionary environment where salary budgets are being trimmed and job applicants far outnumber the positions available.
I
By Yoke H ar L ee
t is without a doubt an employers’ market. A company advertised one vacancy at the junior level and was deluged by 1,500 applicants. This may be an extreme example but recruitment officials have been seeing a dramatic rise in job applicants in the market. Salary budgets are also definitely being trimmed over the last 12 months as employers attempt to manage operation costs in an economic downturn. “What we are seeing – over the last 12 months – is that when organisations were asked to project salaries six months forward, each time we went back, there has been a moderation in
the forecast,” says Rob Knox, leader of Mercer’s information business across Australia and New Zealand. Law of supply & demand Mercer’s Total Remuneration Survey 2009 reported that 8% of organisations plan to trim their workforce, and 17% have frozen new hires, according to the New Zealand Herald website. The law of supply and demand dictates that when supply is ample, price falls. Employees changing jobs would find it hard to get a better base pay due to the market being flooded with workers looking for work. “Salary levels are not going up if people are changing jobs but where some companies have a little room to move (on their salary levels), it would be
KEY TAKEAWAYS >> Hiring an export manager? Explore more variable reward rather than fixed pay. >> Expecting a deluge of applicants? Automated systems can save you time/ money. >> Export companies with healthy profits should consider selective hiring as most employees are ready to lower salary expectations. >> Don’t forget to focus on staff retention strategies for when the economy picks up steam.
EXPORTER 13
targeted at skilled workers,” says David Lowe, manager (Employment Advisory Services) at the Employers and Manufacturer’s Association (Northern). However, at the higher end of the market, where exporters need skilled international business development and international sales expertise in their specific industries, good candidates are still hard to come by. Salary levels for these skilled people will hold ground provided employers are unable to find similar expertise in the market. Knox says based on the overall market movements, compensation for
experienced sales professionals rose in the order of 7.5% through 2008 in Australia and 6.5% in New Zealand for the same period. However the market has shifted noticeably lower since the latter part of last year, he adds. Variable pay Employers are also seeking to better utilise their pay expenditure by focusing compensation for sales professionals on variable pay while employees in difficult economic times will be more inclined to be looking to build their package around fixed salaries, Knox adds.
power but there is a split in the market – in some highly skilled roles, where it is still hard to get suitable applicants, employees still hold a balance of power, Oldham adds. Hard to find Top talent in sales and international business development roles are still hard to find, says Pete Macauley, associate director and country manager at Michael Page International. “Candidates with a strong track record in international and export sales – there is a limited pool you have to work from in New Zealand. Michael Page and the
Export managers worth their salt? Here’s what our survey respondents say: • “Export managers – (are) a necessary evil. Some not so good and effective ones think they are worth a huge salary because of their seniority but don’t always have the energy and ability to think outside the square in a new market climate.” • “The market is constantly changing and our staff are aware of the current climate in the industry so no wage expectations by any one at the moment.” • “Market has not changed. I think too many of the best people have left the country, leaving few very good people but a large pool of average people.” • “Market has decreased - wage expectations have not gone down to match sales. But very good response for job positions, both quantity and quality.” • “We have dropped back on staff, everyone else happy to have a job.” • “There is an increase in need, with less budget to fund it! Catch 22!” • “Yes, our market has changed, it has slowed very much. Wage expectations are up. It is a bit of a balancing act at present, to keep staff, employed with the current market, we are doing our utmost to retain them.”
EMA Northern’s David Lowe (left) and Pete Macauley, associate director and country manager at Michael Page International.
The scale has definitely tipped in employers’ favour, says Simon Oldham, sales and marketing manager at Q Jumpers, an online recruitment service provider. “It has been an interesting nine months. There is a sudden shift in power from employees to employers. “We have been tracking the number of applications per role – and the number has risen sharply. The national average in 2008 around this time was 13 applications per role, now it is 35.” Due to the surge in application numbers, Q Jumpers has been seeing increased interest from employers using its automated recruitment system to help filter and shortlist candidates and provide automatic response to applicants. Employers definitely have more
clients we partner with are continuing to have success in sourcing talent from offshore markets,” Macauley adds. Employers have also been less likely to look overseas for skilled roles “which is a bit of a shame,” Oldham says, as overseas candidates brings diversity and relevant skills to New Zealand. One recruitment company, however, recently went across the ditch to Australia, to hire an international marketing manager as no suitable candidate could be found in New Zealand. Patrick Teo, CEO of BCS Group, a turnkey provider of airport management systems, reckons that New Zealand has an attractive talent pool with international business but not necessarily in the type of industries employers are seeking.
What we are seeing – over the last 12 months – is that when organisations are asked to project salaries six months forward, each time we went back, there has been a moderation in the forecast.” Rob Knox / leader of M ercer’s information business across Australia and New Zealand
14 EXPORTER
One company in Auckland has found an innovative way to help trim staff costs. Six of its employees, men around the same age who account for a significant amount of fixed costs, have opted to forgo one day of pay every second Friday. What do they do? They all go fishing in their boss’ boat.
Here, it is important for the company to have a good HR policy in place to attract new talent to the company. At BCS, although the new additions may not have the requisite industry experience, people within the company with industry knowledge have been willing to share. “This worked for us primarily because of the culture within the company,” Teo adds.
Salary levels are not going up if people are changing jobs but where some companies have a little room to move (on their salary levels), it would be targeted at skilled workers.” David Lowe / manager (Employment Advisory Services) at the Employers & Manufacturer’s Association (Northern)
Macauley says he hasn’t seen employers lowering salaries on offer where there is a distinct need to fill a role requiring export-related experience and specific skills. And those who already have good business development people are now focusing on retention strategies and organisational developmental strategies to ensure they provide career paths for their existing talent and reduce the risk of losing them to competitors, he adds. Where a candidate has been in the market for three to six months, there is greater willingness for these candidates to take on lower level roles and on a lower salary, Macauley says.
Candidates with a strong track record in international
Positioning for recovery Lowe from the EMA says there is indication that companies may be selectively hiring, positioning themselves with the right people for when the economy picks up. Knox from Mercer is of the same view adding that companies are always on the lookout for key talent. “In this market, however, they can be more discerning about how they do this. While pay pressures have eased, companies will still want to pay competitively, keeping an eye on current circumstances but mindful of the need to manage retention as business conditions improve,” he adds. [END] YOKE HAR LEE / writer
and export sales – there is a limited pool you have to work from in New Zealand. with are continuing to have success in sourcing talent from offshore markets”. P e t e M ac au l ey / asso c i at e direc tor a nd cou ntry ma nag e r, Mic ha e l Pag e International
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.
It doesn’t matter what you export, where you export, how big or small it is, New Zealand Post can make it happen. Call us on 0800 276 7848 or visit www.nzpost.co.nz/export
EXPORTER 15
R+R 20008
Gone fishing
> E Y E O N G OV E R N M E N T
The morphing of NZTE’s funding mechanism The old market development grant scheme is being tossed out. In place is a new scheme which aims to be more targeted in its approach to helping companies reach new markets. By V irginia McMillan
E
xporters’ love-hate relationship with the market development grant is all but over. While Exporter has heard from companies who valued the New Zealand Trade & Enterprise (NZTE) grant scheme’s dollar-for-dollar support for forays into new markets, there were also complaints that “box-ticking” and compliance were a drag on time and resources. Now the scheme is morphing into a new fund, its name not yet decided as the magazine goes to press. This time, the focus will be on return on investment for taxpayers’ dollars expended. The old grant scheme closes this year, after companies already in the system have had their final applications processed. The new fund will feed out $30 million a year, less than the former scheme under Labour but with a more strategic approach. Applicants will fit one of two funding streams. The first will apply to “key
16 EXPORTER
KEY TAKEAWAYS Out with the old, in with the new >> Market development assistance grants are being phased out. >> A new fund will provide up to $1 million (including GST) for “key accounts” or up to $500,000 for “pipeline clients” (over five years). >> Companies will match the grants with their own investment. >> The overarching theme will be long-term benefit to the company and to New Zealand. >> $30 million annually will be up for grabs.
accounts”, which will be considered for up to $1 million (including GST); the second, to “pipeline clients”, who will be eligible for up to $500,000. In each case, the maxima apply in a five-year period and could be given
in one year. Companies will match the grants with their own investment. Grant McPherson, NZTE group general manager for business solutions, says an emerging exporter planning to attend a trade show may still be in line for a grant. Connections But the new approach will consider how the company is connecting with the new market and with other NZTE services, such as those in offshore offices, and how the show fits the company’s three-, five- or 10-year goals. The overarching theme will be longterm benefit to the company and to New Zealand, says McPherson. The scheme being phased out did not require companies to assess factors contributing to a marketing exercise’s success, nor did it require NZTE involvement via other services, he says. He admits form-filling could become cumbersome, and multiple or different funds might have been accessed, each with different criteria. There was also a “first come, first
Fans of the old scheme Auckland-headquartered storagesystems manufacturer Lundia has found market development grants “instrumental” for high-profile advertising and website creation in its newest market, Dubai. Managing director Monte Stone says the company is disappointed with the grants’ demise. “We know the government has to trim its sails but maybe this is something that should be maintained.” He was commenting after Economic Development Minister Gerry Brownlee announced the canning of the old scheme but before details of the new one became available. Emerging export company Roundy, run by Wellingtonians Walter and Margaret Hensch, received a market development grant to help them present the patented Roundy plasterboard technology to interested parties in Korea. Walter Hensch says it’s understandable the government wants to prioritise this spending. The couple are grateful for the assistance and say they have also been helped “tremendously” by their NZTE client manager. [END]
SDC18848
served”, entitlement approach that won’t be seen with the new fund. The help will be more disciplined, the approach more planned and the probability of success higher, McPherson says. Each application will be assessed on its merits, and grants made for projects or efforts that are additional to “business as usual”. Some work – eg, to improve productivity – might have a domestic focus, with an eye on future offshore expansion. The changes come not just as a cost-cutting exercise (see Budget story on page 27). They are also, McPherson points out, in tune with feedback from hundreds of business people. He says NZTE held focus groups with clients, engaged with clients offshore, and heard from organisations such as Chambers of Commerce on the shape of the grants scheme. “No one said they didn’t agree with what we are trying to achieve.”
3 ports close to Izone. 2 sea, and 1 air. These
PORTS are easy
TO access by road and rail. Izone has land to
SUIT your plans and
YOUR budget, whether you’re exporting
PALLETS or container loads. Izone has flexible development options and the cheapest priced industrial land* in the Christchurch area, and therefore has potential for a low cost of occupancy combined with very low rates from a supportive council. To find out more about making a base of operations here in the Southern Business Hub go to
www.izone.org.nz
VIRGINIA McMILLAN / writer Virginia is a freelance journalist specialising in business and health stories. She has worked as a reporter, sub-editor and editor and as assistant editor at The Independent.
RIghT PlaCE
RIghT PRICE
RIghT SIZE
The future of industry is in Canterbury
0800 569 455 or visit www.izone.org.nz * according to an independent survey
EXPORTER 17
> LO G I ST I C S
Control your goods Exporters shipping goods internationally should have the backup of a strong domestic network in foreign markets to make sure goods arrive on time. By Val L eveson
W
ith a rather tough global economic climate, courier companies are noticing that customers are looking at ways in which they can consolidate their international shipments, says Senior Vice President – Oceania, DHL Gary Edstein. “Exporters are looking at a range of services; not just express, but day-definite services too. They’re also looking at sourcing closer to market,” he says. DHL has a 50:50 joint venture in the New Zealand market with Express Couriers Limited (ECL), as well as a long-term relationship with New Zealand Post. Edstein says that costs for its services are based on the urgency of the shipment (ie: how quick it needs to be
18 EXPORTER
KEY TAKEAWAYS >> It’s a good idea to look at all the services courier companies offer – sometimes a day’s delay can save a lot of money. >> Efficiency of your courier service reflects on you and how you do business. >> Courier companies are realising that customers are wanting to consolidate their international shipments. >> Costs are often affected by urgency. >> To save costs it’s important to know your demand cycle, plan in advance, create greater efficiencies in your business and choose a good networker.
at the destination) and the weight and dimensions of the shipment. DHL offers flexible billing and payment options for transport charges, duties and taxes, enabling seamless integration with your account systems. It also offers easyBill – for fast and efficient electronic invoice delivery. Tips for shippers Edstein’s recommendations to New Zealand exporters are: • Know your demand cycle. “This is particularly if you’re a smaller exporter, you can save a lot of money by knowing your customer’s demand cycles and scheduling production to allow you to move freight in a consolidated manner. “Shipping one larger box will always work out more cost effective than shipping numerous, smaller boxes.”
• Plan in Advance. Take advantage of a deferred service for deliveries that are less time sensitive in nature. “As a result of the global financial crisis, we have noticed our customers are seeking more cost effective ways in which they can move freight while maintaining a presence in key markets.” • Time is money. “In these uncertain economic times, it is equally important to look at ways that you can create greater efficiencies in your business,” Edstein says. • We know manual processes can be
Edstein says: “It is your reputation on the line if your customers are left waiting because the local freight company doesn’t maintain the same standards as your international freight provider. Proof of delivery is also a very important export feature for you and your customers especially for highvalue items.” Simon Hayes, Business Development Sales Manager of New Zealand Post, says that his organisation’s International Economy Courier is a cost effective
service when sending items to 25 key destinations worldwide. He says that NZ Post keeps costs consistent by not having fuel surcharges for account holders. Also, NZ Post charges by weight, not dimensions – which can be cost effective for people transporting light-weight products such as clothes. He says his company is an extremely well-networked organisation with partners all over the world – these include different country’s postal systems, and DHL when necessary. NZ Post also offers International Economy Courier, which although slightly slower, can reduce as much as 60% of the cost. He suggests that sending things in volume can help financially. “Putting things together can bring the cost per item right down.” [END] 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.
And we have a $0 fuel surcharge on our International Express and International Economy Courier services.
R+R 20008
Gary Edstein, DHL Express Oceania senior vice president
time-consuming and costly, which is why we offer a range of online and desktop tools to assist customers in preparing shipping documents, managing addresses, booking a pick up and tracking shipments. Each of our eComm tools are designed to save our customers time and create greater efficiencies for them in using our services.” • Choose a good networker. “If your provider doesn’t have a large domestic network in other countries, at least make sure they can control the movement of the shipment from pick up to destination with complete visibility.”
Call us on 0800 276 7848 or visit www.nzpost.co.nz/export
EXPORTER 19
> AWA R D S
Above: (From left) Glenn McGill (Absolute Foods) and David Griffiths. RIGHT: Rodger Latimer (Teknatool).
Enter the Kiwi dragons: Our companies succeeding in China The road to China is fraught with obstacles. The following winners of the Cathay Pacific NZCTA (New Zealand China Trade Association) Awards 2009 show how guts, sheer tenacity and innovation can break down Chinese walls. Category The NZCTA Supreme Trade Award (sponsored by Cathay Pacific and HSBC)
Winner Teknatool International Ltd
Category: Doing Business in China/ Investor in China Award (sponsored by Mondiale Freight Services Ltd) Winner: Teknatool International Ltd Albany-based Teknatool has been manufacturing high-end power tool products since 1955 and exporting since 1980. In 2005, it set up a manufacturing facility in Qingdoa to supply the Chinese and other export markets. Initially, a 50/50 JV with a Hong
20 EXPORTER
Kong-based partner, Teknatool bought out its partner and now runs the facility as a 100% subsidiary. An R&D division was introduced at the Qingdao facility, where 70 local staff and 2 New Zealand Engineers are employed. Teknatool’s strategy is to mix the best of NZ and Chinese business and design practices at the Qingdao facility, where it plans to build a dedicated motor manufacturing plant for its new proprietary DVR technology motor. www.teknatool.com Category: Best Importer or Exporter with China Award (sponsored by HSBC) Winner: Absolute Foods Limited Based in Whangaparaoa, this premium seafood products supplier first visited
China in 1995. It spotted an opportunity to create a market at the five star end of the hotel and restaurant trade in China after hosting a group of executives at the Shangri La Hotel there. Its ingredients for success: keeping strong control of the entire supply chain to China, and working with a long-term local partner in China. Through frequent visits to China, the company lends strong support to its local partner. It also pays strong focus to creating brand awareness in China. Absolute Foods currently has 100% market share in China and expects to double sales within 12 months. It has taken it only three years to achieve the progress it made in China compared to over 10 years needed to crack its Japanese market. www.absolutefoods.co.nz
Category: Best Use of Hong Kong by an NZ company for its business Winner: Sonar Group HK (Orca) Launched in 1995, Orca performance triathlon suits quickly made waves throughout the USA and Europe and were being worn by world class athletes. Founder Scott Unsworth looked for production facilities around the world, but it wasn’t until 2003 he settled on Hong Kong as Orca’s strategic longterm base for product development, production management and logistics. Since then the range has been expanded to include performance sportswear. Production is mainly done in China, with global marketing, design and IP retained in New Zealand, and European sales handled from Orca’s office in London. Orca says Hong Kong’s efficient systems and processes has made it an ideal hub to service clients around the world and fuel the company’s organic growth over the past six years. www.orca.com
Above: (From left) Jens Madsen (Ports of Auckland), Carol Ward (Zespri) and Trade Minister Tim Groser. RIGHT: (From left) Liu Feng (COSCO) and David Thorrold (Bio Vittoria).
Special commendation for work in China: BW Murdoch and Beca Group.
Category: Business Excellence Award (sponsored by Cosco NZ) Winner: Bio Vittoria BioVittoria, the NZCTA Supreme winner in 2007, is based in the Waikato, and continues to operate effectively and innovatively in China. Its JV factory in Guangxi Province processes Luo Han, a fruit, which in turn produces a zero calorie sweetener. The resulting product is exported to multi-national companies based in USA. BioVittoria established the Luo Han Grower Association, comprising some 5,000 growers and has doubled seedling plantings in each of the last three years. Its keys to success are its vertically integrated value chain from plant selection through processing to marketing; its strong focus on quality control and, as always required for China, its relationships with all stakeholders from grower to customer. www.biovittoria.com
Category: Best Logistics Strategy for China (sponsored by Ports of Auckland) Winner: Zespri International Ltd Zespri‘s huge success and economic impact is hinged on its expertise on moving kiwifruit from the grower in rural New Zealand to the customer overseas. It sells over $1 billion and around 100 million trays of fruit annually. Sales to China commenced in 1993 and by 2007 had reached five million trays. Zespri has faced the challenges of inconsistent infrastructure, investing with supply chain partners to overcome the obstacles of presenting fruit throughout the market in good condition. The underpinning principles of the Zespri system include total integration and documented traceability from grower to consumer. Amongst its key strategies, Zespri plans to source and sell Chinese fruit under the Zespri brand and to pack one million trays in China by next year. It targets to sell 15% of its crop in China by 2020. www.zespri.com
BW Murdoch The judges commended the hard work, sheer tenacity and professional approach of process engineer BW Murdoch in setting up a WOFE (wholly owned foreign enterprise) in China to build dairy production plants. www.murdoch.co.nz Beca International Ltd The judges commended the scale, geographical spread, use of local expertise and success in China of engineer and consultancy, Beca. www.beca.com [END]
Background This award is the third in the series. Cathay Pacific was the prime sponsor and shared the supreme award with NZCTA. The supreme prize is a cash prize of $10,000 presented by NZCTA and a business class return trip for two presented by Cathay Pacific with other benefits in China arranged by Cathay Pacific and HSBC.
EXPORTER 21
> CURRENCY
NZ currency riding on risk takers’ fancy Don’t bet on where the NZ dollar is heading. Even the pros are undecided on what the mercurial kiwi will next do. HiFX’s Mike Hollows says currency forecasting is akin to fortune telling, but he expects the NZ dollar to test US65c within the next month or two and maybe push higher, especially if the US dollar continues to weaken against its major trading partners. Expectations Here’s what some market analysts expect the kiwi to do: • The NZD/AUD looks set to continue bouncing between AUD77c – 82.50c (77.00 represents an important 20-year trend line). • Against the Japanese yen, the NZ dollar recently returned above 60 yen and looks on course to test 65 yen. • Against the euro, the NZ dollar is expected to range between .4250 -.4750 to the euro but with an upward bias. • Against the sterling, the NZ dollar looks range bound but with an upward bias. HiFX expects it to test
KEY TAKEAWAYS
A
By BOB E DL I N
greater appetite for risk tolerance – essentially – explains the NZ dollar’s recent strengthening. It has rallied 18% on a trade weighted index basis in the past three months after falling 32% in just over a year. Against the US dollar it has rallied 28% from its lows, after falling 40%. “When investors overseas feel confident, they buy growth and risky assets, like shares and the NZ dollar,” BNZ chief economist Tony Alexander explains. “When they are worried, they
22 EXPORTER
sell growth assets and the kiwi dollar that’s why the kiwi dollar tends to move with the likes of the US share market.” Regaining lost ground The NZD has recovered some ground in line with gains in the US sharemarket since the second week in March. The US currency has weakened at the same time as investors have moved from it as a safe haven currency. If the global economy sours again, and sharemarkets fall, the NZD would drop back below US50c – “we don’t think that’s going to happen, but it’s a vulnerability,” says Alexander.
>> HiFX’s Mike Hollows expects the NZ dollar to test US65c initially, and then maybe push higher, especially if the US dollar continues to weaken. >> The NZ dollar’s trade weighted index looks to have broken out of its recent confined ranges, so the next technical move is likely to be up. >> BNZ’s chief economist Tony Alexander says the Kiwi rises when investors gain confidence, and vice versa. >> Westpac chief economist Brendan O’Donovan says any forecast should come with a health warning as one can argue for the currency to move either way.
Topsy turvy Kiwi Here are some tips on how to cope with the volatile NZ dollar • Be aware of how currency movements can affect your business’ profitability. Identify and quantify its value to the bottom line of your business. • Develop a strategy as to what levels, and to what extent you wish to hedge currency flows. • Take advantage of good research and the experience of market professionals. • Consider taking advantage of extreme moves in the currency and hedge a percentage of currency exposure as forward cover. • Know whether you are receiving a fair price on your foreign exchange transactions. Banks can charge between 0.7% an 2% of the value of a transfer – in some cases tens of thousands of dollars can be saved simply by having a pricing discussion with your current provider. • Deal with a fully licensed and regulated foreign exchange provider who has a proven track record of experience. Tips provided by Latitude FX Ltd
.4025 and possibly .4150 over the next few months. Hollows is concerned about the NZD trade weighted index, which looks to have broken up out of its recent confined ranges and looks poised to track higher. Deutsche Bank chief economists Darren Gibbs doubts the currency will retain its new-gained strength, although in the very near term it probably will go higher before depreciating. “But we’re not as bearish on the currency as many of the other banks - we are saying it could be around 55c-56c.” Westpac chief economist Brendan O’Donovan says any forecast should come with a health warning. He can make a case for the currency further appreciating, and a case just as convincing for it to depreciate. Why the kiwi will go higher: Our banking system is healthy, relative to many others; • NZ’s GDP growth has been hurt less than many of our trading partners; • Continued growth in the world economy points to a stronger NZD; • Investors’ risk appetite has been heightened by signs of the massive
decline in the global economy being arrested; • Each improvement in US economic data has tended to be bad for the US dollar (it is seen as better for the rest of the world, reinforcing investors’ willingness to take on more risk and buy commodity currencies and the like); • Commodity prices have improved and equity markets have rallied. Why the kiwi will be weaker: • The world is shunning debt and NZ is one of the most indebted countries in the world; • The bout of increased risk appetite won’t last – during its lost decade, Japan had four periods of strong equity market rallies but all unwound. Similarly, after the Great Depression, the US had about seven episodes of strong rallies in equity markets lasting an average of 40 days before unwinding. [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.
Helping your business to navigate the foreign exchange markets If you would rather spend more time on your own business than having to deal with managing your foreign exchange, give the specialists at HiFX a call. We can provide you with a no obligation assessment of your FX exposure, and have a range of tools and services available to deal with all your foreign exchange needs. To speak to a member of our commercial team, please call:
09 306 3700 Alternatively, email info@hifx.co.nz or visit www.hifx.co.nz
HiFX holds an Australian Financial Services Licence (AFSL) in both NZ (AFSL No. 240914) and Australia (No. 240 917) and are regulated by the Australian Securities and Investments Commission.
12011 HiFX NZ Business Ad.indd 1 Process Cyan Process Magenta Process Yellow Process Black
9/11/07 10:40:18 AM
EXPORTER 23
> CURRENCY
A game of averages Five successful exporters from the Bay of Plenty share their war stories on how they have been dealing with the finicky NZ dollar.
I
BY BOB E DL I N
t’s a difficult time for traders, says HiFX currency specialist Mike Hollows, who urges exporters to be conservative, to keep things tight and be disciplined. “From a positive perspective, if the currency is heading higher, it’s generally because global optimism is picking up a little bit, and if that’s the case, then hopefully markets will be improving for their businesses,” he says. “That’s something to balance the position up a little bit.” Overcooked The BNZ is saying the currency is over-cooked and could pull back, but advises exporters to get it locked up and focus on their business. Look at your exposure over the next two or three years, says BNZ chief economist Tony Alexander, and hedge now. “We are cyclically low, you lock
24 EXPORTER
it in, you get your hedging done. “That sort of message is going down quite well in the business sector, not only in regard to forex hedging, but interest rate risk hedging – they just want to set their rates and get on with running the business.” If he had to ring currencies in order for export hedging (the opposite would apply to importers) he would rank the Aussie first, followed by the yen, the US dollar, the euro and the pound. Earl White, at Bancorp Treasury Services, says people should have a proper risk management framework and manage the risk within their tolerances. He sees nothing much different in trading conditions. “The Kiwi is always volatile – there are no special conditions today.” Five Bay of Plenty exporters – each in line for local export awards – agree with him. Stainless Downunder (producing marine products for the superyacht
KEY TAKEAWAYS >> Lock up any gains in the NZ dollar. Stay focused on your business. >> If you don’t already have a risk management strategy, get one. >> Remember currency volatility is a way of life for now. >> Build in healthy margins so you don’t get choked off by sudden Kiwi dollar gains.
market) mostly is paid in NZ dollars. “So my best advice would be to try to get paid in NZ dollars,” says general manager Andrew Lilly. His firm has no formal forex policy, but aims to get a 50% deposit. Thus half the price of a job is paid up front; the other half is paid before the job leaves the Katikati workshop (partly because the firm
deals through a US distributor which handles much of the risk). But the company has been doing more of its own marketing, particularly through Europe, and is learning to handle more of the risk itself with forward cover and so on. Eclipse Valves Limited manufactures and supplies valves and regulators for CNG, fluid delivery and gas handling systems. It exports mostly to East, West and North Asia and South America, selling in US dollars but without forex advice. Manufacturing costs are worked out and locked in, but material prices rise and fall with the exchange rate, says chief executive David Short. It’s a matter of averaging things out – “then we just take the wins and losses from there.” Some work stretches out over 60 days, and day-to-day currency fluctuations don’t much influence the end result. The volatility of recent months has presented no particular difficulties. Allied Industrial Engineering, a heavy mechanical engineering service company exporting mostly to Australia, prefers to sell in NZ dollars. Some customers have delayed payments, waiting for the exchange rate to go back in their favour; hence it is talking
about dealing more in Australian dollars. It takes out foreign exchange contracts to minimise the exchange risk in just about 95% of cases for its imports and exports, but “we are not in the game of playing the exchange rate,” says general manager Mark Lovegrove. “We have learned the hard way a couple of times and now remove the total exchange risk by taking out foreign exchange contracts.” Bluelab Corporation Limited manufactures hand-held meters and control equipment for measuring and controlling parameters such as the pH, conductivity and temperature of a liquid. Exporting mainly to the US, Canada, Britain and Australia, it has several approaches to forex management – “we do a bit of hedging when and if we can, and we have tended to shift our purchasing into US dollars for our inputs, so we have got some sort of hedge there,” says managing director Greg Jarvis. “And we budget for US dollar business towards the high end, then keep it there regardless of what the current exchange rate is doing. We will budget – say – for a US70c-plus level, because we have been undone in the past by budgeting US60-plus, only to see it at
US75c.” Thus it aims to be profitable at a higher level and gear its productivity around the higher rate. Nature Shop Ltd, in Tauranga, sells natural fibre products such as ugg boots and merino wool clothing. About 95% of turnover comes from exports. It takes full payment in six currencies: sterling, euro, the US dollar, Australian dollar, yen and NZ dollar. Managing director Conrad Cranfield isn’t greatly troubled by the volatile exchange rate. He keeps a close eye on daily rates and reads a lot of the business news – “but to a degree, because we take so many different currencies, we can offset a lot of our costs into the foreign currencies rather than having to pay everything in NZ dollars, and having a spread of currencies means things balance out to a degree. As a retailer, we’ve got a healthy margin built in, so we can probably have a 10c shift in the US dollar and not change prices.” Nature Shop is not hedging, but as it grows will consider it. [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.
Exporting? Paying suppliers? Photo: istockphoto
Foreign Exchange
to discuss your requirements, or register on our website for a FREE demonstration.
EXPORTER 25
> PROFILE
Without fear of favour website assessment for exporters
B
uild a website and customers will follow is a great fallacy. An export company will succeed in drawing global customers only if the website offers great user experience and is highly functional. “Better websites mean more profit. The quality of that website directly drives the number of users and the likelihood of those users being influenced to do something, like buy your stuff or represent you in a market,” says Shane Middlemiss, founder of e-Biz Watch Ltd, a company that assesses websites against best practices.
Shane Middlemiss, founder of e-Biz Watch Ltd
How will your website fare?
e-Biz Watch has collated around 400 best practises relevant to export-oriented websites and rates clients’ websites against these criteria. Clients can quickly see the areas they can get their web developer to improve or even decide to get a new web developer. e-Biz Watch is not affiliated with any developer
26 EXPORTER
and its service stands or falls on its ability to provide unbiased expert evaluation. e-Biz Watch’s independent expert website assessment comes at a fixed fee. Middlemiss says: “You need independent advice because the ‘free’ website reviews from developers come with a catch – you are both subject to the promotion of their wares
and they have a vested interest in over-criticising a competitor’s performances. It is a loss-leading hook that you don’t have to get caught by.” Pretty websites may attract users but not buyers. Potential buyers may be turned away by a site’s poor e-commerce functionality or just simply a lack of product information. This is why e-Biz Watch tracks over 400 factors when measuring the performance of a particular website. By benchmarking a company’s website against the best-in-class, companies can get clear guidance on where the weak spots are to make future improvements; and find out where their strengths are to tap further opportunities. Assessment results for each of the criteria measured are graphed against comparative exporter sites’ results. The reporting system describes key implications of each of the rankings found, and suggests remedial actions. Two depths of benchmarking are offered: $1,000 + gst for usability and content assessment; and $2,500 + gst for a full best practice review which incorporates the site usability and content review plus a site’s search readiness, accessibility, personalisation and industry integration. For more information, call Shane Middlemiss at e-Biz Watch, 07 552 0031, or email shane@e-govwatch.org.nz [END]
e-Biz Watch Ltd Collates over 400 best practices to help companies measure their website’s usability, functionality and performance. Telephone: 07-552-0031 Founder: Shane Middlemiss Email: shane@e-govwatch.org.nz
> E Y E O N G OV E R N M E N T
Little cheer for export sector from National The National government’s Budget has cut into spending for export development with a main casualty being the popular Market Development Assistance Fund.
by Virginia McMillan
A
focus on value for public money – called by some the “razor-gang” approach – can be expected to reduce state spending on the export sector. Core spending on economic development is forecast to rise to $212.8 million in 2010 from $193.1 million in 2009. Finance Minister Bill English’s May Budget projects this will drop in future years. This spending comes off a 2007/08 peak.
An early casualty of the new National government is the Market Development Assistance Fund. By closing it this year (see “The morphing of NZTE’s funding mechanism”on page 16 for more details), English says, the government is saving $100 million over four years. Gone, too, is state support for a New Zealand Innovation Centre in Auckland. The previous, Labour-led government had promised $25 million over 10 years. Rugby World Cup stadium, getting $35 million, will offset some of the savings in the economic development budget.
EXPORTER 27
THE BUDGET & EXPORTERS Highlights from government spending in 2009/10 in areas broadly affecting exporting
Research, science & technology • Government is spending $745 million (including $15 million on admin/measuring), up from $687.5 million • Foundation for Research, Science & Technology budget grows by $4 million to $431.7million • $4 million a year continues to be available for piloting low-carbon technologies • Royal Society research cut by more than $4 million • Industrial Research Ltd keeps its $5.6 million • $8 million more for competitive industry research • $9 million more for Marsden Fund Foreign affairs & trade $492.5 million, including a $61.3 million increase to: • deepen ministry’s capability and capacity through additional staff, increase in support infrastructure and higher cost of trade negotiations Biosecurity • $42 million on surveillance of new organisms • $69 million to manage border risks • $30 million on bovine TB management
MFAT Planned additional spending for the Ministry of Foreign Affairs & Trade (MFAT) has been trimmed by $9.5 million in 2008/09 and by $105 million over the next four years. MFAT is still expected to receive a $282 million funding increase in the four years, especially as a lower dollar has recently increased its offshore costs. But the overseas posts network is in for a wider review. The aim is to gain greater co-ordination and efficiencies among all government agencies with staff offshore, says Trade Minister Murray McCully in a statement. NZTE Export-oriented New Zealand Trade & Enterprise (NZTE) will get $194.9 million in 2009/10 for providing services and $56 million for cash grant
28 EXPORTER
Customs • $44 million on import, export and excise transactions • $10 million on investigating offences Climate change • $471 million for allocating NZ emission units • $10 million to develop carbon accounting Communications • $290 million operating and capital investment in ultrafast broadband infrastructure (including policy advice) Food safety • $51 million for monitoring and assurance Agriculture & forestry • $38 million on Kyoto Protocol climate-change commitment • $30 million for Primary Growth Partnership • $95 million for Crown forestry contracted services Fisheries • $34 million on sustainable fisheries
schemes. In 2008/09, Labour budgeted $54 million for NZTE’s market development assistance alone. Budget 2009’s key points about services and programmes (mainly NZTE): Analysis & Development for Firms – $2.5 million in savings, gets $18.4 million Identifying International Market Opportunities for Firms – savings of $3 million in 2008/09 and $700,000 in 2009/10 – gets $73.9 million (up from $70.4 million) International Investment Facilitation – cut by $700,000 in 2008/09 and by $2 million in 2009/10 – gets $15.2 million Expo 2010, Shanghai, China – gets $24.3 million
Regional & Sector Development – gets $47.3 million Training & Advisory (eg, business incubators, brokering, export training & advice, Path to Market) – $1.3 million savings in 2008/09, 500,000 saving in 2009/10 – gets $15.76 million – targeting 8,000 to 10,000 businesses Market Development Assistance Fund (see page 16 for related story) – gets $40.7 million (including some previously unspent) – fund closing, only existing clients can apply in 2009/10 Growth Services Fund (will replace Market Development Assistance Fund) – gets $9.6 million (up $3.7 million); absorbing MDAF, rising to $30 million in 2010/11 Enterprise Development Fund – fund closed 2009 (was $2.77 million) Enterprise, Culture & Skills Activities Fund – fund closed 2009 (was $1.5 million) International Biotechnology Partnerships – gets $4 million ($2 million not used in 2008/09) Regional & Industry Development – gets $635,000, down $1.1 million with cuts – eg, to Buy Kiwi Made (closing) and Kiwi Expats Association (support ceasing, was getting $1.89 million over three years) Seed Co-Investment Fund – gets $8 million Venture Investment Fund – gets $14.87 million Large Budget Screen Production fund – gets $35.5 million depending on demand Management Development Fund – gets $756,000 Regional Partnerships & Facilitation – gets $16.2 million (up $4.5 million) – $1.8 million in extra support for business incubation – $10.4 million in savings made in 2008/09 Transformational Initiatives Fund – $1 million expected to be spent 2009/10. [END] VIRGINIA McMILLAN / writer Virginia is a freelance journalist specialising in business and health stories. She has worked as a reporter, sub-editor and editor and as assistant editor at The Independent.
CASH LOW Lock Finance is New Zealand’s leading independent trade and business finance company offering a fully integrated combination of trade finance, working capital, debtor finance and factoring. freephone 0800 ASK LOCK (0800 275 562) www.lockfinance.co.nz Lock Finance (formerly SH Lock) has been providing New Zealand businesses with financial services since 1889
> LO G I ST I C S
Tossed in a sea of red Massive overcapacity has threatened the viability of shipping lines who have been busy consolidating. New Zealand container capacity has been affected by shipping companies streamlining their routes. By Louise B lockley
F
rom his calm enclave overlooking Auckland Harbour, Simon Edwards, Hamburg Süd’s New Zealand general manager, commercial, remains upbeat though realistic about global economic and shipping turmoil. “There is no doubt we are faced with a situation that is very grim but you can’t run and hide. It boils down to understanding your cost base to become sustainable and managing the relationship you have with your customers,” says Edwards. Global shipping losses are staggering. Some estimates expect the industry to lose more than USD32 billion in 2009; almost 500 ships are sitting in layup – 11% of worldwide capacity.
30 EXPORTER
KEY TAKEAWAYS >> Global shipping losses are tipped to hit USD32 billion in 2009. >> Almost 500 ships worldwide are sitting idle. >> More shipping lines are expected to merge services to consolidate routes and capacity to survive. >> New Zealand will see larger ships calling at fewer ports in the future. >> Hamburg Süd New Zealand is currently discussing a merger of their Asian service with other carriers.
Due to global overcapacity some new container ships ordered in the boomtimes are heading direct from the yard to layup berths. Asia is the popular layup spot being the cheapest and most widely expected to spearhead any “bounce back” in cargo. Anchorage for unused ships is becoming a new business opportunity. Casualties Major casualties are possible but Edwards is confident Hamburg Süd will not be one. It’s owned by the Oetker Group, a large German family business with turnover of 7.7 billion Euros. Edwards cites diversified group interests – banking, wine, beer, shipping, food, and luxury hotels – as a financial safeguard.
Hamburg Süd is suffering but to some extent less than the large global carriers. We have minimal exposure to those East-West trades which are the ones that are really suffering.” Simon E dwar ds / H am b u r g S ü d ’ s Ne w Z e a la nd g e ne ra l ma nag e r, comme rc ial
“Hamburg Süd is suffering but to some extent less than the large global carriers. We have minimal exposure to those East-West trades which are the ones that are really suffering.” Hamburg Süd New Zealand claims the number two spot for this country’s container volumes – approximately 150,000 twenty-foot equivalent units (TEUs) annually. Total New Zealand volumes are estimated at between 1.3 and 1.8 million TEUs – less than 1% of world container trade. Following four years of rapid growth both organic and through acquisition, Hamburg Süd New Zealand is now in a “consolidation phase”, Edwards says. “Hamburg Süd and our original Columbus Line (brand) started containerisation in New Zealand in 1971 and we are the only shipping line still here. One of the key facets to effective management is that you need to know when to grow and when to pull back and consolidate in challenging times.” The first blow in 2008, prior to the financial market collapse, was bunker (marine fuel) prices almost tripling and ship prices skyrocketing, making many trades uneconomical. Then recession really hit with demand dropping dramatically while capacity continues to increase. New Zealand imports have dropped by approximately 20% providing fewer containers to meet steadier export demand. Matters of convenience Hamburg Süd’s local fightback at rising bunker costs was joining forces with Maersk Line on the Trident service to the US East Coast. Two other carriers withdrew from New Zealand, now just calling at Australia. Another two in the South Asian trades merged and removed tonnage for operational efficiency ultimately reducing New Zealand container capacity. More changes are on the horizon – declining import rates which were previously the mainstay of profitability mean carriers’ bottom lines are hurting. Hamburg Süd is discussing a merger of their Asian services with other lines to balance supply and demand and
create a sustainable system in a tough economy. “From a financial perspective we are hopeful we can because we really want to stem the blood that’s coming out of the systems at the moment. You’ve got shipping lines globally who wouldn’t have thought they would be operating together and now suddenly they are as a matter of convenience.”
now more reliable and sophisticated and is confident of continuing levels of service. “What we will see in the future is larger ships coming to New Zealand. Rather than having lots of ships in the 1,700 to 2,500 TEU size, we will have larger systems of more than 4,000 TEU and there will be a concentration of services.” Those ships will call at less New Zealand ports and smaller coastal shipping will become important for distribution. “With the import issues happening now we probably won’t see any
Hamburg Süd’s local fightback at rising bunker costs was joining forces with Maersk Line on the Trident service to the US East Coast. Two other carriers withdrew from New Zealand, now just calling at Australia. Another two in the South Asian trades merged and removed tonnage for operational efficiency ultimately reducing New Zealand container capacity.
Trans shipping Other changes recently saw the end of the longest trade lane in the world – direct weekly services to Europe. Hamburg Süd’s non-perishable cargo is now trans-shipped onto vessels in Cartegena, Columbia adding two to three days on transit times. Chilled meats and perishables are trans-shipped in Manzanillo, Panama – costing more but satisfying the need for faster transit. Edwards says they have tried to hold direct services as long as possible but running smaller ships with less cargo on long routes is no longer viable – the fuel cost alone is millions of dollars per voyage. He believes transhipment operations are
light until the second half of 2010. So we have to put ourselves in a position where we can take cost out, consolidate for the next 18 months then when things turn we will look to grow again. We are not going anywhere. We see closer relations with our clients as driving increased knowledge and together we can plan what we have to do to survive this.” [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.
EXPORTER 31
> INTELLECTUAL PROPERTY
When it is not OK to use your Kiwi name offshore Given the drab economic environment, exporters may need to reassess costs and timelines for new market entry and decide where their IP fits in. BY V irginia McMillan
R
ecessions tend to spark an upturn in rip-offs of commercial ideas, say lawyers in the intellectual property (IP) sphere. James & Wells Intellectual Property partner Simon Rowell says in all the recent recessions, some companies have sailed much closer to the wind where other parties’ IP rights are concerned. Offshore distributors have been known to register their supplier’s
KEY TAKEAWAYS EXPORTERS FEEL THE PAIN OF IP THEFT Exporter magazine poll finds Kiwi export companies heavily targeted >> Sixty-four (or 30%) of our 214 survey respondents last month reported their IP had been stolen in recent years. >> Suspects and perpetrators were local rivals, opportunistic offshore operators or employees. >> One respondent is challenging an overseas player in court for alleged theft of IP and has spent $100,000 on IP protection recently. >> Another is in the midst of legal action against a former employee. >> Respondents commonly spend thousands of dollars a year for basic protection. >> Spending can reach several hundred thousand dollars when a large research and development investment is at stake.
32 EXPORTER
trademark in the offshore country, he says. “Then, when [the New Zealand supplier] wants perhaps to terminate for non-performance, it is hard to get the brand back.” Exporters are vulnerable when talking to people in a new country: “Your business could be stuffed if they register [the trade mark] before you do.” Register in each country, and ensure distribution agreements spell out the rights of all parties, exporters are warned. Kate Duckworth, senior associate with IP specialists Baldwins Law, says risks arise when demonstrating a new product or service at a trade fair offshore. Disclosing too much detail can ruin the chance of obtaining a patent. Signed confidentiality agreements are likely to be the answer here.
How Kiwi Companies View IP
IP & The Recession
New Zealand companies recognise IP as important.
Numbers behind IP • Patent, trademark and design registration applications at the Intellectual Property Office of New Zealand are down 22%, 15% and 12.5%* respectively on two years ago.
• Substantial minorities believe they do not know enough about IP. • Company representatives often feel IP has created opportunities for their business. • Around a third feel lack of IP protection has cost their business opportunities. • IP protection is clearly a relevant issue for those considering exporting. Source: A J Park survey by UMR, 2007
Before going to new markets Before entering new markets to try to beat the recession, Rowell says, exporters should do trade-mark searches in each territory. There’s no guarantee they can trade under the same name as in New Zealand, since someone else may already have that right. A J Park partner Corinne Blumsky also cautions emerging exporters against assuming it is OK to use their Kiwi name or introduce their Kiwi product offshore. If the name could cause confusion with an existing product or if its overall look is similar, the Kiwi could be in trouble. Many businesspeople have been surprised to receive a “cease and desist” letter from an aggrieved offshore company, Blumsky says. Sometimes new branding, marketing materials and packaging must be designed just for one country. As Charlotte Henley, a partner at Kensington Swan explains, IP is a national right. “You need to apply, or investigate what is available, in each country.” Assess IP timelines Earl Gray, IP partner at Simpson Grierson, says with the recession, exporters may need to reassess costs and timelines for new-market entry, and decide where IP fits in. Although as an IP practitioner he sees the value of protection, he notes that “some businesses get away with thin or next to no registered IP offshore”. It depends on a business’s competitive differences and appetite for risk: “They would need to line it up with the realities of the current market.” Registrable trade-marks may be in the form of a word or words, a logo or image (and sometimes a combination of these) and, perhaps, colours; other IP categories are designs (also registrable) and inventions (protectable by patents). Duckworth says applying for a patent using an international mechanism (PCT) buys time in which to decide on
• Other territories also appear affected, lawyers say. countries, and spreads the costs. Henley says she is often asked: “What’s the point of protecting my IP if I don’t have the money to enforce it?” She responds there is value, even if the exporter doesn’t have the full funds to enforce. In her view, a patent or registered trade mark deters a number of would-be infringers. Insurance may be obtainable that would cover costs in the event of an action. The majority of IP disputes are settled without legal proceedings or significant sums being involved, says Henley. Blumsky says some parties take all steps to protect their rights and this can be seen as aggressive if they look to stop the infringer from trading by seeking an injunction, as well as seek reimbursement for loss. On other occasions, after an
• Many companies are watching their costs, slowing their expansion and filing for protection in selected markets only. • Legal actions for alleged breach of IP rights haven’t reduced. * IPONZ’s latest figures are for July to April 2008/09; these have been compared with the same period in 2006/07
exchange of letters outlining terms and conditions, a rights holder may allow a newcomer onto market under a similar brand. [END] VIRGINIA McMILLAN / writer Virginia is a freelance journalist specialising in business and health stories. She has worked as a reporter, sub-editor and editor and as assistant editor at The Independent.
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CONSULTANCY - DISTRIBUTION - EXPORTS - IMPORTS - WAREHOUSING
EXPORTER 33
> INSURANCE
The trade credit risk vortex Exporters are hard hit by high premiums and tough policy conditions including lower indemnity cover as global trade credit insurers tighten their watch on risk exposures.
T
By Yoke H ar L ee
he financial credit crunch has taken its toll on the trade credit insurance market where premium costs have risen sharply and underwriters are scaling back on their risk exposures. The wool industry is one of the casualties as underwriters have all but stopped writing new business in this sector. Trade credit insurers have also been hesitant to write new business for the auto, textile and apparel, retail, mining and building and construction industries, industry officials say. Due to the sharp rise in demand for
34 EXPORTER
KEY TAKEAWAYS >> Be prepared for your trade credit insurers to get tough on you. >> Spend time helping your insurers understand the profile of your debtors >> Try the Export Credit Office if private insurers won’t insure your trade >> Understand the Export Credit Office will only fund viable transactions >> Manage your risks well, chase up on clients slow in paying trade credit cover, the Export Credit Office has stepped up its role, and is exploring the concept of co-insuring with private insurers. The government is also considering increased funding for the ECO to help it cater to exporters’ demand for trade credit protection. Companies across the world
are undertaking stringent internal assessments of their risk exposure and trade credit insurers are undergoing the same process. “What we are starting to see is a reduction in cover provided by the industry,” says Mike Kayes, trade credit manager at QBE Insurance, a key Australasian trade credit insurance player. He confirmed that QBE has been reluctant to take on new business in the wool sector but this could change. “In the past, if an insurer was happy to provide cover for $1 million in trade value, the company would probably be only willing to cover up to half of that value now. And if financials from the client are not up to date, they would probably say ‘no’. Everybody is taking a more conservative approach in the underwriting of the credit risks,” Kayes adds. Atradius New Zealand’s country manager Kevin Harris says most of the firm’s cover is still in place and his firm continues to provide cover to troubled sectors. “There are several industries, including construction and mining for instance, that we are paying close
attention to but we have not withdrawn from those industries. “We have a long association with the wool industry and continue to cover it domestically and internationally. Having said that, it is one of the industries that has struggled in the downturn and we have been obliged to scrutinise and react to many credit limits that are not sustainable in the short term,” Harris adds. Indemnity drops Exporters are definitely feeling the pinch as premiums for trade credit insurance have leapt by between 20 and 30% in the last 6 months. Insurers are also putting the onus on clients to provide up-to-date financial information; are tightening policies to ensure payment terms are shorter; and reducing the amount they are prepared to provide cover for. Indemnity levels – previously sitting near 90% – are being reduced and insurers are not likely to provide indemnity cover for over 85%. The downward rating for Atradius to A- (from A rating, in March 2009), a global insurer based in Netherlands, has also left a gap in the New Zealand market. Market observers say Atradius has been the most aggressive in scaling down exposures in this part of the world after the parent company reported a net loss of EUR193.4 million for the 2008 financial year (2007: net profit of EUR164.2 million). QBE, Euler Hermes, Atradius and Coface are the key players in the New Zealand market. Atradius’ Kevin Harris says in response to this: “The opinion of the ratings agencies does not affect our underwriting position. Our decisions are made based on the data available on an individual buyer, the macroeconomic environment and the country risk elements if it is an export deal.” Rodney Mathers of Trade Credit Bureau, based in Katikati, told Exporter that due to the tough conditions imposed by underwriters, exporters were caught in a tight situation. Cost of cover has “doubled” in some cases, he says, and exporters are struggling with the inability to find cover.
In the past, if an insurer was happy to provide cover for $1 million in trade value, the company would probably be only willing to cover up to half of that value now. And if financials from the client are not up to date, they would probably say ‘no’. Everybody is taking a more conservative approach in the underwriting of the credit risks.” Mike Kay e s / trade credit manager, Q BE Insurance
Atradius New Zealand’s country manager Kevin Harris.
Neil Bhikharidas from Aon Trade Credit, a trade credit insurance broker, says increasingly businesses seeking cover would have to be very up-todate with their financial information on debtors. “What we are seeing is that for clients with trade credit programmes, insurers are standing by them. For these clients, to maintain their exposures, they need to have updated financial information on their debtors – where financial information is not provided, there have been issues for renewing these policies.” He adds: “What is critical for exporters to do is to continue to manage their risks. They need to be more wary about whom they are trading with, and be prudent about collection and not stray on accounts that are overdue.” New Zealand Council of Wool Exporters executive officer Nick Nicholson says it is not surprising the trade credit insurers are toughening up as “they have taken some large hits in the last six months”. The wool
We see a role for the ECO, in helping to meet the private sector’s inability to cover the wool sector, for instance. But the transaction still has to meet our criteria. We are in discussion with the wool sector on how to fill the gap left by the private sector (insurers).”
industry has been experiencing problems in the reduction of individual trade credit insurance limits and some banks have toughened conditions on forward sales making it hard for the wool industry which typically has forward deliveries. Nicholson is however heartened by the fact that the Export Credit Office (ECO) is stepping in to meet the demand for trade credit insurance cover for the wool industry where private insurers and banks have not been able to. Carmen Moana, senior underwriter at the ECO, says her organisation is exploring the concept of co-insurance between the ECO and the private sector, where the ECO will help provide part cover in deals where private sector firms are unable to fully take on full cover due to their risk limits. In February, the ECO revamped its product and processes to make them more market friendly. The government gave exporters a shot in the arm by providing $50 million to ease trade credit cover for exporters. “We see a role for the ECO, in helping to meet the private sector’s inability to cover the wool sector, for instance. But the transaction still has to meet our criteria. We are in discussion with the wool sector on
Risks rising • Nearly 82,000 Kiwi companies have had their risk or payment profile downgraded since January 2008. This is the largest number of downgrades ever in a 15-month period, according to Dun & Bradstreet. • Close to 38,000 firms are now rated a higher risk of financial distress in the coming 12 months and a further 44,000 are more likely to pay their trade accounts in a severely delinquent manner. – Dun & Bradstreet
C a rm e n Moa n a / s en ior u n derwrite r, Exp ort Cr e d it Offic e
EXPORTER 35
Managing your trade credit insurers Kevin Harris, country manager for Atradius New Zealand, provides some tips for exporters who are seeking trade credit cover.
1. Establish a clear credit policy. This provides a consistent guideline for how your company will manage its receivables. 2. Make sure the customer understands your business terms. A clear contract that outlines payment periods and terms and conditions, will help resolve potential legal problems. 3. Know your customer. It is essential to capture and maintain accurate customer data so you know who to chase for late payments. 4. Check creditworthiness. Offering credit terms without adequate or up-todate creditworthiness is like playing Russian roulette. Depending on the business volume and risk assessment, regularly check your customers’ credit rating. 5. Measure key indicators. Monitoring key figures such as ‘average days of sales outstanding’ and ‘debtors’ financing costs’ will identify cash flow trends. Look out for customers who consistently exceed their payment terms. 6. Set credit limits. Allocate the maximum line of credit you’re willing to offer to individual customers based on their creditworthiness rating. Overshooting a credit ceiling should trigger appropriate reactions.
how to fill the gap left by the private sector (insurers),” Moana says. She adds that the exporters still have to meet the ECO’s underwriting standards and make sound commercial sense. In all cases, exporters have to explain why they can’t get private sector insurance cover. Exporters will be notified how long it will take the ECO to approve an application and “we may take longer” due to the information needed. She adds however that the ECO aims to get a deal approved within 10 days. The ECO is also in discussions with three trade credit insurers – QBE, Atradius and Euler Hermes – on plans to roll out a co-insurance programme to meet the demand by exporters. [END] Note: Just before this magazine went to print (on June 24th), the government announced an extension of $100 million in short-term trade credit insurance guarantee for exporters. YOKE HAR LEE / writer
7. Payment on your terms. Having access to a variety of payment terms will enable you to set your exposure for each customer individually depending on their risk profile – for example, prepayment, down payment, discounts and due dates.
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 nance terms beyond 1 year)
Short term trade credit guarantee
US surety bond guarantee
General contract bond guarantee
Short-term working capital guarantee
For more information or application 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.
36 EXPORTER
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> E X P O R T E R E D U C AT I O N
The passage to India India can be a lucrative export market for Kiwis prepared to spend time courting their counterparts, attend long meals and make repeated visits. By Louise B lockley
L
ast July New Zealand Trade and Enterprise (NZTE) ran sell-out seminars on exporting to India – the previous year’s series was cancelled due to lack of interest. The tide has changed. India is an emerging market for Kiwi goods and services. An Indian Free Trade Agreement is in its negotiation infancy. In 2008, exports to India rose by over 50% from a year earlier, partly due to Solid Energy’s coal. Approximately half India’s population of 1.1 billion is under 25 and this youthful sector is driving societal changes in consumption and credit use. Twenty million Indians are born every year and its economy is still growing despite a downturn. However, New Zealanders in the market caution that it takes time, patience and a regular schedule of visits before business is on the agenda. “In most cases Kiwi’s must slow down, be very responsive and very, very patient,” says Jon Redwood, Compac Industries Ltd International Business Development Manager. Compac’s CNG equipment is important to an Indian government promoting the gas as a“greener alternative fuel”.
38 EXPORTER
KEY TAKEAWAYS >> Deals are done on relationships – it may take many visits before any business is done. Be patient but persistent. >> Status and connections are very important. Get help from NZTE, independent consultants or trusted, recommended locals. >> Never underestimate the importance of cricket. Sir Richard Hadlee, John Wright and Sir Edmund Hillary are the three most well-known Kiwis in India. >> India’s economy is still growing despite the economic recession. >> Whatever a company budgets to market to India they will probably need to double or triple it! >> Partnerships with other New Zealand companies may be necessary to meet the volume requirements for this huge market
NZTE survey A 2008 Nielsen survey of Indian business perceptions, commissioned by NZTE, found Kiwis are seen as lazy with little appetite for business. Don Rae, NZTE International Market Manager for India explains the findings don’t literally mean New Zealand businesses are lazy they just don’t go back and visit as much as expected. Relationships and family are everything Relationships are everything is the cardinal rule of business in any market
but it is imperative in India. The adage of the deal isn’t done until you have had dinner at the family home or been to their child’s wedding applies. “There’s a sort of staircase you need to climb. It starts with getting to know the person with three or four social meetings with that person not touching on business and that will slowly elevate up to a business kind of discussion. It is generally a two to three year period to lock in your entry to the Indian market,” explains Rae. NZIFS director Robert Barker says his company’s model of representing a group of Canterbury agritech businesses
in the Indian market works well and addresses the need for regular visits. The market development consultancy has two Indian offices with local staff who make initial visits but often hit a glass ceiling and won’t get access to decision makers. When Barker or his colleagues visit, usually every second month, the initial groundwork has been done and they can often see the correct person immediately. “Deals [in India] are done on relationships and most New Zealand companies don’t take the time to build up the relationships. They like to see you two or three times. If you go there once a year you are not going to get any business,” says Barker. Rae reiterates “See ya soon mate” does not mean in 18 months time because they won’t be your mate any more. Status counts Status and connections are important for business introductions. You must have status yourself or some connection to someone who does. Your distributor must have status with either government or high rating “relations” in the business. Cricket’s status cannot be overestimated. Barker is discussing a business visit with Sir Richard Hadlee
– he believes Hadlee’s status will give them instant access to any CEO of any top 10 Indian corporate. New Zealand’s approach needs to be creative and proactive in India as the Europeans are hitting the market hard. Barker cites the NZD20 billion oil refinery built by Reliance Group last year as an example where New Zealand companies should have been involved. Growth and societal changes India’s huge internal consumption has helped shield it from recession. Demand for building and infrastructure as well as consumer goods is on the rise but Rae sees New Zealand’s most exciting opportunity in food-chain modernisation. Previously self sufficient in food production, India has recently become a net importer of food. Political and market initiatives now aim to reduce the 40% food wastage from farm to table. Opportunities exist in harvesting, on-farm storage, processing, transport, packaging and related areas.
with differing state laws. The eastern states are rural and less developed. Most businesses head to the financial capital of Mumbai or to Delhi. With products like wine a regional strategy is important as three states still practice prohibition. Trade shows are also regional. Norm Morgan, Tradex’s director, says Indians will not travel far to attend trade shows. Attendance is usually low. Distributors may also only cover particular regions. Whatever a company budgets to market to India, Redwood advises to triple it. To align yourself with a distributor with the right connections and status is the greatest priority, he says. India is a physically tough country to travel in and a tough, patience-testing market but Kiwi exporters who do their homework will find our commonwealth connections, shared language, English legal system, cricketing icons and Sir Edmund Hillary’s legacy provide some common ground. [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.
Where to start? It pays to view India as individual states rather than a single, homogenous country. It’s very regionally focused
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EXPORTER 39
> GUTSY PEOPLE
Viewpoint DR GANESH NANA Chief eCONOMIST, Business and Economics Research Ltd (BERL)
Exports are important – yeah right! For far too long, the export sector has been left to burn on the altar of international best practice and the monetary doctrine of ‘inflation is bad’. It is time for a change.
W
ant to know how important exports are to the New Zealand economic development framework? Refer to the latest Budget. The word exports got mentioned six times. That compares with debt, which stole the show at 34 mentions. But it is not just in this Budget. Have a look at the fundamental basis of NZ’s economic policy framework for the past 20 years. I talk of none other than the Reserve Bank Act of 1989. Exports get zero mention there. What about the associated Policy Targets Agreement? Nope, not there either! Surprise you say? Well, it shouldn’t. Simply put, New Zealand’s economic policy of the past 20 years has, at best, paid lip service to the needs
40 EXPORTER
of the export sector. Rather, the need to rein in the spectre of inflation has been paramount indeed. At times, this pre-eminence has been carried to ridiculous levels. For example, even when inflation has been tamed and the specified target has been met, we have witnessed the ritual parade of financial market commentators pointing to individual items whose inflation rate was above average. Actually, a rudimentary grasp of School Certificate arithmetic (okay, NCEA level 1 mathematics) would tell you that there will, by definition, always be some prices that rise at a faster pace than the average, and that some will rise slower than the average. That is the very nature of an ‘average’ figure. Pointedly, any focus on those items whose prices rises have been at a rate below the average has been conspicuous by its absence.
Crippling productivity Through the mid-2000s, the aboveaverage rise in house prices has attracted most attention. Economic policy was being encouraged to set interest rates higher in response to these inflationary conditions. Perversely, when it was clear that such settings were not only crippling the productive (including the export) sector, we persevered in pursuing higher interest rates. Further, when it was clear the policy was patently ineffectual in dealing with house price inflation, we continued with higher interest rates. Evidence showing that higher interest rates were indeed exacerbating house price inflation – by attracting funds from abroad and so facilitating an expansion of credit available to mortgage borrowers – did not make any difference to our policy.
The there is no alternative argument held sway. Killing the patient All the while, the export sector was left to burn on the altar of international best practice and the monetary doctrine of inflation is bad. Inflation is indeed cancerous to an economy. But, curing the disease by killing the patient doesn’t sound to me like a great idea. Might it not be better for our leaders, officials and commentators to enlighten the populace that we need to shift from a country fixated on financial markets and house prices, to one focussed on creating wealth via establishing and maintaining competitive exportoriented business enterprises. The export sector should be nurtured as the engine of advancing prosperity and its considerations should be paramount in our search for solutions. So let us not continue repeating past mistakes. The likelihood of repeating the mistakes of the past
should, rightly, haunt us. To err may well be human. But, to not learn from past errors is just plain unprintable. An alternative (like the Singapore exchange rate regime) would be a managed exchange rate. This is neither quick nor easy. My critics say we can’t fix the exchange rate. But read carefully. I wrote ‘managed’ not ‘fixed’. There is a difference. And no I am not repeating the mistakes of
the past, because I am definitely not suggesting ‘propping up an uncompetitive exchange rate’. Whatever the options, there must be a better way to run an economy. One where income-earning exports are not suffocated by a high and volatile exchange rate. One where productivity-improving investment in resources is not strangled by punishingly high interest rates. [END]
Singapore TWI’s stability vs NZTWI’s chaos Index
Exchange Rates
133.0
NZ$ TWI
116.5
100.0 Singapore$ TWI 83.5
67.0 Apr 99
Apr 01
Apr 03
Apr 05
Apr 07
Apr 09
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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> PROFILE
Simple cost effective warehouse & distribution option into the Australian market
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common problem faced by companies wanting to expand into Australia is finding somewhere safe and secure to store their goods and ensure products are dispatched to customers without delay and above all understand the difficulties of commencing in another country. Entering the Australian market is just the start of a range of ongoing costs that include building rental, guarantees and bonds, insurance, staff, machinery and security, in addition to the day to day management of that operation offshore. However, one firm is making the job a lot easier – offering clients a total service that can be tailored to suit the clients’ complete requirement, from secure warehousing and order taking and dispatch, through to full administration. Contract Warehousing started operations in 1978 and has grown from the Auckland-based operation. The two-time winner of the Westpac awards for warehousing and distribution now operates in two cities in Australia. The company’s staff meets the needs of the clients who trust the firm with products ranging from fine food and wine to building materials and clothing. The company provides a wide range of service skills that have been developed and gained over an extensive period by managing director, Rod Giles.
42 EXPORTER
Our clients send us their products so they are on the ground in Australia. We arrange freight, customs, warehousing, stock control, run the call centre, do invoicing and deliver goods anywhere in Australia. And we do this for a pre-agreed fixed fee for the work being done.” Rod Gi le s / managing dir ector Co ntract Warehousing
Clients source and market their products as normal, but then Contract Logistics manages the supporting services. This provides the ability for seasonal cost fluctuations without the financial commitment of their own operation. Giles says his firm handles both split case, full case and pallet orders as may be required and the benefit for his clients is that they can get on and do business without being concerned about the warehousing operation. “They are not signing leases, buying
hoists or employing staff – all of that is taken care of by us for a known cost,” he says.
Contract Logistics Ltd Contract Logistics Ltd is the Australian division of the Auckland based company Contract Warehousing Ltd with storage and distribution operations in Melbourne and Brisbane. Tel: 09-272-9500 Managing Director: Rod Giles Web: www.contractlogistics.com.au
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> co st m a n ag e m e n t
Have experts will travel Sophisticated information reporting tools and the power of bulk purchasing have put travel consultants back in control.
I
By Yoke H ar L ee
n June 2007, a terrorist and his accomplice drove a dark green jeep loaded with several propane canisters – their mission: to bomb the Glasgow Airport in Scotland. The terrorist were stopped but not before some damage was done. A Kiwi businessman was in transit at London’s Gatwick, on his way to Glasgow. His corporate travel agent, alerted to terrorist attack on Glasgow, was able to quickly locate him, and help plan his next flight path. This, says, HRG Travel NZ’s Lynn Adams-Pearce, is one of the real reasons why companies still use corporate travel agents who seemed to have survived the onslaught of self-help online internet booking systems. Travel management companies have been investing in upgrading their travel management systems to provide better
KEY TAKEAWAYS >> Travel consultants can execute transactions in less time than what a company employee is capable of. >> Carbon footprint arising from corporate travel is now regularly measured by socially responsible companies. >> A key question to ask for those seeking to do online booking themselves is: are you able to compare costs across all key components of your business trip? >> Powerful cost analysis and reporting tools from travel management companies can be integrated with a company’s reporting system, taking away a mountain of audit trail a company needs to do.
services to their ever-demanding customers who not only want costeffective flights, hotels, car rentals but also other more modern-day imperatives such as records of their carbon footprint. “We have had companies that have come back to us after trying to sort out their own travel
arrangements. Very quickly, they realise they don’t have the same access to the type of systems we have in place,” adds Adams-Pearce, general manager (operations and corporate services) at HRG Travel, a local affiliate of the international firm of the same name. A typical employee travelling who
EXPORTER 45
makes his/her own travel arrangements would have to spend time combing online booking sites or airline sites to find the best fares. Time saver Adams-Pearce says that the average time taken to complete a transaction, according to one estimate, is about 22 minutes. “Travel management companies – with the different tools available to them – can do that in two minutes. It has been shown that in the long run, we are still able to provide the best and most appropriate fares – although not necessarily the cheapest.” For larger corporations with many frequent travellers, travel management companies also bring on what internet booking sites cannot offer. One is the ability to keep a close watch on a company’s carbon footprint from its travel activities. “The more socially responsible companies have specifications on what type of cars they rent. One company has a specification that their rental cars have to be of l.6-litre capacity or less. Others like to keep track of what type of aircraft they board. Travel management companies are able to keep companies aware of the suppliers that they are using,” she says.
46 EXPORTER
Competition Over the last four to five years, airlines have started to provide online booking facilities for customers. The mushrooming of other internet travel sites has also lured business from travel management companies. In fact, global travel sites such as Travelocity, Orbitz and Expedia have cranked up the competition, some by reducing the fees they charge on flight bookings, others by offering free bookings for limited promotional periods. Others, such as Flight Centre New Zealand, have realised that increasingly, not only larger companies have travel needs. Small and mediumsized enterprises (SMEs) serve as an attractive niche as well. Flight Centre started its new brand Flight Centre Business Travel (FCBT) in 2008 with an outlet in Albany, North Shore, and has quickly added three other stores, one each in Greenlane, Hamilton and Tauranga. Marie Pilkington, public relations manager for Flight Centre in New Zealand, says FCBT provides SMEs a place to get professional travel help. “It is a very cost efficient way for small businesses to get our expertise.” Customers have various levels of
complexity in their travel needs. “The way each client likes to engage with FCBT and FCm Travel (Flight Centre’s other corporate travel brand) solutions differs greatly according to each business’ needs,” Pilkington adds. Eye on expense Corporations are more intense in scrutinising their travel expense. What corporate travel management companies are now offering are sophisticated reporting tools that can centralise myriad travel expense items under one system so companies can analyse their spending patterns. And the cost of accessing all this – according to Adams-Pearce – is fairly small relative to a company’s overall travel expenses. She cites as an example, a company that spends $3 million in annual travel expenditure would assign between 1 and 2% of that to their travel management company. [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.
TRAVEL WISE Back to basics Photo: istockphoto
No doubt your company will be responding to the current economic conditions with a review of costs throughout your business. As travel spend is often a top three spend item, it should not be overlooked – but where do you start? Some basic scrutiny of your current travel habits, spend patterns and travel policy would be time wisely spent. Here are some general topics that should not escape your consideration: • Is your travel policy well published within your company? • Does your actual travel activity reflect the policy? • Do you have leakage to your policy – direct bookings or non-preferred suppliers being used? • Can you book further in advance to access lower fares and increase choice? • Should you implement a travel authorisation process to give more visibility of spend? • Can you pool taxis or use rental cars on longer journeys? • Have you consulted your regular travellers to get suggestions on cost reduction opportunities? • Have you discussed your current usage with your preferred suppliers? • Can you deliver more loyalty by reducing the number of preferred hotels? • Have you considered a Friday ban on travel to internal meetings? • Do you have an opinion on Premium Economy cabins for your long-haul travel? • Do you share the travel spend data by division/budget holder? This list only scratches the surface. To find out how Atlantic Pacific American Express can help, see their advertisement below. Also refer to page 45 for our article on travel management.
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EXPORTER 47
global stage EXPORTER looks at innovative NZ products seeking a worldwide audience
I f y o u h a v e a n i n n o v a t i v e p r o d u c t y o u w a n t t o t ak e t o t h e w o r l d , e ma i l e d i t o r @ e xp o r t e r M A G A Z INE . c o . n z
Greenlane® Micro Biogas Solution Biogases produced from landfills or refuse waste are increasingly being utilised to produce pure methane for vehicle refuelling or pipeline quality gas. New Zealand energy technology company Flotech Group has been a world leader in biogas upgrading technology since its inception in the 90’s – involved in many large scale worldwide projects. The new Greenlane® micro biogas kit is applicable for smaller users such as larger farms, landfills and sewerage plants. This micro solution which treats small volumes of gas run off – producing a stream of fuel equivalent to 10-50 litres of petrol per hour – is Flotech’s latest market development focus throughout Europe. The solution is particularly exciting for regions trying to find renewable sources of energy from within their own borders, often attracting government subsidies to do so. Biogas benefits include a reduction of greenhouse gases, noise reduction as vehicles are quieter, less oil dependency and waste recycling. Founded in 1983 to supply CNG filling equipment then expanding into compressor and heat exchanger manufacture, installation and servicing, Flotech’s turnover has steadily grown to NZD50 million with 90% export revenue.
PoleScan
Unlike any other downlight, the Nimbus Lighting Group’s DOT70 can swivel 358 degrees and tilt up to 35 degrees which casts light onto most areas of a room and is capable of varying the beam of light it emits. Quick adjustment of the patented modulating mechanism reduces its wide 80 degree light beam to a narrow 9 degrees, changing the ambience of a space by lighting it with a uniform, wide distribution of light or a narrow beam. Diffusion and accent lenses can be added to further expand beam options and coloured filters or a UV lens can also be fitted. Australia is Nimbus Lighting’s largest export market with continuing growth into the Middle East and United Kingdom. Expansion plans include the US market later this year.
PoleScan is a natty piece of ultrasonic technology that can figure out the condition of a wooden power pole from the outside – no digging or unnecessary damage to the pole. Independently and scientifically validated, the PoleScan software operates on a small handheld computer and provides a crosssection plot of external rot, centre rot, termite damage or star cracking. This information is available to the inspector immediately on-site and allows an experienced inspector to make objective decisions about the future of the pole. The system has three main tools - the pilodyn measures timber hardness, the timber probe measures below-ground diameter and the scanner locates internal anomalies. PoleScan and supporting engineering systems are in use in New Zealand, Australia, The Pacific and the Middle East. Trials in the US have attracted the attention of utilities and inspection companies.
Find out more about the DOT70 at www.dotdownlights.com
For more information www.polescan.com
For more information visit www.flotech.com
DOT70 Beam Modulator Downlight
48 EXPORTER
> GUTSY
PEOPLE
Viewpoint JON MAYSON
Photo: Dreamstime
CHAIRMAN / NEW ZEALAND TRADE AND ENTERPRISE
The task of creating mega exporters From a traditional trade promotion organisation to an award-winning economic agency – the NZTE is still evolving its service model as it seeks new ideas to grow NZ’s per capita GDP.
V
ery early on New Zealand Trade and Enterprise (NZTE) realised that Kiwi companies need to be highly engaged in the international markets if New Zealand was to lift its per capita GDP. We needed more New Zealand companies competing successfully on the world stage. We also needed more businesses exporting and for those already exporting to raise the quantum of their exports. That is still very much the case. NZTE’s raison d’etre is to de-risk the experience New Zealand companies have in doing business internationally, and to build the
pipeline of companies that are willing and able to successfully export and grow their international business. NZTE needs to work with the right businesses, at the right time in their life cycle and in the best ways possible. Still evolving This focus has moulded our evolution – from offering traditional trade promotion assistance - to becoming an international award-winning agency that enters into partnerships with firms to provide services throughout their life. The biggest challenge we see is not a lack of international opportunities. Rather, we see the need for New Zealand businesses to grow their critical mass and raise the depth
of their experience to compete successfully in international markets. The last year has been a particularly difficult international trading environment for these businesses. NZTE has been keeping close tabs on what is happening in our major trading markets, and has been using our international network to gather intelligence that we can share with businesses, with Ministers and with the policy agencies shaping the Government’s response to the crisis. The outlook has been quite mixed with some markets, industry sectors and individual companies doing better than others. The strongest New Zealand companies are looking carefully at
EXPORTER 49
their customers, and the strength of their positions. They are addressing which of their business lines are profitable, and which are most consistent with the core value proposition of the company. They are also using the recession as a pause in growth, to focus on profitability, strategy, and their future direction. Building resilience NZTE has a pivotal role to play in helping businesses to survive the current environment and ensuring they are positioned to take advantage when growth returns. That means helping businesses build resilience, retain their presence and relationships in international markets and be in the best position to grow out of the recession. We have carried out research into the strategies that multinational companies have used to successfully survive global recessions. There are some important lessons in here for New Zealand businesses – we will be looking at our own support for businesses with these strategies in mind.
experienced companies looking for new opportunities or new thinking that may help them take the next step in their business journey. In the future we want to be much more flexible with our products and services and to offer businesses solutions tailored to the level of their international business engagement. In the short term we want NZTE clients to grow faster and perform better than other similar firms. In the long term we expect to see NZTE clients well represented in export growth statistics. Last year we achieved our vision to be seen as one of the world’s leading economic development agencies, with recognition at the World Trade Promotion Awards in Hague as the ‘Best of the Best’ economic development agencies. Our challenge is to continue our advances as an organisation and for our clients, in a changing global economy. We are on track to achieve this in partnership with New Zealand businesses. [END]
We contributed to the small business package announced by Government in February; we have funded Biz New Zealand; and have been involved in the development of new products being offered by the Export Credit Office. We have joined with Export New Zealand to run a series of CEO forums in the regions. These were designed to allow businesses to share their experience, challenges and solutions. Raising productivity We will generally be focusing on products and services that encourage productivity – Lean Business and Better by Design are good examples of this. At the same time, NZTE’s overseas network is doing everything it can to help New Zealand companies in market. Our Beachheads programme remains active, and we are continuing to add services in Asia as part of our North Asia strategy. NZTE has also revamped its website. www.nzte.govt.nz intended to provide a first stop for any business contemplating exporting, as well as for
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.
CHOOSE RED_
NEW ZEALAND’S FIRST DUAL CERTIFIED, OFFSET PRINTING COMPANY.
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50 EXPORTER
nvironmental sustainability is becoming an ever increasing issue. At RED_i we have worked hard to become the first offset printing company in New Zealand to have been awarded both FSC and PEFC certification. By using our selection of FSC or PEFC paper stocks, you can have confidence that your brand communication will not only receive printing of the highest quality, but also be guaranteed that the paper used originated from a well managed forest. Internationally, more businesses are choosing to use FSC or PEFC paper, not only for sustainability reasons but also as part of their risk management policy.
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Door-to-door We take care of your consignment the instant it leaves your hands to the moment it arrives at your customers. This includes managing customs clearance so you can be sure that your consignment is in good hands every step of the way. Express import With our export import service, we collect your shipment and deliver it to your door when you need it.
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> PROFILE
The weightless way to export
N
ew Zealand small- and medium-scaled enterprises (SMEs) need to make a bigger shift away from the movement of physical goods into the “weightless” economy as a means to grow their exports. For far too long, companies in New Zealand have avoided tapping the export markets because this falls into the “too hard” basket. Small- and medium-sized companies also typically lack the resources to manufacture or distribute outside Australasia. Many innovative companies in New Zealand have designs, processes and products that can be commercialised but have not taken the steps to do so, says Mark Hargreaves, a partner at intellectual property firm, A J Park. Hargreaves is one of eight in the firm’s commercial team, focused on helping companies commercialise their innovations. As New Zealand seeks to move away from relying on primary industries to grow exports of what the NZ Institute calls “weightless” goods and services, more companies need to explore the opportunities available for the commercialisation of their ideas, Hargreaves adds. Increasingly, this is where New Zealand’s future lies. Fisher & Paykel, for example, is using its New Zealand base as a hothouse for intellectual property development – where research and design takes place – while the physical manufacturing of goods is being moved to cheaper locations such as Thailand and Mexico.
Mark Hargreaves – partner at intellectual property firm, A J Park.
Phil & Teds, maker of baby buggies, is another example of a company that has grown its export earnings having evolved its business model, increasingly using New Zealand as a design house and capitalising on the internet to reach bigger markets while manufacturing closer to those markets in China. Exporters can commercialise their ideas, designs or products a number of ways by licensing, by outsourcing manufacture and distribution, or by using franchising, joint venture, or other collaborative agreements. “We have got to get more people engaged in getting our innovation offshore. Research has shown that New Zealand and Australia have high ratings on citations in science and research but low ratings on patents registered and products brought to market. We are producing good research and ideas but not necessarily converting much of that into commercial success”.
“Do we want to go down the path of innovation and high value added exports? If we do, businesses need to think about means to get their products across the world,” Hargreaves says. New Zealand is far away from big markets. This tyranny of distance is a strong incentive for exporters to focus on developing high value products and services that can be commercialised using various channels to market, he adds. [END]
A J Park A J Park’s commercial team helps companies to commercialise their ideas, designs, products and services. Telephone: 04-474-0999 Partner: Mark Hargreaves Email: mark.hargreaves@ajpark.com
Taking your IP to the world It’s your intellectual property that makes your business unique and stand out on the world stage. To grow your business internationally you need to profit from your IP. As New Zealand’s leading intellectual property firm, we specialise in developing strategies to protect, enforce and commercialise your IP rights in New Zealand, Australia and throughout the world. Talk to us about where you want to take your business.
0800 257 275 | www.ajpark.com | New Zealand | Australia A J Park is the trading name of the two partnerships of A J Park Law and A J Park Patent Attorneys.
52 EXPORTER
> C R E D I T M A N AG E M E N T
Collecting my (over)dues By M ary M ackinven
D
on’t let a day go by once payments are due, before you start chasing a defaulting customer, advises Dun and Bradstreet general manager for New Zealand, John Scott. “The trail goes colder as time goes on. Some companies pull out every trick in the book to avoid paying. Find the right person in the organisation and go straight to them. The company might move, directors change or they go out of business.” Dun and Bradstreet provides credit reports and information on an overseas company to prepare an exporter for doing business, or later when chasing overdue payments. In the latter case, it only represents companies that have a contract with their counterparts, not just an invoice. Letters of credit and proper agreements for trade present a case under law, that is, the right to have the
money paid or to escalate recovery proceedings if there is a dispute. Debt seeds Scott says: “A lot of debt seeds are sown at the start, with poor contracts and understanding.” And the debtor is seldom a rip-off artist; 80% of debts come from customers of more than 12 months who start with good intentions but find things change. Is it always worth chasing the money till you get it? Scott says it depends on the value of the debt (sums must be significant) and what recourse you have. “Be practical. If after three months you have no success, perhaps stop there. But sometimes you have to put good money after bad for the principle of it. If this person has done this four times you might think, ‘I’m going to take them to court to make a point.’ It gives you leverage, to make someone recognise ‘it’s better to pay me than ignore me’.”
KEY TAKEAWAYS >> Understand your debts at the contractual stage. >> Sometimes you have to spend money to chase bad debts for the principle of it. >> Some countries don’t even recognise an ‘abuser pays clause’ that adds all costs and interest to the debtor. >> New Zealand Trade and Enterprise and the Ministry of Economic Development can give advice on these countries. >> Collection agencies charge a commission on recovered debts: no recovery, no cost.
Dun and Bradstreet will give initial advice for free but if companies want to get serious they have to sign a contract. The agency charges a commission on money recovered, and
EXPORTER 53
Q&A Q. Have you ever used an overseas debt collector? How cost effective was it and did it work? A. Most of the 214 exporters surveyed were pleased to have never needed a debt collector for an overseas market. A few mentioned they averted the need by requiring payment up front and focusing on contracts.
Some take a DIY approach: “It is better to front yourself in person. Face to Face you get a better response.” Some who have chased debt overseas used a lawyer, director or distributor in the market. Those who used a collection agency were not always impressed and commented: • “It didn’t work and we never got paid for goods this one time.” • “I’ve just used a New Zealand debt collector and it’s cost me $4500 and they have said get a lawyer, who said he wants $10,000. So I’m going to use lawyers in the future for debt collection.” • “Have used debt collectors in the USA, Japan and New Caledonia. USA was effective. A waste of money in the other two.”
On the positive side: • “Similar cost as in New Zealand and it worked.” • “Expensive but it works. We are currently shopping in Sydney for a cheaper alternative.” • “Used one several times. Costly but sometimes effective.” • “Very expensive. It took forever but it worked...”
• “Not very effective.”
• “Cost effective but hard to manage the results.”
• “It didn’t work, so no cost.
• “It’s great.”
Some companies pull out every trick in the book to avoid paying. Find the right person in the organisation and go straight to them. The company might move, directors change or they go out of business.” Jo h n Scott / g en eral m an ag e r Ne w Z e a la nd for Du n a nd Bra dstre e t
nothing if it fails, but charges extra for legal costs incurred. Better options than court Lines of credit have been tightening substantially and rapidly since about last November, says founder and head of EC Credit Control Ltd, John Harrison. “So it ain’t easy and it’s first in, best dressed. If you are chasing someone you can bet your bottom dollar there are 10 others chasing.” Harrison echoes Scott about the likelihood of recovering overdue payments: “It depends on your terms and conditions of trade – which will differ for each country. If you have none, you are stuffed.” EC Credit Control can provide a free appraisal of clients’ terms of trade and sells a package of suitable documents for about $1,500-2,000. The company is a one-stop-shop and operates on an average 28-day collection cycle compared to two to three years, which is the norm otherwise, Harrison says. A key reason for the company’s
54 EXPORTER
success (apart from the motivation of having to recover debt to get paid a commission) is its ability to list the non-paying business as a defaulter with its country’s financial institutions and suppliers. “This is more pernicious than delays through the court system.” OnGuard New Zealand is a Netherlands-based company that started selling credit management software here this year. Country manager Marc Vergroesen says OnGuard has three products that vary in sophistication and include tools such as ascertaining customer credit limits from companies like Dun and Bradstreet or Veda Advantage, the ability to relate your company credit policy to each customer and to operate in multiple currencies and languages (including Maori). Minimising exposure to debt is done by having robust processes up front; knowing as much as you can about your customer before you ship the goods, reinforces Veda Advantage New Zealand’s managing director John Roberts.
Veda Advantage New Zealand’s managing director John Roberts.
“Above all what is needed is effective handling of an export transaction until shipment occurs and thereafter, effective debt supervision: time is money,” he 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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> LOGISTICS
Moving an envelope, moving a 40-footer New Zealand Post is keen to help exporters reach the world with its flexible courier services. BY Val L eveson
N
Z Post’s best kept secret is the breadth of its capability – this Kiwi icon can deliver not only a tiny envelope but a load as hefty as a 40-foot container. And if there is anything Simon Hayes, Business Development Sales Manager of New Zealand Post, wants exporters to know, it’s that his organisation is “100% committed to supporting the exporting community in their endeavours overseas.” NZ Post, with partners all over the world, considers itself extremely wellnetworked in the logistics sphere. “We find that our capability tends to be a very well-kept secret. When most people think of NZ Post, they think just of mail. In fact our services can range from couriering an item weighing 250gm to delivering 40-foot containers. “The only area that we don’t offer services in is perishable goods. If it doesn’t rot, we can assist.” Imports, exports Besides offering international doorto-door freight forwarding service, NZ Post also deals with customs clearance, documentation, storage and distribution. It handles full container load, part container load, or multiparcel shipments. Hayes says: “Exporters should come to us and ask how we can help them in their given situation. We have a lot of flexibility and can deal with individual needs because of our partners – which include national mail services and even DHL if needed. “When businesses engage with us, they are pleasantly surprised. As far as airfreight is concerned, we are in the top five senders of airfreight out of New Zealand to the world. We can send
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KEY TAKEAWAYS >> NZ Post is well-networked and has partners all over the world. >> It can courier an item weighing 250gm to delivering 40-foot containers. >> It does not move perishable goods. >> Save up to 30% on NZ Post’s premium International Express Courier if you are prepared to wait for an additional day of delay on your traditional courier delivery period.
Simon Hayes – NZ Post Business Development Sales Manager
up to 30 kg internationally with our two to six day services.” He says with NZ Post’s International Economy Courier service, customers can send goods to 25 key countries using a tracked service. “People who are prepared for their parcels to be just a day slower than a traditional courier, can save up to 30% of the cost of our premium
>> NZ Post is keen on being flexible and attentive to exporter’s unique needs.
International Express Courier services.” Hayes stresses that: “We make sure that what’s expected happens. We take client feedback very seriously and look at how our services are supporting the customer and helping them not pay more than they have to. We realise how important exporting is to New Zealand – and we want to help people do that successfully.”
NZ Post’s offer PRODUCT/SERVICE NAME
TIME TO DELIVER
OTHER INFO
International Express Courier
Delivers within one to five working days.
It is a premium courier service to 220 destinations worldwide for documents or parcels. No fuel surcharges or rural delivery fees.
International Economy Courier
Delivers within two to six working days.
This service is ideal where cost is more important than speed. Delivers to 25 destinations worldwide. No fuel surcharges or rural delivery fees.
International Air
Delivers within three to 10 working days.
A prompt service for sending letters and parcels to over 220 destinations worldwide. Includes envelopes and packets.
International Economy
Delivers within 10 to 25 working days.
Useful if time is not of the essence. Can save up 15% off International Air price. Uses continuous weight pricing. This means you will pay for the actual weight of your items in 10g increments. Minimum charge of 100g applies.
Tuatahi Axes uses International Economy Courier for all its orders, except for saws, when it chooses to use International Express Courier. Jo Fawcett, a spokesperson for the company, says: “We make a point of using products that have tracking, which is a must for us. We also make sure that when the goods leave the factory, we email our customer the tracking number and a link to the website so they can track their own package.”
By having a good business solution, Tuatahi Axes says it has managed to capture a big portion of the competition’s saw and axe market – while remaining based in New Zealand. With a reliable freight partner the company can focus on doing what it does best – innovating and creating unique products for the global market. Fawcett says the company has its sights set on expanding. She says she dreams that one day the company
will be able to ship container loads of goods to overseas markets and when that happens, New Zealand Post will be the preferred carrier as well. [END] 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.
www.maerskline.com
CREATING OPPORTUNITIES IN GLOBAL COMMERCE We believe that creating opportunities is the key to success – in your business and in ours. With our complete range of cold chain solutions, our dedicated reefer specialists take care of your perishables from pick-up to delivery. And with our truly global reach, we ensure your products arrive in the best possible condition – anywhere in the world. Maersk New Zealand Ltd The CPO. Level 3, 12 Queen Street Auckland, New Zealand T 0800 MAERSK (623775) F +64 9 359 3488 E NEZSALINS@maersk.com
June 09.indd 1
22/04/2009 12:24:37 p.m.
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> TELECOMMUNICATIONS
On the road to nirvana with mobile broadband? There is little difference between the mobile broadband packages offered by Telecom and Vodafone. Vodafone does appear to have the slight edge with its faster speeds – 1.4mbps against Telecom’s 800kbps.
R
By Steve H art
eturning to your desk after a day on the road to find the email inbox overflowing can be time consuming to clear and may lead to lost opportunities – such as the email that came in 10 minutes after you left the office with an urgent request. Because it is important to stay in contact with customers – face to face and with email – many people are signing up for mobile internet packages. The upside of having a laptop with access to the internet is that during those down times between appointments you can dip in to work – email off those new orders, read emails from colleagues and confirm meetings with clients. And while being able to work efficiently on the road may sound like
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nirvana, mobile internet services are not always fast and are not consistent across the country. So be prepared for service drop outs and, even if you could afford the data usage, don’t expect to have the same download speeds you enjoy at the office for watching YouTube. Speed not crash hot The speed you get with mobile broadband isn’t always what you are paying for. And there may be many reasons for this, including the load on the network, the speed of your computer, your location and the cell site you are connected to. While 3G broadband coverage is available in most major centres, outside of these areas you will find mobile internet speed drops like a stone. In some places mobile internet is non-existent.
KEY TAKEAWAYS >> The speed on mobile broadband leaves much to be desired. >> Expect service dropouts when you use your mobile internet. >> Outside key service areas, the mobile broadband speed drops. >> Only send emails that you need to when you are on the road.
Telecom says its mobile broadband cell sites offer download speeds of 800Kbps (that’s 200k shy of 1MB) and upload speeds of 300Kbps which can appear painfully slow – especially if you need to send photos back to the office. For those who find themselves using Telecom’s older mobile broadband cell sites then expect download speeds of
Telecom
Telecom
Vodafone
Vodafone
Vodafone
Maximum speed: Down: 800kbps. Up: 300kbps.
Max speed: Down: 800kbps. Up: 1.4mbps
Monthly data
*wireless stick
monthly
*wireless stick
1GB
$310.22
$54.95
Free
$59.95
3GB
$310.22
$84.95
Free
$79.95
Prepay
simm card
Monthly
N/A
100MB 512MB
$34.95
N/A
$39.95
$10
N/A
$39.95
$40
*Wireless sticks (USB Modem) are needed by your laptop to communicate with the internet provider. The wireless card already built into your laptop will not connect with Vodfaone or Telecom.
400-600Kbps and uploads of 100Kbps. Outside of its mobile broadband areas expect average speeds of 80Kbps (that’s slower than a dial up modem from the last century). Vodafone says its 3G speed ranges from 800kbps to 1.4mbps. That means you can download a 4mg music track in less than 40 seconds in a good coverage area. Same difference With a monthly plan that has 1GB data cap you can – according to Telecom – read more than 20,000 plain text emails with no attachments, browse between 10,000 and 20,000 web pages or download 250 4mg songs
(4 x 250 = 1000mg (1GB)). The trick with mobile broadband, right now, is to use it for no more than you need to. You’ll want to keep your data use within your monthly limit and don’t expect it to function with the same reliability and speed as your home or office internet connection – remember mobile broadband services will download data much faster that you can send it back. So only send the emails you need while out on the road. When you compare the packages offered by rivals Telecom and Vodafone you can quickly see that there is little between them. However, Vodafone does appear to have the up hand with its faster speeds –
Capitalise Your Rent For 2 Years
1.4mbps against Telecom’s 800kbps. One thing Vodafone does have though is a $10 a month mobile broadband pre-pay scheme. This option may suit a small operator who see the value in mobile broadband but who wants to keep strict tabs on how much it costs. *Steve Hart is a freelance journalist. Contact him via his website at www. SteveHart.co.nz [END] STEVE STEVE HART HART // writer writer Steve has been working as a news reporter and journalist for more than 20 years. He left APN in 2007 to work as a freelance reporter covering employment, careers, business, technology and digital photography.
Papamoa (3851 sqm)
LEASING Calling all manufacturers, exporters, importers, logistic operators, storage companies or distributors. We have available two large modern warehouses situated in the Mt Maunganui, Papamoa industrial areas. The Landlord is seeking expression of interest from parties serious about setting up their business in either of these locations with a long term commitment. The Landlord is prepared to capitalize for approved companies your rent as a loan for up to 2 years, or take an equivalent equity stake to the same value.
Mt Maunganui (2256 sqm)
For more details of this offer contact: Greg Robison p 027-2456325 e greg@focusonproperty.co.nz Tony Lawrence: p 027-495 9725 e tony@focusonproperty.co.nz Ofce: 07-5721310
“Property management with a difference” 266 Maunganui Rd, Mt Maunganui
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> h a r d wa r e
Spoilt for choice Price is not everything when it comes to choosing a laptop. The cheaper versions that are on offer may not be sufficiently wired with the business applications you need. By ST E V E H ART
S
o the boss says you can get a new laptop to replace the aging machine that has let you down more than once and is as slow as a snail on a bad day. There’s quite a range of computers out there now – from cut down netbooks that deliver just the basics to powerful laptops that include all the bells and whistles. Your basic choice comes down to what your firm tends to use – so unless you are already using Apple Macs or Linux-based computers you are probably going to need a Windows PC. More importantly, before you start pouring over PC supplier’s websites you’ll need to know your budget and what software you will need to buy to put on your new computer. That old version of Microsoft Word and PowerPoint that has served you well
for years may not work on your new machine. And of course you will want to transfer all your old emails from the old computer to the new one, so check that what you are buying will allow you to do this without too much pain. Mini computer Depending on what you need your computer for, you may be able to get away with using a small netbook or mini computer. These machines are small, light to carry and cheap to buy. Some use a memory chip instead of a hard drive to store your documents – reducing power consumption and weight. They can be worthwhile machines so long as you don’t expect them to do everything a full-blown laptop can do. The downside of using a netbook is that they typically do not come with a DVD drive, so you will probably want an external drive ($200) to install
Depending on what you need your computer for, you may be able to get away with using a small netbook or mini computer. These machines are small, light to carry and cheap to buy. Some use a memory chip instead of a hard drive to store your documents – reducing power consumption and weight.
60 EXPORTER
software, and their keyboards are slightly smaller than their big brother counterpart. But these machines can be picked up for less than $800. If you need the full power of a laptop computer then the world is your oyster. It means you have to choose carefully and not be swayed by special offers and discounts. Things to watch for when buying a computer are the size of its hard drive, the speed of the processor, the amount of RAM it has built in, the number of USB sockets and the software it comes supplied with. There’s a lot to consider and the final choice comes down to what you need the computer to do for you. Go for speed While you can add more RAM and a larger hard drive at a later date, things such as processor speed and the number of external ports a computer has are basically set in stone. So given the choice between more RAM and a faster processor, go for speed first and add more RAM later if required. However, 2GB of RAM will handle most of what you need unless you are using it for heavy-duty games and video editing. Software will also be a big issue for you. Many computers on sale in the
KEY TAKEAWAYS What to look for in a new laptop >> Operating system and software: Ensure you get the full business version of any software, not a cut down version for domestic use. >> Processor speed: 2GHz as a minimum >> RAM: This is your computer’s temporary memory and can affect the speed at which your programs run. 2GB should be a minimum. >> Hard drive: 250GB + >> Display: Decide if the screen size is important to you >> Graphics: Does the graphics card have its own memory or does it share your computer’s RAM. For good speed it is better that the graphics card has its own memory. >> Wireless: It is hard to find a portable computer without a wireless card, but check that what you get will work with your firm’s network – speak with your IT manager >> Webcam: Nice to have but not always essential >> Operating System: Check the system is compatible with what you need >> Warranty: You will get one year, but it may be worth extending this – check the fine print.
High Street are aimed at domestic users. You will probably need a computer with an operating system for business users such as Windows Vista Business. Some cut down versions of Windows found in cheaper PCs may not run some business applications.
Given the long list of options open to computer buyers, it is as well to do your research and draw up a list of specifications you need before going shopping. And one final tip, before handing over your cash, call the supplier’s
technical help line to see how long you have to wait for an answer. Most firms will offer a prompt and efficient service when selling their goods, but they should be judged on their after sales service. Contact Steve Hart via his website at www.SteveHart.co.nz [END]
Buy or lease? Owning a computer means you may also end up owning any problems it causes down the track. Leasing may be a good option for you as the firm leasing it to you will own the computer – they will typically pick up all the bills to fix it should the computer go wrong. And when it comes to upgrading you just swap it over. It may also be a more tax efficient option for you too. Check with your accountant.
STEVE HART / writer Steve has been working as a news reporter and journalist for more than 20 years. He left APN in 2007 to work as a freelance reporter covering employment, careers, business, technology and digital photography.
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EXPORTER 61
toolkit
e x p o r te r ’s
use useful tools exporters can LOU ISE BLO CKLEY looks at
Windows 7 ahead of schedule
For more info, check out http:// www.microsoft.com/windows/ windows-7/
62 EXPORTER
Detailed import and export data at no charge Accessing detailed import and export data is easier, thanks to Statistics New Zealand’s release of the second stage of Infoshare. The online tool adds information on imported and exported goods to the vast array of free information already available on the Statistics NZ website. This import and export data makes Infoshare a valuable tool for exporters to gather information from an independent source. “An exporter, for example, could use the data to monitor trends, market conditions and their own position within particular markets,” says Kathy Connolly, manager at Statistics NZ (business indicators). Infoshare also holds a wealth of historical data, which allows users to evaluate trends or seasonal changes. It is updated within five minutes of the official release of new information. Visit: www.stats.govt.nz/infoshare or contact the Information Centre toll-free on: 0508 525 525.
Photo: mychillybin / Blair Walker
According to Reuters, Microsoft’s new Windows 7 operating system will be available on October 22 well ahead of schedule. The new operating system, which replaces the unpopular Vista, was originally planned for roll-out at the beginning of next year. The new system is a big deal as more than 90% of the world’s PCs run on Windows providing more than half of Microsoft’s profit. Microsoft said it will send Windows 7 code to PC makers to load onto new computers around the end of July. By October 22, new computers can be bought with Windows 7 installed and off the shelf software will be available for installation on existing computers. Microsoft confirmed that it will run a program whereby people who buy PCs with certain versions of Vista before October 22 can get a free upgrade to Windows 7, but it has not yet released details.
New service in bid for mobile market Compass Communications recently launched a new competitive mobile service. With mobile to mobile prices as low as 25 cents a minute and monthly access costs starting at just $15, Compass claims business and personal customers are able to save 20-30% on their annual mobile costs. Services are aimed at residential, small office or home office users and small to medium enterprises. Individuals or companies with Vodafone hardware can still utilise it and those currently using Compass’s other services - line rental, tolls and internet - can get one fully integrated account. Vodafone handsets can switch to Compass with a Compass SIM card. Those on other networks may be eligible for a gift card redeemable at leading electronic retailers. Customers can keep the same mobile number regardless of the network they’ve switched from although many are taking a new number starting with the Compass 0280 prefix. Compass offers the same network coverage, and base services as network supplier Vodafone. Consumer plans start at $15 per month with calls from 25 cents a minute and business plans start at $13.95 plus GST with calls from 24 cents per minute plus GST. For more information visit http://www.compass.net.nz/
Turning Point for business success A new business consultancy that promises not to disappear when you need it most or lock your business into unnecessary long-term contracts has just been launched. Turning Point Partners - headed up by two widely experienced advisors Miguel Hamber and Julian Kroll - is dedicated to helping small- to medium-sized companies achieve success with practical advice and cost-effective on demand web-based software tools. The company offers a threepronged approach: that of pinpointing strategy and turning it into success; providing the resource to create the success; and partnering with industry leaders to bring you quality tools, techniques and advice. If you need help to turn your business around then take a look at www.tppartners.co.nz.
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Useful Websites for Exporters Government-related Sites
CUSTOMS TARIFF AND FREIGHT CONSULTANTS
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. Agency for New Zealand economic development. www.maf.govt.nz Ministry of Agriculture and Forestry.
www.aironaut.co.nz Aironaut Customs is a highly motivated, privately owned, independant customs broker.
RECRUITMENT www.logisticsrecruit.co.nz We supply experienced export & import staff, with or without PIN numbers. Temp, contract or permanent roles. Qualified & guaranteed.
MATERIALS HANDLING
www.customs.govt.nz/exporters Customs regulations for exporters.
www.viscountplastics.co.nz Viscount – NZs leading materials handling solutions provider.
www.nzeco.govt.nz New Zealand Export Credit Office. Provides export credit guarantees to support the export activity of New Zealand businesses.
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.secureaload.co.nz Secureaload your cargo securement and protection specialists. www.yale.co.nz For the total materials handling solution – Yale Lift Trucks.
EDUCATION AND TRAINING www.export.ac.nz (New Zealand School of Export) New Zealand’s only Internationally accredited (IATTO) professional qualifications and business development in import/export; Export Library & Information Service. www.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 Business Growth offer practical export training to both new and experienced exporters. From international sales and tax through to market entry strategies and more – we will help you grow and expand your business offshore.
TRADE SERVICES www.jacanna.co.nz International Logistics Company www.sharkpatrol.co.nz Shark Patrol is an exciting new online credit referral network designed to protect its Members from problem payers. 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.regus.co.nz Provider of serviced offices, meeting rooms, virtual offices, conference rooms, and business lounges across New Zealand, Australia and worldwide. www.redwoodcredit.co.nz Specialist trade credit insurance (cover against the failure of a buyer to pay) Broker and consultant.
FOREIGN EXCHANGE www.currencyonline.com Your online currency exchange and transfer service, making moving money easy.
TRAVEL CONSULTANTS www.voyage.co.nz / www.voyage.net.au Founded in 1987, Voyage Affaires is an innovative international travel management company with offices in both Sydney and Auckland and clients that span the globe. www.chinatravel.co.nz Asia’s 1-stop travel shop China wholesaler. www.bwt.co.nz Our website features Business Travel information, as well as an up to date list of International Trade Fairs from our Trade Fairs department.
INSURANCE BROKERS www.tasmaninsbrokers.co.nz Marine Insurance, Liability Insurance, and other commercial insurances as required.
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64 EXPORTER
and when it does you want QBE on your side Imagine: fruit destined for markets overseas ruined when an unexpected visitor boards ship. The first financial bite is felt by local distributors, left with inferior product to deliver. Additional pesticide spraying is required before the product is allowed on shore. Retailers need to display special advertising acknowledging this. Which cuts into their margins – and their sales. And ultimately all look for someone to blame. Someone to pay compensation. QBE has more than 200 different business insurance policies working to help protect New Zealand businesses on land and at sea - including Liability, Trade Credit and Marine Cargo. So when it hits the fan, you want QBE on your side. Talk to your insurance broker about QBE before the financial worm turns on your business. www.qbe.co.nz
QBE-019 Exporter Rapport
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WPT 4733
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No member of the Westpac group accepts liability for 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. You can get a copy of the current disclosure statement for Westpac New Zealand Limited or Westpac Banking Corporation and a copy of the investment statement for any securities for which an investment statement is required from any Westpac branch in New Zealand free of charge or visit www.westpac.co.nz. Westpac Banking Corporation ABN 33 007 457 141, incorporated in Australia (New Zealand division).