P u b l i c ation of the Employers & Manufacturers A s s o c i a t i o n I n c
Issue 127 – July 2015 $6.30
BusinessPlus news | advice | learning | networking
F&P Healthcare big export winner
New property tax explained Electricity future shock Inside • CEO reports on OECD summit • Psychometrics revisited • Auckland port changes up for evaluation • Cheating on sickies?
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BusinessPlus is published by :
On the cover...
The Employers and Manufacturers
PM John Key has presented F&P Healthcare with the Supreme exporter trophy at the Air NZ CargoExportNZ Auckland Awards 2015. Marcus Driller, Investor Relations and Corporate Affairs Manager, wasdelighted. Full coverage starts on p22.
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CONTENTS
Chief Executive: Kim Campbell
Advocacy@WORK
Manager of Advocacy and Industry Relations:
04 Bursting at the city seams
Mark Champion Manager EMA Learning: David Foley
05 Back from the OECD:
Denis Quigan 07 823 9311
mob 027 203 0694
Russell Drake 07 838 0018
mob 021 686 621
Bay of Plenty Terry Arnold 07 575 8401
18 retirement: Planning on
retiring? First fix the legal issues
14 in the lobby:
TPP momentum good news for New Zealand - BusinessNZ CEO, Phil O’Reilly
Waikato
Clive Thomson 07 348 0334 mob 0274 372 808
BusinessPlus
27 Pitango fresh invests, expands 27 Linguis International recovery
07 Auckland port changes up for
22 F&P Healthcare big winner at
undermines investment
Export Awards
20 Driving successful business
24 Winners announced for Bay of
mergers and acquisitions
Mary MacKinven 021 636 089
11
Plenty ExportNZ Awards 2015
SCHEDULE
Building staff engagement at the Gisborne District Council
12 EMPLOYMENT CHAT: An
unpaid leave quandary, the abc of employment agreements, and cheating on sickies?
Contributor Gilbert Peterson
16
phenomenon
export
09 Politically driven policy
advice
Designer
Auckland
06 Technology change to drive
Editor mary.mackinven@ema.co.nz
26 Retirement village expands into 26 Made Blunt boosts distribution
evaluation
Rotorua / Taupo / South Waikato / Whakatane
member noticeboard
news electricity future
mob 021 662 656
Revisiting psychometric assessments: how to deploy them for your workforce
features
My geopolitical and economic overview -EMA CEO Kim Campbell
Manager of Enterprises and Strategy: Mauro Barsi
19
28 WiNTER bRiEfiNgS SChEdulE 2015:
Free to members, register now
TAX TIPS: Ins and outs of the new property tax
Ripeka Mikaere Advertising Sales Colin Gestro 027 256 8014
27
colin@affinityads.com ISSN No. 1176-4953
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ADVOCACY@work
EMA’s team of advocates delivers your concerns as the collective voice of business in the region to Government and local bodies. Your membership of EMA gives your business that voice and adds strength to our collective representation. In addition, you benefit from the lobbying work of BusinessNZ of which EMA is the biggest shareholder.
Bursting at the city seams
Credit 2015 Transport Agency
Coping with Auckland’s rapid growth was the key theme emerging from various forums and discussions for the EMA’s advocacy team over the past few weeks, while new legislation for occupational health and safety (OH&S) has also been a major focus. The restraints on the growth theme began with Finance Minister Bill English’s address to the EMA’s postbudget lunch in late May when the issue of RMA reform was high on the agenda for post presentation questions. Members continue to raise concerns about delays in the processing of consents, variable interpretations of the requirements of the RMA, overprescriptive details in the Act and the difficulties they create in enabling economic growth in Auckland. As the Auditor General’s report made clear, Auckland Council’s response rate to processing consent applications is woeful. It’s tempting to consider this as just an Auckland issue – smaller councils around the country appear to face less pressure to process far fewer applications. But the fact is delays in Auckland are an economic handbrake for the whole country. Mr English made it clear there is no will from Government to alter sections 6 and 7 of the Act to take into account economic benefits from development. Government can’t get the numbers
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BusinessPlus
and therefore won’t push for change. But EMA’s CEO Kim Campbell and the CEO of the NZ Committee for Infrastructure Development, Stephen Selwood, both indicated there would be a concerted push for further, deeper reform of the RMA as well as of the Local Government Act and the Land Transport Management Act. Network connections
Separate discussions at our EMA Policy Forums with Vector CEO Simon Mackenzie and Auckland Transport CEO David Warburton further highlighted the scale of the growth problem. Vector will need to build the secondlargest electricity network in the country to cope with projected growth at an estimated cost of around $2 billion. Vector’s current network is already the largest in the country and the $2 billion projected spend is on top of ongoing refurbishment and maintenance of the current Auckland network which keeps residential lights on and drives the country’s economic powerhouse. Mr Mackenzie also talked about the new innovations in the industry, particularly the development of Tesla’s new storage technology that makes batteries and solar power a more viable option for both residential and industrial use (see story page 6). Mr Warburton’s Auckland Transport
team is not only working to get the best out of the current road and public transport network but also seeking to enhance it to cope with projected population growth of more than 730,000 by the year 2043, 28 years from now. That’s adding the population equivalent of Christchurch. A city the size of Hamilton will be accommodated in the southern part of Auckland, with large populations destined for the north and north-west, both of more than 70,000 people. The numbers are very big with about 7,000 new cars registered and hitting the roads of Auckland every month, 140 buses an hour up central city Symonds St at peak ( the optimum is considered 80 per hour) with the constraints at the downtown Britomart rail terminal reducing efficiency and capacity on the rail network by about 35-40%. We’ll have more on transport in the next issue of BusinessPlus. OH&S law refinements
The political push-back on the proposed OH&S legislation, another major issue for the advocacy team this month, saw us urging Government to take a leadership role, provide some certainty and get on with passing the legislation. In support of that push, the EMA wants enforcement staff levels brought up to the International Labour Organisation standard - good employers can’t be left on their own to create safer workplaces while recalcitrant employees continue to get away with a ‘she’ll be right attitude’ that plainly does not lead to safe workplaces. EMA has also asked for recognition to be given to existing systems that already work in many workplaces, rather than simply just replacing them with safety reps as currently mandated in the new legislation. The advocacy team expects RMA reform, infrastructure development and Auckland transport to be the dominant pieces of work for the EMA for the foreseeable future.
ADVOCACY By Kim Campbell
Back from the OECD:
My geopolitical and economic overview As EMA’s invited representative observing the OECD Forum 2015, I have returned thinking it seems our New Zealand economy and the global economy are hunkering down just as we are for our winter of dropping temperatures. Just a year ago New Zealand was being hailed as the rock-star economy of the OECD (34 member countries that span the globe). But anecdotal and real economic indicators are aligning to suggest growth will be slower and lumpier than the catchy headline suggested. The China slowdown has already contributed to lower dairy prices while the lessening demand from China for steel and the coal used in its processing had a knock-on effect in Australia. Australia and China are our two largest trading partners and their economic slowdowns are having a cooling effect on New Zealand’s growth prospects. Economically-speaking Europe remains stagnant, and is still trying to grapple with its Greek problem, with little to zero prospects for growth throughout the EU partnership. The US continues to bump along the growth line with its recovery taking longer and going slower than many would have predicted. The long-term impact of the global financial crisis (GFC) is still being felt and we’ve essentially lost a decade of economic growth. The key issue is that attempts at stimulating those economies haven’t worked. Printing money has failed to provide stimulus for countries such as Greece and Finland but it has inflated the balance sheets of the major banks around the world, and that has contributed to another potential major issue. This issue is currently flying beneath most radars but there has been massive debt taken on by countries in the socalled emerging markets.
“International trade levels have decreased since the GFC and have yet to recover while international trade sanctions have increased” This appetite for phenomenal debt levels to underpin growth and spending is being driven by low interest rates available from central banks around the world. But any significant across-theboard rate rise – perhaps on the back of US economic recovery – could be catastrophic for countries like Brazil and other significant New Zealand trading partners in those emerging markets. The recent OECD meeting in Switzerland also talked about the lost decade since the GFC; its impacts for New Zealand are real. The main topics for discussion were the lack of economic recovery, the impact of climate change, dealing with the strategic problem of Russia’s expansion, trade issues and the ageing OECD population. The Russian issue has created issues with oversupply in the dairy inventory because of trade sanctions while volatility in energy prices – many European countries rely on Russian oil and gas and those taps are switched off is also an issue. International trade levels have decreased since the GFC and have yet to recover while international trade sanctions have increased. There are an estimated 300 more trade restrictions internationally than there were prior to the GFC. These big international influences
“Economically-speaking Europe remains stagnant, is still trying to grapple with its Greek problem, and there seems little to zero prospects for growth throughout the EU partnership”
tend not to be as catastrophic for New Zealand as they can be for other countries, as our exports have been supported by strong dairy prices. Lower prices also tend to be offset by our floating exchange rate. Of course that does make imports more expensive and literally knocks the cream off the top of our economic performance. A final word on the OECD was the interesting move by Turkey to place on the next G20 agenda the contribution of small-medium enterprises and their role in the global supply chain. Small business is big business in New Zealand with 97% of our businesses having fewer than 20 employees. It is against this global and local economic background that the EMA continues to advocate for driving New Zealand businesses further up the value chain. We encourage moves to give our members better access to key infrastructure such as ports, roads, rail, and electricity networks and we believe access to water allocations is a looming major problem for a number of our productive sectors. We are pushing hard for further investment in these critical areas. The investment and building of the broadband network must progress faster to allow us to keep up with data transfer speeds and we support any moves that aid open and free access to trade and labour. When business is doing well the country is doing well. kim.campbell@ema.co.nz BusinessPlus
5
NEWS By Alan McDonald, EMA Policy Director Vector CEO Simon Mackenzie addressed EMA’s joint Regional Infrastructure and Energy and Environment committees last month highlighting the disruptive technology coming up that could impact traditional networks and industry regulation.
Technology change to drive electricity future Technology change potentially as disruptive as that sweeping through the telco industries is overtaking the electricity industry; both the industry and its regulators will need to find ways to keep pace with the challenges it presents. Vector CEO Simon Mackenzie told a recent joint EMA Regional Infrastructure and Energy and Environment Committee meeting how the traditional model of network distribution is evolving rapidly as new technology providers enter the industry at various points in the generation and distribution chain. “No-one can predict what future technology will bring and we are already seeing game changing technology from the likes of Tesla and Apple who have both made recent significant moves in the sector,” said Mr Mackenzie. “Apple has recently bought Nest, (for about $2 billion) which allows you to remotely manage heating and ventilation, and your electricity load through your smartphone, while Tesla’s new lithium-ion storage batteries are changing the way we think about expanding our network.” New Zealand’s total electricity industry revenues are about $5.8 billion across the retail, distribution, transmission and generation sectors.
“Savings are about $600 per year with batteries costing about $NZ4300 for the 6kw version and about $5,000 for the 10 kW version” Mr Mackenzie says a business like Apple looks at the whole market, “they don’t think or stay within the traditional boundaries.” Thinking like this, outside the traditional boundaries, has encouraged Vector to enter a partnership agreement with Tesla, best known for its luxury, high-speed sports cars but soon expected to become the dominant producer of lithium-ion technology storage batteries. “Tesla’s new battery storage technology gives us an opportunity to think beyond traditional poles and wires,” says Mr Mackenzie. Vector operates New Zealand’s largest electricity network and faces building another like it to keep pace with Auckland’s predicted growth over the next 20 years. “For example we recently costed a traditional poles and wires approach to match expected growth in a specific area of Auckland at $19 million.
Given current regulatory restraints around our return-on-investment we’d struggle to justify that investment on a strictly business only basis. “We also costed an existing battery option at about $4 million. But, the Tesla solution cost just $1 million and came with a 10-year warranty for continual use. If the battery failed for any reason it would simply be replaced.” Tesla has developed large-scale batteries that can store up to 2 MWh and provide up to 4 MWh of continuous use for industrial scale applications. It has also produced 6 kWh and 10 kWh batteries for use in the home. “The average Kiwi home uses about 12 kWh per day so if you link these batteries to a solar panel system or even to the traditional grid you can see the potential for households either to go completely off the grid or manage their power so that they are not buying electricity in the traditional morning
Continued p8
“Tesla has also developed largescale batteries that can store up to 2 megawatt hours (MWh) and provide up to 4 MWh of continuous use for industrial scale applications with 6 Kwh and 10 Kwh for use in the home” A graphic of Tesla’s new $US5bn battery factory being built near Reno, Nevada.
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BusinessPlus
NEWS
Auckland port changes up for evaluation The critical discussions around the future growth of the Ports of Auckland continue with the EMA policy staff invited to represent members at a key step in defining that future. A large group of stakeholders meet this month to form a Stakeholder Reference Group who will then select a Consensus Working Group to carry out the Future Port Study. This may seem like a long-winded process but the future of the Port is critical to both the regional and national economies, while the amenity value of the harbour is also critical to the city and the region. Finding a balance between those needs is yet another example of the pressure on infrastructure being driven by Auckland’s rapid growth and increasing importance and influence on the national economy. Ports of Auckland CEO Tony Gibson was a recent speaker at one of our policy forums and the EMA advocacy team will seek further opinions from all sides of the discussion before going into the July session. The ongoing debate and court
action around the Ports’ plan almost cost Auckland’s economy several lucrative visits by the largest cruise ships while the impact of a halt to current work on another extension following successful court action has yet to be assessed. However, the Ports’ expansion plans – much-reduced from previous plans that included reclamations of 44 and 26 hectares, down to the
current three hectares - have to be balanced against the strong public rebuttal of its continuing expansion into the Waitemata Harbour. Any proposals involving a shift in the Port’s location, or a complete halt to expansion, will require years to implement, or offset, and require another large infrastructure investment for a city already struggling to fund its growth.
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7
NEWS
EMA deeply regrets the loss of occupational health and safety consultant Patrick Seaman, who passed away last month following a short illness. Patrick was a valued member of the EMA Consultants group. He also facilitated EMA training courses with a commitment to inclusive and interactive learning. He will be sadly missed by the EMA Learning and EMA OH&S teams. Patrick was valued as a gentleman who had a genuine
OBITUARY
care for people. Patrick had 33 years of employment and consulting experience in safety and health management. He had worked as an inspector and manager for the former Department of Labour, and ran his own business helping New Zealand organisations, include EMA members, to lift their health and safety performance and awareness. He held Post-Graduate Diplomas in Safety and Business Management, was an active member of the New Zealand Institute of Safety Management (NZISM) and an auditor for the ACC programme WSMP and its WSD audit panel. We send our deepest condolences to his family.
EMA’s new building on schedule Improved facilities for members
EMA’s new Auckland building under construction in Khyber Pass Rd adjacent to the existing office block, is well on the way to completion by March. Once it’s finished you will be able to enjoy its five new training rooms of various sizes with their associated student café for lunches and tea breaks, as well as more open space to mingle and catch up on what’s happening back at your work. Multiple meeting rooms will provide space for you to pop in and talk to your contact at EMA, for example to discuss your needs for training and employment help, or to tell us your story so we can advocate better for you. A café open to the public will be set within open landscaped areas for your enjoyment. And there will be more parking space. We are pleased to be developing a premise with all the modern requirements for our own staff as well – an attractive open plan office environment with more meeting spaces, plus more amenities and a sick bay that also incorporates a comfortable space for breastfeeding mothers. And of course the building has a focus on standards for earthquake proofing and a green workplace environment.
Image: Artist’s impression of the completed building – view from Khyber Pass Rd
Continued from p6
and evening peaks when it is at its most expensive. “Our analysis shows you could save about $600 per year on your current power bill using battery storage and these storage batteries really make solar panels a viable alternative. Tesla batteries cost about $NZ4300 for the 6 kWh version and about $5,000 for the 10 kW version. Tesla’s new $6.2 billion Gigafactory under construction will produce more lithium-ion batteries than the rest of the world’s production combined. Increasing numbers of New
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Zealanders, albeit still a small number, are installing solar panels. But the dramatic impact they can have is highlighted by usage patterns in Queensland where a significant drop in electricity usage took place during the day when subsidised solar panels were introduced (see graph). The subsidies have since been dropped but demand for off-peak power continues to fall by 15% pa as Queenslanders – now used to the idea and seeing the benefits – continue to install solar panels. “Given that the distribution
network, our area of business, is now distributing less electricity and therefore losing revenue, there is a real potential challenge for Vector, especially when our income is regulated based on the theoretical model of a traditional lines company. “We face real issues funding the network growth required to meet Auckland’s growth if thinking and regulation fails to keep to pace with developing technology and change. “It happened in the telco industry and it is happening again in our industry.”
NEWS
Politically driven policy undermines investment EMA and BusinessNZ are very concerned the Government has agreed to a “bounded public interest test” to apply in the event that goods are dumped on the New Zealand market. This public interest test would assess the extent that anti-dumping duties might keep prices higher in New Zealand than if they didn’t apply, and the circumstances that might apply for dumped goods to enter the New Zealand market unimpeded by duties regardless of the effects on a local industry. Goods are dumped if sold in New Zealand below the price they are sold in their country of origin and as well cause injury to the New Zealand industry. The Ministry of Business, Innovation and Employment’s has released a discussion paper voicing some of the supposed issues but few of the reasons for retaining anti-dumping and countervailing measures. In effect it proposes New Zealand should abandon them. It states, “Whether or not the cost of a duty significantly outweighs the benefit will differ on a case by case basis” which makes each case wide open to political intervention, and/or picking off any industry the
the Christchurch earthquake rebuild.” The paper says the new regime would provide “…domestic producers with a limited time-period to adjust to dumped or subsidised import competition.” This suggests New Zealand manufacturers may be displaced by dumped and subsidised competition from offshore, with no analysis of the wider economic and social implications. The proposal also amounts to a fundamental change in our international trading regime, at odds with international convention, and WTO rules and practice. New Zealand’s anti-dumping regime forms part of our long established trade policy whereby domestic producers can seek redress from unfair trade practices such predatory pricing and government subsidisation. They are in common use the world over. New Zealand usually takes pride in conforming to internationally agreed rules and standards set by internationally mandated organisations;
“An overseas company dumping product here would instead cut and run” government or its officials may decide unimportant. The paper lacks a discussion on what constitutes the public interest or the benefits, or disadvantages, of retaining a WTO-compliant anti-dumping capability. There is no discussion of the ‘public interest’ involved in retaining and expanding a competitive domestic manufacturing base with high value employment. Neither does the paper attempt to analyse consumer welfare benefits arising from the proposed changes; officials focus mainly on “the Government’s objectives of improving housing affordability and assisting with
apparently not so in this case. On the local level retaining antidumping trade remedies is vital for the stability and transparency of a small open economy such as ours with virtually no tariffs on manufactured products, and where our businesses must remain globally competitive to survive. Expecting our industries to compete against goods dumped by large international firms is a big turn off for investors, either locally or offshore. What business would invest in a wild-west where they could be undermined at the whim of a politically motivated “public interest test”
exposing them to unfair competition from dumped goods? The current regime already requires a reasonably high hurdle for obtaining anti-dumping protection, and harm has to be proven. It also allows for duties on any dumped product to be reviewed at any time during the five year imposition period. In fact requests for anti-dumping protection for New Zealand businesses have historically made up a very short list: peaches, steel bar and coil, galvanised wire, nails, plasterboard, and diaries - from six countries in total. Quality and safety
Consumers have no recourse when dumped goods fail, unless of course the Government is prepared to stand behind them. No sign of that and no sign either of a Government agency for auditing imports for international safety and quality standards, or policing them should they incorrectly state they meet such standards. New Zealand based firms must stand behind their products or lose business, should a quality or safety issue arise. An overseas company dumping product here would instead cut and run. By then the financial damage to the local company would be done, with markets lost to them locally and offshore, and with staff being laid off. Australia has considered introducing a bounded public interest test on its anti-dumping regime and rejected it. The Australian Productivity Commission found protections are required where injurious dumping or subsidisation can be shown. In contrast, the New Zealand paper suggests our manufacturing should cease where dumped or subsidised goods and services are, even temporarily, available. Finally there is no evidence the costs of housing will be materially altered by the proposed changes. As stated by Housing Minister Nick Smith, “it’s the cost of land rather than the building materials that’s having the biggest and most negative impact on housing affordability”. BusinessPlus
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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.
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comment By Judy Campbell, Chief Executive, Gisborne District Council
Building staff engagement at the Gisborne District Council
Shortly after joining Gisborne District Council (GDC) as Chief Executive in 2010, I commissioned an engagement survey to gain a clear initial benchmark on how staff were feeling and to inform and guide our strategy. While the GDC had used the IBM Kenexa Best Workplaces survey in the past, it had been five years since we last used it. It asks employees to grade their workplace across a number of categories including leadership, culture, recognition and engagement. That initial survey of GDC staff gave a disappointingly poor result – but left lots of room for improvement. The survey showed us the things that were most important to our staff. The strongest indicators of engagement and performance levels included: • Knowing what the organisation and its leaders stand for, and the vision; • Being led by committed managers; • Clear understanding of job roles and responsibilities; • Having the appropriate tools, workplace environment, training and support to achieve their goals; • Timely, clear and frank performance feedback; and • Being fairly remunerated for the job they were doing. We provided staff with full feedback on the results then began working on the most pressing issues. We didn’t get there overnight. Nearly three years and three surveys later, our results have surpassed IBM Kenexa's Local Government Benchmark and we are now resetting our sights on the overall Best Workplaces Benchmark. Some of our most impactful initiatives included toughening up the enforcement of existing policies, restructuring the workforce and ramping up performance conversations
leverage point on all of this is the between managers and their direct third tier managers (20 in total who reports. As we did this, employees saw
manage a total of 300 staff). We put that issues were being addressed, and a huge amount of effort into providing engagement levels began to rise. in-house training for all our leaders but While we did all the usual things with a particular concentration on those around improving communication with key third tier managers who have the staff, in my opinion the real reason we improved our engagement levels is have greatest ability to impact change on the because of three distinct things: front-lines. 1. We looked at the whole life journey of staff at GDC – The training programme we created recruitment to departure and from includes leadership management, articulated how we saw that journey change management, and specialist taking place. contextual topics - in our case local government and our own region’s 2. We concentrated on: unique issues. • Performance Management - It is the combination of these efforts being clear on the things we that has resulted in a substantial needed to achieve and how well increase in employee engagement. Now we have some of those people did in reaching their essentials in place, we continue to individual goals. measure engagement each year and use • Training and Development - the the feedback to fine tune the system. support provided to help people We know that if we’re not moving perform - and forward we will inevitably move • The Remuneration System backwards – there is no standing still. everything else is nonsense if the pay system doesn’t recognise The annual IBM Kenexa Best good and bad performance. Workplaces Survey is open now. 3. We recognised that as a To find out more, go to www. Leadership team of six, the real bestworkplaces.co.nz BusinessPlus
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EMPLOYMENT CHAT
An unpaid leave quandary, the abc and cheating on sickies? School holidays are coming up and Sally has had all her leave entitlement. Do I have to let her go on unpaid leave? I really can’t do without her for the two weeks, but as a mother myself I can’t say no. –
give them an employment agreement? What does it have to have in it: a job description set in stone or? - Dave
Diane Dear Diane I sympathise with you! It’s up to you of course to let her go on unpaid leave if you can find ways to get permanent or temp staff to do her job, or just put the work aside til she gets back. Or, could Sally work from home to complete critical tasks? While she would be taking unpaid leave, you could pay her for her work time only. If it’s hard to let her go on school holidays explain why. Can her job be structured so those times of year are more manageable, for example? Out of good faith you may like to request Sally take time off at a later stage to which you and she mutually agree.
When I hire someone, at what point do I have to
Hi Dave It is a legal requirement for an employee to have an employment agreement (emailed or delivered in hard copy). The agreement signals the start of the working relationship and defines the role required of the employee. Both you and the new employee have to sign it, agreeing to the terms in it, including the employee’s start date. If the employment agreement has a trial period clause, the clause will become invalid if the employee starts working before the agreement is signed. The employer must give the job candidate the drafted agreement to peruse for a few days beforehand and to obtain advice on its contents before they sign (or decide not to). So the signing should take place just before the person starts, or as soon as both parties agree to the terms should the employee have to work out a lengthy notice period in their current job. If the person starts working for you before it is signed, their start date is the first day of work, and not the signing
date. So you are legally bound to pay them from their first day, not their signing date. If you haven’t given them their agreement before they start, any disputes during that period are likely to favour them.
“If the employment agreement has a trial period clause, the clause will become invalid if the employee starts working before the agreement is signed” The agreement does need to include a job description. Get one of our employment relations consultants to help you draft that if necessary because it can be written in a way that allows for flexibility for both the employer and employee, without needing a complete re-write if a small aspect of the role changes, which is common of course.
Our guy Bill keeps extending his sick leave
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Free call AdviceLine, NZ 0800 300 362, AU 1800 300 362 or visit our website, www.ema.co.nz
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EMPLOYMENT CHAT
of employment agreements, and honestly we know it’s a fraud. We have to put an end to this and move on and replace him. How do we start? – Chuck Dear Chuck Come to EMA’s morning conference for employers on Managing Medical Incapacity in Auckland on July 28, and learn all! But briefly, the issue is one of impacts on the workplace. Does Bill do his job to what is required of him? Or can your firm afford to replace him on a temporary basis? Does his absence affect other employees’ ability to do their jobs well? You have the right to manage performance problems. It’s time for a chat with Bill when he returns and about the effect his absences have on the business. If the result of that discussion is inadequate, it could be followed by a formal performance review. If he does not respond to invitations and requests to attend meetings or is generally obstructive in an unreasonable way to your very fair and reasonable approach you might need to take disciplinary action. If you are unsure about how long you
“If you are unsure about how long you should wait to take action, talk to an EMA employment relations consultant” should wait to take action, talk to an employment relations consultant since this can depend on Bill’s employment agreement, discussions you have had with him and so on. If his are intermittent absences, putting him on an Absentee Management Programme could also be an option. This is a progressive warning system which may ultimately lead to termination. • By the EMA communications team in consultation with EMA Advice, and loosely based on real calls to EMA’s AdviceLine. All names are fictional.
EMA members can start with our free AdviceLine team at phone 09367 0909 or 0800 300 362 (within New Zealand), and 1800 300 362 (from Australia), 8am-8pm weekdays. Alternatively, email advice@ema. co.nz or read or print information such as the A-Z of Employing – a manager’s guide on more than 100 specific employment topics, at www. ema.co.nz
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BusinessPlus
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IN THE LOBBY
TPP momentum good news for N US moves advancing a potential Trans Pacific Partnership have increased its chances of success. The vote by the US legislature to give President Obama the power to fast-track trade negotiations including TPP means the negotiations have suddenly become much more real. The authority given to the President to move the negotiations along (the Trade Promotion Authority or TPA) doesn’t by itself achieve the Trans Pacific Partnership, but it does allow the President to submit a deal to the US Congress and Senate that they must vote either for or against, without further changes. The upshot is that big players like Japan and Canada and the US itself will now move towards making their last offers and every other country involved will now be working hard to
shore up their priority interests. The deal won’t be achieved immediately – there are many issues to tie down first. But the negotiations will hopefully be proceeding rapidly. The countries involved will want to move quickly before outside events such as the 2016 US presidential election distract negotiations. New Zealand will be seeking the best deal possible for dairy and other products, and seeking to move forward our interests in services industries and elsewhere.
Getting market access for our dairy products is one big challenge. Some TPP participants, notably Canada, have dairy producers whose significant domestic political power are opposed to competing on a level playing field against New Zealand’s efficient dairy farmers. Representing a smaller nation and lacking tariffs to use as bargaining chips makes negotiating harder, but New Zealand’s negotiators are assiduous and world-class. They are focused not only on the big
Employers impacted by law changes to protect vulnerable children The Vulnerable Children Act 2014 which came into force on July 1st directly impacts on certain key workforce employees, contractors and specified unpaid people who work with children. The Act is far reaching. Many employers should consider whether they are covered by it, and if so, what checks and balances they may need to put in place. There are two key changes for these employers: 1) Child protection policies
Certain state agencies and their contracted or funded providers of children’s services must adopt child protection policies which identify and report any child abuse and neglect that comes to their attention. This requirement applies to the Ministry of Business, Innovation and Employment, Te Puni Kōkiri, district health boards, boards of trustees of state and state-integrated schools, and sponsors of partnership schools kura houra. 2) Safe children’s workforce
Anyone working with children under these services, including teachers
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and medical professionals such as doctors, midwives and occupational therapists must be vetted by police either every three or every four years, whether they are ‘core’ workers or not. ‘Core workers’ are those employed or engaged by the state sector or state funded organisations to provide regulated services, and work alone with, or have primary responsibility or authority over children. Under the Act the following must be implemented: a) a new standard safety check for all paid staff in the government-funded children’s workforce; and b) workforce restrictions preventing people with certain serious convictions from roles that involve working alone with, or with primary responsibility for children. The safety checks require a full identity check, a police vet, the gathering of other information and a risk assessment. Less information is required to be gathered if the worker is an existing employee/ contractor. A similar subsequent safety
check of a children’s worker is to be carried out within three years after one previously. As well as the above checks, the Act also provides: • New criteria for interviewing prospective employees and their referees. • A prohibition on certain organisations from employing/ engaging a core worker who has been convicted of a specified offence, and does not hold the required exemption; and • A process for the suspension and/or termination of a core worker, where the organisation reasonably believes the worker has been convicted of a specified offence. Non-compliance could be costly. Companies and organisations that do not meet the above compulsory requirements could be liable for fines up to $10,000 for each offence. For more information on the Vulnerable Children Act and its impact on your business, visit the Children’s Action Plan website at www.childrensactionplan.govt.nz And contact us at the EMA for help with the transition.
Phil O’Reilly
New Zealand items like dairy, but also on the wider benefits from a Pacific trade deal. Getting more connected into growing markets in the pivotal Pacific arena would be a huge economic benefit for New Zealand. The TPP would be an antidote to our biggest economic problem – the tyranny of distance. Being the furthest away from world markets - effectively being the most remote developed country in the world - has been an enormous handicap to us earning a good living. Other countries can trade with their neighbours across nearby borders; for them earning export dollars is much easier. But if you’re a New Zealand exporter, it’s hard to keep in touch with rapidly changing consumer needs and tastes when you are 20,000 kilometres away, and it’s expensive to ship your goods so far to market. In addition, our profile as an agricultural producer makes us vulnerable to tariffs and other forms of
“Big players like Japan and Canada and the US itself will now move towards making their last offers” protectionism as trading partners seek to protect their own agricultural sectors. Our size or scale is another disadvantage. Being a small economy means we have less power to achieve a good bilateral trade deal – that’s why we have always supported multilateral trade initiatives. Successive governments, both National and Labour-led, have understood these handicaps, and worked hard to achieve multilateral and bilateral agreements wherever they appeared possible.
MFAT negotiators have brought home some prized deals, including the historic CER with Australia and the highly successful trade agreement with China. But not all agreements have given us everything we wanted. For example the recent FTA with South Korea did not break down all tariff barriers or increase access for all New Zealand products. But all trade deals negotiated on our behalf have been net positive for trade, and have helped us make connections across those thousands of kilometres, and have given our export businesses more confidence to invest. The Trans Pacific Partnership would be a huge benefit for us and it’s good news that the TPP negotiations now have momentum towards the connectedness we need. Phil O’Reilly is Chief Executive BusinessNZ www.businessnz.org.nz
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BusinessPlus
15
TAX TIPS Jo Doolan
Ins and outs of the new The two year bright line test announced just before the budget caught many by surprise and we now have the discussion document out with a deadline for responses of 24 July. From October 1 this year if you buy and sell a residential property within two years of acquiring it,and it is not your main family home then you will be taxable on any gains made on the sale. The officials are suggesting that if you make a gain then the amount is taxable at your marginal rate, however the clanger is if you make a loss this is quarantined and can only be offset against other taxable profits that you make from selling property. Also, if you sell the property and make a loss and the sale is from someone associated with you, then the loss is not allowed. Another potential trap that essentially shortens the two year period is the two years run from the date that the property is first registered in your name and the date of sale is
“The definition of residential land will not include land that is used predominantly as a business premise or as farmland” the date when the sale and purchase agreement is entered into. The definition of residential land will cover land that has a dwelling on it, and on land where there is an arrangement to build a dwelling. It will not include land that is used
predominantly as a business premise or as farmland. For these purposes the hobby farmers or life style property owners will need to be careful; to be farmland the area of the land and the nature of it must be capable of being worked as an economic unit. One of the concerns around the main home exemption is whether this would apply when the home is owned in a trust; the proposed definition says the property has to have a dwelling on it and the dwelling is occupied mainly as a residence and is the main home of the owner, or if the owner is a trustee and one or more beneficiaries of the trust. If the settlor of the trust has a main home that is not owned by the trust then the main home exception cannot apply to any property owned by the trust.
Don’t be frightened of IRD interest rates and penalties. Simply purchase tax from the TMNZ tax pool to settle your tax bill. Save up to 30% on IRD interest and eliminate late payment penalties. For a better tax outcome visit tmnz.co.nz, talk to your tax adviser or call 0800 829 888.
EMA/HP/TP3
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TAX TIPS Claire Dilks
property tax Another concern is related to properties that were inherited or transferred under a relationship property agreement. For inherited property the proposal is that these will be excluded from the bright-line test, and the beneficiary will not be liable under the bright-line test for any subsequent disposal of the property. Transfers under a relationship property agreement are not initially taxable, however if the property is disposed of within two years of the registration date on the acquisition of the property, and it is not the main home of the person it was transferred
“There are all sorts of tricky definitions and anti-avoidance rules that we will cover in more depth next month� to, then they will be caught. The tricky bit here is if the property was owned by the couple for three years and sold it would not be caught. If the couple enter into a property relationship agreement and the property is transferred and sold within two years of this happening, and not used as the main residence, then you will be taxable on any gains. The proposals also state that you will be allowed deductions for property costs according to ordinary tax rules. This means extra record keeping and must mean some sort of apportionment around private compared to deductible expenses. There are all sorts of tricky definitions and anti-avoidance rules that we will cover in more depth next month. However, the overriding thing is: do not forget the two year brightline tests only apply if you are not taxable under the extensive existing rules that tax property transactions
which include buying a property with the intention of resale and being associated with a builder or developer. If you are taxable under these provisions, rather than the brightline test, and happen to make a loss then you can deduct your loss against other income which almost makes it advantageous to be taxable under the existing rules rather than under the bright-line test. Will these rules make a fundamental difference to property prices? The answer is: who knows? Perceptions can drive property prices down. The reality is that, based on the number of people they will impact on, means any material difference will be remote.
But some of the research shows that properties in Auckland are often held for less than one year and for the rest of the country they are held on average for seven or eight years. So to put this in context in 2014, there were 86,000 sales of residential property and 8,400 of these were held for less than two years. The estimate overall therefore was based on the 2014 figures that just over 3,000 properties would have been taxable. Joanna Doolan is a Tax Partner with EY Claire Dilks is a Senior Tax Manager with EY joanna.doolan@ nz.ey.com claire.dilks@nz.ey.com
HAVE YOUR CAKE AND EAT IT TOO Specialist consultancy & legal services at member rates.
Our team can help you throughout the employment relationship, every step of the way.
Free call AdviceLine 0800 300 362 or visit our website www.ema.co.nz
BusinessPlus
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RETIREMENT By David Shannon In the sixth in our series on Retirement Planning David Shannon reviews the critical legal issues.
Planning on retiring? First fix the legal issues When we think of our retirement we may like to think of a simple, no-fuss existence – one not involving lawyers. But a number of considerations call for legal advice or a lawyer to some degree. In fact, this is a time in life when doing things right is most important. The legal issues at this time of life can have a big impact on our families later on if not taken care of. Unfortunately many people fail to address them and it can lead to their families and heirs winding up in drawn out court cases. Why you should make a Will
Don’t wait for retirement to make a Will. If you are 18 years of age or over, married, or in a partnership, you should have a Will. Possibly because of the association with dying, some people never get around to making a Will. But if you die without a valid Will, you die ‘intestate’ and the distribution of your assets will be made according to legislation. It may leave great confusion, even hardship for those dear to you, and your final wishes may not be by passed. A Trustee company, or your Solicitor can advise you and prepare your Will for you. But before seeking their help decide exactly what you would like to happen to/with everything you hold dear. When should you revise your Will?
Many circumstances can change during your lifetime that may make the terms of your Will undesirable, unfair, inappropriate or invalid. The following are the most common situations that call for a review of your Will. • Marriage or re-marriage • Separation • Dissolution of marriage • Change of person named in the Will • Change of assets • Legislative changes
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Appointing an executor
When making a Will you must name an executor – that is the person(s) who will administer your Will. Common choices for an executor are a partner, friend or relative, a business professional, eg lawyer or accountant, or a Trustee Company. The duties of the executor are many but essentially this is the person who will ensure the wishes you have set out in your Will are followed. It is critical that you are confident that your Executor is competent and willing to carry out the required tasks. Lastly, you should review your Will at least every five years, and if you lose your Will make a new one promptly
“If you are 18 years of age or over, married, or in a partnership, you should have a Will”
Family Trusts
Establishing a Family Trust and assigning by gift or by sale, assets to a Trust has become an accepted way of safe-guarding assets for the future use of beneficiaries. A Family Trust is based on a relationship of “trust” between the Trustees and beneficiaries in which the Trustees are responsible for the management and protection of the Trust’s assets. The establishment of a Trust requires professional guidance. Property (Relationships) Act
The Property Relationships Act renames and amends the Matrimonial
Property Act. It provides for the same property division rules apply now to de facto, including same sex, relationships as apply to married and civil union couples. This means that ‘relationship property’ as defined by the Act will now generally be divided equally between the partners unless there is a contracting out agreement that specifically provides some other arrangement. Enduring Power of Attorney
An Enduring Power of Attorney is a legal document appointing a person or organisation to act on your behalf for the rest of your life; or if you become incapable of understanding, or of making decisions concerning your affairs or personal care. As the population ages and more of us live into our ‘declining years,’ the need for Enduring POA’s for both personal property and for healthcare is increasing. Should you become incapacitated without having made an Enduring Power of Attorney, important decisions are likely to be made by the Family Court and the decision of that Court might not be what you would have wished. In summary
While most of us may wish to avoid involving lawyers, preparing for retirement is one time when their advice and assistance is essential – if not for our own well-being, certainly for the future of the family we leave behind. In our Next Issue we will look at Retirement Housing and Leisure: Needs, costs, safety, maintenance; Leisure options in the change from working to doing what you want; Keeping a sense of purpose; Looking forward! For more information on Retirement Planning and Seminars for your employees about it, please visit www.pretire.co.nz or email rpseminars@xtra.co.nz or phone 04 567 7512.
comment By Nicola Pohlen and Emma Hageman
Psychometric assessments revisited: how to deploy them for your workforce Leaders in organisations are demonstrating greater interest in psychometric assessment. Contributing to this are the global trends of utilising data, hiring on attitude and acknowledgement of the importance of company culture on profitability. Psychometric assessments provide insight into likely intellectual ability, personality and behaviours of individuals; the way they think, how they relate to others and their working style. Companies are using the results gained by applying these evaluation tools for: • External and internal hiring decisions • Filtering suitable candidates • Predicting job performance • Ensuring organisational fit of potential hires • Understanding team composition • Career and leadership development • Assessing intellectual (IQ), Emotional (EQ), Adaptability (AQ), and cultural (CQ) fit The assessments have also become more accessible through the use of online platforms, and more affordable for HR budgets. Types
The two main types are ability and personality assessments. Ability Tests
The most common measures are verbal, numerical and logical reasoning (some providers name them differently). These are timed tests with varying levels of difficulty, and are widely considered to be challenging. When completing them the individual should be in an environment with no distractions. Personality Assessments
These evaluate how an individual is likely to act in certain situations. They explore motivation and work preferences, indicating areas in which an individual may feel most confident. Value is gained from understanding your company culture and aligning
the results of the assessment to the candidate’s characteristics. Managing expectations
To achieve the most positive experience and valid output for everyone engaged in a psychometric appraisal the most critical aspect is to provide transparent communication around the process and sharing the results. Interpreting the data should be done by a qualified person who can guide managers to apply the information in the context of the situation, whether it is to complement recruitment, engagement or the development of people strategies. Participants’ experience can be enhanced by providing clear parameters around the specific assessments for completion, timeframes, practice resources and a point of contact for questions. Feedback recognises the time investment and will validate the results, provide career development and leave a suitable impression. Often it has been the lack of transparency that has created resistance to psychometric evaluation because of a poor experience earlier in their career. Application in a recruitment process
Hiring decisions present an element of risk which can be minimised through use of a robust recruitment process that elicits as much information as possible. Psychometrics as part of this can validate information gathered in earlier stages, and indicate areas for further investigation. Therefore they should be included later, after the final interview, and before reference checking.
An exception to this is for high volume roles (eg graduate recruitment and call centre roles) for which there is significant numbers of applicants and where it is applied earlier as a screening tool. Ideally, the outcome will show consistency between interviews, psychometric assessments and reference checks. Elements for success
Applying psychometric assessments effectively in a workplace relies on: • Choosing assessments that fit requirements • Knowledgeable and professional interpretation • Transparent and constructive communication • Knowing your company’s characteristics and benchmarks • Inclusion in recruitment as part of a comprehensive evaluation process • Ensuring a positive experience for your participant Conclusion
Existing and potential employees of entire companies are now completing psychometric assessments more commonly to provide: • an understanding of organisational strengths and capability gaps, • cultural alignment and team dynamics, and • a background for individual career and leadership development. A practical approach to psychometric assessments will deliver business value across all talent strategies. Nicola Pohlen and Emma Hageman are principals of POHLEN PARTNERS LTD, HR and recruitment specialists. n.pohlen@pohlenpartners.co.nz r.webb@pohlenpartners.co.nz www.pohlenpartners.co.nz
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NEWS
Driving successful business mergers and acquisitions What should the acquisition strategy be for any business, and what are the norms these days for acquisition or sale? These issues were discussed at the Business Intelligence Breakfast workshop held by Lowndes Associates lawyers inpartnership with EMA in Auckland last month. Lowndes prinicpal Kerri Dewe framed the context by noting merger and acquisition (M&A) activity in 2014 had been thehighest for seven years. The increase in activity has also seen prices increase accompanied by a willingness to pay more, and with lengthening times accorded due diligence. Michael Stiassny noted the need for business people to be aware of the value and performance of all assets in which they have an interest almost on a daily basis. There should be no sacred cows and no emotion attached to whether to retain ownership or sell any part of a business. New Zealand companies trade in their business assets far less than they should, he said. The evidence is more of them tend to be sold to overseas people who find our businesses good value.
“We are not seeing New Zealand companies competing for local assets” Our directors are risk averse - they don’t think enough as entrepreneurs. When a board is risk averse the culture throughout the organisation will be risk averse. Michael emphasised the need to “dress up the bride” ready for sale, particularly covering off health and safety risks, ensuring tax and financial records are pristine, and that the company has a corruption policy. He distinguished between offshore
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buyers. For Japanese, partnerships are important whereas the Chinese often want control, either through their shareholding, by board representation, or through contractual supply and distribution arrangements, and when they negotiate their ‘observers’ present can exert considerable influence over the outcome. PwC partner Murray Schnuriger traversed the topic ‘What’s in the market now and recent trends.’ He noted 80% of the deals in New Zealand were in the $10m - $120m range with higher competition for businesses in faster growth areas. PwC were involved with 12 IPO’s last year compared to eight in total in the five years prior to that. Private equity is making a comeback, particularly from Australia. Murray cited three recent instances with more to come, observing we’re in strong economy, relatively, and ‘we were surprised Australian PE was prepared to look through the recent Australian/NZ cross rate.” They’re looking for bolt on opportunities, and exits, he said. The emergence of iwi investors is interesting, (eg Go Bus); their involvement is intergenerational, and they have a low cost of funds due to
their charitable, no tax status. A lot of inquiry is from Japan; their government has been pressuring their companies to get out and invest (eg Oji and CHH). And every week Murray said they see at least one new group from China; four recent deals are the evidence: Synlait, F&P, Martin and Good Health. “Chinese interests have built up an impressive portfolio here in a short time.” Nonetheless US and European investors have a lot of money and remain quite aggressive. (eg Paton). “Its interesting that we are not seeing New Zealand companies competing for local assets. It seems we are not prepared to put capital at risk to grow the business. We are seeing competition for our assets everywhere except from New Zealand.” Murray had some words of advice on how that could be changed: 1. Create a strategy and just go out and do it. 2. Don’t low ball the offer.
NEWS
3. 4. 5. 6.
7.
Skimping on the berley could backfire Keep deal momentum up and running In considering the valuation use the information you see in front of you, not what you may think. Know your competition – play to your strengths to highlight their weaknesses. Exclusivity is valuable but you have to earn it by providing fair value and low execution risk. Also warranty indemnity insurance is becoming popular again and should be considered. Stay disciplined – avoid deal fever and overpaying but pay what is fair.
Another trend Murray noted was the re-emergence of vendor due diligence with a return of break fees. Ross George founded Direct Capital 20 years ago. He discussed “Using M&A as part of your company growth strategy,” either by moving in, or out, of an activity. “Its a shame more NZ companies are not involved in M&A activity,” he said. But acquisition, or exiting a part or all of a business has to be executed well.
Michael Stiassny, Ross George, Kerri Dewe and Murray Schnuriger
“Once you have bought a business, you need a 100 day plan to execute it and an 18 month strategy to realise its value. It’s a big job, quite a lot bigger than buying it in the first place” “Once you have bought a business, you need a 100 day plan to execute it and an 18 month strategy to realise its value. It’s a big job, quite a lot bigger than buying it in the first place. “But no matter what business you’re in you want to be a growth company, a momentum player.” Ross put up the figures showing New Zealand companies in the early 2000’s having the cheapest EBIT multiples with Australia’s the most expensive, a trend that had reversed by 2012. He said, we ask our companies to write out a list of the companies they would like to buy regardless of the price, and a list of the divisions of their own companies they would like to sell. After doing this a decision to do nothing is still a viable option, but if people think M&A activity is risky, doing nothing is also risky. And
buying a business for example, in Australia is less risky than trying to establish one there from the ground up. The aim is move from a capital constrained strategy to a growthled strategy. Because the capital is available. You need to stay friends with your competitors, Ross said. They could well be the people you approach with an acquisition proposition. Make allies of them, respect them and talk to them. All strategies have issues where commercial and personal issues are very fused. Its no good acquiring a business out of town unless you can spend a lot of time there. “Being in control is not important. What is important is the value of your equity in a business and whether it is increasing in value or diminishing.” BusinessPlus
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a. Sir George Fistonich was presented with the 2015 Exporters Champion accolade by the PM b. Greg Olsen of F&P Healthcare accepted the Commercialisation of Innovation award from Baldwins Intellectual Property partner Sue Ironside c. The Quantium Solutions E-Commerce Exporter of the Yearaward was presented to Merryn and Grant Strakerof Straker Translations
b
d. Bic Runga, guest entertainer
a
c
e. Jim Jackson and daughter Amanda of Jackson Electrical won the QBE Insurance Exporter of the Year (Sales under $25m)
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F&P Healthcare a winner at Seven winners emerged from amongst 25 finalists at the AirNZ Cargo ExportNZ Awards Auckland 2015 presented last month. F&P Healthcare came out top winning three of the coveted Awards including the Supreme Winner accolade. Sir George Fistonich was named the 2015 Export Champion not only for his legendary promotion of New Zealand wine but also for his trail blazing efforts offshore promoting New Zealand in general. The award finalists came from the widest range of New Zealand enterprise: home brew, robots, marine winches and self-service payment systems. “We were delighted to showcase such a brilliant cross section of New Zealand’s most innovative, successful and exciting companies,” said Catherine Lye, northern director for Export New Zealand. “The depth and range of the companies attracted to enter our awards reflect the prestige with which they are held,” she said.
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Westpac Exporter of the Year (Sales over $25 million) Winner: Fisher & Paykel Healthcare www.fphcare.co.nz
The judges said: FPH is a world leader in medical devices and systems for use in respiratory care, and treating obstructive sleep apnoea (OSA). To lift their market ranking from a distant third in the OSA market their design team decided to focus on customercentred design, visiting patients in their homes, putting themselves through a sleep lab and personally testing prototypes. The project took three years and revolutionised the comfort and simplicity of full-face masks. The Simplus face mask launched in 2013 has attracted strong demand from clinicians and patients. The judges were impressed with their dedication and creativity which has
clearly paid off as FPH has taken market share and sales are growing rapidly. The company is also now using the roll-fit technology, developed for Simplus, in other applications. The other finalists were Compac Sorting Equipment, Invenco and JMP Engineering. QBE Insurance Exporter of the Year (Sales under $25 million) Winner: Jackson Electrical Industries Ltd http://jackson.co.nz
The judges said: “Congratulations on your success. We enjoyed visiting your company again and witnessing the many changes taking place. Top marks for your company’s longevity and profitability. We were particularly impressed with the sense of community responsibility promoted by your directors. “Though the lack of regional
diversity counted against you, nevertheless your performance in a very difficult market in Australia far outweighed this. Investigating new market opportunities in Indonesia was also positive.” In addition, the judges noted changes in governance, and exciting developments of side industries, and the introduction of new machinery, especially robotics. Overall an excellent entry. The other finalists were Agility CIS, Straker Translations, and Vetus-Maxwell APAC Ltd. BDO Food & Beverage Exporter of the Year Winner: Imake Ltd http://imake.pro
The judges said: Imake supplies ingredients, equipment and know-how for people to make their own craft beer, cider, spirits, liqueurs, cheese, yoghurt, sausages, and more, at home.
Imake brands include Mad Millie, Mangrove Jack’s, and Grainfather and their export growth has been very impressive. The other finalists were Invivo, New Image Group and OOB Organic. TNT Emerging Exporter of the Year Winner: Bidvest Export www.bidvest.co.nz/logistics/exports
The strength of their business planning was well above the rest in this category. Bidvest were our choice due to their: • Passion for excellence in customer service, not talk but action, going the extra mile, along with excellence in quality of produce • Intimate knowledge of the produce product and suppliers to achieve the best product at a competitive price
•
Bidvest seek out fussy demanding customers who will pay extra for the best service • As a result they guarantee any produce to be 100% perfect on arrival or will credit without question. The other finalists were CS for Doors, I Love Ugly, and IQ Commercial. Quantium Solutions E-Commerce Exporter of the Year Winner: Straker Translations www.strakertranslations.com
The judges said: We were most impressed with Straker’s massive export growth over the last few years, now 92% of total sales using cloud based technology, a 24/7 operation and an innovative pricing structure for continued on p24
Auckland exporter awards f. Robert Foster, partner with BDO, introduced their sponsorship for the F&B Export category. g. Jackie Clarke can not only MC to kick up a storm, she was a highlight of the entertainment
g
h. Greg Edmonds is Export Channel Manager for Air NZ Cargo, the major sponsor of the Auckland Export Awards I. The Bidvest Export team were delighted to win the TNT Emerging Exporter Award j. The Imake team led by MD Peter Eastwood took out the BDO Food and Beverage Exporter Award
f
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k. Mannesi Danzi and CEO Sarah Perry of Snapcomms CEO accepting the Endace ICT Exporter Award
h k
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Winners announced for Bay of Plenty export awards 2015 Trimax Mowing Systems NZ took out the ‘Sharp Tudhope Lawyers Exporter of the Year’award at the annual Bay of Plenty ExportNZ Awards late last month. Veteran exporter Ray Ellis of Ellis Agricultural Services (E.A.S), was the surprised and humbled recipient of the ‘New Zealand Trade & Enterprise Service to Export’ award for his outstanding contributions to the export community throughout the region. The five winners of the awards sponsored by Zespri International were announced at an ‘eighties Fame’ themed awards evening at the ASB Baypark stadium lounge on June 25th. Head judge, Kelvin Trask, said “We had an impressive range of businesses enter the Export Awards again this year, with strong entrants across all categories. It is exciting to continued from p23
their 20,000 customers globally. This Telarc certified company invests over $1m a year on web advertising making them a worthy e-commerce export finalist. Highlights were: • Straker have developed their own unique IP software to track sales and quotes • Sales are currently $7m+ with projections for the new financial year around $12m with 95% exports • Their 1,000’s of translators are all on a tender arrangement with each bidding in their price to Straker • Most income is paid in advance • Their margin is 65%+ - the industry average is 50% • They will be making an IPO soon and plan to buy some niche competitors in Europe • The enthusiasm of Merryn and Grant to really grow and expand the business is infectious! The other finalist was I Love Ugly.
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celebrate the success of our Bay of Plenty Exporters and recognise their resilience and hard work.” The winners: United Travel Business Emerging Exporter of the Year Award Stoney Creek www.stoneycreek.co.nz
The judges said: Highly technical rugged outdoor clothing is the life blood of Stoney Creek, with their mission to maximise the customer experience in all climatic conditions… their move into export markets is showing great results. The Stoney Creek hunting range is second to none, and they have embarked on e-commerce and social media marketing strategies to a wide global audience. The other finalists were FSP
Baldwins Intellectual Property Commercialisation of Innovation for Export Winner: Fisher & Paykel Healthcare (as above) www.fphcare.co.nz
The other finalists were Compac Sorting Equipment, Hammerking Rollers and IQ Commercial. Endace ICT Exporter of the Year (sales $1m- 10m) Winner: SnapComms www.snapcomms.com
The judges said: SnapComm’s innovative solutions and dedication to customers are impressive as is their growth in export revenue. SnapComms develop and market employee communications software allowing large organisations to communicate more effectively with staff by delivering company messages directly onto a range of devices such as PCs, Macs, smart phones and tablets. SnapComm also has offices in the UK and USA. 99% of their sales are overseas. “These guys know how to get attention. They use their knowledge to empower the internal
Pacific, KiwiSeng , New Zealand Manuka and TidyWork (NZ). Page Macrae Engineering Innovation in Export Award Automation & Electronics (NZ) www.automationelec.com
The judges said: Automation & Electronics have revolutionised log processing using latest camera and laser technology increasing yield by a minimum of 5% over other technologies. Their 3D Log Scanner and Optimising system scans the log and calculates the best cutting strategy and automatically orientates the log at speed. The system also learns as it collects data providing the mill with forward planning capability. The other finalists were Avocado Oil New Zealand, KiwiSeng and Oceania Defence. communication capabilities of their customers. Their growth through innovation in software development, marketing and operations is a solid foundation for future growth.” The other finalists were Flintfox International and Modica Group. Supreme Winner Winner: Fisher & Paykel Healthcare www.fphcare.co.nz
The winner of the 2015 Supreme Award has an enviable reputation for sustainable high export growth. Our winner has a very clear, wellarticulated and focused business strategy producing outstanding results. They have invested heavily in R&D to deliver innovative high value products distributed through a range of channels depending on market need. Their investment in training, health & safety and in their staff is a role model for other New Zealand companies. We can all be proud of F&P Healthcare – a truly outstanding company.
Sharp Tudhope Lawyers Exporter of the Year Award WINNER: Trimax Mowing Systems NZ
Photo credit Wayne Tait Photography.
L-r: Winners of the Bay of Plenty ExportNZ Sharp Tudhope Lawyers Exporter of the Year Award, Trimax Mowing Systems NZ Ltd: Chris Chaplin, Bob Sievwright, Michael Sievwright, Jim McKeown and Murray McDonald.
Beca Export Achievement Award Paramdip Singh – Director, Special Projects International, Waiariki Institute of Technology. www.waiariki.ac.nz
The judges said: Paramdip Singh has been instrumental in growing the international student population at Waiariki Institute of Technology from 200 to the current level of 1200 students. Paramdip’s dedication and commitment extends to making sure the students are well supported outside the classroom and integrated into the community. Key contacts and relationships built over the years by Paramdip have resulted in a strong reputation for Waiaraki, and loyalty from agents in the market. The other finalists were Michael Sievwright, Trimax Mowing Systems NZ, and Richard Wyeth of Miraka.
New Zealand Trade & Enterprise Service to Export Award Ray Ellis - Managing Director, Ellis Agricultural Services
Ray began his forays into exporting at the age of 27 when he represented New Zealand on a trade mission to Taiwan which resulted in NZ sending 6000 cows to Taiwan. In 1989 Ray moved to the mighty Bay of Plenty where he owned an avocado orchard, exported Pinto juice and ran a kiwifruit pack house. When approached to supply NZ potatoes to the crisping/chipping industry in Malaysia and the Philippines Ellis Agricutural Services was born. E.A.S supplies potatoes, onions, carrots, tallow, proteins and animal feed to eight Asian countries as well as the Middle East and Russia. Ray has also been involved for 20 years with market access at Government to Government level in six countries, working and travelling with MPI and MFAT negotiators. He has also been Chairman of Food Bay of Plenty, a member of Onions NZ, and an export representative on the Potato Market Access Committee. Ray has been a member of ExportNZ (previously the Export Institute) for over 20 years.
Sharp Tudhope Lawyers Exporter of the Year Award Trimax Mowing Systems NZ www.trimaxmowers.com
Trimax Mowing Systems is a family-owned Tauranga company that designs, manufactures and distributes tractor-powered mowing equipment for municipal and commercial customers. Sports fields, turf farms, golf courses and parks across New Zealand, Australia, UK, Europe and the USA are all cut by Trimax. The judges said: Trimax is cutting its way into new markets in the UK, Europe and North America with its tractor powered, cutting edge mowing equipment, and its’ latest model – The Snake. Trimax thrives on a culture of connecting directly with customers and a ‘how can we?’ approach. It has established its own distribution and service support structures in-market, and evolved to in-market manufacturing capability while retaining core product development and design component in NZ. The other finalists were Automation & Electronics (NZ), MB Century and Doherty Couplers & Attachments. BusinessPlus
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Member noticeboard
Made Blunt boosts distribution
Made Blunt, the innovative New Zealand designed umbrella that has changed its product category, is in the midst of a period of healthy growth. The company manufactures offshore and now has 15 distributors serving over 30 countries. “For our business model we aren’t that top heavy with staff,” says managing director Scott Kington. But he adds they have just taken on another full timer to bring staff numbers to seven, starting from just one in 2010.
Major markets are Japan, the US, Australia and Taiwan, and of course the home market. Scott says Japan is going really well and they have a new collaboration in LA. Asked about the success of the revolutionary rain protection, Scott says “people respond to something built right. Our umbrellas are designed for the New Zealand elements.” Our umbrellas are the stick type – the other is the collapsible. Next year we hope to launch a newer version of a smaller umbrella.
Retirement village expands into Auckland The Arvida Group retirement village company has raised capital to buy new aged care facilities in Auckland. The villages cater for the continuum of care from independent living through to aged care services. The company has 17 villages across New Zealand after its recent amalgamation programme and IPO; its code on the NZX main board is ARV. Chief executive Bill McDonald says the conditional acquisition of Aria Bay, Aria Park and Aria Gardens (collectively, “Aria Villages”) in Epsom, Browns Bay and Albany is now underway for approximately $62 million. The Aria Villages portfolio of three high quality facilities provides a high needs-based offering across 295 care beds, 70 serviced apartments and nine new independent apartments. “The acquisition broadens Arvida’s North Island presence into the Auckland market and was a compelling opportunity,” Mr McDoanld said. “The acquisition is
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expected to be value and dividend enhancing for shareholders and provide opportunities for further growth. “We look forward to providing high quality retirement and aged
To fund it, Arvida is raising up to $41m of new equity through the issue of $6m shares to vendor shareholders of the Aria Villages, which will be subject to the same escrow arrangements as shareholders
care services to the residents, a great working environment with career development opportunities within the wider group for staff, and overseeing the continued success of the Aria Villages as part of Arvida.” Completion of the acquisition is anticipated this month conditional upon statutory supervisor consents and obtaining District Health Board and Ministry of Health approvals.
under Arvida’s IPO, and a $30m underwritten placement at $0.84 per share. The placement will be followed by a share purchase plan for eligible shareholders to participate under the same terms as the initial placement participants, up to a maximum of $5m. The balance of the acquisition will be funded under Arvida’s existing debt facility.
Member noticeboard
Pitango fresh invests, expands
Pitango, makers of organic fresh soups and meals, is quadrupling its factory floor space with an expansion into a new $3 million plant in Manurewa, South Auckland. The company expects the investment to create 20 new jobs at peak season, though this growth outlook appears conservative. Pitango exports are projected to make up 80% of output by the end of 2016, a 15% increase on current sales. Large growth markets are Japan and South Korea. Besides being well known for its ranges of organic pre-prepared meals, Pitango also caters for other dietary needs such as gluten free, dairy free, low fat and vegetarian. Managing Director Graham Laurence says “we’re proud we use natural and local ingredients in our products and that in this way we help support the farmers around the country who produce such high quality vegetables and meat.”
Linguis director Mike Dawson presents a graduate with his certificate witnessed by former principal Lee Kammerer.
Linguis International recovery phenomenon When their building got trashed in the Christchurch earthquake, the last thing business education provider Linguis International expected was a phoenix-like recovery. Seventeen of their students from South America fled to Auckland. But they said they didn’t want their tuition fees refunded. They wanted instead to stay on. Linguis said ok and set about establishing a campus in Auckland. After fulfilling that first obligation back in 2011 they found they didn’t get much traction in the north. But they persevered and went ahead with renting a classroom for the start of the 2012 academic year with just three students enrolled. By the time they opened there were 13 students. Then things took off. Director Mike Dawson continues the story. By the beginning of 2013 we had 130 students in Auckland, he says, and by the beginning of 2014 we had approximately 300 students. “We had to find larger accommodation very quickly. “By September in 2014 we had approximately 850 students, 1100 in all including 360 in Christchurch. Last year we had a very significant share of the New Zealand Indian market for business studies.” “One Monday we had 60 new students enrolling at our campuses.” Linguis International Institute focuses on offering diploma courses in business studies to levels 5, 6 and 7, and certificates in General English. They are working towards being able to offer ever higher levels, along with approvals for courses in healthcare management. They now own a 1000 sq m of space at 300 Queen Street in Auckland with other premises available. The panic for now appears to be over. BusinessPlus
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SCHEDULE
FREE for all EMA members / To register call AdviceLine on 0800 300 362 or email Advice@ema.co.nz
Winter Briefings Schedule 2015 Waikato / BOP Day/Date
Time
Venue
Mon. 20th July
9.30am - 11.00am
The Junction Hotel, Function Room, 700 Pollen St
THAMES
Mon. 20th July
3.00pm - 4.30pm
Trinity Wharf, 51 Dive Crescent
TAURANGA
Tues. 21st July
9.30am - 11.00am
East Bay REAP (Upstairs), Reap House, 21 Pyne Street
WHAKATANE
Tues. 21st July
3.00pm - 4.30pm
Suncourt Hotel & Conference Centre, 14 Northcroft Street
TAUPO
Weds. 22nd July
9.30am - 11.00am
The Holiday Inn, Corner Froude & Tyron Streets
ROTORUA
Weds. 22nd July
1.30pm - 3.00pm
Central North Island Kindergarten Association, 6 Glenshea Street
PUTARURU
Weds. 22nd July
5.00pm - 6.30pm
Big Apple, 584 Main South Road
OTOROHANGA
Thurs. 23rd July
9.30am - 11.00am
Kingsgate Hotel Te Rapa, 100 Garnett Ave, Te Rapa
HAMILTON
Day/Date
Time
Venue
Thurs. 23rd July
2.30pm - 4.00pm
Bruce Pulman Park, Teamsports Centre, Walters Road
PAPAKURA
Fri. 24th July
9.30am - 11.00am
Butterfly Creek, Tom Pearce Drive
MANGERE
Mon. 27th July
9.30am - 11.00am
QBE Stadium, ASB North, Stadium Drive
ALBANY
Mon. 27th July
3.00pm - 4.30pm
Bruce Mason Centre, 1 The Promenade
TAKAPUNA
Tues. 28th July
9.30am - 11.00am
Stamford Plaza, Albert Street
AUCKLAND CITY
Tues. 28th July
2.30pm - 4.00pm
Ellerslie Event Centre, 80 Ascot Avenue
REMUERA
Weds. 29th July
2.30pm - 4.00pm
Waipuna Conference Centre, 58 Waipuna Road
MT WELLINGTON
Thurs. 30th July
9.30am - 11.00am
Counties Inn, Rata Lounge, 17 Paerata Road
PUKEKOHE
Thurs. 30th July
3.00pm - 4.30pm
Waipuna Conference Suites, 60 Highbrook Drive
EAST TAMAKI
Fri. 31st July
9.30am - 11.00am
Quality Hotel Lincoln Green, 159 Lincoln Rd
HENDERSON
Fri. 31st July
3.00pm - 4.30pm
EMA Room 2C, 159 Khyber Pass Road
GRAFTON
Mon. 3rd Aug.
7.30am - 9.00am
EMA Board Room, 159 Khyber Pass Road
GRAFTON
Mon. 3rd Aug.
11.00am - 12.30pm
Titirangi Golf Club, Links Road
NEW LYNN
Tues. 4th Aug.
2.00pm - 3.00pm
Webinar:
Auckland
Northland Day/Date
Time
Venue
Weds. 5th Aug.
3.00pm - 4.30pm
The Northerner, Corner North Road & Kohuhu Street
KAITAIA
Thurs. 6th Aug.
9:00am - 10:30am
Scenic Circle Bay of Islands, 58 Seaview Road
PAIHIA
Thurs. 6th Aug.
1:30pm - 3:00pm
Kingsgate Hotel Whangarei, 9 Riverside Drive
WHANGAREI
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BusinessPlus
Coming in August 19th Annual
Managers & Team Leaders Conference
Discover the Ingredients for Success
AUCKLAND | 20 August 2015 @ Rendezvous Hotel You’ve heard it said: “people leave bosses not jobs”. This full day conference will give you the key ingredients to be confident in your interpersonal relationships. Questions answered include: How do I sell an idea to staff? How do I help people feel passionate about what they do? How much should I pay to keep stars on my team? How do I win people’s trust and when do I leave them to get on with the job? How can being more self-aware help me better communicate in a ‘one on one’ situation? And how do I best sort staff discord and grievances? This conference gives you the ‘person to person’ skills to become a confident and respected leader.
REGISTER NOW: events.ema.co.nz/managers
Administration Professionals Conference
4th Annual
Sharpen Your Supporter Skills
AUCKLAND | 26 August 2015 @ The Maritime Room You are your Managers’ ‘go-to’ person but when was the last time you took a day out to sharpen your skills so you’re a proficient supporter? Join us for this full-day conference where you will gain new skills, ideas and a few treats to try for yourself! During the day there will be some special giveaways, and the afternoon will see a fashion show of the latest clothing by KILT. A range of interesting topics will be covered: How to Manage Your Manager – Marie Posa, Innovative Training Service Stealing Project Management Ideas – Julie Kidman, Mindstep Limited Developing and Increasing Your Influence – Lisa Mandic, Activate Management Group Ball Juggling at Its Best – Helen Garner, Magpie Media KEYNOTE: Boost Your Energy and Double Your Brain Power – Claire Turnbull, Mission Nutrition & Healthy Food Guide Magazine Writer Personal Presentation – Cut Above Academy, Hair and Makeup Specialists FASHION SHOW: KILT - with drinks and nibbles If you are in any type of administration or support role, this day out is just for you! Register now to receive the early bird price.
REGISTER TODAY: events.ema.co.nz/admin
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