Exporter Issue 14 by Adrenalin Publishing Ltd

ISSUE 14 MARCH QUARTER 2010

EXPORT OPPORTUNITIES ON EVERY PAGE

John Key: Achieved or not? • Going to Shanghai Expo • Protecting your IP in China • Trade financing: Getting it right • NZ Dollar: Bumps and... more bumps

ISSUE 14 MARCH QUARTER 2010

COVER STORY EYE ON GOVERNMENT No marks for good policies yet for John Key Rating John Key

FEATURES

REGULARS

TRADE FAIRS Bypassing camels for Shanghai World Expo Who’s going to be at the Expo?

PUBLISHER’S VIEW / SAY IT LIKE IT IS Mike Taillie I love New Zealand… but!

CORPORATE TRAVEL Online travel booking gets smarter The value of online booking tools

PROFILES Tracy Ellingham Getting the right formula for group incentive travel

FREIGHT Exporting from a lifestyle bloc Mom builds successful export business

TRADE FINANCING Managing trading risks Financing to free up vital cashflow

EXCHANGE RATE More choppy rides for the kiwi Tracking the NZ dollar

Schenker New Zealand Old company, new moves

VIEWPOINT Gilbert Ullrich Uncovering export value in our backyards

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John Blackham Lifting NZ’s weightless exports

PRODUCTS Exporters’ Toolkit Products & services you should know about

TECHNOLOGY Recovering lost data Art of retrieving what’s lost

EDUCATION Grooming exporters to act global Hot courses for exporters

DIRECTORY Useful Websites Information for travellers and exporters

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Global Stage Innovative NZ products seeking a worldwide audience

SHIPPING Sharing the load Dealing with piracy insurance

cover photography: NZPA

BORDER CONTROL Keeping MAF happy, making customers happy MAF need not be a pain

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

EYE ON GOVERNMENT Wearing NZTE’s badge of honour Is it worth the hassle?

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

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COPY EDITOR: Anthony Doesburg

DESIGN: Craig Haythornthwaite / URBAN_i, Phone: +64.9.631.1400

TRADE FAIRS Big is not better at trade fairs Selecting trade fairs

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Getting the big stick ready for Chinese pirates IP strategy for China

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> PUBLISHER’S VIEW

Say it like it is mike taillie EXPORTER MAGAZINE / publisher@exportermagazine.co.nz

I love New Zealand… but!

am one of New Zealand’s biggest fans. Along with owning the New Zealand Trade Centre promoting New Zealand exporters to international visitors, I also own Arrival magazine – the country’s largest tourism title picked up by international visitors. I have a passion for showing off what we make, and what attractions we have for people to see and experience. One of things international visitors rave about is the “kiwi way”. They see Kiwis as so friendly, genuine and laid back. We invite visitors home without hesitation and we still do a lot of business over a beer and handshake. International visitors develop an emotional attachment to New Zealand based, quite often, on their holiday experience of New Zealand. They then seem to look for an excuse to do business with New Zealand, not always, but certainly quite often. Now, while this laid back attitude is a highly enduring quality, there are times when it is just not appropriate; there are times when the serious Kiwi needs to show his face. This is

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in the area of customer service. One of the team members at my café business called me the other day and asked me to pick up a bottle of Charlies juice that was unopened. In the bottle was a “fruit fly” floating in the fresh juice. I accept that this can happen, but it’s the initial response from Charlies that has got me wound up. I called them and explained what I had in my hand. Their response was, “no worries, we will come and pick it up and bring a replacement bottle”. Imagine this bottle being handled by a customer in one of our large export markets and the customer taking the bottle to the store owner who contacts the importer, who rings Charlies and gets the “no worries” response. This just does not cut it if we are to compete on an international stage. I have had a similar experience with my Ford Territory lately. I got given a combination of reasons why I am having problems with it. They include: “you must live near the water” (well most Kiwi’s do!), “do you own a boat” (no, I don’t but I would love Graeme Hart’s.), “there must be inherent faults”, (don’t tell me just fix them – very scary)

and “what did the previous owner do with the car” (no bloody idea actually). The car is a few years old, and under warranty so what would have done it was to just deliver the service. That would have kept me a cheerleader for Ford – but it is a bit late now! At a government level I want our sights set higher. Being average in the OECD rankings does not inspire, not for the world, let alone New Zealanders. If it is good enough for us to expect the All Blacks to be first, that is, win the World Cup, then we should expect the government and all New Zealanders to aspire to being Number 1. I aspire for New Zealand to have the world’s best healthcare system, education, the lowest crime rate; for our children to have the best country in the world to play in; and for our businesses to have the easiest environment to do business in. Anything less than Number 1 is like having the goal of the All Blacks making the semi-finals. I still love New Zealand …. But we can, and must do better! [end]

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> E Y E O N G OV E R N M E N T

No marks for good policies yet for John Key John Key may be more visible than his predecessors but the jury is still out on whether he cuts the mustard as a Prime Minister who will lift NZ into the first world.

BY BOB E DL I N

rime Minister John Key has fast-tracked the signing of bi-lateral trade agreements with New Zealand’s trade partners and promises capital market reforms for New Zealand. The jury, however, is still out on whether he excels, barely meets the mark or underperforms on his promise to lift the economy out of the doldrums. In his statement to Parliament on February 9, Key said the government’s economic policies were aimed at shifting the economy more towards

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KEY TAKEAWAYS > John Key has fast-tracked free trade agreements with quite a few countries. > His worst move: killing the NZTE’s Market Development fund. > Exporters see him as being apathetic about stabilising the exchange rate. > Some pin hopes on an international ﬁnance hub to lift the NZ economy.

exports and productive investment, and away from consumption and borrowing. He promised to open up exporters’ access to world markets. Last year, New Zealand signed free trade agreements with Malaysia and with the 10 countries of the ASEAN block. This year it will sign agreements with Hong Kong and with the economies of the Gulf Co-operation Council and will work towards a free trade agreement with the United States through the Trans-Pacific Partnership. Trade negotiations with India and Korea are on the agenda, too.

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Efforts will continue to conclude the Doha round of World Trade Organisation negotiations and the government aims to press for progress with Australia on the Single Economic Market. high marks For connection In terms of connection with other countries, says Export New Zealand chairman Ken Stevens, the governments is doing “exceedingly well” and Trade Minister Tim Groser is doing “an excellent job”. While nothing fundamentally has changed from the previous government’s approach, “they are connecting more effectively, they are breaking through the paranoia in the American market, and they are getting good audiences there. They are looking at it more proactively than maybe the Labour guys did.” He sees Mike Moore’s appointment as Ambassador to the US as a good move. The perception is that ambassadors were being appointed to take a hard look at trade.

toP marks:

• Access issues and trade negotiations • Tim Groser could do better:

• The exchange rate • More focus on weightless exports bottom oF the class:

• Abolishing market development grants • Too much emphasis on commodities

we are still with tina [there is no alternatiVe monetary Policy], so nothing is going to change … but without Fundamental change, the inVestment ProFile won’t change. that’s bad For growth and Jobs.” JO H N WAL L EY, C EO, N EW ZEALAND MA NU FAC T U RE RS A ND E XP ORT E RS A SSOC IAT ION

aPathy on eXchange rate But many exporters have been left out in the open, with the phase-out of New Zealand Trade & Enterprise’s Market Development grant. Stevens says the exchange rate is a concern, but “there’s nothing much we can do about that”. John Walley, CEO of the New Zealand Manufacturers and Exporters

Association, hears mixed stories: “I don’t hear a lot of highly negative or highly positive comments, except around the nonsense of exchange rates.” Increasingly, a sensible longterm exchange rate related to trade is needed so both importers and exporters could win. “We are still with TINA [there is no alternative monetary policy], so nothing is going to change … but without fundamental change, the investment profile won’t change. That’s bad for growth and jobs,” Walley says. lows marks For adding Value More generally, Key is not cutting the mustard in terms of red-carpeting added-value exports (but no government had done well in that area for two decades). The focus has been on commodities, not on added

value, Walley says. The loss of the research and development (R&D) tax credits is also unhelpful. Businesses invest in R&D only if they are going to export, and implicitly the credits are an export policy. Ron Dards, a management consultant who advises exporters, says there has been “not much difference, really”, since the change of government. “They are more commercially orientated, but they are not doing anything to make commerce happen.” The exchange rate is a classic example. “They would like you to believe they have no control over it, but they do. The exchange rate is one of the places where it really hurts,” Dards adds. A big effort is being made to secure access to traditional markets, but that does little for Dards, who helps companies to sell to places like Russia, sub-Saharan Africa, the Baltic states, the Balkans and South America. Russia has 150 million people with money and is a cash economy, but the nearest New Zealand trade office is in Hamburg, Dards says.

they are connecting more eFFectiVely, they are breaking through the Paranoia in the american market, and they are getting good audiences there. they are looking at it more ProactiVely than maybe the labour guys did.” John Walley, CEO of the New Zealand Manufacturers and Exporters Association.

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KE N ST E VE NS , EX PO RT NEW ZEALAND CHAIR M AN

John blackham, chieF eXecutiVe oF Xsol, is disaPPointed there has been “a total lack oF any Policy or initiatiVe.”

no marks For good Policies Simon Dyer, managing director of 2C Light Company, gives no marks for good new policies (“not yet”). He considers the shutting down of NZTE’s Enterprise Market Development grant as “deplorable” and “ridiculous”, saying “it’s the best thing that they were offering”. New Zealand must export its brainpower and technology, but winding down the development grants is “completely counter-intuitive”, Dyer says. “I don’t expect the government to give us handouts in all cases, but we are an island state in the middle of the Pacific, so we really need help to grow our exports so we can improve our total net value as a country.” Bob Fenwick, chief executive of Planhorse Systems, thinks the jury is out on the new government. “We are still waiting to see.” He credits the government with doing an excellent job with free trade agreements, but says the phase-out of the export market development grant scheme is a black mark.

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The export credit guarantee scheme is starting to make inroads into support of exporters. It is into its fourth year but the banks are getting to grips with what the scheme is all about and exporters are getting the benefit. On the exchange rate, Fenwick has mellowed over the years. “I don’t think there is anything they can do about it.” John Blackham, chief executive of XSOL, is disappointed there has been “a total lack of any policy or initiative”. The government’s focus on commodities, “digging exports out of the ground or growing more sheep”, will not make us a wealthy nation, he adds. more Visible, more accessible His particular beef is that New Zealand is one of the poorest performing countries with weightless exports. Besides film-making, much more could be done to stimulate these exports. He hopes something will come of Key’s proposal to transform the country into an international

financial hub focused on the administration of overseas pension funds. Infrastructure will be created to facilitate and encourage the registration and administration of international pension funds under a proposal from the Capital Markets Taskforce. Paul O’Brien, chief executive of Easiyo, praises Key for turning up at factory openings and publicly supporting exporters. He is more visible and accessible than his predecessor, according to O’Brien. He could not identify new initiatives from the Key government, “but I can say the Trade & Enterprise people are more energetic and more helpful under this government”. Example: when he complained to NZTE recently, his wish list for help was promptly fulfilled. “A few years ago, it would have taken six months to crank them up.” Exchange rate volatility, on the down side, makes it “bloody hard” to export, he says. [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.

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> T R A D E FA I R S

Bypassing camels for Shanghai World Expo Business people heading to Shanghai World Expo are hoping to showcase their products, build new relationships and patch old ones. In the process, Kiwis hope to show the world how to throw a good party at the New Zealand pavilion. BY LOUI SE BLO C K L E Y

laying bridesmaid to snorting camels in Pushkar, and Virgin Galactic space flights, this year’s Shanghai World Expo ranks number 10 among Lonely Planet’s top 10 things to do in 2010. New Zealand exporters looking for a leg-up in China are bypassing the camels and heading directly to Shanghai. The New Zealand Government and five corporate sponsors are footing the bill of more than $32 million for New Zealand’s pavilion and its VIP hosting including Ruth Pretty catering, New Zealand wines, a mezzanine venue and the main open-to-thepublic New Zealand experience and rooftop garden, expected to attract seven million visitors. Exporters only need to cover guests’ entry into Expo (about $40 a head). New Zealand’s Shanghai pilgrimage will take many forms: Seresin Estate’s winemaker Clive Dougall hosting a one-off, wine-matched, dinner for 40 guests; Export New Zealand Bay of Plenty’s large contingent of regional exporters; and Tauranga’s mayor and local MPs booking the VIP facilities for six days. Most are using the Expo as part of a wider China market visit.

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KEY TAKEAWAYS > Shanghai 2010 World Expo runs from May 1 to October 31. > A signiﬁcant VIP corporate hosting venue and Ruth Pretty catering is provided free of charge to New Zealand exporters. You do not need to be an NZTE client. Bookings are still available. > If you are going to the Expo make sure you plan carefully to get the right people there at the right time. > NZTE’s New Zealand Central facility is a valuable tool for exporters in Shanghai both during and outside World Expo. Check it out at: http://www.nzte.govt.nz/nzcentral > For more information email: expo2010@nzte.govt.nz or visit http://shanghaiexpo2010.nzte.govt.nz or phone 0800 555888.

Product launches, relationshiP building Angela Wallace, executive officer at Export New Zealand Bay of Plenty, is enthusiastic about hosting opportunities at the pavilion for her region’s exporters. Some members of the group are also visiting Tauranga’s sister city Yantai, organised by Tauranga City Council. the new Zealand goVernment and FiVe corPorate sPonsors are Footing the bill oF more than $32 million For new Zealand’s PaVilion.

“Because a lot of the companies that are going have established relationships in China they are making the most of bringing in their people and strengthening relationships and doing product launches, etc,” says Wallace. Bay of Plenty-based software company Pingar LP is launching its Chinese language product with a presentation for 110 guests followed by meetings with potential customers. Its English language software was recently launched in Las Vegas and the House of Commons in London, and Hong Kong. Co-founder and CEO Peter Wren-Hilton views the Expo as its Chinese beach head.

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“The presence of Stuart Crosby, the mayor, adds weight to the delegation. Mayors in China are treated far more highly than they are in New Zealand,” says Wren-Hilton. The Tauranga and Rotorua MPs are also expected, which means the Chinese government will probably provide similar representation. With government and universities being Pingar’s target markets, this is good news for Wren-Hilton, who is also joining the delegation to Yantai, which will include a university visit. Whatever exporters’ reasons for attending, two important themes are common – it’s all about relationships and careful planning is needed to get key contacts to the New Zealand pavilion. Robin Piggott is sales manager at Dominion Salt, which supplies mostly pharmaceutical-grade sodium chloride for intravenous and dialysis solutions. Part of the Bay of Plenty contingent to both Shanghai and Yantai, he will visit other customers independently.

the facts so far • More than $30 million from the government coffers has gone into the New Zealand pavilion project plus significant corporate funding. • Corporate sponsors are Solid Energy, ZESPRI, Air New Zealand, ANZ Bank and Fonterra. • NZTE’s VIP hosting bookings at the time of writing are: • 23 individual companies have registered interest for specific dates • 200 New Zealand companies are expected to host guests during the six-month Expo • 8 regional delegations reserving dates (each planning to take a business delegation) • 6 ministerial-led missions (with business delegations) • 115 functions • 3433 meals

bay oF Plenty-based soFtware comPany Pingar lP is launching its chinese language Product with a Presentation For 110 guests Followed by meetings with Potential customers.

He’s also hoping to entice Korean customers. “I have a very good relationship with the Koreans and if I can encourage them to come to Shanghai just to go to the World Expo, by being there I think it will help cement that relationship,” says Piggot. being PrePared He also believes in being prepared: “It costs a lot of money to travel anywhere so you really have to do a lot of work before you go. You have to put everything in place because it’s too late once you get there. I’ve been travelling for export for 18 or 19 years — I know from experience.” New Zealand Trade & Enterprise (NZTE) has formed a business leveraging team to help businesses and regional groups take advantage of trade opportunities. New Zealand team lead Jane Cunliffe says the pavilion showcases Kiwi high-tech, innovative and creative values and the VIP facility adds the touch and feel of wine and food and discussion. The team is also responsible for organising ministerial trade missions and venue bookings.

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NZTE’s team lead Jane Cunliffe.

As a foundation partner (sponsor) of the New Zealand pavilion, ZESPRI International is happy to align its kiwifruit brand with the Expo in a market providing annual sales of $50 million, 4% of total sales. Sales are projected to rise to $65 million within a few years. The 10-year target is 20% of annual sales. Communications manager Melanie Palmer says Chinese consumers are historically good fruit eaters and with increasing income, brand awareness

ZESPRI’s communications manager Melanie Palmer.

and quality consciousness, the future looks good. While Palmer won’t reveal how much ZESPRI is spending on the Shanghai deal, she says it is “not an insignificant amount”. As ZESPRI’s global advertising and promotion spend last year was $70 million it is likely the amount is a teeny drop in a big ocean. With seven million potential consumers predicted to visit the pavilion, a kiwifruit vine on the rooftop garden, bragging rights, VIP hosting opportunities, a senior ZESPRI presence at ministerial delegations and ZESPRI retail merchandise, those bucks should deliver plenty of bang. “The investment is not as important as the value returned on that investment for us and we are certainly planning to make the most of that,” Palmer says. low registration Not all potential Kiwi visitors have decided on the pilgrimage yet. NZTE is expecting more than 200 companies to host guests although only 23 are registered. H Dawson Sons and Co (Wool) NZ entertained customers at the 2005 World Expo in Aichi, Japan but remains undecided about Shanghai. Managing director Keith Cowan says: “We are in a different scenario in China in that we have our own team on the ground there. We didn’t have in Japan. We are actually trying to assess at the moment whether we are going to be able to get to the right people and use it in the right way.” [end] LOUISE BLOCKLEY / WRITER Louise is an Auckland-based freelance writer who has recently completed an AUT Bachelor of Communication Studies in journalism. She has worked in the travel industry and for publications such as The New Zealand Herald and New Zealand News UK, London, in advertising sales.

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> C O R P O R AT E T R AV E L

Online travel booking gets smarter Online travel booking tools are becoming a way of life for some companies that find it more convenient and cost-efficient to have business travellers handle simple transactions with the click of a mouse. BY SA N G E E TA A N A N D

ccess to thousands of hotels, easy changes of schedule and instant booking confirmations are just some of the benefits corporate travellers have come to rely on to speed up the shaping of their travel itineraries. While New Zealand is reportedly out of recession, the pressure on costs remains, so Kiwi exporters are trying their best to keep business expenses under control. Using online travel booking systems has become a way of life for some companies needing more efficient ways to organise work travel. Some businesses have found ways to travel less. However, for most exporters, travel continues to be a core part of the business, and travel is expected to increase as overseas markets show signs of recovery. The trend over the past decade is upwards. Business travellers multiplied by 16% to 281,000 between 1999 and 2008, according to the Ministry of Tourism. Over 80% of them depart from Auckland, 11% from Christchurch and 9% from Wellington. They go away for an average of 14.2 days, mostly to Australia (56%), the United States (6%) and China (4%). Online accommodation bookings, according to a 2009 Ministry of Tourism survey, have risen to 58% from 42% since

KEY TAKEAWAYS > Booking online shows real-time availability and gives instant conﬁrmations. > Templates for multiple bookings or repeat bookings save time. > For more complex bookings, travellers may still use a travel agent. > A high adoption rate and ease of use are essential to get a payback from online tools.

2007, while phone bookings have fallen to 30% from 44%. Pre-trip research has increased by 39% since 2007, and much of this is being done online. time and money So what is causing the shift? Many New Zealand exporters are using online booking tools to save time and money. A popular tool is Serko Online, which automates the process so a corporate client can make a booking in less For an oFFline booking the aVerage internal cost to make the booking is $150; to make an online booking the cost is around $20.” DA RRIN G RAFTO N, CHIEF EX ECUTIV E O F SER KO.

than two minutes, says SERKO chief executive Darrin Grafton. It’s not just the speed of booking but also the cost saving offered by online tools that is attracting users. “For an offline booking the average internal cost to make the booking is $150; to make an online booking the cost is around $20,” Grafton says. And there’s more to it than that. “Not only is there an internal saving, but there is also an external saving by implementing a buying strategy. The strategy helps a corporation to book travel the way they work and travel. This enables cheaper fares to be booked where travel will not change, etc; this saving can be as high as 30%. On average, corporations will save 27% by using Serko Online from moving from an offline travel procurement process to an online procurement process.” where many traVel One organisation that has reaped such savings is New Zealand Trade & Enterprise. “[Serko] has the functionality we need as a large organisation with multiple travel bookers,” says Julian Moore, group general manager of New Zealand Trade & Enterprise. Online tools are said to be up to 10 times faster than traditional booking methods. “Online booking saves time because it eliminates double handling and, as a result, also reduces our

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agency fees,” says Moore. With an annual spend of about $1 million of travel booked online, NZTE has made considerable savings. For a rushed executive, online booking also offers the advantage of instant confirmation. “Booking online provides real-time availability, which saves time because we’re not waiting to hear back for confirmation. It allows us to be in control of our bookings; for example, we can change departure times on flexible airline tickets prior to ticketing,” says Moore. Another tool in the market is Sabre. It gives access to 400 airlines and has pricing tools that make it easy to find the best fares. Sabre can also be used to book rooms in more than 88,000 hotels. Online tools are also popular with

at a glance: what the tools offer • Online tools like Sabre and Serko offer ease of use with an intuitive user interface. • The tools give access to low-cost carriers like Jetstar and Pacific Blue. • Some tools let you manage your offline as well as online booking in one place, choose your seat or make changes, and have an itinerary texted to the traveller’s mobile phone. • The tools act as a travel supplier directory where contact details can be easily found.

oPerational saVings are Passed directly to clients and the saVings are signiFicant as Processing is done by the user instead oF a consultant.”

need high adoPtion rate But online tools are not always the best bet. While handy for straightforward travel bookings, it can be necessary to speak to a travel specialist for complicated itineraries. “Online booking saves time on simple domestic and transTasman flights. However, it is more cost-effective and efficient to deal with our travel agent for more complex and long-haul bookings,” says Moore. Also, the adoption rate needs to be very high for organisations to get the benefits. And not all organisations can achieve a high adoption rate. SEEK used Serko for a while, but stopped. “The move from the booking tool was a secondary result of changing suppliers,” says Brigid Carey, SEEK manager of administration. “But SEEK staff who manage travel bookings do prefer to speak to a person rather than use a booking tool, which, at the time, could be a little clunky, slow and inflexible.” [end]

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travel management companies like HRG. HRG can process online bookings for clients more quickly, says senior manager e-support services Grant McConville. “As such the savings we make operationally are passed directly

to the client. Obviously this is quite a significant saving as most of the decision work and actual processing in creating the booking is done by the user and the tool, instead of a consultant.”

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> PROFILE

Getting the right formula for group incentive travel

re you overspending for incentive tours on the wrong segment of your customers? Not every incentive provided for key customers will yield you the same returns, hence it takes real targeted spend to get the investment right. Group travel specialist Tracy Ellingham is increasingly convinced that companies need to be smart about how they allocate money to reward key customers. “Companies need to be clear where they are going to spend their incentive travel money. Is it going to be for new customers? Is it going to be on customers who have been loyal, or those who have increased spending over the last year?” She also strongly advocates being upfront with clients on what will be paid for them on these incentive travels. “With customer incentive tours, it is important to be upfront when you present to your customers, what they need to spend on. Often the pitfalls come when customers are confronted with what’s not included in the tours.” From magically lit-up beaches, dining on tables set on the shores, down to sandal drop-offs for

with customer incentiVe tours, it is imPortant to be uPFront when you Present to your customers, what they need to sPend on. oFten the PitFalls come when customers are conFronted with what’s not included in the tours.” T RAC Y E LLINGHAM , GR O UP TRAV EL SPECIALIST

travellers, Ellingham’s suppliers are able to provide the special touches to create memorable group trips as well as private events. Sometimes key customers are looking beyond being pampered. “Some groups may choose to participate in local volunteer work for a community they are visiting - for example, a recent group who travelled to Fiji did volunteer work for a local school,” she adds. Ellingham who has been in the industry for 20 years is affiliated to Travel Managers which links together a pool of travel brokers. Being an independent operator means she has the freedom to choose for her clients the best airline deals, hotels, group operators, car rentals and travel insurance companies. Ellingham considers the following to be critical areas for companies to consider before picking their travel consultants:

• The depth of the travel specialist’s experience • Is your agent TAANZ1 bonded and IATA2 accredited? • How much attention does your travel specialist pay to details? • Does your travel specialist have easy access to a network of suppliers? • Is your travel specialist available 24/7? [end] 1. TAANZ: Travel Agents Association of New Zealand 2. IATA: International Air Transport Association

tracy ellingham travel & group specialist Specialises in managing corporate group travels, private functions and incentive tours. Tel: 0508 4 TRAVEL (0508 487 283) Mobile: +64 21 399 162 Email: tracy.ellingham@ travelmanagers.co.nz

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Exporting from a lifestyle block Looie James doesn’t have a showroom or a fancy office. Operating from her 4ha lifestyle block northwest of Auckland, she runs a thriving virtual store that sells high-end toys to Australasian retailers.

BY VA L L E V E S O N

our years ago, Looie James was a stay-at-home mum with seven children living on a lifestyle block down a gravel road northwest of Auckland. The semi-isolation didn’t preclude the still stay-at-home mum from running a thriving export-import business called Plushtoys.co.nz, which supplies 60 retailers across Australia and New Zealand with toys, handmade comfort blankets and playthings imported from Europe, Asia, Israel and the United States.

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KEY TAKEAWAYS > It’s possible to run an export business efﬁciently using Rural Post to get your parcels to their foreign destinations. > With agreement with the Rural Post owner-driver, you can get packages picked up from your lifestyle property. > Parcels can be tracked. > An export business can be successfully run without a physical showroom/ofﬁce.

Meeting her logistics needs is Rural Post owner-driver Carol Whitelaw, whose personalised service has kept James’ business growing. James was looking for something to do besides raising a family. “I just felt I needed something else – stimulation away from the family. This of course was difficult since I have so many children — they range from 15 years to 18 months. I wanted to find something I loved and felt good about. “As a child I didn’t have many toys, and with having so many children, I now know quite a lot about toys. I decided to look at high-end shops —

> FREIGHT

I wasn’t interested in the low-end area of things. There’s a lot of rubbish out there for kids that is quite damaging to the environment. “So I started looking at toys created from organic fibre at the high-end of things.” teddy bear break She looked first to Europe, and started to contact manufacturers. It was difficult to be taken seriously, but a German teddy-bear maker agreed to supply her and things started from there. She built a website and started to get her toys placed in high-end stores, such as Smith & Caughey. “This gave the business some prestige.” After two years she took on a business partner. She asked her

a sign on her letter box saying “boxes to be collected”. She says using this system, her goods get to their Australian destinations in two to three days. James particularly likes being able to track her parcels. “In all the time I’ve been using the service, I’ve had only one problem – a box went missing as the store had moved, and it had been delivered to the wrong address.

we don’t haVe a showroom, but we do haVe a Phenomenal website where PeoPle can look at our Products. we do 97% oF our business online and i constantly use email marketing to uPdate our store customers on what’s aVailable.” LO O I E JA MES , PLU S H TOYS

manufacturers if they would consider her for supply to Australia, too, and all but one said yes. After going to a trade show in Sydney in February last year, things exploded. “People loved what we had to offer – but we hadn’t really considered how to get the goods to them. We needed to look at how to ship things quickly. I’m a stay-at-home mum with seven kids – I was using New Zealand Post for New Zealand orders, so I contacted them to find out what was available for Australia. They said they could help with good, competitive rates.” keePing uP with the orders One issue, James says, is that the orders were getting bigger and bigger. “Taking them to the rural post office was getting to be too much – they were getting too big. And this is where our local Rural Post woman came in. “She said she was more than happy to take the packages from my back door.” James says she now texts Rural Post owner-driver Carol Whitelaw when she has goods to be picked up, or puts

I managed to track it and it was delivered to the correct address on the same day.” growth eVery year James says she manages to work out pricing online and over the phone and uses clear big envelopes that she keeps at home for invoicing. “I’m always careful not to go over A$1000 value on my parcels, as that makes them liable for taxes on the other end.” She says she has an account with New Zealand Post and pays monthly. The first year of her business saw $5000 in sales, last year she enjoyed $160,000 in sales, and she is expecting that to double. “Each year we have doubled our sales. “It’s looking like at the end of March we will have made $300,000 in sales in a recession financial year. We have enquires daily from stores. We have another trade fair to attend in July and are looking at huge volumes of stock in October.” James says living rurally helps rather than hinders her. “It’s a low-cost

business working from home. We have 4ha and are building a warehouse on one of our paddocks for the business. It’s time to move out of the garage — it’s supposed to be a playroom for the kids! “Why move into some industrial park when we can have packages collected from here. That’s what makes the difference. “We don’t have a showroom, but we do have a phenomenal website where people can look at our products. We do 97% of our business online and I constantly use email marketing to update our store customers on what’s available. “There are a few people who don’t like email marketing so for them we’ll post hard copies. Part of it is learning how stores like to be contacted, but a lot of my business is run on my laptop on the sofa.” She says she’s finding Australian stores don’t mind dealing with a New Zealandbased distributor, as long as they can pay in Australian dollars and they can phone you on an Australian number. “It just makes it easier for them.” She says her older children help with the business. “My 15-year-old daughter is great at graphic design, so she helps out with that.” Her husband helps with the spreadsheets. James says there have been some challenges with the rapid growth of the business. But the two things that make it all possible are Rural Post ownerdriver Carol Whitelaw and her access to broadband. [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.

EXPORTER 17

T I K L O O T

E X P O R T E R ’S

USE USE FUL TOO LS EXP ORT ERS CAN lou ise blo ckl ey LOO KS AT

Smart web presence

Jetstar’s Akarana Lounge BUSINESS TRAVELLERS can now take advantage of Jetstar’s low fares with the convenience of a lounge at Auckland Airport. Opened in February, the Akarana Lounge gives passengers on the airline’s domestic New Zealand network all the benefits at a special introductory price from $9.99. Passengers travelling on Jetstar’s network from Auckland to Christchurch, Wellington or Queenstown can purchase entry to the Ðkarana Lounge to enjoy a range of complimentary food and beverages, as well as plasma screen entertainment, and a range of convenient business facilities including workstation areas, complimentary Wi-Fi access and computer terminals prior to their flight. The Ðkarana Lounge is exclusively available for purchase for Jetstar or Qantas customers flying on Jetstar’s domestic New Zealand network from Auckland. Access is also available for purchase for Jetstar and Qantas international passengers when connecting from an international service at Auckland Airport onto Jetstar’s domestic operations through Auckland, which directly serve Christchurch, Wellington and Queenstown. Jetstar or Qantas customers can purchase entry to the Ðkarana Lounge at Auckland Airport at the door for the special introductory rate of $15NZD if they missed the online purchase. For more info: http://www.jetstar.com/nz/en/travel-info/travel-services.aspx

18 EXPORTER

SAVVY EXPORTERS understand the importance of having a world class web presence. Right now, your potential markets will be looking for services you offer and checking out your company online. So, it’s critically important that you’re aware of how they are getting on…listen and measure. There are two tools by Google that are invaluable and free to use. Google Analytics installed on your site will track visitors and their online journey and can help you discover usability issues or experience blockages. Google Alerts is a great tool that allows you to listen in on the online conversations taking place about your sector. Simply sign up to receive daily updates on relevant key words and phrases including your company name. If you are thinking of jumping in on the Social Media Wave - this is the place to start. To access these free tools - use Google, or talk to BKA Interactive about assisting you. For more info: www.bka.co.nz

Looking to expand into the UK & Europe?

CargoConnect PORT OF TAURANGA’S new online cargo management system, CargoConnect, is already boosting customers’ productivity. Shipping companies, importers, exporters and border agencies can access the new web-based system to manage all of their cargo movements and information transfer to and from the port’s container terminal. Port of Tauranga Commercial Manager Graeme Marshall says the secure system can be fully integrated with customers’ existing IT processes using direct system to system data transfer (B2B), transforming the information flow between exporters, shipping lines and the port. Cargo documentation can be automatically updated with accurate details and the system also reports discrepancies and compliance, such as reefer time off-power. Features include vessel, customer and pack point-specific data warehousing, container auditing and release, and hazardous goods functions. The Ministry of Agriculture and Fisheries, one of the first users of the system, is using it for container release and inspection purposes. CargoConnect also offers automated Customs clearance warnings. Mr Marshall says CargoConnect is generating efficiencies through the entire supply chain. “Users can log in from anywhere, any time and get all the information they need – what cargo is in the terminal, what’s being loaded on to a vessel, any discrepancies in the information or processes – by directly interacting with the terminal’s own operating system via the Internet,” he says.

QUATTRO BUSINESS SERVICES provides national and international business support for SMEs wishing to expand their product and service portfolios and can benefit from using Quattro’s own people in New Zealand and UK/Europe. Quattro’s key attributes are in sourcing, finding distribution channels and contact facilitation. Examples of recent assignments are: • A UK market entry assessment for a NZ Inbound Tour Operator. • Locating European sources of supply for two products for a beverage importer. • Helping a baby-wear exporter to transition her distribution to a new UK agent. • Finding a NZ source of supply for a UK health products importer. • Locating supply sources for an export trading company looking to enter new markets in UK and Asia. If you think Quattro would be a good addition to your toolbox contact them for a no obligation initial discussion? Quattro business services tel: 09 5224843, mob: 0211852178 email quattro_ic@yahoo.co.nz

For more info contact: martynm@port-tauranga.co.nz

Auckland Co-op Taxis Going Green CO-OP TAXIS HAVE over 60 years experience in the taxi industry and understand the need to offer a consistent and reliable service to the community. There are a wide range of vehicle types including vans, business class cars and environmental vehicles. As it is the largest taxi company in New Zealand it has accepted responsibility as a greenhouse gas emitter and has embraced the challenges of reducing its environmental impact. There are over 500 environmental vehicles in the fleet, made up of hybrids, diesels and LPG. Through a proactive best fleet replacement policy, Co-op is well advanced in having a core fleet without petrol-only vehicles. Since August 2008 all new vehicles entering the fleet had to be of environmental standard. The aim is to be the taxi provider of choice by advancing changes across fleet operations that will make them cleaner and ‘greener’. Find ranks at the Auckland International and Domestic Airports. Also ask how they can help you with a corporate taxi account. Phone 300 3000

Free Tax Seminars and Workshops INLAND REVENUE is running a series of free workshops for people who are thinking of starting their own business or are new to business. The workshops are held in most regions. Depending on the seminar or workshop selected, they cover: • Record keeping requirements • Keeping a cash book • Income and expenses • Budgeting for income tax payments • An overview of GST • Keeping wage records • Manual and electronic calculations of PAYE and other deductions (e.g. Kiwisaver).

EXPORTER 19

> TRADE FINANCING

Managing trading risks for the antipodean Understanding how to price the risk of selling on credit terms can help Kiwi exporters reach global markets in a cost-effective manner.

BY YO KE H AR L E E

xporters can free up cashflow or reduce unnecessary trading risks by seeking the help of specialist trade financiers who understand how to help ease cashflow throughout the entire supply chain. Freeing up vital cashflow helps exporters keep their financing costs to a minimum to ultimately help reduce the cost of business. As an example, an exporter with stacks of containers sitting on the wharf awaiting loading and shipment can free up cashflow tied up with the forwarding company by seeking packing credit from the bank. This is particularly useful if freight is a major component of the business cost. Gavin Haworth, head of trade and supply chain at HSBC, says calling on the advice of banks early can help exporters cover risks and understand costs to ensure those costs are priced into the transaction, not eroded from margins, as is the case if costs are only identified after contracts are signed. “Very often, businesses are so focused on the sale, they forget that with margins being so compressed, the price may be insufficient to cover the risks they are assuming,” Haworth says. He recommends getting the help of an experienced trade financier to price or cost large consignments of products to offshore markets. This is particularly true for those exporters that ship irregularly to unfamiliar markets. “We can help exporters understand the working capital cycle, to ensure they

20 EXPORTER

KEY TAKEAWAYS > Talk to your bankers early in the sale process, not after contract. > Help your banks understand your product cycle, your risks. > Be meticulous in presenting your documentation. > Don’t risk selling without trade credit insurance or appropriate banking risk cover.

Depending on the type of LC (standby, revocable, irrevocable and revolving LCs), they can amount to between 0.5% and 3% of a contract value. buyers want better terms Due to the higher cost of obtaining credit during the recession, buyers have been seeking more supplier credit terms. Haworth says in some instances, overseas customers were sometimes happy to pay the cost associated with funding New Zealand purchasers as these were lower than obtaining local

Very oFten, businesses are so Focused on the sale, they Forget that with margins being so comPressed, the Price may be insuFFicient to coVer the risks they are assuming.” G AVIN HAWORTH, HSBC HEAD O F TRADE AND SUPPLY CHAIN

identify risks, costs and put in place an appropriate structure that will maximise profit for their business. The working capital cycle for an international trade is more complex than the traditional domestic sale,” he says, adding that the better a bank understands an exporter’s supply chain, the better it can help structure a cost-effective price for the exporter which can include the trade financing element. During the last recession, the cost of funding rose in tandem with higher risk profiles associated with overseas buyers facing business downturns in their home environment. Banks are typically shy about revealing the cost associated with issuing letters of credit, traditionally the most secure form of trade financing.

funding in their own countries. “You have to ask yourself ‘what does it cost my business to assume those costs’ and price them into the contract for that term,” Haworth says. Often an exporter would sign a contract, then seek short-term financing from banks, Haworth says, but is too late at that point to understand if the risks can be covered or if the cost of the sale has been accurately worked out. A bank presented with an LC from a foreign buyer’s bank would typically be comfortable paying the local exporter up front, based on carrying some of the risks for the duration of the product’s shipment to market, and ultimate payment by the buyer.

EXPORTER 21

cash uP Front Some exporters only deal with buyers who pay cash up front, or who can present an LC. Some exporters trade on open account but seek cover from trade credit insurers. The cost of trade credit insurance has ballooned over the past 24 months due to the high incidence of defaults on payment from overseas buyers. Costs associated with LCs have also risen during the recession as liquidity in the banking system tightened. ASB Bank international trade services senior manager Gary Cross advises exporters to present all the information they have to help their bankers efficiently devise appropriate trade credit solutions. “Stick to your knitting; for instance, don’t compromise risk for return, particularly in regards to foreign exchange or over exposing yourself to credit risk. “As New Zealanders we are inherently trusting. Companies engaged in international trade need to look past this and ensure that they understand the risk profile of what they are undertaking and ultimately are comfortable with what is put in place to mitigate these risks,” Cross says. For timber exporting company LumberLink, LCs have been the

trade credit Financing is not an issue ProVided the banks are conFident you are dealing with a customer with a sound Financial track record.” WOOL EXPORTING COMPANY JOHN MARSHAL AND CO’S MANAGING DIRECTOR, PETER CRONE,

most reliable form of payment. Tony Johnston, a director of the company, says juggling sending goods to customers and balancing the customers’ need for speedy delivery of goods at the right payment terms has also been a challenge. LumberLink exports timber regularly to 17 countries and insists on prepayment, part payment of LOC, or cash against documentation. “We don’t ever give ownership of the product until we have the cash,” Johnston says. Getting banks to support an exporter with trade finance for different parts of a manufacturer’s supply chain is doable if the banks are certain the financing is reaching a customer that has good credit risk, and will help improve the cost of doing business, Johnston says.

are dealing with a customer with a sound financial track record. “I think over the past two years, the biggest challenge [for the wool industry] has been obtaining trade credit finance insurance. Cost of insurance has gone up by over 65%. The government has stepped in to assist in this area [with the Export Credit Office],” Crone says, adding about 75% of his company’s business is done on LC terms. Cost of trade credit insurance and the tightening of credit insurance terms have featured highly in the past 24 months. The situation is easing somewhat, industry officials observe. However, certain industries are finding it difficult to gain trade credit insurance, particularly the wool and textile industries. [end] YOKE HAR LEE / WRITER

sound Financials key Wool exporting company John Marshal and Co’s managing director, Peter Crone, says trade credit financing is not an issue provided the banks are confident you

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.

22 EXPORTER

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> E X C H A N G E R AT E

More choppy rides for the kiwi The kiwi looks less likely now to rise past US80c compared to a few months ago. What’s certain is more volatility for the local currency.

BY BO B E DL I N

t’s still a tough call between the kiwi having seen its peak or whether it will pass US8c. Whatever the next direction, exporters who have survived a tough past 24 months should brace themselves for more volatility. “It will be choppy. We could see a 5% to 8% movement over a period of month or two during the next year as it slowly moves lower,” says Mike Hollows, director of trading at HiFX. “We think we’ve seen the high in the kiwi-US,” he says. “I wouldn’t be surprised if we went down to the mid-60s, maybe US63cUS64c this year. The Reserve Bank said in its end-ofyear Monetary Policy Statement that prospects for some exporters have improved but the higher exchange rate “is likely to have put more pressure on some exporters, particularly those not selling commodities”. On the trade weighted index, the NZ dollar fell 0.9% in December but was 17.3% higher than a year earlier; it gained 2.3% in January, then fell 2.3% in February. Against the US dollar, it eased from an average US71.62 cents in December to US68.3c by February 9 then rose to almost US70c at the end of February.

24 EXPORTER

KEY TAKEAWAYS > Brace for choppy currencies. > Ignore exchange rate forecasts. > Try to smooth out the bumps. > Consider how your business will cope with sudden NZ dollar moves. By then it had fallen against the Aussie dollar from an average A79.29c in December to A77.85c, and against the yen from an average JPY64.15c in December to JPY61.61c. reasons For easing oF kiwi The shrewd exporter – having survived probably the toughest period for years – should brace for more volatility. The US dollar, valued against major trading partners, generally has trended down for around 10 years. HiFX’s Hollows believes it will be subject to a few years of corrective recovery against those currencies, which could have a flow-on effect in keeping the kiwi dollar down. Unchanged interest rates until mid-year in New Zealand should keep the kiwi away from investors who are chasing yield, too. Another factor is that government stimulus of global

economies is starting to wear off, and the effects of the recession are likely to drag on economic activity for the next few years. That’s not a good environment for trade growth and commodity-based currencies. “It will be a choppy ride,” Hollows says. He advises exporters to stick to the age-old rules of having protective strategies when tendering for business so they don’t get caught in an exchange rate squeeze during a bounce-back. Weakness against the Aussie dollar is great for New Zealand businesses exporting to Australia. If it slips much below A77c, Hollow believes, it could slide to A73-A74c. His general advice: if you see dips, “leave a little bit of powder dry for lower levels, but do some hedges according to your company policy”. Exporters with pricing geared variably according to contracts and one-offs need discipline to avoid too much reliance on the currency doing what they need. It’s important to smooth out the bumps. “Get good advice and use discipline,” Hollows adds. BNZ chief economist Tony Alexander says exporters basing currency strategy on currency forecasts “are making a big mistake” because currencies can not be reasonably forecast.

Vulnerability Only the last 5% of decision-making should reflect someone’s view of where the currency is going, Alexander advises. The rest should take account of your vulnerability to whatever the exchange rate might do. Having said that, the risk is the kiwi will appreciate once the Reserve Bank starts tightening monetary policy in June. Reaching US80c is less probable than Alexander believed a few months ago, but “we could get there mainly on the back of slightly improving world economy, so people will be more willing to buy risky currencies like the NZ dollar.” Moreover, our interest rates are likely to rise before they start rising in the US, Europe and UK. The kiwi has fallen to around A77.5c, near the lower end of the range it has traded against over a 10-year cycle, but Alexander regards a strong bounceback as less and less likely because of the strength of the Australian economy. But the kiwi could rise “quite a bit more” against the pound, because of the dubious outlook for the UK economy and the interest rate differential favouring the NZ dollar.

the Focus should not be on whether the kiwi will rise or Fall but on the degree to which it could moVe either way. the outlook: 2010 is likely to be as Volatile as the Past two years C LIFF BROWN, CLIENT ADV ISER AT BANCO R P TR EASURY SERV ICES.

Consult your currency adviser, he says. The trick is to identify your currency risk. degree oF moVement Cliff Brown, client adviser at Bancorp Treasury Services, says the focus should not be on whether the kiwi will rise or fall but on the degree to which it could move either way. Levels around US70c and A78c may or not be good for a business. Exporters will have their own numbers to crunch on what’s acceptable. But no one knows what direction the market will take and following a forecast – from the banks, economists or whoever - is likely to lead you astray. It’s more important to ask what happens to the business if it goes to US75c or US65c. “So it is really the potential volatility that’s concerning for us. That’s where we focus our advisory recommendations,” Brown says. The outlook in those terms is that 2010 is likely to be as volatile as the past two years, adds Brown.

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26 EXPORTER

Major swings in either direction can’t be ruled out. He says if the rate available now is good enough for a business, and helps to lock in the expected gross profit margins, “then you would need to have a decent reason not to do the trade through a forward exchange contract or an option, or some other hedging tool”. “If they turn the question around, instead of asking when should I do it, ask is there any reason why I shouldn’t do it now?” The critical issue is having a reasonable estimate of business volumes over the coming year and knowing what cash flows to expect in foreign currency. [end] BOB EDLIN / WRITER Bob, a journalist for more than 40 years, writes about trade, agri-business and the economy. He has been editor of NZ Truth, and managing editor of the National Business Review.

EXPORTER 27

> T E C H N O LO GY

Recovering lost data A company can be brought to its knees when precious data is lost. Lost data can be retrieved provided hard disks are not too severely damage. BY A N T HON Y DO E S B U R G

f 140,000 computer hard drives fail each week in the United States as claimed by a leading data backup service provider, perhaps 1,500 can be expected to do so in New Zealand. A portion of the owners of those hard disks will have no backup, despite constant reminders of the need to keep copies of important computer files in case of just such an eventuality. Another portion will have made backups but, for one reason or another, they won’t have worked. Computer users might be getting more savvy, and backup systems more sophisticated, but data loss remains a great money-spinner for those in the business of recovering the contents of damaged disks or helping avoid disaster in the first place. silly moVes “People do extraordinarliy silly things,” says Brian Eardley-Wilmot, director of Auckland company Computer Forensics. “Often they put the backup on the computer’s internal hard drive.” If the drive fails, the backup copy is going to be of little use. Less stupid, but barely less risky, is making a backup to a secondary internal hard drive. The chances of two drives giving up the ghost might seem remote, but Eardley-Wilmot says if

28 EXPORTER

KEY TAKEAWAYS > In most cases of hard disk failure, data can be recovered. > Auckland company Computer Forensics charges up to $2,500 per disk to recover data. > Online data backup can be a cheap and convenient way of safeguarding important ﬁles. > Online backup services are available from New Zealand and overseas providers. > Backing up is just the ﬁrst step — it’s crucial to regularly test that your data can actually be restored.

the computer’s power supply fails, an electrical spike could erase the data on both. “It’s not uncommon for a power supply to generate spikes, and spikes can come from the mains through the power supply.” In a decade of dealing with customers’ data dramas, Computer Forensics has brought thousands of hard disks back from the dead. Its customer list reads like the Yellow Pages. Indeed, Yellow Pages can be found there — along with Air New Zealand, DB Breweries, Lincoln University, Auckland City Council and dozens of others — so if you find yourself in the embarrassing position of needing the firm’s services, you’re in good company.

reViVing dead disks You’re also in pretty good hands. Eardley-Wilmot says the seven-person outfit can generally revive a drive that has suffered an electronic or mechanical fault. “Most times we are successful but it is a matter of what has happened to a disk. The times we can’t get data are when there has been massive physical damage to the extent that the readwrite heads have collapsed on the spinning surface of the disk.” Commercial customers can expect to pay from $900 to $2,500 to get their data back, which will take up to four days. “Their concern is ‘we’ve got to get this data back’, and really, in the big picture, $2,000 is irrelevant,” EardleyWilmot says. For customers whose need is dire, Computer Forensics will work around the clock for double the fee. Eardley-Wilmot thinks most organisations recognise the need to do backups. But two groups within businesses — those on the road, and senior managers — struggle with the process. “You’ve got road warriors — how do they backup? The fact of the matter is it’s very tricky. It requires tremendous discipline, but the very last thing they’re going to think about is backing up. “And then you have senior management — some think backups are for staff, not for them; that sort of syndrome.

EXPORTER 29

“There’s a lot slips through the net even in the largest corporations.” Other organisations believe they have a data security regime in place but get a rude shock when disaster strikes. “There are many cases where people come in and they’re shattered; they think they’ve been backing up and they haven’t. “What they’re forgetting to do is fire drill — at the end of every month, say, taking a document and seeing if they can recover it.” If Computer Forensics is the ambulance at the bottom of the cliff, Auckland company Plan-b offers a service that is a safety barrier at the top with paramedics down below. backing uP data Its BackupNOW service uses the internet to transfer a daily copy of your data to a secure Plan-b facility. The service is automatic and saves any capital outlay on backup hardware or software. Rather than make a complete copy each time a backup is done, Plan-b technical director Symon Thurlow says the system only transfers new files. That means it’s efficient, and minimises data volume costs. Customers can choose

30 EXPORTER

backuPnow uses the internet to transFer a daily coPy oF your data to a secure back-uP Facility. the serVice is automatic and saVes any caPital outlay on backuP hardware or soFtware.

how long Plan-b keeps backups of their data, and pay according to the amount kept — from $2.50 a gigabyte — and for how long. Data restoration is also via the internet, with customers logging on to a Plan-b web portal to recover files. Alternatively, it can be done at the Plan-b data centre. If multiple computers need to be restored, that can be done concurrently, Thurlow says, taking only as long as the slowest computer to restore. BackupNOW is one of several services Plan-b sells that are designed to protect organisations’ “nerve centres”, Thurlow says. Even greater security is provided by ServerNOW, which keeps a near-replica of the customer’s computer. “Online backups in various guises have been available here and there, but it has never been this efficient and affordable,” says Thurlow. Using the internet, such services can be provided from anywhere in

the world. US company Mozy, which puts weekly hard disk failure in that country at 140,000, aims its online backup offering at small businesses and consumers. The fee for backing up a single PC is US$3.95 a month and US50c a gigabyte a month. As with BackupNOW, after the initial backup, only changed files are transferred. The crucial thing with any backup, of course, is whether you can restore what you need when you need it. On that score, Mozy reviewers at US magazine PC World give the service the thumbs-up. They point out, though, that a backup system in your office will do the job faster, if less conveniently. [end] ANTHONY DOESBURG / WRITER Anthony Doesburg is an Auckland-based freelance journalist who specialises in technology.

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> E D U C AT I O N

Grooming exporters to act global They are short, they are flexible and applicable. Export-focused courses are meeting a gap in the market, rising enrolments suggest.

32 EXPORTER

BY M ARY MACKINVE N

nrolments for logistics studies at Massey University this year are up 30% on 2009, says Professor Norman Marr, director of logistics and supply chain management. “The feedback is we appear to have the content right, so students can immediately use what they have learned, which is beneficial to the employer.” While most employers do not pay staff to study, those who do tend to reimburse on completion and others require their employees to commit to staying with the firm for a number of years. Postgraduate subjects include integrated logistics, and executive

KEY TAKEAWAYS > Logistics studies enrolments are up 30% this year at Massey University. > Export NZ offers ﬁve new “export fundamental courses”. > Knowledge of documentation in freight matters is important. > Employers seem more likely to pay staff to study short courses.

supply-chain decision-making. This year Professor Marr is looking for a student to undertake a postgraduate research programme investigating

business’ control of the supply chain and effects on their decision-making such as pilfering and the expectation of sweeteners in other markets. One-day practical courses on specific aspects of exporting are the focus of training at the export New Zealand division of the Employers and Manufacturers’ Association (Northern). This year five new “export fundamentals” courses are offered, aimed at the management and trouble-shooting side of exporting; for example, putting together a business plan and dealing with agents, says Ken Vesey, learning manager of exporting and international trade. They add to the practical topics such as international trade documentation. “We take participants through the process of filling out the docs they will probably need,” Vesey says. “Even if you are using a freight-forwarder you still have to know what happens and check your documentation. We give samples and say ‘find the mistakes and consider how much money you will lose if you did it that way’!” reasonably Priced The employer is paying training costs as the prices are not exorbitant, and often trainees are the small-medium business owners themselves, says Vesey. This year he also hopes to start courses on specific countries or cultures, for example, China. This year Export NZ offers in-house workshops to teach modules for the globally recognised Certificate and

this year eXPort nZ oFFers in-house workshoPs to teach the modules For the globally recognised certiFicate and diPloma oF international trade at its auckland Premises.

Professor Norman Marr, director of logistics and supply chain management at Massey University.

Ken Vesey, learning manager: exporting and international trade at the Employers and Manufacturers’ Association (Northern).

unlike courses oFFered at uniVersities the knowledge gained at the new Zealand school oF eXPort is Practical and immediately aPPlicable in the workPlace.” P I E R RE SC H I N DL ER, C U STOME R S E RVIC E S T E A M ME MBE R S E RVIC ING E U ROP E (FONTER RA)

Diploma of International Trade at its Auckland premises. Assignments for those qualifications are ultimately assessed by the New Zealand School of Export in Palmerston North that tutors online and by phone. The modules in the diploma that students find particularly practical are international trade research and international marketing, says Alison Vickers, marketing director. getting uP to scratch School director Dr Romuald Rudzki says if New Zealand exporters want to compete successfully in global

markets, they have to train to the same standard as their competitors in other countries. They need qualifications that are accredited by the global body, the International Association of Trade Training Organisations (IATTO), of which Rudzki is a board member. ”We need practical courses like ours. And you can have our qualification in your email signature.” But Rudzki finds companies don’t fund students’ studies because of a lack of awareness of the value. Recent diploma graduate Ziena Jalil, Trade Commissioner to Singapore, says she undertook the programme to keep

abreast of what New Zealand exporters were studying and also to brush up on her knowledge. “I wasn’t looking for another university degree – rather, something that was very practical and could be applied daily in the world of international trade. “What I liked most about the diploma was the very helpful faculty and the flexibility of the programme. I travelled a lot in my previous role and would have struggled to complete a study programme that wasn’t as flexible.” Another recent graduate is Pierre Schindler, a customer services team member servicing Europe at Fonterra. “I was pleased to see that unlike courses offered at universities — I have studied economics, commerce and international business — the knowledge gained is practical and immediately applicable at the workplace,” he says. “The one-on-one support I got during my studies has been outstanding. The staff have been very supportive and proactive at all times and didn’t spare efforts to ensure that I get the best out of my studies.” Auckland business incubator The Icehouse does not deliver export courses as such, but increasing its resident and student businesses’ international capacity is a key aim, says Liz Wotherspoon, director of the ICE Bridge programme for established businesses. “Whether a company goes offshore or exports or not, domestically it still needs to defend itself against international competition, such as global companies. So they need an international mindset.” New Zealand Trade & Enterprise hopes to offer a “global mindset leadership programme” from next year that will include a pilot, says Euan Purdy, manager of business development. [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.

EXPORTER 33

> SHIPPING

Sharing the load Piracy can delay goods being shipped to your customers. Make sure you read the fine print to ensure delivery delay costs are mitigated for. BY VA L L EV E S O N

he Gulf of Aden and the coasts off Somalia have overtaken the Straits of Malacca as a hive of pirate activities. While exporters not shipping via these routes may not have to yet pay a higher price for the cost of insuring against piracy, they need to be vigilant about additional costs tied to longer-shipment periods due to rerouting of carriers. According to media reports, insurance companies have raised premiums for sending a cargo through the Gulf of Aden. There is still a high risk associated with cargoes travelling through the above areas. Willum Richards, group claims manager / regional manager, Associated Marine Insurers Agents says that cover for loss due to piracy is included in most insurance policies. “It is possible for exporters to buy a piracy clause, but most are automatically covered. Piracy insurance has not become more

34 EXPORTER

KEY TAKEAWAYS > Cover for piracy risk is automatically part of most insurance policies. > Piracy insurance has not become more expensive. > Piracy can cause goods to be detained for a few months on average – loss of orders as a result of delivery delays are not covered by standard policies. > If you are exporting perishable goods, make sure that there is a clause in your policy covering that. > Always check with your broker what you are actually covered for. expensive – its bundled in with basic insurance. There’s no increase in rates, no special references.” Piracy is an age old problem – in fact the insurance industry’s roots are in trying to lessen the losses caused by this crime. According to Kevin Allen, chief executive officer of Tasman Insurance Consultants: “In the early days shipping used to deal with the perils of the sea by creating shore load – 10 ships would leave Portsmouth with 10 per cent of cargo on each vessel. If seven managed to arrive at

the destination – that would mean 70 per cent of the cargo was saved. This was the advent of insurance – it’s about sharing the load.” Face oF a Pirate John McKelvie of Vero Marine Services says that in recent years, piracy has become a curious mixture of sophistication and simplicity. “Sophisticated because of the modern technology involved by Somali ‘fishermen’ in identifying and tracking their prey, but simple enough in the

actual execution with AK47s threatened from small skiffs.” He says that what has changed is the nautical range and the scale of the ransoms demanded. “In 2008, the International Maritime Bureau recorded 111 pirate attacks, with 815 crew and 42 vessels taken, some vessels as far away as the Seychelles. For the first six months of 2009, 240 attacks have been recorded worldwide, more than half of these off the coast of Somalia and in the Gulf of

vessels have been subjected to attack – and since major exporters tend to use containers, being affected is a possibility.” The thing to note, though, is goods can be detained for a few months on average – loss of orders as a result of delivery delays are not covered by standard policies. “People would be insured for physical loss or damage, consequential loss would not be covered.” If you are exporting perishable goods,

in 2008, the international maritime bureau recorded 111 Pirate attacks, with 815 crew and 42 Vessels taken, some Vessels as Far away as the seychelles. For the First siX months oF 2009, 240 attacks haVe been recorded worldwide, more than halF oF these oFF the coast oF somalia and in the gulF oF aden.” JO H N M C KELV I E OF VERO MARI N E S E RVIC E S

John McKelvie of Vero Marine Services

Aden. This region has now overtaken the Straits of Malacca in terms of the number of attacks, becoming the most dangerous waters in the world today. On average, ships and crew are held between three and six months,” he says. cargo rerouting But what does this all mean to New Zealand exporters? McKelvie says: “Our cargo passes through the Straits of Malacca. Containerships carrying our cargo do not go so close to Somalia as to be seriously threatened. The main effect has been re-routing, meaning longer times at sea as vessels avoid the Suez Canal and navigate instead around South Africa.” Richards says that exporters who are importing or exporting from Europe can be concerned about piracy. “In the shipping lanes near Somalia, container

36 EXPORTER

Associated Marine Insurers Agents Willum Richards.

event. It’s better to know exactly what cover you need before.” Richards suggests that brokers should be used to help look at what could possibly go wrong, and what should be insured. “They will help you look at the extra costs of additional cover and you can decide whether it’s worthwhile for you to go ahead.” One thing that exporters don’t often consider, Richards says, is covering their goods for trade shows. “What if you show up but your goods for your stand get waylaid? You’ve paid for the costs of the exhibition, your plane fairs, accommodation and more – that can be very hard on smaller exporters. However, you can buy insurance for wasted expenses. “This type of insurance is not standard, but you can arrange it through your broker. For smaller operations, this could be vital.” Richards makes the point that most things can be covered. “Basically, exporters need to be sure that everything they think is covered is indeed covered. They need clarity. There’s nothing worse than finding something isn’t covered, such as delays as a result of piracy, when you need to claim.” Richards points out that piracy can happen anywhere. “Previously the hotspots were Singapore and Indonesia, and hence cover is part of standard policy wording. In fact, it’s more difficult to exclude piracy cover than include it. But it’s good

PreViously the hotsPots were singaPore and indonesia, and hence coVer is Part oF standard Policy wording. in Fact, it’s more diFFicult to eXclude Piracy coVer than include it. but it’s good to conFirm what you’Ve got the coVer with a broker.” WILLU M RIC HAR DS, GR O UP CLAIM S M ANAGER / R EGIO NAL M ANAGER , ASSO CIATED M AR INE INSUR ER S AGENTS

Richards suggests making sure there is a clause in your policy covering that. “There are a variety of ways of insuring things like fruit or meat – anybody concerned about the loss caused by delays of weeks should check that their policy covers them.” anticiPating what can go wrong Richards says all exporters should look at their policies and anticipate what could go wrong and whether they are covered for it. “Too often something happens with a shipment and a person find that they’re not covered for that

to confirm what you’ve got the cover with a broker. “Every client’s needs are different. Brokers are there to advise their clients and do a specific risk assessment. What unusual exposure do you have? What cover is there for that? It’s hard to be generic.” [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.

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> BORDER CONTROL

Keeping MAF happy, making customers happy Being religious about compliance can help fast-track your products to market. Some exporters outsource export documentation while bigger ones have specialist teams to handle MAF and export requirements. BY M A RY M AC K I N V E N

omplying with food regulations for export might be expensive initially but the returns justify it, says Honey Valley New Zealand managing director Steve Lyttle. “Don’t be put off by regulations. “We need risk-management programmes under the Animal Products Act [that governs procedures], but the act has fast-tracked our business more than anything else has. Having documentation and systems gives us traceable honey right down to the particular processing batch. Asian buyers love that certainty. It’s a great marketing tool.” A key regulator for Honey Valley is the New Zealand Food Safety Authority (NZFSA). This year, Lyttle has been driven to having his honey tested at the world’s top honey quality testing laboratory in Germany to clear his name when he suspected high cane sugar levels in a supply of honey he had bought. Though not a safety issue and correctable, some possibly malicious person had

38 EXPORTER

KEY TAKEAWAYS > MAF regulation, with its stringent paper trail, can help fast-track products to markets. > Research, get the information you need. Get things right up front. > Don’t give reasons for competitors to sabotage your export efforts. > Don’t front up to MAF lastminute or when the product has already left home.

wind of his admission of the problem to the NZFSA and went to the media. So even hints of a lack of compliance can open the door to sabotage. The New Zealand Customs Service administers export/import prohibitions such as arms to Afghanistan, and checks “export entries” accurately reflect the goods being sent. Customs client services manager Terry Brown says the electronic entry must be notified to Customs at least

48 hours before goods are due to be shipped or flown out, allowing Customs or another agency to examine the goods if necessary. A successful entry results in the goods being cleared and being issued a Customs Export Delivery Order (CEDO) – no goods can be loaded without one. Brown recommends commercial exporters employ a customs broker or freight forwarder that has software interfacing with Customs, or employ an in-house customs team. Fees and clearance times are reduced for companies that have joined Customs’ voluntary Secure Exports Scheme (SES). beauty oF comPliance Importing countries’ phytosanitary requirements for plant and forestry products, to prevent the spread of pests and disease, are certified by the Ministry of Agriculture and Forestry (MAF). A MAF Biosecurity New Zealand spokesperson says the biggest incentive for exporters to comply is their knowing uncertified products

EXPORTER 39

honey Valley managing director steVe lyttle has been driVen to haVing his honey tested at the world’s toP honey Quality testing laboratory in germany to clear his name when he susPected high cane sugar leVels in a suPPly oF honey he had bought. A N D R E W DA N I E L L S , B U S I N E SS D EVELOPMENT MANAGER, DB BREWERIES.

dairy is not so important. We use our importers to help, check websites and key staff in markets or ask the customer because they want us to do the right thing.” Translations can be time-consuming and costly. “Sometimes we have to demonstrate the translation was done by a recognised company, not just a student, for example. So we use a New Zealand firm we can trust. “Our tag line is ‘green lane our consignments’. Research, get the information you need. Get things right up front.”

Sarah Townsend, owner/director of The Aromatherapy Company.

the biggest Problem in eXPorting is the customers themselVes, esPecially big comPanies, more than customs. they can haVe Very strict rules — one gaVe us a 500-Page manual about carton siZes and where the label goes on the carton, and Honey Valley New Zealand managing director Steve Lyttle.

are unlikely to be accepted by the importing country. “One of the most common mistakes is to contact MAF late – just prior to departure or once product has left the country.” how a big comPany handles it Fonterra has regular ongoing meetings with regulators because of the significance of dairy to New Zealand, and good relationships with them, says Bo Patel, supply chain group global access manager. A specialist Customs team handles those matters as an SES partner in New Zealand, and liaises with Customs about tariffs for free trade agreements, for example. The main compliance body Patel’s team of 12 deals with is the NZFSA, which in turn monitors the World Trade Organisation (WTO) and informs Fonterra of international regulation changes. But not all countries are members of the WTO.“Some documentation requirements are not easy to find in countries where

so on. and iF you get it wrong, there are huge costs.” SA RA H TOWNS END, OW NER THE AR O M ATHERAPY CO M PANY

outsourcing eXPort documentation The staff at Peter Shakes Jewellers relax while two worldwide express companies and an individual broker handle their export documentation, duties and entry fees. Managing director Peter Shakes says occasionally a parcel is held up because the description is not adequate or the necessary paperwork is not complete. “The US is very, very rigid, wanting to know what you are sending down to the last paperclip, almost!” Eventually goods get cleared but

useful compliance websites include: • www.biosecurity.govt.nz/regs/ exports • www.mfat.govt.nz • www.nzfsa.govt.nz • www.hea.co.nz • www.moh.govt.nz • www.customs.govt.nz

the us is Very, Very rigid, wanting to know what you are sending down to the last PaPercliP, almost!” P E TE R S H AKES , MA N AG I N G DI REC TOR P E T E R S HA KE S J E WE LLE RS

40 EXPORTER

missing a delivery date can affect the business’ reputation. The company avoids identifying itself as a jeweller to minimise the risks of tampering or theft of goods in transit. Tariff codes are adequate to tell regulators who they are, and also make it clear the package is commercial and not personal, he says. The director/owner of Star Products, trading as The Aromatherapy Company, Sarah Townsend, says compliance at the New Zealand border for exporting is pretty straightforward. “As long as you fill out the paperwork correctly — and you do after a while — it’s okay. “The biggest problem in exporting is the customers themselves, especially big companies, more than Customs. They can have very strict rules — one gave us a 500-page manual about carton sizes and where the label goes on the carton, and so on. And if you get it wrong, there are huge costs. “Once you have paid for that mistake you never make it again.” [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.

> PROFILE

Old company, new moves

ogistics covers a myriad of activities and DB Schenker in New Zealand does them all. From its headquarters in Airport Oaks, Auckland, Schenker (NZ) Ltd. provides warehousing, freight forwarding and customs clearance services, ocean freight, air freight (on first, business or economy service transit times), land transport, fairs, events and removals, with the latest tracking technology. Some of the exports DB Schenker handles are key to the New Zealand economy: dairy products, lamb, beef, fish and wine. The New Zealand company’s perishables division handles other exports requiring temperature control such as cut flowers and organic soup. DB Schenker has extensive experience in cold chain logistics, particularly in storing products for the healthcare industry. And the global supply chain management provider has added new services to its well-developed areas of expertise. New Zealand managing director Ulf Barnard particularly draws attention to DB SCHENKERsmartbox, a recently introduced system that provides 24-hour, GPS-driven, real time global tracking for ocean freight. A major advantage to clients is

Schenker New Zealand managing director Ulf Barnard.

certainty of the whereabouts of their products on all main trade lanes and throughout the supply chain – from DB Schenker’s door to the customer’s. But beyond that, DB SCHENKERsmartbox can measure real time GPS coordinates, temperature, humidity, g-force, door alarms, movement inside packaging, light, vibration and intrusion. Barnard says these features reduce the client’s logistics costs, provide accurate data and transparency, with a potential to reduce clients’ insurance premiums. Another service is DB SCHENKERtranstasman offering customers high frequency airfreight and

regular ocean freight services to and from Australia. On both sides of the Tasman DB Schenker has dedicated Transtasman teams taking care of all export and import requirements whilst concentrating on the short transit times. Upon arrival in Australia various services such as FCL delivery system, cross-docking, warehousing and distribution are available to customers. Barnard summarises: “New Zealand companies need a strong worldwide supply chain partner that can control their logistics and freight activities into and out of New Zealand. “DB Schenker in New Zealand is that partner, with very strong worldwide backing. “We have a single purpose that drives us toward success. That purpose is straight forward: our customers take care of their business and we’ll take care of the rest.” [end]

db schenker nZ Schenker is a leading international provider of integrated logistics services in worldwide air and ocean freight, and in associated logistics services. Managing Director: Ulf Barnard Telephone: (09) 2552 801 Email: ulf.barnard@dbschenker.com Website: www.dbschenker.co.nz

Delivering solutions.

EXPORTER 41

> E Y E O N G OV E R N M E N T

Wearing NZTE’s badge of honour Some find it hard to quantify the impact of winning an award, others swear by it. The 42-year old export awards continue to be a magnet for exporters seeking fame, recognition and marketing leverage. BY M A RY M AC K I NV E N

he best thing for Beca about winning the supreme award at last year’s New Zealand International Business Awards has been the pride engendered within the organisation, says managing director international, Paul White. “As a leading player in the engineering design sector, we’re proud that our projects regularly win major technical awards. However, this award has thrilled everyone at Beca by endorsing the way we do business, and giving recognition to the success of our offshore operations. “The New Zealand media coverage [of the awards] has been invaluable in building our profile locally, particularly with potential clients and staff. “Offshore, meanwhile, we hope to leverage the endorsement of ‘NZ Inc’ at the Shanghai Expo and similar arenas, and we anticipate that the prize money [of $100,000] will yield concrete results in terms of future project wins. “We feel our efforts in entering have been repaid tenfold in terms of pride, profile, endorsement, staff motivation and financial reward.” Very old award The government’s national export awards programme has been running for 42 years and was revamped last year to focus less on sectors and look more holistically at running an

42 EXPORTER

KEY TAKEAWAYS > Entries to the 2010 New Zealand International Business Awards close on April 16. For entry forms see www.nzte.govt.nz under “events”. > Look at the categories you will get the best leverage from. > A 2007 win/award may mean little by 2017. > Last year there were almost 100 entries, 30 ﬁnalists and 10 winners.

international business from New Zealand, says convenor of judges for the past two years, and this year, Jack Stephens, New Zealand Trade & Enterprise group general manager, international. “We go to a lot of trouble to help people before they do stage II,” Stephens says. “It’s not just about what you are doing but how, and demonstrate that to us, such as processes for tracking performance. We base it on the old Baldridge framework.” Winning the special category “Best Use of Research and Development in International Business” last year has

helped Triodent with relationships here and overseas, says publicist Peter Watt. The company’s trademark product overcomes one of the most difficult procedures in dentistry – filling molars. Watt says of the win: “It’s hard to quantify but has added to the respect people have for us. We have more credibility and get action from some businesses where we may not have so easily before. “Ninety-eight per cent of our business is overseas so perception overseas is really important. And it helps to be able to say we were New Zealand’s top company for R&D in 2009. It’s in oiling the wheels; it gets us some mana we didn’t have before. A lot more people know about us now, even domestically, due to the awards publicity as well as word of mouth.” rise in credibililty Emerald Foods won the 2009 “Best business $10m to $50m” category. Chief executive Shane Lamont says there has been increased credibility in overseas markets, and internally. The win is hailed on marketing material such as websites and email signatures, especially in Asia, including Japan, where it’s particularly important.

we Feel our eFForts in entering haVe been rePaid tenFold in terms oF Pride, ProFile, endorsement, staFF motiVation and Financial reward.” PAU L WHIT E , MANAGING DIR ECTO R , INTER NATIO NAL, BECA

Above from left to right: Bob Durrant, Andrew Wilson, Keith Reynolds (CEO), Paul White (MD of Beca’s International division or “Beca International), MP Gerry Brownlee (Minister for Economic Development), Graeme Roberts, John Mayson (Chair NZ Trade & Enterprise), and Simon Walter. Left: Paul White accepting the award from John Mayson.

EXPORTER 43

Emerald Foods managing director Shane Lamont and the company’s ice cream stand.

“Staff put in a fair amount of effort to enter and the thorough process plus the external review provides validity for the company’s systems, procedures and technologies. It can be a challenge to focus on anything other than selling products,” Lamont says. Of all the categories, “Best Use of Design in International Business” was the most suitable for winner Modtec, says Ian Cooper, head of sales and marketing. “Just this year in Sydney

we were with one of the largest furniture manufacturers in the world and we were more confident with that award behind us, and it gave them more confidence in us. “Recognition from media articles helped secure one strong international lead and to secure an expat employee for whom we would not have been on the radar otherwise.” Entering was absolutely worth the effort, Cooper says. “And it was a good night!”

limited liFe sPan Last year’s “Emerging international business leader”, Mark Eglinton, chief executive of NDA Group, says the award was generic enough to span multiple roles and has been helpful. “It’s a good category because you need recognition of individuals and companies, but sometimes it’s hard to make that distinction because a company is a bunch of individuals,” Eglinton says. Two-and-a-half years after the IBEX Group of Companies was supreme winner, general manager of IBEX Industries Ray Connor says his firm still promotes the achievement on its website and the back of business cards, to tout offshore. But nothing lasts forever. “It has a limited time window. If in 2017 we are still waving that flag it will be pushing it; even 2009 was a stretch. “Your team, products and so on change and the market moves. A lot happens in that time,” Connor 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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44 EXPORTER

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> GUTSY PEOPLE

Viewpoint gilbert ullrich CHAIRMAN, NZ-PACIFIC BUSINESS COUNCIL

Uncovering export value in our backyards New Zealand needs to focus its exporting efforts on close neighbours such as Australia and the Pacific Islands as they have proven to be of more value than countries such as China.

ecently, the EU Trade Ambassador responded to the question of a possible NZ/EU Free Trade Agreement (FTA) by bluntly stating “but what do we get out of it?” This pretty much sums up NZ’s problems with world trade, and in particular exports. Since 1984, when NZ became officially nuclear-free, this factor has over-shadowed our dealings with the US (including trade). Such are the problems of being a small, remote, but peaceful country – we are largely insignificant on the world stage when it comes to the real nitty-gritty issues of global trade and geo-politics.

46 EXPORTER

New Zealand’s economic meltdown in the late 1980s resulted in open market reforms that saw a wholesale sell-off of the country’s SOEs at bargain-basement prices. While not denying that some of these were necessary to improve efficiencies, we radically went far further than the rest of the world – and now we have few bargaining chips left when negotiating trade deals. For a start, we are a nation high in debt. According to Statistics NZ, last year, on average, Kiwis had committed nearly two-thirds of their weekly income to paying off mortgages, leaving little else for productive investment.

Volatile currency NZ exporters have also found it difficult to operate under the volatile and often high NZ dollar. This is unlike China, which has maintained an artificially low currency to help its exporters while its so-called basket of currencies seemed permanently joined at the hip with the US dollar. As exports of “services” are not so easy to identify, and analyse, my observations will have to focus on “merchandise” exports (the area I am familiar with). While looking at NZ’s exports, we must not lose sight of the other side of the trade ledger, imports. For example, we are told that exports to China have grown

phenomenally since the FTA – but have we looked at the imports side? Overall, we have a trade deficit of $2.33 billion with China for the year ended January 2010, which is 13 times our deficit with the whole world, of $178 million. Focus on markets with high yields Here are some possible answers to how we can improve our exports, without fuelling imports. First, we must seek to arrive at a lower and more stable NZ dollar that is shielded from speculation by Japanese housewives and Belgian dentists. The speculative interest in our currency results in an exchange rate that bares no relationship with our true economic situation. Some people have suggested a rate of between US55c and US60c to the US dollar would be appropriate. In 2001, the NZ dollar was sitting at US41.98c, but by 2007, it had gone up to US71.71c. Fortunately, the NZ dollar has stayed far steadier against the Australian dollar, and helped our exports across the

ditch. In 2009, we had our largest trade surplus, of $1.64 billion, with Australia. This brings me to the next point – focusing on the markets that are of real value to us. Our current obsession with exporting to developing economies (especially Asia) has seen milk powder, unprocessed logs and wool, raw hides, wood pulp, coal, and plastic and metal waste exports soar. Our exports of value-added goods to China in machinery equipment was only $82 million last year, just 2.3% of our total exports to China. During the same period, we sent $1.4 billion worth of machinery and equipment (including optical, medical and furniture) to Australia; $571 million to the US; and $68 million to Fiji. I am not suggesting we should desert the China market – but let us refocus on where the real “value-added” markets are. We should therefore make it a priority to nurture the Australian and Pacific Island markets, which provide us with a combined trade surplus of $2.9 billion, of which $1.13 billion is with the Pacific Islands alone. Let’s not take our closest neighbours for granted. The US, Canada and some selected EU

countries should also be high in the priority for “value-added” exports as well as Japan. But first, let’s look after our own backyard. Rather than pursuing flashy trade missions and bilateral trade pacts, we should also keep under the radar, and focus offshore resources on one-on-one relationship building, and in-market support. My preference is to see a Doha-style free trade agreement with the whole world – which keeps the playing field far more level. New Zealand’s shrinking manufacturing/exporter base is a result of, among other things, our export competitors providing extensive government support to their export economy while erecting non-tariff barriers to protect domestic businesses. Our export capability is also being threatened by the loss of skills to Australia as well as New Zealand increasingly becoming merely a branch office for transnational corporations with head offices in Europe, North America or Asia. This undoubtedly will affect our export capability. [END]

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 47

R+R 20008

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.

> T R A D E FA I R S

Big is not better at trade fairs The biggest or best fairs may not be the right one for your products. Lots of preparation and groundwork prior to attending a fair help make a success of the trip, our writer says.

KEY TAKEAWAYS > Do your homework. Check out who has exhibited in the past and what kind of buyers a show attracts. > Don’t just go for the biggest show in your industry or you can get lost among the big players. > Make appointments with key contacts before you head for a show. > Set goals on what you want to achieve at the show.

BY LO UI SE BLO C K L E Y

ew Zealand exporters could attend an international trade show every day of the year and still not exhaust the overwhelming list of annual events. Choosing where to spend a company’s precious trade show budget can be daunting. The obvious way of narrowing down choice is to ask whether the show is in your target market and supports your product but the finer decision points involve careful research and preparation. Exporters attend shows for varying reasons, says Hans Frauenlob, New Zealand Trade & Enterprise (NTZE) operations director, ICT/creative/services, who has had many years of involvement with trade shows. With large shows such as CeBIT, the big-name German technology show in March, exporters

48 EXPORTER

> Don’t overlook the chance to bring key customers to you in New Zealand rather than going to trade shows – they are often keen to come here.

don’t always exhibit first up. Some have come to him and said, “I think I need to learn about the European market”, and firstly attend as a visitor while others decide it is for them and invest in exhibiting straight off. Frauenlob believes it is not always which show exporters choose to go to but the preparation they do beforehand that makes the biggest difference to success. Rocking up hoping to be inundated by passer-by customers is usually a mistake. Making appointments at or around the show before you leave home is the most successful strategy. getting the attention It is not as simple as creating a list of must-attend shows for Kiwi exporters. As Frauenlob points out, even the most

well known shows may not be right for certain products. Often it is difficult to stand out among the throng of other exhibitors in a big show and it could be better to attend one that is smaller and less well known but more finely tuned to your specific product, with less competition. However, there are several well known shows that attract big buyers from around the world. Frauenlob points to several across industry sectors. The Fort Lauderdale International Boat Show, from October 28 to November 1 this year, is the big marine industry show for New Zealanders. Its focus is power and sail boats as well as equipment and accessories exhibitors. The show attracts about 1000 exhibitors and 118,000 visitors. The 2010 show

calendars list several major boat shows each month in various locales. NZTE was involved in both Fort Lauderdale and the Monaco Yacht Show in 2009 and the Abu Dhabi Boat Show in March 2010. CeBIT is the big name in the technology sector, held in Hannover, Germany in March each year. The 2010 show was held from March 2 to 6. It covers the latest IT and telecommunications products, services and solutions under the themes of business IT, ICT infrastructure and future ICT. With a mix of exhibits, conferences, keynote addresses, corporate events and business lounges, it is an annual meeting point for ICT buyers, sellers, developers and users from around the world. Food & beVerage The food and beverage sector is particularly overstocked with international shows. Some popular ones for Kiwi exporters include Food and Hotel China in Shanghai in November. There are several Food and Hotel shows including Vietnam, Malaysia and Arabia. Other popular F&B shows include Foodex Japan in Tokyo in March, which attracts buyers from Korea and China. The US National Restaurant Association show held in May in Chicago is well known to New Zealand exporters, as are Fancy Food in San Francisco in January, and New York in June. For the healthy products sector there is Natural Products Expo West in Anaheim in March. In Europe the big billing F&B show is SIAL in Paris in October.

Hans Frauenlob, New Zealand Trade & Enterprise (NTZE) operations director.

recent shows with nZte involvement • • • • • • • • • • •

Cleantech Investment Forum, Feb 2010, San Francisco Tecnocarne, August 2009, South America Monaco Yacht Show, September 2009 Ausbiotech, October 2009, Australia, NZBIO managed, with NZTE support Health Ingredients Japan, October 2009, Japan Fort Lauderdale International Boat Show, October 2009, US Medica, November 2009, Germany Food & Hotel China, November 2009, China Arab Health, January 2010, Dubai Singapore Air Show, February 2010, Singapore (with Aviation NZ) RETECH, February 2010, Washington

upcoming shows with nZte involvement • FOODEX Japan, March 2010, Tokyo • International Conference for Teaching and Learning with Technology, March 2010, Singapore • Taste Sydney, March 2010, Sydney • Abu Dhabi International Boat Show, March 2010, Abu Dhabi, Dubai • Natural Products Expo West, March 2010, Los Angeles • Globe 2010, March 2010, Vancouver, Canada • Natural and Organic Products Show, April 2010, London • National Restaurant Assoc (NRA) Show, May 2010, Chicago • BIO2010, May 2010, US, NZBIO managing, with NZTE support

new Zealanders are oFten so intent on getting oVerseas to their market they can sometimes oVerlook the more simPle but eFFectiVe idea oF bringing your key Potential and eXisting customers to your Place.” HA NS FRAUENLO B, NEW ZEALAND TRADE & ENTER PR ISE ( NTZE) O PERATIO NS DIR ECTO R , ICT/CR EATIV E/SERV ICES

Frauenlob also mentions BIO 2010 in Chicago as one of the majors held in May. NZBIO manages the New Zealand contingent with support from NZTE. It is aimed at exhibitors that “heal, feed and fuel the world” from biofuel to pharmaceuticals. Trade shows tend to follow current business trends, according to Frauenlob, which is evident in the increase in environmentally orientated shows. The biennial GLOBE trade fair and conference on business and the environment in Vancouver in March and the Cleantech Investment Forum in California in January are two environmental shows that attract NZTE involvement. medica, dÜsseldorF Other shows rated as among the most popular by Frauenlob, also with NZTE involvement, include Medica in Düsseldorf, Germany. Celebrating its 40th anniversary last year, the medical trade show attracted 138,000

trade visitors. Health Ingredients is another big player for Kiwi exporters. There are several different shows – Health Ingredients Japan is in Tokyo in October and Health Ingredients Europe was held in Paris in November 2009, and Madrid hosts this year’s. Frauenlob says New Zealanders are often so intent on getting overseas to their market they can sometimes overlook the more simple but effective idea of bringing key potential and existing customers to their place. Organising a mini-event here can be a successful tool. He says people around the world are “dying to come to New Zealand” and this country leaves a lasting impression. [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 49

> GUTSY PEOPLE

Viewpoint John blackham SOFTWARE ENTREPRENEUR

Lifting NZ’s weightless exports New Zealanders spend too much time trying to reinvent the wheel. To raise national income, a sharper focus on weightless exports is needed that calls for active mining of the vast web of knowledge already in place.

or New Zealand to retain a first-world standard of living it must earn substantially more from exports. Yet despite government rhetoric about focusing on economic development we have no substantive national strategy to lift our economic performance; no game plan to grow our export revenues. It’s an indictment on the current and previous administrations. Politicians are unwilling to make the bold moves required to match their aspirations, whether getting into the top half of the OECD or catching up with Australia. The previous administration created a Growth and Innovation Framework identifying four areas from which growth was to be

50 EXPORTER

delivered, but they lacked both a strategy with which to make the growth a reality and the courage to invest in making it happen. The current administration has even less, although we have seen a ray of hope, albeit rather ad hoc. The desire to establish Superannuation Fund Administration services as a New Zealand export is a step in the right direction – provided we don’t have to amend our legislation to make us look like a tax haven. Such services are low-hanging fruit in the global market for weightless products. raising our income There are three ways in which New Zealand can realistically earn an income from exporting: the traditional route, commodities; creating added

value products from commodities; and creating and selling weightless goods. The viability of manufacturing is governed by low labour cost, high capital cost and low distribution cost, which don’t favour New Zealand. Weightless products are those for which the cost of delivering it to the consumer is marginal compared to the value of the product. Just being weightless is not attractive in itself. Call centre services are driven largely off low labour cost, not something we should aspire to. Likewise the services that support the tourism sector are largely low wage. Super Fund Administration services are a step in the right direction, but they only scratch the

surface in terms of adding value. Real added value comes from exploiting knowledge. The words “knowledge is power” sprang from the distribution of knowledge following the introduction of the printing press. It is just as true today, especially with the introduction of the internet. Yet few have figured out how to harness the value of existing knowledge. We prefer to reinvent things, to rediscover knowledge, an expensive process compared to mining existing knowledge from the web. Mining knowledge The EU estimates that “up to 30% of all expenditure in R&D is wasted on redeveloping existing inventions”. In the same vein the US Patent and Trademark Office estimates that 99.8% of patents have no commercial value. Millions of dollars are wasted on patenting alone, let alone the billions in associated R&D costs. The same applies to New Zealand. Anecdotal evidence shows hundreds of millions of dollars being lost due to reinvention in both private and public sector R&D.

Let’s stop wasting money reinventing knowledge and instead mine existing knowledge to the advantage of New Zealand business. The cost of mining knowledge is way less than the cost of reinvention. Indeed, mining knowledge offers New Zealand a potential new business opportunity, one first suggested by an official at the UK Intellectual Property Office. Instead of paying people to reinvent things, we could become knowledge mining experts, finding existing knowledge to solve specific problems. Just finding knowledge for patent searches would be a start. Myth-busters There is a belief that we must develop our own intellectual property, acquire our own knowledge. Yet it is the application of knowledge that creates wealth, not the discovery of knowledge. Kiwis are good at application. They are generalists, with an all-round grasp of problems, compared to the specialists in the silo business structures of the US. Another myth is that a patent secures ownership of your intellectual property (IP), when in fact it merely records

that you have registered your IP. It does not guarantee that you are not infringing someone else’s patent or that your knowledge has not been previously published and so open for anyone to use, as is frequently the case. Apple did not invent the iPod. It only discovered this when it was sued by a US patent troll for infringement. A search uncovered an earlier patent for an identical device. The iPod was in the public domain and the troll’s patents worthless. Apple was saved. The intriguing aspect of this story is that the IP for the iPod was on the web, for anyone to find and exploit – without incurring the R&D costs that Apple had to invest. Anecdotal evidence suggests that New Zealand could have saved millions of dollars by first mining the web for knowledge to support an “idea”, rather than spending money, time and effort on R&D, reinventing or rediscovering what is already known. The web is a mine of knowledge just waiting to be turned into applications and exported. [END]

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R+R 20008

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.

Call us on 0800 276 7848 or visit www.nzpost.co.nz/export

EXPORTER 51

> IP

Getting the big stick ready for Chinese pirates It may take up to 30 months to protect your patent in China but having a stick to wield against Chinese copycats and IP thieves is a necessity.

BY YOKE H A R L E E

hristopher Withers’ company Aquatite Enterprises has a certificate from the Chinese patent office for his Wetwall Caddy™ invention. The pity is Withers will never be able to read a word of what it says unless he learns Mandarin. The Chinese won’t supply him with an English version. That’s life in China. Concessions are not often made unless it is convenient. Withers has, however, chosen to take the safe road – by getting a patent for his invention, he will at least have recourse if copycats decide to steal his design. China, Withers says, will be an important market for Aquatite Enterprise which makes devices to prevent leaks resulting from plumbing fittings and water intruding into wall

52 EXPORTER

KEY TAKEAWAYS > don’t start preliminary discussions with chinese distributors without protecting your iP. > your china ambitions may be small now, but it pays to protect your iP before you decide to grow your china business. > be vigilant even if you have a trusted contract manufacturer or distributor in china. > in china, the ﬁrst person to register a trademark owns it, not the creator. > comb through every part of your business for hidden and valuable iP not yet formalised or protected.

cavities. Although the company does not have the resources to tackle the Chinese market yet, it already has patents in place. getting ready For china Aquatite Enterprises has filed patents in four countries – New Zealand, Australia, the US and China. “This was based on advice from our patent attorneys,” he says, adding that the exercise cost over $200,000. It is expensive, but necessary, he reckons. China is still a haven for counterfeit goods and copies of every famous brand can be found in tourist areas, either in the open or under the counter. After its ascension to the World Trade Organisation, China has been more active in shutting down copycat operations but the size of the country makes enforcement an issue. In the lead up to President Barrack

EXPORTER 53

Obama’s visit to China late last year, counterfeit goods and cheap imitations of US brands were cleaned out of noted pirated goods building in the middle of Shanghai, according to one Kiwi at China that time. tedious but necessary Anton Blijlevens, a partner at patent specialist AJ Park, says enforcement of patent violations varies from territory to territory in China. The process of gaining a patent also varies, with some regions easier than others. A common mistake Kiwi exporters make is not bothering to put up with the process because of the initial time and financial resources involved. “For smaller companies, they may realise when they have the money [to pursue patents], they don’t have the stick they need to wield against infringements,” Blijlevens says. The patenting process can take up

china cleans up act on iP protection • in 2008, china’s iP office granted 411,982 patents, up 17.1% from the year before. a total of 93,706 patents were for inventions. • domestic applications made up 85.5% of patents sought, foreigners 14.5%. • local iP administrative offices received 1092 patent infringement complaints. • the iP administrative offices investigated and handled 59 cases of counterfeit patents, and 601 cases of illegal patent use. • 7671 commercial premises and over 2 million pieces of goods were checked during 2008. • the government investigated 56,634 cases of trademark violations and found 47,045 infringements and counterfeiting violations and 9589 general violations. • 19.63 million sets of illegal trademark labels were removed and 22.87 million items of pirated goods were destroyed. (Source: State Intellectual Property Office, China, 2008 Annual Report)

to 30 months and covers the entire country (other than Hong Kong). For a typical consumer product, the cost for seeking a patent may be up

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to $15,000. A New Zealand patent attorney still needs to use a local Chinese counterpart to handle the process, unless the company has a China office. Protecting not Just widgets but know-how Philip Thoreau, a partner and patent attorney at Baldwins, says Kiwi exporters need to think beyond inventions or gadgets when they think intellectual property (IP). “For instance, there are many education institutions going to China. They have huge IP in they way they do things – how you organise the business to produce on time, at a certain cost, how to bring the service to the market. Often this is donated to the other person you’re dealing with as they are not recognised as IP,” Thoreau says. Working out an IP strategy requires a company to actively document its business processes and to work with a specialist on identifying parts of a business’ knowledge that can be classified as valuable IP. Protection of IP should be done before an exporter hits the actual market. “Working out a strategy – that’s the elementary part, it is one of the most fundamental things.” Thoreau says. eVen while discussing Potential distributors, kiwi eXPorters should be mindFul that an unscruPulous Party may register a comPany’s brand and hence haVe ownershiP oF the brand. PHILIP T HOREAU , PARTNER , BALDWIN S

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Typically a small exporter goes to China and spots an opportunity. He then discusses potential breaks, potential products with Chinese parties, not knowing there is a huge risk of losing IP. Even while discussing potential distributors, Kiwi exporters should be mindful that an unscrupulous party may register a company’s brand and hence have ownership of the brand. “This creates an immense problem for you – them tying down your brand to their system, tying the source of supply to your brand,” Thoreau says.

Anton Blijlevens, partner at patent specialist AJ Park.

underestimating the eXPertise, time and money reQuired to gain credibility and build a business in the middle east is one oF the most common mistakes kiwi comPanies make in the region.” J O MU LLINS, GENERAL M ANAGER , BUSINESS DEV ELO PM ENT, AT EDUCATIO N CO NSULTANCY CO GNITIO N CO NSULTIN G.

He advises Kiwi exporters to register their brands ahead of discussions with potential distributors. In China, the first party to register a brand gains ownership of the brand. So a Kiwi creator or owner of a brand late in registering it will lose ownership. Think you have found a trusted manufacturer? In one Kiwi manufacturer’s case, even a close relationship with a contract manufacturer had its flaws. This Kiwi company discovered similar products cropping up elsewhere. The licensed contract manufacturer had been running night shifts without the principal Kiwi company’s knowledge, and collecting the extra profits. The Kiwi company had to send a trusted Kiwi employee to live on the factory grounds to keep an eye on the manufacturing activities. Lawyers say China copycats will still prevail but having patent, trademark and copyright protection means having a stick to wield against copycats.

“If you have good protection, there is less likelihood of infringement,” Thoreau says, adding that global brands that have been aggressive in protecting their brands have been more successful at stamping out counterfeiters. A Kiwi company can seek judicial recourse for patent infringements. On another level, local authorities also have the power to shut down operations of copycats, but do not award compensation to IP holders, says Blijlevens. China has a national strategy to deal with IP infringement. Local news agency Xinhua reported in February the arrest of a general manager at Beijing’s famous Silk Street Market, who was selling counterfeit Louis Vuitton bags. [end] YOKE HAR LEE / WRITER Yoke Har was formerly a senior Reuters correspondent, a Business Herald writer, and personal finance editor for a regional media company. Most recently she managed internet and intranet content for a global US consultancy.

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Pack to survive, pack to save Export companies are using packaging redesigns to lift brand awareness and to achieve cost savings and environmental sustainability as products are shipped to many destinations. BY SA N G EE TA ANAND

xporters’ packaging decisions have an important impact on profitability but are also critical in the survival of the product. But some packaging designs are purely aesthetic. Lion Nathan is using packaging to strengthen its brand, based on consumer research. “We develop all our consumer propositions, including packaging design, based on consumer insights and needs,” says Roy Ong, Lion Nathan New Zealand’s innovation director. “Depending on those insights, we aim to design packaging that is unique with high consumer appeal. Hence, we may spend more or less on packaging depending on the design objective.” In 2007, that led the brewer to develop

56 EXPORTER

KEY TAKEAWAYS > Packaging decisions should be driven by consumer research. > Packaging design should form part of your overall export strategy. > It pays to be sensitive to local trends and culture while making critical export packaging decisions. > Don’t underestimate the rigours of the journey that packaging faces. > Consider cost and the environment – they make social sense and can lift a product’s proﬁtability in competitive export markets.

premium packaging with a self-adhesive label for Steinlager PURE. “We also designed a proprietary bottle with unique embossing to go with it,” Ong says. Packaging For brand awareness Packaging design forms part of Lion Nathan’s overall innovation process. Consumer research helps in understanding complex export markets. The brands Lion Nathan exports (primarily Steinlager and some Speight’s, Lion Red and Mac’s) are generally domestic brands which expatriates seek out in other markets. It pays to be sensitive to local trends and culture. “We are obviously very aware of the packaging rules and requirements in different markets and may select slightly different imagery to meet the demands of a particular

> PACKAGING

market; for example (we used) more New Zealand landscape imagery on our exported Steinlager,” says Ong. Steinlager Classic underwent a major trademark packaging revamp in 2009. It included new designs on bottle labels as well as secondary packaging. The packaging upgrade took 18 months to complete and another three months to execute in the market. “The brand has enjoyed solid growth since this relaunch and gave us another reason to talk to past and present Steinlager consumers,” says Ong. enVironmental imPact Marketing considerations are only a part of packaging strategy, according to the New Zealand Packaging Council, which represents the a $2 billion industry. The environmental impact across the packaging lifecycle is becoming increasingly important to New Zealand companies, says Paul Curtis, the council’s executive director. Speaking at the council’s last awards ceremony, he said: “The winners showcase how industry is taking a complete supply chain approach to new product development and not just looking at recyclability.” One of New Zealand’s largest exporters, Fonterra, won the Supreme Environmental

Packaging award for implementing a world-class export packaging solution to deliver its anhydrous milk fat to markets worldwide. The dairy giant put together a crossfunctional team that included customers Mars and Kraft. The team developed an international solution that saved over $8 million a year and eliminated the need for 2500 tonnes of paper. Fonterra has done away with 40,000 wooden pallets a year since it moved from a custom-built one-tonne container for butterfat to a reusable steel container that has an integrated pallet. And last season the dairy producer avoided the use of 430 tonnes of paper by reducing packaging waste in its powder packing areas. About 115 tonnes of plastic a year is also being saved as a result of redesigning its 20kg cheese bags.

and turn it back into slip-sheet for their export product. This helps our clients close their waste loop and greatly minimises the dumping of plastic waste. Once scrap plastic is turned into slipsheet, it can be recycled again at the receiver’s end.” Slip-sheets can help improve export sales. “All excess space taken up by pallets is now free for more products. Also the low price of a slip-sheet improves the overall cost of goods — the price of expensive pallets no longer needs to be factored into the equation of manufacturing the initial product,” says Spencer. Such out-of-the-box thinking is important in packaging design, says Natalie Hilterman, trade marketing and business development analyst for Viscount Plastics, a materials handling solutions provider.

steinlager classic underwent a maJor trademark Packaging reVamP in 2009. it included new bottle label designs as well as secondary Packaging. the Packaging uPgrade took 18 months to comPlete and another three months to eXecute.

cost concerns Driven by similar cost-saving considerations is an innovation-focused packaging firm, Astron Plastics Group. Companies including New Zealand Sugar, Nestle, Fonterra and Lion Nathan have been using Aston’s packaging to save costs. One such solution is slip-sheet, a thin sheet of plastic designed for sliding products into an export container. The sheet is generally the same width and length as a pallet but just 1mm thick. It is used in conjunction with a forklift attachment called a push/pull unit. The idea of the slip-sheet is to save customers from spending on pallets, says Steve Spencer, Astron’s sales and business development manager. “The sheets are made from 100% recycled material processed in our Auckland or Christchurch facilities. We collect scrap plastic from our customers

“This includes the best product fit on export pallets or hand-stacked in containers, and the creation of stable loads. Don’t underestimate the rigours of the journey that the packaging faces; a ship’s pitching and rolling will place high stress on packaging’s top load strength.” Going back to basics, Viscount designed a simple solution that has resulted in a 30 per cent space saving. By switching from a round pail to a square pail, not only do exporters gain space and use fewer pallets, they also get a novel way of making their packaging stand out, perhaps offering a point of difference to clients, says Hilterman. [end] SANGEETA ANAND / WRITER Sangeeta Anand, is an international writer specialising in business, supply-chain and technology. She has written for several publications in New Zealand and overseas.

EXPORTER 57

global stage EXPORTER LOOKS AT INNOVATIVE NZ PRODUCTS SEEKING A WORLDWIDE AUDIENCE

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Merino Kids™ Blunt Umbrella THIS IS THE UMBRELLA of the future – one that can withstand gusty winds of up to 117 km per hour and doesn’t fold upwards when you need it to work on a windy, rainy day. The Blunt Umbrella has already caught the world by storm for its unique design and innovation. Inventor and Kiwi designer, then living in the UK, Greig Brebner, told friends he could design a better umbrella – one that would outperform conventional umbrellas. It has taken nearly a decade to get the Blunt Umbrella project going. Reviews of the umbrella have been good from influential magazines, including Wired, in the US. Managing director of the company

Scott Kington said the umbrella solves several key problems with conventional umbrellas which break, tear at the tips and poke people in the eye. A superior canopy tension system (rational tensioning system) provides the perfect angle for the umbrella every time. “We have recently signed a Japanese distributor and they are now selling our umbrella into high end department stores. We are just finalizing discussions with a USA based distributor. It is getting an amazing response, particularly within the design community at this stage,” Kington adds. FOR MORE INFO: HTTP://WWW.BLUNTUMBRELLAS.COM

Skinfood MAKING QUALITY SKIN CARE products that are free from artificial colours and perfumes, Skinfood – a New Zealand company – is now making waves locally and abroad. The company manufacturers a range of skincare products that are environmentally friendly, unisex, free from artificial colours, perfumes, paraben and preservatives. Having won over New Zealand consumers with its high quality, natural based skincare range, Skinfood is now going global, with the UK market providing a successful international platform. Skinfood recently won the Best Green/Natural Product in the 2008 New Zealand Woman’s Weekly Beauty Awards, voted for by the magazine’s readers. New Zealand Woman’s Weekly is one of the county’s best-read women’s titles with a circulation of 98,000. Skinfood was founded in 2002 and is now sold in over 220 stores throughout New Zealand. After launching through supermarket giant, Tesco in the UK, Skinfood is now making further inroads, with listings at other stores throughout the UK including Lloyd’s Pharmacy, Morrisons, John Lewis, Waitrose and through amazon.co.uk. Other offshore markets are now being investigated including Australia and France. MORE INFO: HTTP://WWW.SKINFOOD.CO.NZ/

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MOTHERS LOVE THE BEST for their kids. This cool Kiwi company has tugged at the heartstrings of all mothers trying to give the best material comfort to their babies. Merino Kids™ makes a range of baby clothes, baby sleepbags, wraps for babies using 100% natural fibres which are renewable and biodegradable. Although still a baby in terms of business life cycle, Merino Kids™ has already won a few prestigious international design awards for its Go Go Bag the Cocooi Babywrap and the Cocooi Sleepbag. The company was founded by Amie Nilsson, during 2003 and since that time has grown significantly to now become one of the global leaders and commentators of using natural fibres for young children. Nilsson says on her company’s website: “When I first started Merino Kids™ back in 2003, it was born out of necessity for my first daughter Lillybelle. As a mother researching the availability of baby, infant and toddler sleepwear products I was shocked at the number of synthetic products that were flooding the market. More so I was dismayed at the size and state of the unregulated global industry.” FOR MORE INFO: HTTP://WWW.MERINOKIDS.CO.NZ/

Richard Kavanagh Hair Straighteners RICHARD KAVANAGH’S work has been widely featured in international hair and fashion magazines including Vogue and UK Cosmopolitan. He has styled hair for celebrities such as Naomi Watts and the Black Eyed Peas, and travelled extensively to perform his hair magic in places such as LA, New York, London and Singapore. Fed up with not being able to get high quality tools for use on the hair of models he was working with, Kavanagh decided to build his own tools, the result -- the Richard Kavanagh (RK) straighteners and curling irons. The straighteners are made from full ceramic plates that emit far infrared heat. All of Richard Kavanagh products come with a 30-day no-questions-asked refund policy guarantee, and a 12-month full replacement warranty for manufacturer defects. FOR MORE INFO: HTTP://WWW.RICHARDKAVANAGH.COM

Van Dyck Fine Foods – Crepes NEW ZEALAND’S ONLY CREPE manufacturer and exporter, Van Dyck Fine Foods, is celebrating its tenth anniversary this year with the prospects of further export growth. Van Dyck manufactures crepes and a variety of other hot plate products in its purpose-built factory in New Plymouth. Van Dyck ships a 40-foot container of gluten free crepes every six weeks to one of its clients in Australia. Growing sales through Australian supermarkets is likely to generate additional export opportunities within Australia for 2010, and negotiations are progressing well with a new Canadian distributor. It also sells to NZ retail and food services markets, as well as Thai Airways, Singapore Airlines and Emirates. Belgian immigrant couple Marcel Naenen and Inge Vercammen started Van Dyck Fine Foods in 2000. Van Dyck’s range of products include sweet, plain and gluten free crepes, hotcakes in plain, chocolate, and gluten free and mini hotcakes for children’s menus. Van Dyck also bake blinis, a savoury mini pikelet, used like a cracker. Its latest product -- corn and capsicum fritters, in large and bite-sized versions. MORE INFO: HTTP://WWW.VANDYCK.CO.NZ/

Aquaﬂow Bionomic KIWI TECHNOLOGY company Aquaflow Bionomic Corporation has figured out how to successfully harvest algae from sewage ponds for almost two years now, even in winter air temperatures of below zero. There are many species of algae to be grabbed from the ever-changing algae population rising and falling according to the whims of the environment. This company recently clinched a deal to supply Honeywell UOP with the know-how to grow algae using Aquaflow’s technology at a UOP demonstration site in Hopewell, Virginia. There CO2 will be captured from the exhaust stacks of the Hopewell caprolactam facility and delivered to a pond near the plant where algae will be grown and harvested. It is significant for a New Zealand company to be involved in a complex project like this, and indicates the broad application of the Aquaflow technology,” says Aquaflow director Nick Gerritsen. MORE INFO: HTTP://WWW.AQUAFLOWGROUP.COM

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> LO G I ST I C S

Effortless move Tracking systems are getting more sophisticated. The race is on to not only keep an eye on your products from afar but to trim the cost of moving them to their final destination.

BY VA L L EV E S O N

ike many technologies, tracking services have gone from something unique to mainstream – fleet tracking and goods tracking are now available to most companies, no matter what size. As Anthony Browne, CEO of New Zealand Agility Logistics, says: “For most exporters, it has become a prerequisite to have goods tracked and to provide tracking information to customers. Most companies have tracking systems online, where customers can type in a number and get information about where their goods are.” Browne points out that this is the minimal expectation of tracking, but companies such as Agility Logistics look to put more value into tracking. And here’s the rub – when looking at what companies offer, “tracking” doesn’t always mean the same thing. It could be the basic “check on the web” where your parcels are and when they are expected to be delivered, or more advanced technology. Along with Agility Logistics, other key market players include Hemisphere Freight, PBT Group and TNT. time-consuming According to Browne, tracking alone is not enough. “If you’re a larger company,

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KEY TAKEAWAYS > For most exporters, tracking goods has become a prerequisite. > Finding the right logistics partner is vital – it reflects on your business. > Not all tracking services are created equal – find out what’s available and what’s best for you. > Tracking should save you time and resources and boost efficiency.

you may have 50 items en route at the same time. Do you want to be spending time typing 50 numbers into a tracking site daily? No.” He says his company’s role in terms of exporters is very important. “We’re the final link in the supply chain. All the energy and commitment, time and money you put into your business comes to very little if an exporter’s logistics partner doesn’t complete its part well. All that work can come to nothing. “We’re about getting the goods delivered. It’s a competitive market, so it’s in our interests to develop cuttingedge technology for tracking.” Browne says his company uses the latest tracking systems. This means

proactive email notification, online documentation (where you and your customer can view relevant shipping documentation) and more. “We measure expected delivery and actively monitor things, so we can check for delays. This gives customers the ability to keep control over freight movement with minimal effort. “Traditionally, you would log into an internet site, enter a number and the onus would be on you to seek the information required. With our system, customers are alerted to any issues, so they don’t have to log into a site every day.” customising what is tracked Browne says the information you receive is customisable. “Some people want information on every event, some only want to know if there is a delay. You can avoid information overload and ask to be alerted only if an event has affected something. If everything’s on schedule, you probably don’t have to know. Second-generation tracking accepts that all customers have different requirements. We try to see what best suits a particular business. “Receivers of goods can also receive notifications if the exporter chooses. This stops double handling of information.” With this system, the exporter can

restrict access to what the receiver of goods can see. “You can make sure they have access only to what’s been delivered to them, not the full order.” Browne says his company does not charge for the tracking part of the service. “It’s about adding value to our customers and differentiating ourselves from competitors.” “We look at our customers and their needs. As they get larger and more complex, their needs grow – and we need to adapt to their needs. The prospect of working with a logistics partner without cutting-edge technology would mean more work for the exporter. There are serious players in our industry. The competition means we have to keep ahead.” can the system deliVer? Hemisphere Freight general manager Rodney Hughes says exporters need to be mindful of two things when evaluating tracking systems: can the tracking system reduce internal costs, and will it provide an efficient service to their clients? “As a result of the development of our system, HemiTrack, over the past six years we have implemented tracking systems that have achieved both of these objectives for our clients. A common

method is to allow customer services representatives, who normally have no actual involvement in shipping, access to product availability and delivery information to respond to client enquiries. “This is ‘live’ data, available 24 x 7, via the internet, in any easy-to-use format, and achieved by collecting the product detail within export orders.” He says Hemisphere can also customise HemiTrack according to clients’ needs. “Hemisphere can also develop electronic data transfers and web services to reduce costs and improve customer service.”

A powerful feature of Hemisphere’s service is the ability to find out which container a particular product is in. “Our customers can say they want that container offloaded first and delivered first if there is a hurry – even when it’s en route. It’s about product rather than shipment tracking,” he says. [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.

EXPORTER 61

Useful Websites for Exporters GOVERNMENT-RELATED SITES www.mfat.govt.nz Ministry of Foreign Affairs and Trade website. Trade and economic relations information. www.nzte.govt.nz New Zealand Trade and Enterprise. Agency for New Zealand economic development. www.maf.govt.nz Ministry of Agriculture and Forestry. www.customs.govt.nz/exporters Customs regulations for exporters. www.nzeco.govt.nz /info@nzeco.govt.nz The New Zealand Export Credit Office (NZECO) provides financial guarantee products for New Zealand exporters and banks. Our products help exporters manage risk and capitalise on trade opportunities around the globe.

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

RECRUITMENT www.logisticsrecruit.co.nz We supply experienced export & import staff, with or without PIN numbers. Temp, contract or permanent roles. Qualified & guaranteed. www.teamrecruitment.co.nz Team Recruitment specialise in the logistics & supply chain areas, supplying top quality people from the operational level through to project & senior management for importers, exporters, shipping, international & domestic freight forwarders. “Quality candidates quickly” – this is our purpose & our goal is to deliver this to you wrapped up in outstanding service. Having specialised in this market for 15 years, we have considerable knowledge of the people in these industries, and can add valuable people to your team as your needs arise.

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

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. www.ema.co.nz / www.exportnz.org.nz New Zealand’s premier exporting partnership brings you a series of targeted, contemporary, and practical export and international business courses. EMA Learning and Export New Zealand offer workshops in areas such as trade documentation, trade shows, foreign markets and international marketing, plus the Diploma of International Trade (in conjunction with the New Zealand School of Export). www.shortcourses.ac.nz The University of Auckland Business School offers over 200 2-day practical business and management Short Courses each year to provide business and professional people from all walks of life opportunities to up-skill and re-skill. Short Courses also deliver an ever-growing number of in-house courses which are delivered specifically for an organisation, when they want and where they want, with the option to have the courses tailored specifically for that organisation. 0800 800 875. www.ltg.co.nz LTG provides applied, distance qualifications. Prior learning/experience are recognised. LTG specialise in bridging qualifications including the CILT(UK) Certificate and Professional Diploma in Logistics & Transport. www.theicehouse.co.nz/ownermanaged The ICEHOUSE Business Growth Centre, Auckland Join business owners and entrepreneurs becoming globally capable with ICEHOUSE knowledge, tools and contacts. www.nzlogistics.co.nz Manukau Institute of Technology’s New Zealand Maritime School is the premier provider of logistics, shipping and freight training in New Zealand. www.learningpost.ac.nz Learning Post – Study at Your Own Pace at Your own Home. Fit education around your work and family commitments Contact us today for more information 0800895895.

INTELLECTUAL PROPERTY www.baldwins.com Turn ideas into profit through sound IP management. Whether you’re looking to commercialise, develop, protect or enforce your IP rights call 0800 baldwins. Mention ‘Exporter’ when you call to receive a free consultation with our experts. www.ajpark.com A J Park are the clear leaders in IP. They provide a full range of IP services, including trade mark, patent, and design protection, copyright advice, commercialisation and litigation. www.everedgip.com EverEdge IP provides a comprehensive range of intellectual property related services to corporations, research institutions, individuals and investors with the objective of assisting organisations and individuals to generate and maximise the value of their intellectual property.

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

TRADE SERVICES

TRAVEL CONSULTANTS

www.jacanna.co.nz International Logistics Company

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.sharkpatrol.co.nz Shark Patrol is an exciting new online credit referral network designed to protect its Members from problem payers.

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

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.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.

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.apx.co.nz Atlantic Pacific American Express (APX) offer a comprehensive corporate travel management service to large corporates and SME’s. APX are an American Express Business Travel Partner, offering innovative business travel solutions to increase savings and control over your travel program, including reporting, online booking tools and access to AMEX global corporate hotel rates.

www.regus.co.nz Provider of serviced offices, meeting rooms, virtual offices, conference rooms, and business lounges across New Zealand, Australia and worldwide.

MATERIALS HANDLING www.viscountplastics.co.nz Viscount – NZs leading materials handling solutions provider.

www.redwoodcredit.co.nz Specialist trade credit insurance (cover against the failure of a buyer to pay) Broker and consultant.

www.secureaload.co.nz Secureaload your cargo securement and protection specialists.

www.bka.co.nz When you’re talking to the world, you need a world class website. At bka interactive, that’s what we build. We help our clients connect with the world through their websites.

www.yale.co.nz For the total materials handling solution – Yale Lift Trucks.

TRADE CREDIT

www.tmnz.co.nz Tax Management NZ is NZ’s original tax payment intermediary dealing with most of the top 200 companies, all of the largest trading banks, and the top four chartered accountancy firms. We can help you too. www.tabak.co.nz Selling businesses is all Tabak does, which allows it to be fully committed to their clients throughout the sales process – from bringing buyers and sellers together and to achieving to a satisfactory.

www.atradius.co.nz Company description: Atradius provides trade credit insurance and collections services worldwide with a presence in 42 countries. Its products help protect companies from payment risks associated with selling products and services on credit.

exporter is not responsible for the contents or reliability of the websites listed above and does not necessarily endorse the views expressed within them. For more information regarding these listings please contact the listings directly.

FOREIGN EXCHANGE www.currencyonline.com Your online currency exchange and transfer service, making moving money easy.

ISSUE 12 SEPTEMBER QUARTER 2009

DECEMBER QUARTER 2009

EXPORT OPPORTUNITIES ON EVERY PAGE

Feedback the publishers of eXPorter magazine welcome all feedback and ideas on the content of this magazine. more speciﬁcally, we encourage you to let us know if there are:

In search of better loan rates

Banks slow to budge 60% of exporters surveyed still paying the same old rates despite OCR plunge

Untangling the Chinese puzzle

Managing the credit and risk monsters in 2010 Sharpen your act or fall over

• Tackling green packaging

Govt gives exporters money, then take some back Staked your home for the business? Ask for housing loan rates!

• Internet payment solutions

When demand shrinks, hedging exposes you to high risks

• Middle East in a thousand and one nights

New Trade Minister Tim Groser’s game plan

• War with the pirates

• Stories/companies/personalities you would like to read about • Innovative export products that should be profiled • New products or services that you feel would be of value to other exporters

send your contributions to: publisher@exportermagazine.co.nz

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EXPORTER 63

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Using your overdraft for international trading?

WPT 4889

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

• Choose payment terms and currencies to suit your business needs

• Find a more cost effective way to fund your imports

• Be in a position to negotiate better prices by settling immediately with your suppliers.

Call our International Business Team today on 0800 300 332. Westpac’s current lending criteria apply to all applications for finance. No member of the Westpac group accepts liability for the losses suffered as a result of it converting currencies and any exchange risks from the conversion of currencies is the responsibility of the account/deposit holder. Some services may be provided by Westpac New Zealand Limited. Westpac Banking Corporation ABN 33 007 457 141, incorporated in Australia (New Zealand division).