Business Plus April 2017 by EMA

ISSUE 146 APRIL 2017

Enzo Nutraceuticals Human clinical trials for boosting exports P31

BILL OF LADING NEEDS DIGITALISING

P10

GO BACK TO BASICS TO FACE NEW CHALLENGES

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SENTENCING UNDER THE NEW OH&S REGIME

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AUSSIE F&B EXPORTERS ON TOP IN SE ASIA

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…AND MUCH MORE!

EMA courses are very professional and well-structured. Jessica Sturgess, Health and Safety Coordinator Stryde Projects

Start 2017 right, book your business training with EMA. Visit ema.co.nz for more information

On the cover: BusinessPlus is published by The Employers and Manufacturers Association (Northern) Inc (EMA) EMA is the major shareholder of national lobby group, BusinessNZ. BusinessPlus is attached to EMA’s fortnightly email newsletter, e-report, next on April 5th.

Nutritional supplements company Enzo Nutraceuticals has completed a second wave of clinical trails to provide science-based evidence its products support recovery from brain injury such as concussion, and more uses. Pictured are co-owners Dr Matt Frevel (left) and David Giles.

Designer: Ripeka Mikaere Printer: MHP Distributor: Rocket Mail Advertising sales: Colin Gestro, Affinity Ads, M + 27 256 8014 E colin@affinityads.com ISSN No. 1176-4953 EMA Head office – Auckland: 145 Khyber Pass Rd, Grafton, Auckland, NZ Private Bag 92066, Victoria St West, Auckland 1142. P +64 9 367 0900 E ema@ema.co.nz

Enzo Nutraceuticals Human clinical trials for boosting exports P31

BILL OF LADING NEEDS DIGITALISING

Full story page 31 Editor: Mary MacKinven T +64-9-367 0939, M +21 636 089 E mary.mackinven@ema.co.nz

ISSUE 146 APRIL 2017

GO BACK TO BASICS TO FACE NEW CHALLENGES

P10 P15

SENTENCING UNDER THE NEW OH&S REGIME

P20

AUSSIE F&B EXPORTERS ON TOP IN SE ASIA

P28

…AND MUCH MORE!

Contents Commentary EMA’s CEO Kim Campbell on: Impact of an ageing population on employers Local government needs more funding options

Your purpose and opportunity - key to navigating global megatrends BusinessNZ economist Stephen Summers on: More small business needs to embrace e-commerce How to manage an ageing workforce

Seen @ Employers Forum and Policy Forum in Auckland

The Bill of Lading needs digitalising: a shipper’s perspective

Hamilton: EMA/ExportNZ Waikato 103 Tristram Street, Hamilton. PO Box 490 Waikato Mail Centre, Hamilton 3240. P +64 7 839 2713

Employment Emerging technologies set to propel small business

Tauranga: ExportNZ Bay of Plenty Smart Business Centre, 65 Chapel Street, Bay Central, Tauranga, 3110. PO Box 13202, Tauranga Central, Tauranga 3141. P +64 7 571 0600

The not-so-new business challenge: getting back to basics Employment Chat – Q and A: Easter holiday confusion and company vehicle off-roading Out, out damn asbestos

Untested health and safety regime: a perspective on sentencing

Case law: Redundancy, or not?

Ramping up basic work skills

AdviceLine: NZ 0800 300 362 AUS 1800 300 362 E advice@ema.co.nz Phone 8am-8pm weekdays for information about employment and more, plus referrals to EMA Legal lawyers and your local EMA consultant in employment relations and/or occupational health and safety. Visit www.ema.co.nz for owner and staff training programmes, conferences and other events, employer guides and templates, manufacturer services, media statements and submissions, export development and more EMA contacts Chief executive: Kim Campbell Membership manager: Kayne Franich External Relations manager: Val Hayes Advocacy & Industry Relations manager: Mark Champion Learning manager: David Foley Enterprises & Strategy manager: Mauro Barsi Industrial Relations & Safety manager: Paul Jarvie Finance & Technology manager: Paul Yeo Corporate & Building Services manager: Sheree Alcock ExportNZ manager: Catherine Lye

In Business IT: How the Internet of Things is transforming energy management IT: With Clouds forming everywhere, how does business choose the best? Selling up: Good time for Baby Boomers to exit their businesses

Compliance: Making food safety law work better for business

Corruption: Whistleblowing policy for the ultimate protection

23 24

International Trade Cross-border e-commerce is the 21st century spice trade

Celebrate with our intrepid Kiwi exporters

Aussies have it over Kiwis in Southeast Asia

Member Profiles Laszlo Boats NZ: Going for gold

Enzo Nutraceuticals: Human trials for boosting nutraceutical exports

+ Inside BusinessPlus is free to EMA members

Training Plus insert detailing April training courses, and more BusinessPlus April 2017

Advocacy helping business succeed As an EMA member you are part of a 4000-plus business collective which employs more than 250,000 staff. This collective voice is extremely powerful. It allows the EMA Advocacy team to exert influence on your behalf and be your voice at the table to deliver a landscape which allows business to be more effective and successful. The team has honed its approach to advocacy and the key issues it will focus on. This ensures the teamâ&#x20AC;&#x2122;s efforts are used to shape the key decisions influencing your business environment. Advocacyâ&#x20AC;&#x2122;s key areas of focus Coping with the challenge of growth and development, in particular how this relates to infrastructure development, transport and the resource management system Addressing skills development, education and training Health and safety and all employment law related matters Export and trade opportunities for growth

CEO Commentary By Kim Campbell

Impact of an ageing population on employers It’s a fact: we’re all ageing by the minute. It’s also a fact that New Zealand, like many countries around the globe, has an “ageing population”. At present we have about 700,000 Kiwis aged 65 years or older. In 29 years’ time this is projected to almost double to 1.2 million. By comparison, the number of those aged up to 14 years will flatline at about 900,000 over the same period. Our birth-rate is hovering at around two, ie, two births per woman in the child-bearing age range. This rate will not repopulate the New Zealand labour market in the medium to long term, and immigration alone will not find us enough workers for the proposed labour needs in the future. We are also living longer. Life expectancy at birth is now 79 for men, and 83 for women, whereas those who were born in the 1870s could expect to live to their 50s. In general, many of us aged 65+ are in relatively better health compared with earlier generations at the same age.

Retirement delayed Many aged 65+ are working past this traditional age of retirement too. Sometimes this is because we

still need an income, sometimes this is because we still really want to make a difference in the workplace and sometimes because we enjoy coming to work and doing what we do. Overlay this with the ongoing skills shortage and the fact many other economies are facing the same challenges. This raises the very real issue that it may become increasingly difficult for employers to find the staff they want in the future if they don’t take action now.

into retirement. However, this is now changing and it is no longer the status quo for people to finish working at 65 years of age and going straight into retirement. On average, most people are working to age 67. New Zealand is ranked fourth in the OECD for having the highest employment rate for 65-69-yearolds, and ranked second highest for the employment rate for 50-64-yearolds. This may have been one of the reasons behind Prime Minister Bill English choosing to raise the politically contentious issue of increasing the age of entitlement for New Zealand Superannuation from 65 to 67. While this is significant, it is only one aspect of the debate. As we look forward to living longer, we need to re-think what retirement looks like.

This is why we’ve started to turn our thinking to how employers can look to retain, retrain or recruit mature workers. We now consider that in the medium term New Zealand will be competing for workers along with all other countries that are in the same predicament.

One solution is to embrace working longer and realise the potential of mature workers who have so much experience and talent to offer. However, this is not about being forced to work on; rather it’s about enabling and encouraging those who want a working life.

Multiple perspectives

We need to figure out how to keep the skills of our mature workers up-to-speed, how we keep our workforce healthy enough to work and what practices employers may need to enlist to cater to the needs of a mature worker.

We need to look at the ageing of the population from all perspectives. There needs to be a national conversation on this, as the ageing population is a dynamic which will impact on all sectors of our society. We also need leadership around the public policy discussion. Historically, this has been driven more from the perspective of managing people

These are all considerations we have on our agenda as we scope this programme to address what will be a significant issue for employers in the very near future.

Kim Campbell is EMA’s chief executive. Email kim.campbell@ema.co.nz BusinessPlus April 2017

Commentary By Alan mcdonald

Local government needs more funding options As local councils in the EMA region northwards of Taupo begin public consultation on their Annual Budgets, the process itself highlights the limited options available to those councils to meet their ongoing infrastructure demands.

Auckland Council funds just 50 per cent of its activities from rates, so further targeting the ratepayer base is never going to be enough to fund the cityâ&#x20AC;&#x2122;s growth and current infrastructure.

BusinessPlus April 2017

Auckland continues to pour raw sewage into the harbours every time there is significant rain; the roads are severely congested; and while public transport is improving, that is off a low base. While the city needs much greater investment in infrastructure, city finances and their revenue base just cannot cope with rapid population growth. As local councils in the EMA region northwards of Taupo begin public consultation on their Annual Budgets, the process itself highlights the limited options available to those councils to meet their ongoing infrastructure demands. For a number of councils (local authorities) the problem is about funding infrastructure and services while coping with rapid growth and historic underinvestment. For others itâ&#x20AC;&#x2122;s about maintaining, servicing and replacing ageing infrastructure while suffering declining ratepayer bases.

For example, Tauranga has a city centre regeneration project to fund. Hamilton City Councillors have choked on and rejected a surprise 12 per cent rates rise, apparently driven by a budget shortfall of $12 million caused by growth since signing off its Long Term Plan in 2015. Cost savings are available to Hamilton City if it can ever agree with its two near neighbours on shared water reticulation and waste water services, but in the interim that Council is looking at a rather large hole in its operating budget.

Solutions? In mid-March, Auckland Mayor Phil Goff finally announced a plan to look at Council spending, particularly within the Council Controlled Organisations (CCOs such as Watercare, ATEED and Auckland Transport). That may result in reduced staff costs or a form of shared services.

But otherwise the 2017 proposed budget from Auckland City only promises a rate rise “no higher than 2.5 per cent”. Inflation is currently 1.4 per cent. The annual budget also proposed more taxes on segments within the ratepayer base, such as a targeted rate on developers to discourage land banking. It also proposes a targeted rate on accommodation owners, resulting in central city motel and hotel owners paying their fourth or in some cases fifth targeted rate. The accommodation targeted rate raises just $30 million per year, when the city is billions short of keeping up with infrastructure demand. The budget also defers reduction of the business rate differential by another year. The only reference to costs savings is centred on timing differences on interest payments on the Council debt, a debt level that is very close to its ceiling and prevents Auckland Council from contributing further to pressing infrastructure projects such as public transport, roading and storm water.

Central Government has made it very clear that it won’t further open its wallet until Auckland does more to pay some of its share in major projects like the Auckland Transport Alignment Project (ATAP). ATAP faces a $4 billion funding shortfall in the first 10 years of what is meant to be a 30-year project to decongest traffic in Auckland.

Texas alone. The bonds created to provide the finance are repaid from raised tax levels over an extended period of time - 30-50 years – spreading the debt over multiple generations that benefit from the infrastructure. Labour Housing spokesman Phil Twyford is proposing a similar structure to deal with Auckland’s housing issue.

That’s about 29 years too far away.

Local ideas

Mayor Goff’s Regional Petrol Tax proposal was rejected out of hand by central Government and while it may have raised $100 million or so, it, like the targeted hotel bed rate, is tinkering at the edges of a funding shortfall well into the billions.

While Government seems reluctant, tolls or congestion charges could be used to help fund the $4bn shortfall in ATAP. Congestion charging is a critical part of ATAP but estimated to be 10 years down the track. Tolling motorways sooner may prove acceptable to Aucklanders already wearied by sitting in traffic, missing appointments, failing to get family to sports and other activities and losing productivity in their businesses – all the while sucking in the fumes they are spewing into the atmosphere.

Auckland Council funds just 50 per cent of its activities from rates, so further targeting the ratepayer base is never going to be enough to fund the city’s growth and current infrastructure.

Looking overseas Auckland’s problems just highlight the issues facing many councils – they don’t have enough funding tools to pay for their activities. But many of the alternative options require legislative change. For example, in the UK many cities have now been granted special status, following the example of Manchester City, which unlocks Government funding to provide infrastructure to encourage growth. Government then takes its dividends to repay that debt from an increased share in the tax take from growth in and around the new infrastructure. That opportunity isn’t available to Auckland City when, for example, land values and business opportunities have increased around the train stations planned for the new Central Rail Loop. In the US, Municipal Utility Districts (MUDs) have been created where special district governments finance all of the utilities and community facilities. There are 1100 MUDs in

The EMA is in favour of greater use of Public Private Partnerships (PPPs) to provide critical infrastructure. The success of recent school and roading projects, including the recentlycontracted second stage of the motorway north of Puhoi, is taking some of the political sting out of going ahead with this form of project. Local Government New Zealand (LGNZ) came up with a 10 Point Plan to improve local government funding in 2015. One of the options was a Visitor Tax currently under consideration by Central Government. Other options focussed on other targeted taxes and levies, such as Special Economic Zones and a local government share of the GST tax take, which are being further developed by LGNZ. While Government has a full plate and many distractions in an election year, perhaps it could make a mark by doing more than just look at some of the alternatives available to fund local government, and make up the critical infrastructure lag we are facing in our region.

Alan McDonald is EMA’s policy director. Email alan.mcdonald@ema.co.nz BusinessPlus BusinessPlus March April 2017

Commentary By Abbie Reynolds

Your purpose and opportunity - key to navigating global megatrends Talk of disruption and accelerating global change has not only become part of our daily news feeds, it’s an increasing reality reshaping our daily lives and business choices. But what does accelerating global change really mean? What is the impact now and in the future and how do employers, manufacturers and our wider business community respond? Understanding these global scale trends and then looking for the opportunity and how it aligns with your purpose is one way of answering these questions. Ernst & Young consultants identify at least eight megatrends in recent research, as outlined below. The ‘centre of gravity’ is shifting from the west to the east. By 2025, 20 of the world’s 50 richest cities will be in Asia and by 2030, the Chinese and Indian middle classes are expected to make up 35 per cent of global consumption, up from just 6 per cent in 2011. There’s also a massive power shift underway. Of the 100 largest global economies, 40 are now companies. Social media platforms now outrank nations. And the growth and rising power, wealth and political autonomy of cities is set to increase their relative importance as economic actors. Generationally we’re changing in ways we’ve never experienced. Did you know that 75 per cent of millennials check the sustainability creds of brands? And they’ve grown up connected, collaborative and mobile - they might not think or

behave like you do. By 2020, they will make up more than 50 per cent of the workforce. We’re seeing acceleration in the speed of disruptive technologies to market, from automation and robotics to smart living reshaping the way we do things. In the next 20 years, 47 per cent of occupations in advanced economies are at high risk of being automated. And climate change: the biggest megatrend of all expected to be the greatest driver of innovation since World War 2. As businesses, governments, cities and civil society get focussed on meeting the Paris Agreement commitment to keep warming below 2 degrees, we expect to see innovation on a scale we haven’t experienced before.

Opportunities vs threats And we need to face these challenges in a time of declining trust in our key institutions, including business. It’s hard for human beings to think and act for the long-term, even more so in the face of globalscale trends. That’s why the more data we have, the more we can make evidence-based decisions – and that is critical for any business if we’re going to find the opportunities. If you are a business owner – no matter what shape or size – you need to understand how these trends could impact your sector, your market, your business. And then consider how these trends present an opportunity.

As Kiwis we value our ability to innovate. If we can find an opportunity where others see threats, we have a good chance to create value. But we will also need to do this in ways that build, rather than erode trust. How do employers and manufacturers tackle these challenges? Sustainable Business Council members use a sustainability lens, finding ways to reduce their negative impacts on society and environment, and increase their positive impacts. Other members go a step further, making purpose their driver; a purpose that delivers for society, communities and staff, as well as shareholders. I draw a parallel here with the tragic whale stranding at Farewell Spit in February, where I was on duty as a Project Jonah marine mammal medic helping brief volunteers. A tragedy yes, but also a demonstration of the power of purpose in bringing out the best of humanity in a collective desire to help, to find a solution, to pitch in and deliver value. The challenges we face are an opportunity for innovators and entrepreneurs. My suggestion to all New Zealand employers and manufacturers, is to start thinking about how you can engage your curiosity and desire to make a difference, so we as a business community can come up with the solutions.

Abbie Reynolds is executive director of the Sustainable Business Council. Visit www.sbc.org.nz 8

BusinessPlus April 2017

Commentary By stephen summers

More small business needs to embrace e-commerce The latest annual survey of small business in Asia-Pacific provides a good snapshot of that sector in New Zealand.

Zealand because of our low scores for online sales. New Zealand came 7th out of eight countries for e-commerce.

The survey was conducted among accountancy members of CPA Australia that has more than 160,000 members working in 118 countries.

The survey found that only 38 per cent of New Zealand small businesses were earning revenue from online sales, compared with an average of 69 per cent in the other countries.

Every year CPA Australia surveys small and medium enterprises (SMEs) in New Zealand, Australia, China, Indonesia, Malaysia, Singapore, Hong Kong and Vietnam, giving an overall picture of the state of small business in the Asia Pacific region. The latest picture that emerges of New Zealand is generally of confidence. Most New Zealand small businesses surveyed achieved growth last year and have positive expectations for 2017 about growth, the economy and hiring expectations. However, the survey’s main finding raised a worrying issue for New Zealand. The main finding was that small businesses focusing on innovation, e-commerce, social media and exporting are significantly more likely to be growing, than those that are not. This was the case for all Asia Pacific countries surveyed, but it is particularly important for New

And only 11 per cent of New Zealand small businesses expected to grow their ecommerce presence this year, compared with an average of 34 per cent in the other countries. As a small market remote from larger markets overseas, New Zealand offers less scope for small businesses to grow. So it is even more important that they get into online selling and exporting.

E-commerce for growth Online selling, particularly to overseas markets, is a critical skill for small business to master. The most recent Business Operations Survey from Statistics New Zealand (from 2014) showed a similar picture of how New Zealand small businesses were approaching e-commerce. It found that 92 per cent had access to broadband, but only 66 per cent

had a website and only 44 per cent were set up for online sales. We can expect the figures to have improved since 2014, although from a low base. Meanwhile, many consumer surveys - here and overseas - show that shoppers expect in the future to do more shopping online. The message to small business from these research studies is clear: it’s important to get set up to trade online. There are many options available for a small business to make a start at e-commerce. Gaining an internet presence can be as simple as starting a Facebook page. Online selling can begin with only a few changes to an existing website. Setting up a basic shopping cart and secure payment processing facility on a website can now be achieved without high technical skills or large upfront costs. But it could be the single most important move a small business could make. Online selling could be the critical first step towards making export sales and for transforming from a small business into a larger one.

Stephen Summers is BusinessNZ’s economist. Visit www.businessnz.org.nz BusinessPlus April 2017

Commentary By Paul Jarvie

How to manage an ageing workforce It’s fair to say when I started to look at the impact the ageing workforce will have on New Zealand employers in the near-to-long-term, I thought this would be about dusting off the retirement manuals of yesteryear. When the age of retirement rolled about, it was standard practice to ensure those nearing 65 attended retirement seminars. The purpose of these was to prepare the worker for not working. How times have changed. Now, we do not have an age of retirement; we have an age of entitlement (65 years old) to receive the National Superannuation, but that doesn’t mean you have to stop working at this age. As was referred to in Kim Campbell’s column on page 5, there are many dynamics we are facing on a national and global scale, which will mean

employers will need to look on mature workers as an opportunity rather than a liability. We know that about 42 per cent of businesses have no programme in place and a further 40 per cent have no plans to address how they will manage mature workers. Yet 40 per cent are expecting an increase in workers aged 65 years in their enterprises in the near future. This was borne out in the focus group we conducted late last year, whereby our round table discussion revealed that employers had started to realise that the ageing workforce was a matter they needed to deal with. They were keen to explore options that enabled them to address this for their own enterprises, and at the same time were seeking national leadership on this, via their membership of EMA.

We are working with key players such as the Commission for Financial Capability, the Ministry for Business, Innovation and Employment, the Ministry for Social Development, and the Human Resources Institute of New Zealand. As a group, we need to shape our programme of work, and when we have more detail we will share that with you. Research indicates that this is a worldwide problem and as such we may well be competing for migrant labour, therefore it is very prudent to manage the human asset you have now. In the meantime, we are developing a tool box for employers, which will provide you with ways you can retrain, retain or recruit mature workers to best suit the needs of your enterprise. The aging workforce has been likened in significance to the industrial revolution.

Paul Jarvie is EMA’s Employment Relations and Safety Manager. Email paul.jarvie@ema.co.nz

BusinessPlus April 2017

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Seen @ Employers Forum and Policy Forum in Auckland

Mike Burgess [EMA] and Margaret Gracie [NZ Steel]

Graeme Mountfort [EMA board] and Paul Jarvie [EMA]

Muriel Roake [Muriel Roake], Sue Parr [Auckland Council] and Chris Lund [Glidepath]

Chris Pearce [Hick Bros Civil Construction] and Deepak Rathi [MM Kembla NZ]

Monya Nicholson [Wesfarmers Industrial and Safety], Karen Moller [Linfox Logistics (NZ)] and Yulene Knight [VINZ]

Marnie Simmons [Vector] and Amy Castle [Vector]

Astrid van Holten and Aaron Megchelse [Careers NZ]

Nicola Pohlen [Pohlen Partners]

Mark Champion [EMA], David Talbot [UMR Research] and Alan McDonald [EMA]

Yannis Naumann [IAG]

BusinessPlus April 2017

Shannon Huse Caldwell [Fletcher Building Holdings] and Val Hayes [EMA]

The Bill of Lading needs digitalising: a shipper’s perspective The shipping liner’s Bill of Lading (BOL) is the last of the global trade documents awaiting a sustainable, electronic solution. Here we look at why it needs to be digitalised and why the hold-up. All the other generic trade documents - customs declaration, commercial invoice, certificates of origin and packing, analytical and health documents – arguably can be, or are, in the process of being sustainably issued and distributed electronically. But not the centuries-old BOL that has served traders well, as initial evidence of the carriage contract between the merchant (holder) and the carrier of the goods, as well as the liner’s formal receipt of the goods for carriage, and as a document of title (entitlement) to the goods. It is a simple and effective document, understood and trusted by all parties involved in international trade. The BOL is subject to an international convention and enshrined in each trading country’s legislation. It is still needed, primarily to mitigate an exporter’s payment risk when selling into overseas markets – particularly to high-risk countries or buyers. The non-negotiable sea waybill (SWB) - serving as evidence that delivery instructions have been issued to the named consignee - has gone a substantial way towards removing the secondary needs for a BOL, which are the functions of carriage and receipt. With some exceptions, there is nothing stopping exporters sending trade documents including the SWB electronically, into most countries, for open account transactions. However, when that trade involves unacceptable payment risk, the liner BOL typically goes with the remaining trade documents in paper form to the seller’s bank, which in turn couriers the BOL to the buyer’s bank for

eventual passage to the buyer or consignee.

Advantages of going electronic However, shippers and other parties need a sustainable, electronic (eBOL) solution to respond to shorter lead times, faster information requirements, customer service nextin-class experiences, and to reduce costs. An eBOL would also revolutionise the trade finance supply chain. Traders and banks, etc, would be able to move trade documents faster and more efficiently, which in turn would lead to embedding data for further automation.

Resistance The core hindrances to developing an electronic BOL revolve around carriers, sustainability and legality. Firstly, the liner carriers. They hold the trump card, as they issue the BOL, and are reluctant to do so electronically. It is hard for shippers/ exporters to compel them to do so, as choice of carrier is based on freight cost and shipping service – not documentation. Besides, many carriers do not understand the need for a BOL or challenge that they may be superseded. But despite advancing technologies including blockchain and smart contracts, a versatile BOL will always be needed, albeit in changed form. So, while each carrier has its reasons, I can say, after 27 years’ engaging with carriers, their core reasons are: • lack of understanding of the trader’s need and use; and • perception of cost, risk, demand and priority. Secondly, sustainability. To get critical mass in e-trade data, any eBOL solution must be scalable

Commentary By Clyde Fletcher

including being the conduit for other trade documents; must be simple to use or integrate into the issuer’s and user’s back-office; and be costeffective to implement and use. Ideally the eBOL would also be multi-carrier-capable (to avoid multiple carrier systems), secure and legally sound with security features within the bounds of PAIN (privacy, authentication, integrity and nonrepudiation), and enable title to pass from one entity to another with a minimum of fuss and registration requirements. Thirdly, legality. With some exceptions the BOL maritime conventions and country legislation state or assume the BOL is issued in paper form. However, there are established ways around this that are being used without contention in the bulk trade, through user agreements where the parties to the BOL agree the electronic BOL has the same effect as the paper BOL. There are at least two eBOL solutions in use – Bolero and ESS (Electronic Shipping Solutions) CargoDocs – but neither has been adopted by main carriers for the liner trade, nor ticks all the sustainability boxes. A third and promising solution in prototype uses the blockchain technologies (OGYDocs: Wave). Fonterra is engaged with a carrier over a possible blockchain solution. So what can be done to advance the cause for a sustainable liner BOL? Nothing, unless carriers are enlightened, induced or compelled. Ideally carriers with courage will engage collaboratively with a multicarrier solution provider that keeps front of mind their customers, ie, shippers and consignees. And ideally international trade organisations will urge carriers to move with the times, without the need for governments to compel.

Clyde Fletcher is manager of the Fonterra Documentation Centre, Global Operations at Fonterra Cooperative Group Ltd. Email Clyde.fletcher@fonterra.com BusinessPlus April 2017

employment By Nirupam Sakar

Emerging technologies set to propel small business Emerging technologies such as artificial intelligence and “the Internet of Things” are set to massively disrupt most industries over the next decade, according to a recent report from US analysts Gartner and IDC. This disruption is all the more critical for the small business segment, which could strategically leverage current and emerging technologies to drive their growth and scalability, to add new revenue streams, to beat competition and find new markets. Here are a few of the current and emerging technologies small business should be focusing on.

Cloud services Although cloud computing has been around for some time, 2017 will probably be the year small business widely adopts managed cloud services. The key advantages include low costs, access to complex managed services and advanced analytics. Cloud platforms can offer small business collaboration and file sharing services, eg, Dropbox and Microsoft 365; data-backup services, eg, Amazon, Azure and Rackspace;

CRM, sales and marketing automation services, eg, Salesforce and InfusionSoft; and more!

and communicate with potential customers, and provide leads to sales teams.

Small businesses on the cloud are also able to rely on the rapid rate of innovation championed by cloud platforms to future-proof themselves.

Virtual Reality (VR)

Mobility Most businesses are already using smartphones to log appointments, access work emails and collaborate and communicate. But the rapid proliferation of cloudbased applications allows small businesses to engage customers on the move through CRMs, social media and most importantly mobilebased payment solutions, anywhere there is mobile coverage.

Artificial Intelligence (AI) AI can not only automate repetitive tasks such as data entry, by pulling in relevant data from emails and phone calls, but also provide insights and predictions based on multiple data sources. Platforms such as IBM Watson and SalesForce IQ can also create bots that can autonomously perform specialised tasks such as engage

VR gives small businesses the marketing and promotional tools to immerse customers in a lifelike 3D product experience. All it takes is an inexpensive 3D camera to shoot a video and upload it to YouTube. Customers can view the video through their headsets. The possibilities for businesses such as those in tourism, hospitality, retail, training, construction and automotive industries are almost endless.

The Internet of Things (IoT) Small businesses in traditional industries actually stand to gain the most from adapting to IoT, or the network of connected devices. They can drastically increase productivity and efficiency, simply by placing sensors in objects that make up their products and services. These objects can then communicate real-time usage data for cloud services to analyse in real time. Learn more at EMA’s Digi_X conference: see below.

Nirupam Sarkar is EMA’s portfolio manager – digital learning. Email Nirupam.sakar@ema.co.nz

14 June 2014 | Auckland Save the Date

DIGI_X REDRAWING BOUNDARIES

Redefine your business to create new revenue streams, add value and redraw the frontiers using technology and innovation. For owners, managers, marketers and anyone working on business strategies for the future. Pre registrations now open! www.digix.nz

BusinessPlus April 2017

employment By Peter Elder

The not-so-new business challenge: getting back to basics Managers are often overwhelmed by significant changes that challenge the status quo and past norms. Notwithstanding that New Zealandâ&#x20AC;&#x2122;s economic fundamentals are relatively strong, a large number of organisations are having to restructure every day to stay in business. Competition is leading to profit margins tightening and falling, and stress levels increasing. There are no instant and easy solutions. Often it is necessary to go back to the basics - enhanced with new technology and/or alternative services - that have sustained a company over a long time. I identify the business basics as these five: strategic planning, leadership, marketing and sales, financial accountability, and human resource planning. Each is discussed below.

Strategic planning Business is too often conducted day-to-day, month-to-month or year-to-year. However, it is critical that all organisations set aside some time to develop a strategic plan that contains visioning about what the business will look like in three, five or 10 years; and how that vision can be achieved. At a minimum this planning involves taking time out of the business, which includes turning the cellphone off, to talk about the challenges the business faces and how to deal with them.

At the initial stage, the process involves undertaking a SWOT analysis and considering how you may want to grow the business, or even keep it; then how to achieve those outcomes and who will do what.

In a number of businesses that has been simply about getting someone out and about to raise the company profile.

The bottom line â&#x20AC;&#x201C; financial accountability In many companies the financial outcomes do not match the budgeted expectations. Worse still, companies fall over because of a lack of understanding about the real state of their financial circumstances.

The strategy then needs to be communicated and implemented, and reviewed.

Arguably a companyâ&#x20AC;&#x2122;s business drivers should never solely be the bottom line. But there is a critical role for financial expertise and input, which relates business strategy to financial outcomes and maintaining reasonable profit margins, which allow for capital investment.

Leadership

Human resource planning

At its simplest, leadership involves a combination of setting the strategy, leading change, creating the desired culture and managing outcomes.

It is a common misconception that a positive workplace culture is the outcome of some warm and fuzzy human resource (HR) intervention. That is not the case.

It goes without saying that there is a need to have at least one person who is leading and guiding the business. In a number of smaller businesses it is often not clear who is actually leading and accountable for the business and its outcomes, or worse, there is no effective leadership occurring. In such cases it is necessary to decide how the accountabilities and responsibilities will work within the management structure, so that one specific individual is given responsibility for the required business decisions.

Marketing and sales It is a simple truism that to build your business you need to address ways you can increase sales and keep existing customers. You need a specific plan or actions to promote the organisation and improve sales.

A positive culture is the outcome of very proactive leadership actions relating to communication and accountability. Where organisations focus on future growth through strategic planning, they value people investment and as a result, specific HR actions are implemented. HR strategy at its simplest involves implementing processes and actions which will ensure your company recruits the best people, retains those people, keeps them trained, informed and inspired, and reinforces the desired behaviours and outcomes. As a by-product of those actions, promotions are usually made from within the company because there is no need to look outside for the best people. You already have them.

Peter Elder is an EMA employment relations consultant. Email peter.elder@ema.co.nz BusinessPlus April 2017

EMPLOYMENT

Easter holiday confusion and company vehicle off-roading Q. Easter opening times for business have changed – what’s the story? - Nick Dear Nick The Easter statutory public holidays this year are Good Friday on April 14 and Easter Monday on April 17. Easter Sunday is not a public holiday and is therefore treated like any other Sunday in relation to employment. Easter Sunday is, however, subject to shop trading restrictions. Easter trading is most relevant to the retail industry, as most other businesses take the opportunity to give their staff and themselves a fourday holiday, but shoppers never stop… Trading is allowed on Easter Monday and of course Saturday of that weekend, but still prohibited on the Friday and in some cases, Easter Sunday even though it is not a public holiday! The Shop Trading Hours Act 1990 was amended in 2016 to enable territorial authorities to decide whether retailers in their districts can open on Easter Sunday.

BEST E H T EST YOU WE T R O F ...

Easter Sunday is not a public holiday and is therefore treated like any other Sunday in relation to employment. Easter Sunday is, however, subject to shop trading restrictions. If you intend to trade on Easter Sunday, first check whether this is permitted under a local council policy. If you require your employees to work on the day, employees must have been given at least four weeks’ notice of the requirement to work on Easter Sunday, and they had the right to refuse. Further detail about the process is available in EMA’s A-Z employers’ guide to Shop Trading. If your business normally operates on a Sunday and you do not require employees to work on Easter Sunday,

it is recommended you consider how the day will be managed and discuss your requirements with employees. Annual leave or changes in rostered days may be considered as options as long as you comply with the Holidays Act requirements and any relevant terms of employment. If you are unable to agree with staff on an alternative, you may have an obligation to provide employees with pay for the day. If you are affected by shop trading restrictions on Easter Sunday, consider whether other work can be provided to your employees that does not involve trading to the public (for example, stocktaking or administrative work). On the public holidays of Good Friday and Easter Monday, all employees for whom the public holiday would otherwise be a working day are entitled to a paid public holiday at their Relevant Daily Pay or Average Daily Pay if they have the day off. If your employees work on the day, they will be entitled to the time and

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BusinessPlus April 2017

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EMPLOYMENT a half payment for the time actually worked on the public holiday. If Good Friday or Easter Monday fall on a day that would otherwise be a working day for an employee, and they work on any part of the day, you must also provide them with an alternative holiday. In many cases it will be very clear that the day on which the public holiday falls would otherwise be a working day for an employee. However, if it is not clear, an employer and employee should consider the following factors with a view to reaching an agreement on the issue: • The employee’s employment agreement • The employee’s work patterns • Any other relevant factors, including o whether the employee works for the employer only when work is available, o the employer’s rosters or other similar systems, o the reasonable expectations of the employer and the employee that the employee would work on the day concerned. •

Whether, but for the day being a public holiday, the employee would have worked on the day concerned.

Then there’s ANZAC Day on Tuesday, April 25. Nothing has changed about trading on this day: you can’t trade till 1pm. Q. One of my workers goes off-roading in the company 4WD on weekends and brings the vehicle back filthy till I ask him to clean it. I’m sick of this and want to dismiss him – can I? – Jeff

doesn’t immediately do the right thing, and disobeys a reasonable instruction after being told not to use the 4WD for off-road purposes, he could risk disciplinary action. Or maybe take the vehicle off him altogether…or give him a two-door town car…

Hi Jeff It’s not really misconduct, if he is allowed to use the vehicle for any manner of recreational purposes without limits. And if he does clean it when you ask. However, it would be much easier if you had a company policy about the use of company cars. It seems a bit extreme to thrash a company vehicle like that (I shudder to think of your maintenance costs and the rapid depreciation) so I’d be inclined to remove off-roading from the kinds of personal use you allow, in your “vehicle policy” or employment agreement. His behaviour is annoying for you and he seems to be taking you for a ride….excuse the pun. But dismissal stuff? Not yet. If you do not have a policy there will be no way you can dismiss him. Try having a discussion with him and changing the rules of use. If he

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By the EMA communications team in consultation with EMA Advice, and loosely based on real calls to EMA’s AdviceLine. All names are fictional. The information in this article is a guide only and not to be used as business advice without further consultation. EMA members can start with our free AdviceLine team at phone 09-367 0909 or 0800 300 362 (within New Zealand), and 1800 300 362 (from Australia), 8am8pm weekdays NZ time; or email advice@ema.co.nz You can also find information at www.ema.co.nz such as the A-Z of Employing – a manager’s guide on more than 100 specific employment topics, or the detailed Employer Guides on 12 popular topics.

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employment By john jury

Out, out damn asbestos One year ago regulations were passed to manage asbestos in existing buildings. In another year’s time, by April 4, 2018, workplaces will have to have prepared or reviewed their asbestos management plans.

reasonably to know that there is a risk of exposure to respirable asbestos fibres in the workplace must ensure, so far as is reasonably practicable, that all asbestos or ACM giving rise to the risk is identified.

For employers (a PCBU or Person in Control of the Business or Undertaking) the emphasis is to identify the presence of asbestos in the workplace and compile this data into a hazard register.

The purpose of identifying asbestos in buildings is to prevent, or if this is not reasonably practicable, to minimise exposure for workers and other people on the premises. To achieve this, PCBUs need information about whether asbestos is, or is likely to be, present in the buildings. This will help the PCBU assess the risks it presents and work out how to manage those risks.

The requirements come from the Health and Safety (Asbestos) Regulations 2016 and the Approved Code of Practice for the Management and Removal of Asbestos. Large amounts of asbestoscontaining material (ACM) were used for a wide range of construction purposes in new and refurbished buildings until 2000. This means there are many buildings in New Zealand that contain asbestos or ACM. If the ACM is in good condition, and unlikely to be disturbed, it may not present a significant risk. However, if the ACM is in poor condition, or is disturbed or damaged, asbestos fibres are released into the air. If breathed in, these fibres can cause serious lung diseases, including cancers. Workers who disturb the fabric of buildings during maintenance, refurbishment, repair, installation and related activities are exposed to asbestos every time they unknowingly work on ACM, or carry out work without assessing and managing the risks. These Regulations require a PCBU with management or control of a workplace who knows or ought

Guidelines on surveying the damage WorkSafe NZ has produced guidelines on how to complete an asbestos survey. An asbestos survey will: • help the PCBU manage asbestos in the workplace, • provide accurate information about the location, amount and condition of asbestos and ACM, • help decide if remedial action is required. The PCBU can use the survey information to prepare a record of the location of any asbestos, as well as an asbestos management plan for the workplace. The asbestos survey can identify all the asbestos and ACM that needs to be removed before starting refurbishment or demolition work. The guidelines describe three different surveys: for management of asbestos or ACM, for refurbishment or demolition. The type of survey a business owner requires will vary during the

John Jury is an EMA Health and Safety Contractor. Email john.jury@ema.co.nz 18

BusinessPlus April 2017

premises’ lifespan, and several surveys may be needed over time. A management survey is recommended during normal occupation and use of the building to make sure the existing asbestos and ACM is being managed. A management survey is the standard survey carried out to support the workplace PCBU in identifying asbestos in the workplace. Its purpose is to identify, so far as is reasonably practicable, the presence and location of any asbestos or assumed ACM in a building which could give rise to a risk of exposure to respirable asbestos fibres. This includes ACM that could be damaged or disturbed during normal occupancy, including foreseeable maintenance and installation. A refurbishment or demolition survey may be necessary when the building (or part of it) is going to be refurbished or demolished. The purpose is to help PCBUs locate all the asbestos in a workplace (or the relevant part) before work commences. It is a disruptive and fully intrusive survey which may need to penetrate parts of the building structure.

Asbestos survey report The survey report should describe the scope, type and extent of the survey. It should summarise the most important information, including: • the locations of identified (or assumed) asbestos or ACM, • areas not accessed, which should be specific to the survey, • ACM with a high material assessment score, • clear notes on any recommended actions and priorities.

employment By kent duffy

Untested health and safety regime: a perspective on sentencing Business is yet to see the outcome of any prosecutions under the year-old, Health and Safety at Work Act 2015 that came into force last April, but it is anticipated that this is not far away. This is because there have been a number of serious harm incidents in New Zealand workplaces since the Act took effect. An interesting consideration in this context concerns the question of how the courts will approach the subject of sentencing, and to what extent it will differ from the former legislation. The Act provides sentencing criteria, which a court is obliged to consider when determining sentences for particular offences. The main categories of offences under the Health and Safety at Work Act relate to the following: •

Reckless conduct in respect of duties;

•

Failing to comply with a duty that exposes an individual to a risk of death or serious injury or illness;

•

Failing to comply with a specified duty.

Much like under its predecessor – the Health and Safety in Employment Act 1992 - the courts must still apply the Sentencing Act 2002 when determining how to sentence an offender under the new occupational health and safety regime. The Sentencing Act requires the court have regard to a number of different principles of sentencing, including accountability, deterrence,

culpability, the seriousness of the offence, consistency, aggravating and mitigating factors and any measure to make amends.

Focus on purpose of the Act One of the key changes to sentencing criteria under the new regime is the court’s obligation to have particular regard to the purpose of the Health and Safety at Work Act 2015. The main purpose of the Act is to secure the health and safety of workers and workplaces, by prescribing a number of core objectives. These objectives include the principle that workers and other persons be given the highest level of protection against harm to their health and safety in the workplace. When this particular feature is considered in light of the three main categories of offences highlighted above, it becomes apparent that the courts have considerable scope to impose significantly increased penalties. For example, corporations can be fined up to $3 million for conduct that recklessly exposes a person, to whom health and safety duties are owed, to a risk of death or serious injury. The new sanctions also include the ability of the court to impose lengthy terms of imprisonment for such conduct. At this point in time there is limited guidance on how the courts will approach the subject of sentencing, as we are yet to see any cases decided under the new regime. For now, this means some uncertainty in

terms of understanding the effect of the new legislation on sentencing. However, is suggested that the courts will continue to look at authoritative legal decisions made under the 1992 Act in guiding initial approaches in this area. But while case law decided under the previous legislation may assist the courts, it is likely that sentencing principles will evolve to reflect the increased emphasis on penalties under the new Act. Penalties under the new legislation have the potential to be significant. As mentioned above, corporations can be fined up to $3 million and their officers fined up to $600,000 and/or sentenced to five years imprisonment. Individual workers may also be imprisoned and/or fined up to $300,000. Even the least serious offences can attract exposure to fines of up to $500,000. Based on these factors it can be inferred that approaches to sentencing will become increasingly punitive, in order to reflect the object of the Act. With that said, it is very important to ensure your business is doing everything it can do to provide the highest level of protection against harm to workers and to other people’s health and safety in your workplace. •

Alongside other services, the EMA can provide your business with advice, education and training to help you understand your obligations under the Health and Safety at Work Act 2015.

Kent Duffy is an employment adviser in EMA’s AdviceLine that members can call for free, 8am-8pm weekdays. Phone 0800 300 362 within NZ and 1800 300 362 from Australia. Email advice@ema.co.nz BusinessPlus April 2017

employment By alex till

How to protect your company when considering employee redundancy •

Determine whether you wish to offer redundancy compensation (RC), as you are not legally obliged to.

•

If you decide to pay RC, include a technical redundancy clause, whereby if the employee is offered employment within the company (redeployment), which is substantially similar to the role that is to be lost, then the employee is not entitled to receive RC.

•

If paying RC, also include a provision where the company is sold on. This will not be considered to be a termination of role or employment if they are engaged on the same or similar terms, and RC will not be payable. Consider redeployment and/or retraining prior to terminating the role and/or employment. Critically review the redeployment role offered, to determine if there is “continuity of character” with only limited changes (salary, location of work, seniority, etc). Ensure continuity of service within the organisation between redeployment roles. EMA Legal can assist with reviewing and drafting your redundancy clauses.

BusinessPlus April 2017

Redundancy, or not? The majority of employment agreements that we review have clauses that address the situation where an employee’s role becomes surplus to the employer’s requirements, including where substantive changes are made to the employee’s position. These clauses, often headed up “Redundancy”, should include, amongst other things, a definition of redundancy and information as to whether an employee will receive redundancy compensation.

During the restructuring process, Mr Slotemaker applied for different roles within the company including as an aquaculture technician that attracted a significantly lower salary and was based at a different location. Mr Slotemaker was offered this position and formally ended his role as distribution manager role on 24 December 2015. He was on paid annual leave until 15 January 2016, and began his new role on 27 January 2016.

Note that neither the Employment Relations Act 2000 nor other legislation provide for a statutory entitlement to redundancy compensation.

Mr Slotemaker claimed in the Employment Relations Authority that he was entitled to redundancy compensation for the loss of his role as distribution manager.

The commonly-accepted definition of redundancy comes from a Court of Appeal decision in 1990: “a termination of employment attributable, wholly or mainly, to the fact that the position filled by the worker is, or will be superfluous to the needs of the employer”.

The employer disputed this and the Authority was therefore required to determine whether a “redundancy situation” had arisen and if so, whether Mr Slotemaker was entitled to redundancy compensation under the terms of his employment agreement.

The same Court later confirmed in 2000 that termination was a prerequisite for redundancy.

His employment agreement for his former role as distribution manager included an entitlement to redundancy compensation, as follows:

The 2016 case of Slotemaker v The New Zealand King Salmon Co Limited (Slotemaker) highlighted other decisions from the Employment Court and Court of Appeal that there only need be termination of a role, rather than employment, for redundancy to be considered as a fact.

End of employment or just the role? In Mr Slotemaker’s case, he had been employed at NZ King Salmon since 1996 but his role of distribution manager was disestablished in November 2015.

“19.1 Where any redundancy situation arises, the employee will be given not less than one (1) month notice period. 19.2 Payment will be made on the basis of six (6) weeks for the first full year of service and two (2) weeks for each complete year thereafter… 19.3 No redundancy situation will arise where the employee’s division, unit or company is sold to another party and the employee is offered

employment

Ramping up basic work skills Employers are being helped to take on young people, with a Government strategy that boosts the teaching of “soft” employment skills. The strategy, called the Employability Skills Framework, sets out the key behaviours, attitudes and personal qualities employers say are essential for getting and keeping a job, such as using technology, getting a driver’s license and being drug-free. It includes a new online resource designed to help young people (secondary and tertiary students) enter the workforce, available at www.youthguarantee.net.nz and www.careers.govt.nz The Framework will also help make it clear to young people and

employment with that party on the same or similar terms and conditions of employment.” The employment agreement did not define what a “redundancy situation” was, or when one arose. After considering the commonlyaccepted definition of redundancy (as outlined above), the Authority found that, in the context of redundancy, termination of employment does not require a conclusion of the employment relationship – that an employee must leave the actual employment of the employer – because “redundancy relates to the position not the person”. The Authority found “the meaning of termination of employment must be the end of the work that the employee is engaged in, ie, the end of the position not the

educators what employers want, says BusinessNZ chief executive Kirk Hope. “The transition from education to work is bumpy for many young people and this framework will help smooth the transition. “Other things to be considered include how to build these skills into course design and how best young people can demonstrate these skills to employers.” The Ministry of Education and Careers NZ worked with employers to develop the Framework. The Auckland Council CCO, the Education and Skills Trust that is known as COMET Auckland,

end of the person working for the employer. Therefore, there can be a “redundancy situation” where a position is disestablished and an employee proceeds to work in a new role with an employer”. The Authority considered that the employer had an obligation to consider Mr Slotemaker’s redeployment arising from a statutory obligation (the Employment Relations Act 2000 sections 4, 103 and 103A), and found that the obligation to redeploy, and the obligation to pay RC according to a contractual obligation, are not inconsistent. The Authority found that the parties had the option of excluding redeployment situations from the entitlement to RC, as they had done in excluding situations where the employee is offered employment with the purchaser

developed the Youth Employability Programme with partners including EMA. That programme, described in BusinessPlus (December 2016 issue, p18), is aligned to the Youth Employability Framework. The programme provides an explicit sequence of learning activities to build the competencies (employability skills) business leaders have said they want to see young people display; and a process to assess and record those competencies. It incorporates students completing 80 hours of work experience with an employer and 20 hours of community service, to practice the skills they’re learning in workshops.

of the employee’s division/unit/ company. Consideration was given to the purpose of RC that it is to sustain the employee until further “and equivalent” employment can be found, and to cushion the employee from the impact of lost income and benefits. The Authority held that Mr Slotemaker had not found “equivalent” employment, and therefore it was entirely appropriate for him to receive RC in the circumstances. The Authority ordered the employer to pay this to him within 14 days of the determination. In the subsequent determination as to costs, it was noted that the employer was appealing this decision to the Employment Court. We will keep you posted!

Alexandria Till is EMA’s senior solicitor in the Waikato. Email Alexandria.till@ema.co.nz

BusinessPlus April 2017

in business By david spratt

How the Internet of Things is transforming energy management Part 2 in our series of four articles on how companies use the Internet of Things to be more efficient, cut wastage and to compete locally and globally.

make better decisions and drive out inefficiencies going forward.

You may recall from Part 1 (in BusinessPlus, March 2017) that the virtually unlimited number of device “addresses” available on the internet makes it theoretically possible to tag every molecule on five planets the size of earth. This scale virtually guarantees that the price of Internet of Things technologies will fall to the point where we can observe the “behaviour” of any object for a tiny fraction of what it costs today.

• Energy Heat Maps These maps depict the intensity of energy usage in a graphical format (think rain radar) using colour. They can be adjusted to look at consumption at different times, in different areas and even on specific devices.

Some solutions will drive competitive advantage for all types of Kiwi companies as the price of Internet of Things technologies spirals down over the next few years. Whether you are heating water, making ice or melting plastic it’s the cost of energy that hits the bottom line hard. To put this in perspective, my monthly electricity bill at home is roughly $300. My brother in Melbourne also pays around $300, except, quarterly! Given the low cost of energy in Australia, a kiwi business competing in their market is seriously disadvantaged unless it can find a way to drive down energy costs. The Internet of Things goes some way towards achieving that goal. Internet-connected machines that communicate their operational states mean that you are able to inexpensively measure the energy footprint of every device that you operate in your business. By monitoring these footprints, you can

Here are three examples of the tools at your disposal:

If you are a manufacturer this means better information about load shifting, staff management, expansion planning, investment analysis and deciding whether to add machines or redeploy the ones you have more effectively. • Device analytics When the device you are monitoring presents data to the internet there is always someone collecting that information, storing it and comparing it to other similar data. You can now not only compare your device’s performance against the guy’s down the road or even in Australia; you can benchmark its performance against the same make and model located worldwide. The internet will soon touch most devices in the world, but not everyone will be using the data it provides for their own competitive advantage. A recent global survey (available on request) proved that only half of all manufacturers actively monitored their energy costs beyond simply checking their bills! Device analytics delivers our businesses the opportunity to genuinely strive to be “world class”

in a global market that increasingly demands, and often measures, our energy performance. • Benchmarking More and more businesses are coming to understand that data has unique value. We currently protect and mine our customer lists, pour over product sales data and analyse our financial information. Soon we will find ourselves with access to myriad streams of data from all over the world and from thousands, if not millions of widgets, as they tell us when and how they are performing. By benchmarking our energy efficiency performance against these millions of devices worldwide we open the doors to new ways of competing. This is not just about ensuring that a particular device or production line is running efficiently, though. We can learn a great deal from machine benchmarking such as comparing one production line with another just by seeing whether a compressor is in steady state (constant load), shunting (on/off) , or has a cyclical load (varying over time). Is the operator leaving the machine running at full speed even during low load periods? Or is this operator really, really efficient, in which case how can we learn from him? Highlighting energy efficiency and the production data that this provides delivers businesses the opportunity to strive for better performance across the board. It delivers a measurable comparison with competitors worldwide and offers the chance to save a few more resources for those who come after us.

David Spratt is a director of Total Utilities Management Group. Email your ideas or opinions to david@tumg.co.nz 22

BusinessPlus April 2017

in business By paul johnson

With Clouds forming everywhere, how does business choose the best? In recent years the marketing machines of many IT services companies, both local and global, have embraced the term Cloud computing and created offerings which promote the virtues of their particular solutions. In reality Cloud computing is not a particularly new concept, rather perhaps a new paintjob with a marketing veneer covering over the detail of how services are actually delivered. Broadly speaking, Cloud can be considered an outsourcing concept where IT infrastructure resides onsite, in local datacentres or on the other side of the world. Managed Cloud offerings can off-load the responsibility for maintaining the physical infrastructure, the operating systems, the virtual environments and the applications running on them.

Private vs public Cloud A major difference in Cloud offerings is the concept of public or private Cloud. Reviewing various online resources, the definition of these terms varies. However, private Cloud is typically specific infrastructure operated by a service provider for its customer base. By default a private Cloud is not directly accessible from the Internet, and such access is added where necessary in a tightly controlled manner. The private Cloud can be a good option if you: • Require high levels of performance, • Have security-sensitive information,

• •

Require responsive support partners, and Have a complex environment.

As opposed to private Cloud, public Cloud offerings typically reside in major urban locations with access deliberately available from anywhere in the world via the Internet. Public Cloud can offer businesses a simple turnkey solution for ondemand services and has the potential to suit customers with: • Temporary infrastructure requirements, • Long term archiving, • Disaster recovery/business continuity, and • Standardised business applications such as email. Perhaps one of the more common myths of public Cloud computing is that it is a more cost-effective option for businesses. Real-world experience suggests this is often not the case. With evolving technologies constantly driving more efficiencies, on-premise and datacentre-hosted infrastructure owned by customers is often a far less costly option, and can save as much as 50 per cent over a 36-month term compared to public Cloud. Often the most effective and sensible approach for a business to take is a combination of public and private Cloud, or what is termed a hybrid Cloud solution.

Evaluating options In order for a business to decide which approach is best, there are some key questions it should be asking: • What are we trying to achieve, and what IT infrastructure

Perhaps one of the more common myths of public Cloud computing is that it is a more cost-effective option for businesses.

Often the most effective and sensible approach for a business to take is a combination of public and private Cloud, or what is termed a hybrid Cloud solution. solutions will enable this? What level of security and redundancy is appropriate for the applications we use? • How would our business be impacted by loss of access to our core infrastructure and applications? • How do we intend to differentiate ourselves from our competitors, and can our IT infrastructure be an enabler? Perhaps the most important consideration for a business, which is often overlooked, is security. •

With numerous threats and a whole global community of cybercriminals constantly looking at ways to financially compromise businesses, ensuring security risks are mitigated through a vigilant approach to protecting your data should be a top priority.

Paul Johnson is manager of Network Edge. Visit www.networkedge.co.nz BusinessPlus April 2017

in business By michael fokkens

Good time for Baby Boomers to exit their businesses New Zealand’s Baby Boomers number around 1,068,000, which represents about 27 per cent of the population. This is a significant proportion heading towards retirement. And many business owners are Baby Boomers who are approaching the task of exiting the businesses they have spent the past 30–40 years building up. The term “baby boom” refers to the generation of babies born during the 18 years immediately after the end of WW2, between 1946 and 1964. The Global Financial Crises (GFC) beginning 2007-2008 had a huge impact on the profitability of many businesses in New Zealand and some Baby Boomer owners didn’t make it, while others lost a significant amount of value off their businesses. But recovery from the GFC has been steady in New Zealand, with many businesses now enjoying lucrative times and buoyant markets. It can be difficult to walk away from a business when times are good, though it’s the best time to be selling! Some Baby Boomers are ready to sell and reap the rewards of their efforts whilst they can still enjoy them. On the flip side is the owner who is facing ill-health, or whose heart is just not in the business anymore, or whose succession plan has suddenly changed. Ill health often drives a business owner to a firesale situation: they need to exit the business as quickly as possible, often resulting in a low asking price or business closure.

have a good understanding of what their business may be worth, yet they are relying on this sale for their retirement nest egg.

Don’t rely on the kids I regularly see family-owned business where the kids are expected to take over the business. When this succession plan suddenly changes, the owner can be left having to remain in the business for significantly longer than they wanted, while they prepare their business for sale to ‘an outsider’. With a family succession, the blood, sweat and tears that mum and dad have put into the business is often undervalued by their offspring and the owner may walk away with a fraction of what the business is worth. Having a succession plan will go a long way to avoiding these issues. Essentially, succession planning is all about transferring control and ownership to others with, ideally, a win-win outcome. The process can seem daunting, especially facing matters such as how the sale will affect you, your family, other stakeholders and, of course, the business after you leave. If part of your exit strategy includes selling your business, here are a few tips that may help:

Sales tip 2: Get an appraisal now Get a benchmark on the value of your business, then have this updated yearly as your business grows and improves. This way, you will be able to understand what the impact of your actions are having on your business, from a value perspective. Sales tip 3: Financial records Get your books clean and keep them up-to-date monthly. Too often, purchasers have to wait for financial information and they lose interest. Sales tip 4: Set up and document business processes and systems This documentation should include an accounting system, payroll system, employee manuals, CRM system, sales and marketing processes. These provide transparency and evidence that the business is well operated, and more easily handed over to a new owner. Sales tip 5: Inventory of physical assets Often when it comes time to selling a business, the asset register is not accurate. Review and update the asset register on a regular basis to ensure the items are accounted for and in good working order. If there are obsolete items or assets that are not operational, repair or dispose of them.

Sales tip 1: Build a senior management team

Sales tip 6: Stock/inventory

Implement and strengthen roles such as General Manager, Sales Manager, Operations Manager that are fundamental to your business.

Don’t procrastinate about old and obsolete stock. Deal with it on a consistent basis. Don’t let this be used as a bargaining tool when negotiating your sale price.

The good old New Zealand attitude of “she’ll be right mate” means that a lot of Baby Boomers do not Michael Fokkens is a former business owner and now business broker at LINK Business Broking (Licenced REAA08). Email michaelf@linkbusiness.co.nz 24

BusinessPlus April 2017

in business By Ministry of Primary Industries

MPI started to hear that some people were finding the plans too long, complex and difficult to get to grips with. The ministry realised a radical approach was needed.

Making food safety law work better for businesses The Ministry of Primary Industries (MPI) recently released a new template for a food control plan. That won’t mean much to anyone outside the food industry, but if you run a café or restaurant, or maybe a deli or bakery, then chances are you need to use one. If you manufacture food, you’ll also be interested. The new plan – used for managing food safety – makes the new Food Act easier for a lot of people. A food control plan is the way higherrisk food businesses work with the new Food Act. It identifies all the food safety risks in a business, and shows how they are managed. Food control plans had been in circulation for a while, as many businesses adopted them voluntarily. We had a lot of positive feedback about them: they gave businesses all the information they needed to make safe food, and helped them to demonstrate it. And since the Food Act came into effect a year ago, many more businesses have started using the plans. Many of those businesses are small, with few staff and few resources.

We started to hear that some people were finding the plans too long, complex and difficult to get to grips with. We realised a radical approach was needed.

Template simplified Over the past year, we have worked with small businesses across the country to redesign the plans. We held workshops and focus groups, visited businesses and councils, and tested widely our ideas at every stage. The result is a template that has 87 per cent fewer words. But it still gives businesses all the information they need to manage food safety, in a way that’s clearer and easier to use. It’s structured in a way businesses say will work better for them. Although the template is for food service and retail businesses, it can help food manufactures too. If you manufacture higher risk products – like ready-made meals, salads or fermented foods – then you’ll need to produce your own ‘custom’ plan. But a lot of what you need is covered by the template. You can simply pick up those sections as they are, and just create additional parts for any processes that aren’t covered.

A new law can mean big changes. That was the aim of the Food Act. It is risk-based, because making and selling food is hugely varied and so are the risks. It recognises that people - not kitchens - make safe food. And it gives businesses more flexibility, and responsibility, for food safety. All this will make food safer. But we also recognise that doing things differently can be difficult at first. That is why we are working with businesses to try and make things easier wherever we can.

Suggestions please We’ve already created a number of resources including leaflets, posters and videos, but what other practical tools would help you to implement food safety on a day-to-day basis? This might include new types of record keeping, training materials or other things that make food safety easier. Feel free to suggest ideas on our Facebook page or by email. A reminder that many food businesses needed to register under the Food Act by March 31 this year. If you haven’t already done so, check www.mpi.govt.nz/foodact to find out what you need to do. BusinessPlus April 2017

international trade By BRENDON WILSON

Whistleblowing policy for the ultimate protection Doing business profitably and with positive cashflow is hard. It’s also hard to keep good staff who are loyal, committed and contributing all they can to your business potential. But it’s harder still to recover when you are defrauded of funds.

of your greatest assets. Not listening to whistleblowers leads to greatly lessened loyalty, commitment and contribution by employees at all levels, and can lead to your most valued people considering moving to a better employment climate.

One important protection facing all these issues is adopting whistleblowing, a practice whose time has truly come. The days when someone is “letting the side down” by raising a red flag about something or someone in the business, are gone - it is not disloyalty, it is your ultimate protection against disloyalty and fraud.

If you were being systematically defrauded of, say, $1 million (not unknown) would you really not want to hear about it…and the earlier the better? And to act on it?

Whistleblowing in the workplace has traditionally been seen as grizzling and divisive, and has often marked out the complainant for rough treatment by management and colleagues. But in recent years it is being seen in a totally different light. The view in enlightened companies is to recognise the enormous value of empowering staff and management by saying in effect, “we trust you to tell us about any way we can do things better, and anything we are doing badly, and especially anything we need to know about to keep our business profitable and reputable”. And then walking the talk.

An employer’s openness to whistleblowers cannot exist alone in a company culture; it must be a part of a robust, inclusive environment which encourages staff participation and trust, and which shares information and values across the organisation. Whistleblowing needs to sit within an effective integrity and compliance system, a part of the company’s risk strategy. Whistleblowing must be scrupulously upheld by the organisation’s governance, from board, chief executive and all management down through teams in every part of the business. Peer attitude and expectation, and a culture of ethics and integrity, are the strongest deterrents to fraudulent activity. Relying on auditors as your only line of defence is unrealistic and is burying your head in the sand.

Whistleblowing culture

Whistleblowing benefits

Listening to and encouraging your people at all levels to express their concerns is just good sense, and shows they are respected for taking responsibility, for their integrity, loyalty, specialist knowledge and their ownership of their piece of your enterprise.

Supporting a whistleblower is just another way to support a healthy company culture and ensure you reap the benefits you should expect, such as: • deterring someone in your structure who is tempted to take disloyal or fraudulent action, as they realise their colleagues may suspect them and use the whistleblowing channel and be listened to;

To ignore them or discourage them, or to fail to support their raising concerns, is turning your back on one

• • • • • •

•

There will always be internal fraud, and of course it will be marked by stealth. That is why vigilance is needed, and a critical part of that is building a whistleblowing culture, with channels written into codes of conduct, so staff can raise concerns without fear of reprisal. A whistleblowing structure should include a reporting mechanism such as a website, phone or email blind message box; appointing a senior manager to act as a nonjudgemental confidential earpiece; visibility to staff and management of investigated matters, if they hold water, including always taking criminal behaviour to the police or Serious Fraud Office, for example. Every day more serious New Zealand cases are reported, which cost companies enormous sums and which could have been prevented by whistleblowing.

Brendon Wilson is a director of Transparency International New Zealand. Visit www.tinz.org.nz 26

BusinessPlus April 2017

your people’s loyalty, commitment, pride and satisfaction; your people’s more thoughtful, effective effort for you; less loss of valued staff to your competitors; encouraging staff’s skills, ideas and enthusiasm; improved efficiency and safety record; higher levels of compliance, and risk prevention lest your company be found to have acted illegally or corruptly; knowing about practices and activities costing your business.

international trade By Ken allen

Cross-border e-commerce is the 21st century spice trade Despite all the recent uncertainties around the themes of globalisation and international trade, one thing remains absolutely certain: we will all continue to trade across borders. People have been engaged in international trade for more than 5,000 years. Some of the earliest records of civilization show how trading posts were established in South Asia and the Middle East to support the exchange of goods. One of the main commodities was spices, which were highly prized. On the back of the demand for these high value commodities, and the ingenuity of those who worked to source and sell them around the world, the spice trade flourished and continued through to modern times. It built bridges between different cultures and gave rise to major shipping routes between continents, many of which endure to this day. In many fundamental ways, people haven’t changed over the past 5,000 years. As consumers, they still crave exclusive, high quality and exotic goods. They are willing to invest a certain (but not too large) amount of time and effort to seek out what they want at the best price. And merchants are constantly looking for enterprising, creative ways of taking their goods to new markets and winning new customers. Which brings us to what I believe is the new “spice trade” phenomenon that will help to shape international trade, transform the world’s supply chains and build new shipping routes in the future: cross-border e-commerce.

People have been able to order around the world for years now – particularly from major online retailers – which helped the crossborder market grow to US$300 billion by 2015. And I believe this business will flourish in the coming years.

Superior growth in crossborder sales DHL Express has recently published research into cross-border e-commerce, conducted with the support of a leading global management consultancy, which has thrown up fascinating insights. Primary is that this [cross-border] market offers superior growth rates to those available in just about any other retail segment today. Crossborder e-commerce is expected to grow on average at twice the rate of domestic online retail (which itself is growing faster than traditional bricks-and-mortar) in the period to 2020. The market will be three times bigger than it was in 2015 by 2020. Additionally, it attracts more spend from customers – 20 per cent of cross-border purchases have a basket value of more than US$200. The premium aspect of crossborder commerce is worth noting. According to our research, retailers who offer a premium service (including faster delivery) are growing 60 per cent faster than the average. This is driven in part by the fact that fashion and technology still account for a substantial proportion of cross-border sales. However, the premium opportunity is there for every product. To put it in terms of a burger: on the supply side, you have gourmet burgers that can sell at three times the rate of the fast-food

version. And on the demand side, you have customers who’ll pay any amount of money to get that fastfood burger to their hotel room in the middle of the night.

Premium offer This all makes for a compelling case for building an online offering (with a premium option) that is also open to a business’ overseas customers, whatever your product. Importantly, as we see within our own customer base at DHL Express, this is much, much easier than many people think. The main barriers cited by customers to buying something from overseas are logistics, trust, price and customer experience. Today, you can address the vast majority of these concerns with reliable, global door-to-door logistics networks connecting businesses with customers and enabling easy returns anywhere in the world within days, and off-the-shelf solutions making website visits, price calculations and transactions possible in just about any language or currency. Customers surveyed for our research reported an average sales boost of 10 per cent through simply having a cross-border option. There is a modern-day spice trade emerging, requiring a new skill-set, a new mind-set and new approaches to managing inventories, supply chains and even customer interactions. But it offers a “no-brainer” growth opportunity for all retailers and manufacturers.

Ken Allen is chief executive of DHL Express. Visit www.dhl.com BusinessPlus April 2017

international trade By catherine lye

Celebrate with our intrepid Kiwi exporters Come to carnival night on June 23 to celebrate with the finalists and winners of the 2017 Bay of Plenty ExportNZ Awards. You are invited to dress in carnival theme, as suggested in our Awards launch video that you can watch at http://www.bopexportnzawards.org. nz Our generous award sponsors show you how to dress and move in theme! And all exporters with a presence in the Bay of Plenty are encouraged to enter the Awards right up till May 5. Pick from these five categories: • YOU Travel Emerging Exporter of the Year • Page Macrae Engineering Innovation in Export • Beca Export Achievement • NZTE Service to Export • Sharp Tudhope Lawyers Exporter of the Year Find your entry form and background information, and book tickets to carnival night, at http://www. bopexportnzawards.org.nz Entries from Northland, Auckland and Waikato businesses in the 2017 Air New Zealand Cargo ExportNZ Awards are in the throes of being judged, and finalists will be announced next month. The month after, on June 29, you can attend the gala dinner in Auckland where the winners in the seven categories will be announced in the presence of hundreds of their peers and dignitaries. The night is always fun and inspiring – exporters often achieve stunning results overseas but below the radar back home, and they know how to party and network!

The eight award categories are: • Westpac Exporter of the Year (export revenue over $25million) • Ports of Auckland Exporter of the Year (export revenue $10m - $25) • BDO Exporter of the Year (export revenue $5m - $10m) • DHL Exporter of the Year (export revenue $1m - $5m) • Endace Services Exporter of the Year (export revenue $1m $10m) • Services Exporter of the Year (export revenue over $10m) • Baldwins Intellectual Property Best Commercialisation of Innovation for Export • PLUS, the nominated Exporter Champion for Exemplary Services to Export Visit the Awards website www. exportexcelerator.co.nz where you can check out past winners, and book your seats to the gala dinner.

BusinessPlus April 2017

Each year EMA’s ExportNZ division runs awards programmes to honour exporters in each region who can demonstrate their excellence in achieving profitable and sustainable foreign exchange growth, and other more detailed criteria. Other benefits of entering the Export Awards include: • Public recognition of the finalists and winners for impressing customers and investors; • Internal and external recognition of contributions from entrants’ people, which rewards, retains and attracts the best talent; • Exposure to the feedback of our world class line-up of judges; and • The opportunity to take part in fun networking events!

Key dates May 5

Entries close: 2017 Zespri Bay of Plenty ExportNZ Awards

May 15

Finalists notified: 2017 Bay of Plenty ExportNZ Awards

May 17

Finalists announced: 2017 Air New Zealand Cargo ExportNZ Awards cocktail party

June 23 Winners announced: 2017 Bay of Plenty ExportNZ Awards dinner event at ASB Baypark, Mt Maunganui June 29 Winners announced: 2017 Air New Zealand Cargo ExportNZ Awards gala dinner at SkyCity Convention Centre, Auckland Book now at exportexcelerator.co.nz for Northland/Auckland/Waikato awards, and at bopexportnzawards.org.nz for the Bay of Plenty awards.

Catherine Lye is manager of EMA’s ExportNZ division. Email catherine@exportnz.org.nz 28

The Awards are partly designed to deliver exporters’ results on the radar, to attract exporters’ deserved recognition from the public at large and from their peers and customers.

INTERNATIONAL TRADE By NADA YOUNG

Aussies have it over Kiwis in Southeast Asia Australian food and beverage (F&B) brands are fighting fit and rapidly expanding into Southeast Asia. Are kiwi exporters being left in the dust? Having lived and worked across Southeast Asia for the past six years I am all too familiar with the complexities of establishing export sales in the F&B sector in this region. Only the determined survive. I like to think of us kiwis as being a very determined bunch, and yet, our F&B manufacturers are being alarmingly overshadowed by a bounty of Australian F&B exporters. It’s easy to see why our cousins across the ditch are so hungry. Southeast Asia is on an upward trajectory. Shining new office towers and international restaurants abound in cities like Manila, Jakarta and Bangkok. In the Philippines optimism is soaring as Bloomberg touts the Philippines as a rising tiger in Southeast Asia, with some of the fastest growth in the world. So, where are all the kiwi brands and what do the Aussies have that we don’t?

that these markets are a long game and they are prepared to lay the foundation now to take advantage of future growth. Sufficient resources are committed and the right people put in place to support sales. When it comes to resources, in my experience, there are two aspects that are often overlooked by New Zealand exporters: marketing and personnel. Assigning the right people to the task and having them prioritise the work is notoriously neglected. So too are solid marketing plans and the necessary funds required to activate them. I’ve seen exporters reach for the champagne to celebrate their first sale, only to find that the victory dissolves like the bubbles in the glass when there are no repeat orders. Failing to support sales significantly reduces the likelihood of long term success.

Trade barriers lifting Some New Zealand exporters have simply been holding back from market expansion into Southeast Asia due to non-tariff barriers. Now is the time to take a second look.

Many of the trade barriers inherent in emerging markets across Southeast Asia are gradually lifting. The free trade agreements New Zealand has with this region are better understood (and applied by importers and exporters) and in most cases, the process of registering products prior to export is slowly but surely becoming more efficient. As the trade barriers start to fall the flood gates will open and exporters from around the globe will rush in. At the moment, however, markets like the Philippines, Indonesia and Thailand are anything but congested, so establishing a presence now means you’ll have brand recognition in the future and this will put you in good stead to compete with the tidal wave of competition. Of course, there are myriad factors vital to export success in any market, but if we want to avoid being left in the dust, we need to increase our visibility in Southeast Asia today, and we need to arrive fully prepared for battle.

Short on marketing and personnel For a start, doing business in emerging markets like the Philippines, Indonesia and Thailand is not easy. This environment, where regulations move like shifting sands and profit must be generated amidst extreme price sensitivities, is generally better suited to exporters with economies of scale. With Australia having a population of 24 million, large scale manufacturing is much more prevalent than it is in New Zealand. Another interesting trait is that most Australian exporters acknowledge

A Cold Storage (fresh food) supermarket in Singapore

Nada Young is a director of Incite export development agency for F&B companies trading with Asia. Visit www.exportincite.com BusinessPlus April 2017

Going for gold Taking a black-listed company and turning it around to win international contracts is no small feat. But the manufacturer of rowing skiffs, Laszlo Boats NZ, has done just that AND set its sights even higher, with the help of an Olympian golden boy. In October 2015, husband and wife Laszlo (Lez) Kertesz and Vera Bucsu purchased the company, Kiwi International Rowing Skiffs (KIRS), off a liquidator. Lez, passionate about rowing since childhood, had been KIRS’ main boat builder since 2006. Today, with shipments already into Australia and the US, they have won the contract for the 2017 World Masters Games. Says Lez, “We started [by] rebuilding channels into Australia where our product quality was already recognized. When Mahé Drysdale broke the single skulls world record (which still stands) in the 2009 World Rowing Championships, he was using our shape. “We’ve also been really lucky to start a collaboration with two-time Olympic gold medalist Eric Murray. We believe in synergy and aligning ourselves with others, so in our first year it was really important to find the right strategic partner. “Having Eric on board is perfect for export because he is like a rock star – a living legend for rowers! He is one of our strongest weapons to complement having a great quality product.”

Member profile By Catherine Beard

Export barriers Eric (pictured above) obviously has a huge passion for rowing, and says New Zealand has a great history to build on. He says, “New Zealand builds some of the best rowing boats in the world, but it’s challenging getting the brand out there to the overseas market. “The New Zealand team, for logistical and cost reasons, uses boats from an overseas manufacturer. But of course we want New Zealand crews in New Zealand boats that are going to go just as fast. There’s a lot of export issues that we’re working on to try and establish relationships, and open up more possibilities to sell products overseas.” Australia is a good starting point, as its shipping and export duties are small – only 5 per cent import duty for rowing boats. Other places around the world are very expensive, plus rowing boats are very delicate so unable to be load-shared in a container. Eric says, “It’s a really fine balance – we want to get the boats out there to the world and we have an amazing product, but there are so many barriers that come into play when you’re actually doing it. “We’re working to see if there are investment opportunities for getting the boats overseas, and getting the New Zealand team back in the boats. “People aren’t going to be involved

Catherine Beard is executive director of ExportNZ, a division of BusinessNZ, which serves members via regional offices throughout the country. Email cbeard@business.org.nz 30

BusinessPlus April 2017

in a business or product if they don’t believe in it. I do believe in this and I know it’s a great product. I’ve used it ever since I started rowing, so I know how good it is and the results it can produce. “Having my name on board should help endorse the product and promote its credibility around the world.”

Innovation Vera says they love being creative and thinking outside the box with their marketing. They are the only rowing boat company in the world truly embracing custom-painted boats, for example. Says Vera, “We want to be the Apple of boat building! We recognize the importance of original ideas, great quality, aesthetics and being community-focused. “Winning the contract for supplying boats to the World Masters Games, and catering for the needs of so many people from overseas, is a great opportunity. Argentina just placed an order with us and were blown away that we could paint the Argentinian flag on their boats.” Lez says It was always a dream for the couple to have their own business, so when the opportunity arose due to the liquidation of KIRS, it suddenly became a reality. The next focus for Laszlo Boats NZ is on Japan and the Olympics, so watch this space.

Human trials for boosting nutraceutical exports The results of clinical trials on pine bark extract are soon to be published and are bound to boost growth at nutritional supplement company, Enzo Nutraceuticals based in Paeroa, says founder and managing director David Giles. “This new scientific evidence will aid the company’s next move, into China,” he says. ENZO manufactures a natural health product branded Enzogenol that supports recovery from brain injuries, among other health benefits. Enzogenol is an extract from New Zealand-grown Pinus radiata bark made with a water-only extraction method. It sells as bulk powder and capsule products in the US, Japan, Taiwan, Philippines, Singapore, Australia and New Zealand. Products are available to consumers online and are sold through clinics where doctors and naturopaths promote nutritional approaches to health. “Nutrition is key to getting better,” says David. “We are very much a science based nutritional company with our six human clinical trials supporting our products. People can read our studies at Google Scholar by typing in our brand name Enzogenol. “We can’t rely on the clean green New Zealand image alone. Sure, it is important for our natural products industry, but having good science behind your products is essential for exports. And, of course, Kiwis are also looking to buy high quality, well researched nutritional products,” he says. The new study on brain health about to be published by Pennsylvania State University in the US will show that Enzogenol reduces mental fatigue – a huge issue for the brain injured.

David says, “This study of 42 college-age athletes suffering from concussions cost about $200,000, to measure brain functions. Larger studies can run into the millions. Despite our huge investments in clinical research, we have to be very careful about the claims we make. Our products are not a drug but support the body’s healthy functioning, as our trials are showing. “Fortunately, our studies generate a lot of interest from doctors that recommend our products.” The US research follows on from a 2013 study of traumatic brain injury at AUT showing the product reduces cognitive failures such as memory impairment. In recent months Enzo has formed an association with Keeto Trading in Hamilton, operated by Ting Ting Zhou. “The strategy is to move into the Chinese market over three-tofive years,” says David.

Sustainable, rewarding This is David’s second career. He first worked as an engineer in petroleum exploration traveling all over the world. After returning to New Zealand he saw the opportunity to commercialise research from Canterbury University that first made Enzogenol on a laboratory scale. As an engineer, David designed the first industrial scale plant to produce and commercialise this new health product. The company has six full time staff, and agents in various countries to sell. “I still travel, but share that with our chief science officer and co-owner Dr Matt Frevel.”

member profile

David Giles (l) and Dr Matt Frevel, co-owners of Enzo Nutraceuticals

The other shareholders are David’s father and uncle. “It’s great to be able to build a business based on sustainable products and to help people’s lives. It’s a business we are very passionate about.” When moving from Auckland, where the company set up in 1998, it made sense to set up the extraction and processing plant in Paeroa. It is reasonably close to the raw material supply, the bark that comes from the central North Island, and 10 times more affordable than land in Auckland, while still only 1.5 hours from the airport. “Paeroa is a great place for finding staff and the infrastructure we need such as electricians and engineering.” New Zealand is a great place to do business, David says. “We regularly take advantage of our surroundings when we show our plant to business guests from Asia and take a trip to the pine forests.” His advice for someone in their first year of business? “You have to have perseverance and passion. Keep on and on and on and never give up, even when it gets tough. Get a mentor to bounce ideas off.” BusinessPlus April 2017

Keep your nger on the pulse Your people are one of your biggest assets. To make sure your business is performing at its best you need to get their pay and benefits ‘just right’. That’s where we can help. Using our market intelligence you can keep your finger on the pulse of market trends and act with confidence. The National Employers Wage and Salary Survey covers 216 positions. Our comprehensive reports include splits by industry, location and revenue bands: Salary reports: Reflect Salary ranges by position, location, revenue bandings and industry. Beneets and Conditions reports: Position specific analysis of benefits and conditions. You’ll find sample reports as well as a full list of positions and descriptions on our website.

www.nzsalarysurvey.co.nz The

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