Manufacturer June 2012 June NZ 2012
$7.00
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Opportunity Hamilton Global growth event outstanding success. Page 7
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www.solidtec.co.nz
Rear View
Developments
Kiwinet backed breakthroughs award winning innovations.
Page 11
Does austerity pain actually deliver long-term Page 31 gain?
Revolutionary wind power invention receives international recognition
A Company founder John Down speaking to clients and staff at the opening of ENI Engineeringís new Christchurch premises.
Christchurch engineering company relaunches
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hristchurch company ENI Engineering has relaunched, the firm which Founder John Down says was a strategic move the company has been working towards for some time. “We are definitely geared up for the new opportunities being presented by the rebuild of Christchurch and Canterbury,” Down says. “As yet we don’t know what all of those opportunities will be, but we are well equipped and positioned to provide a high level of service and rapid turnaround to meet whatever demand comes our way.” Growth over the last five years has been an impressive 60% in terms of turnover, achieved by using lean manufacturing methods and increasing capability, while staff numbers remained steady.
ENI’s traditional business of sheet metal fabrication and finishing of a range of metal products including low emission log burners was recently boosted by a new contract with Eaton and Telecom’s Chorus will see ENI manufacturing roadside boxes for the Ultra Fast Broadband rollout throughout New Zealand. The company currently has 52 staff, making it one of the largest sheet metal fabrication companies in Christchurch, with further growth on the horizon expected to support the ongoing city rebuild process. The company also has a longstanding contract to supply all roadside steelwork for the Orion network, as well as transformer housings, boundary boxes and internal switch gear for substations on new subdivisions.
WWW.FOODTECHPACKTECH.CO.NZ
New Zealand invention, designed to make wind power more efficient and cheaper, has been singled out by a renowned wind technology expert as one of the world’s leading new innovations. The invention, Gyroscopic Variable Transmission (GVT), is the brainchild of New Zealander Mr Jega Jegatheeson. It has been featured in a new book, “Innovation in Wind Turbine Design”, by Glasgow-based wind expert Peter Jamieson, as being on the leading edge of wind power technology. Mr Jegatheeson, previously an engineer with the former Electricity Corporation of New Zealand, has been working for over 15 years to solve the problems faced by the wind power industry of gearboxes breaking as a result of the massive
wind gust forces they are subjected to. “It’s widely recognised in the industry that the gearboxes cannot stand up to the incessant forces over time and many fail within as little as five to seven years. The costs of repairs and also the downtime are very significant and alternatives such as direct drive create other expensive problems,” says Mr Jegatheeson. “Unlike traditional wind turbine gearboxes around the world, GVT technology doesn’t rely on gears and expensive electronics. It instead uses gyroscopic reaction forces to transfer the power from the blades to the generator with less stress on the turbine. This will significantly reduce costs – possibly as much as 50% compared to existing systems.” Continues page 20
Jega Jegatheeson (left) with Tony Herewini, General Manager TP Engineering.
vanessa@xpo.co.nz www.nzmanufacturer.co.nz
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NZ Manufacturer June 2012
EXPORT NEWS
If you want things to stay as they are, things will have to change.
– Giuseppe di Lamedosa
Exporter Guide for Turkey
Mitigating Buyer Nonpayment Risk
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ypical terms of trade sought by Turkish buyers range between 30 - 90 days1. While the payment history of corporate buyers has been relatively stable over the last 12 months, NZECO recommends an exporter obtain trade credit insurance on any open account trade. The primary benefit of trade credit insurance is covering the risk of non-payment due to commercial and political events. It is also a good way of ensuring due diligence is undertaken on a Buyer – if a trade credit insurer declines cover on commercial grounds, then this should be a warning to an exporter looking to offer credit. Another benefit of trade credit insurance is that it may enable a proven exporter to obtain a trade finance facility from its bank to help fund the period between paying its suppliers upon shipment of the goods and receipt of the final payments. An alternative way to mitigate repayment risk is by negotiating a letter of credit or other form of documentary collection. NZECO has underwritten letters of credit issued by Turkish banks that have had terms of up to 245 days. NZECO has provided its guarantee to an exporter’s New Zealand bank, to enable the bank to confirm the Turkish letters of credit and advance payment to the exporter.
Enforcement of Contracts and Business Climate
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xporters should be aware that a condition of most trade credit insurance policies (including the NZECO’s short-term trade credit policy) is that in the event of non-payment owing to a dispute between exporter and buyer, the exporter must first obtain a binding legal judgment that validates the debt owed to the exporter. Turkey ranks in the second top quartile of countries on the Ease of Doing Business scale. This scale measures regulation and red tape relevant to domestic SME firms, and in the 2012 ranking round, awarded Turkey with a score of 71/183. In terms of enforcing contracts and controlling corruption, deficiencies in the legal system and corruption are the biggest risks to Turkey’s commercial environment.
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Specifically, Turkey was ranked 53/183 for contract enforcement for 2012, showing no sign of deterioration from 2011. Navigating the Turkish business climate can be challenging at times but a push to synchronize and align Turkish regulations with European Union standards has ensured that the business climate has improved.
Economic and Financial Issues
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rade credit insurance may also cover the risk of non-payment due to the imposition of foreign exchange controls that prevent a foreign buyer from converting local currency into foreign currency to make its payments. Currency inconvertibility, sovereign and enforcing contracts are considered moderate risks. The Turkish lira is expected to be volatile during 2012, after depreciating by 15% during 2011. In recent years, Turkey has been one of the world’s fastest growing economies, with GDP growth of 9.2% in 2010 and 8.5% in 20112. However economic growth is expected to weaken during 2012 due to decreasing domestic demand (hampered by reduced bank credit) and a fall in demand from the EU market (which accounts for 32% of Turkey’s export sales)3. Inflation also remains a key risk to Turkey’s economic outlook. Headline inflation was 11.1% year on year in April 2012, marking its highest level since 20084. Despite these challenges, NZECO forecasts Turkey’s economic outlook to remain stable. This recognises Turkey’s dynamic private sector, highly skilled labour force, and lowest unemployment rate since 2005. Turkey’s banks remaining well capitalised and with low levels
of non-performing loans.5 Turkey’s strategic geographical position between East and the West also provides a positive and diversified platform of economic opportunities.
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Offering Extended Payment Terms
xporters of goods that have an economic life greater than a year may find that their Turkish buyer requests a vendor finance option with extended payment terms. This is often because the Turkish buyer is receiving vendor finance options from other European suppliers. Conversely, exporters may consider offering extended payment terms for competitive advantage or to advance a postponed order. NZECO has had positive experience underwriting several
deals to Turkish corporate buyers where the payment terms have been 6 years starting from delivery of the specialised machinery. NZECO has also underwritten the construction of an Aquarium in Istanbul, and an 8 year financing package related to this project. NZECO needs to be satisfied in the creditworthiness of the buyer, or guarantor of the buyer (which does not have to be a Turkey based company). These deals are structured in partnership with a bank, who provides the funding, and often may result in a financing option that is cheaper than the buyer can obtain locally.
About the New Zealand Export Credit Office (NZECO)
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ZECO is New Zealand’s export credit agency. It sells a range of Government backed trade credit insurance and financial guarantees that complement the private sector. Our products can cover repayments and performance risks which may enable exporters to secure and fund export sales. NZECO works closely with exporters, their banks and international buyers. nextSTEP: Tel: NZECO +64 4 917 6060 or eco@treasury.govt.nz
1 Dun & Bradstreet: Turkey Country RiskLine report, June 2012 2 Standard & Poors: Global Credit Portal: “Turkey, on the path to becoming an emerged market”, May 1 2012 3 Coface Risk Overview / Spring 2012 4 Dun & Bradstreet: Turkey Country RiskLine Report, June 2012 5 Coface Risk Overview / Spring 2012
NZ Manufacturer June 2012
CONTENTS Advisors
www.nzmanufacturer.co.nz
DEPARTMENTS
10 14 16 18 19 21 22 23 24 26 28 30 31
BUSINESS NEWS
Support for management, not subsidies.
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OPPORTUNITY HAMILTON
Tech roadmap equips businesses for growth.
MANUFACTURING TECHNOLOGY
• Solidtec supports cable car manufacturer to take on the world. • Nelson developed camera streets ahead.
Sir William Gallagher
Is the CEO of Gallagher Group Ltd. He is also a Fellow of NZ Institute of Management.
Page 6– OPPORTUNITY HAMILTON – Purification technology uses current to clean water.
DEVELOPMENTS
Stephen Drain
Real work spells equality.
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Stephen Drain is a Director at PwC specialising in Leadership Development and Forensics
ANALYSIS
Manufacturing as a career.
WORKSHOP TOOLS • Upgrade a good idea.
• Scanner inspects small welds.
DEVELOPMENTS
Companies need to look overseas for M&A opportunities.
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Page 10 – DEVELOPMENTS – Textiles energy efficiency to improve.
Catherine Beard
Is Executive Director of Export NZ and Manufacturing, divisions of Business NZ, New Zealand’s largest business advocacy group, representing businesses of all sizes.
PRODUCT NEWS
Portable data collector for predictive maintenance.
BUSINESS NEWS
Bruce Goldsworthy
Entries open for New Zealand Innovators Awards.
ENERGY REPORT
A model of clean tech achievement.
Page 18 – DEVELOPMENTS – Marsden Point skyline changes.
WEB MARKETING
Getting your web site higher in search engines.
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An advocate for NZ manufacturing for 40 years, he was Chief Executive of the Auckland Manufacturers Association for seven years He has been Manager of EMA’s Advocacy and Manufacturing Services, and lately manager for Export New Zealand in the north.
EXPORT NEWS
Exporter guide to India.
A LOOK BACK …
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5 6 8
3
Factories that changed the world.
Is NZTE’s Director Specialised Manufacturing. He is based in Auckland.
Page 19 – PRODUCT NEWS – Test laboratory ensures product safety.
BOOKS
• Boomerang by Michael Lewis.
Adam Bennett
• The Prosperity of Vice By Damel Cohen.
FRONT & CENTRE
Lewis Woodward
Big first year for Productivity Commission.
REAR VIEW
Does austerity pain actually deliver long-term gain?
Page 20 – PRODUCT NEWS – Battery chargers have enhanced durability.
info@techspanonline.com
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Is managing director of Connection Technologies Ltd, Wellington and is passionate about industry supporting NZ based companies, which in turn builds local expertise and knowledge, and provides education and employment for future generations.
www.techspanonline.com www.nzmanufacturer.co.nz
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NZ Manufacturer June 2012
EDITORIAL
The secret of joy in work is contained in one word - excellence. To know how to do something well is to enjoy it.
Publisher
Media Hawke’s Bay Ltd, 1/121 Russell Street North, Hastings, New Zealand 4122.
MANAGING Editor
Doug Green T: +64 6 870 9029 E: words@xtra.co.nz
CONTRIBUTORS
Jurgen Brand, Kevin Kevany, David BurkeKennedy, Catherine Beard
ADVERTISING
Max Farndale T: + 64 6 870 4506 E: max@nzmanufacturer.co.nz
Design & PRODUCTION
Karl Grant T: + 64 6 870 9028 E: daylightmarketing@xtra.co.nz
WEB MASTER
Dan Browne E: dan@membrana.co.nz
PUBLISHING SERVICES
On-Line Publisher Media Hawke’s Bay Ltd
SUBSCRIPTIONS
Media Hawke’s Bay Ltd T: + 64 6 870 4506 E: mediahb@xtra.co.nz 11 issues per year. New Zealand $55. Australia and Pacific $95. Rest of the World $132.
MEDIA HAWKES BAY LTD
T: +64 6 870 4506 F: +64 6 878 8150 E: mediahb@xtra.co.nz 1/121 Russell Street North, Hastings PO Box 1109, Hastings, NZ Publishers of: NZ Manufacturer, The Mirror, Asia Manufacturing News. Plus contracted publishing services.
– Pearl Buck
Too much austerity
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e have plenty of company bosses who reflect to us on how they see manufacturing in the country at present. You have read their articles in our pages as to the concern being shown for growth in manufacturing and the need for quality tradespeople.
At present there is a juggling act underway with government not moving fast enough with the Christchurch rebuild. They have allocated funds for upskilling and training staff to undertake the rebuilding projects but are holding back on releasing the money. This may be prudence based on the financial state of the country or it may be that some aspects of the rebuild are necessarily slower getting off the ground. In the last month Fletchers held a job expo in Christchurch and said they are on the lookout for 200 staff. Where is the planning going? When will they require more? These two examples appear to show a lack of confidence in the market and are hindering the redevelopment. If you need money to train people - and have it – then use it. If you require skilled staff hire them because they aren’t going to hanging around. The talk of training New Zealanders first for Christchurch seems to be very fine talk indeed. Is there an expectation that workers will hang around and wait for the phone call or will move across The Ditch? Is the hourly rate enough for tradespeople to take up an appointment? How long can they afford to wait? Times are tough. Sure. But leadership is needed for Christchurch to rebuild and go ahead. Many people have had their heads together discussing redevelopment plans and how to make them happen. Austerity is one thing, going ahead another. It’s time for decisive action; a lead needs to be taken to bring about a revitalisation and new energy for the future of Christchurch.
Doug Green
ISSN 1179-4992
Vol. 3 No. 5 June 2012 Copyright: NZ Manufacturer is copyright and may not be reproduced in whole or in part without the written permission of the publisher. Neither editorial opinions expressed, nor facts stated in the advertisements, are necessarily agreed to by the editor or publisher of NZ Manufacturer and, whilst all efforts are made to ensure accuracy, no responsibility will be taken by the publishers for inaccurate information, or for any consequences of reliance on this information. NZ Manufacturer welcomes your contributions which may not necessarily be used because of the philosophy of the publication.
www.nzmanufacturer.co.nz
PUBLISHER & MAGAZINE DEVELOPMENT– Max Farndale max@nzmanufacturer.co.nz
BUSINESS NEWS
NZ Manufacturer June 2012
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Support for management, not subsidies
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anagement support – not opportunity to both fill the skills money – is the key to getting shortage gap and provide long more companies to take term career pathways for school on apprentices, according to a leavers. new study by Competenz, the “This study highlighted that Industry Training Organisation there are many small businesses in for the engineering, baking, and NZ that could take on apprentices food & beverage manufacturing with the right support, something industries. that needs to happen if we are The study, which looked at to build a stronger and more skills shortages in the sector and productive skills-based economy. what it would take to increase Skills convert immediately into the number of companies hiring increased productivity, which apprentices, showed that the increases profits,” he said. vast majority (75 per cent) of Competenz CEO John Blakey “Often the reason stated by companies in the sectors do not hire apprentices, these businesses for not taking on apprentices is leaving just 25 per cent to educate newcomers that they feel they don’t always have the people to the trade. While many are unable to because management skills, resources and systems. The they do not employ trades people to train them, response we found was that government subsidies there are still a significant number (27 per cent) can often be a deterrent because they come with who are eligible but choose not to, mainly conditions attached, that can be just one issue too because they lack the skills and resources to take many for these companies to take on.” them on. The study also showed that 14 per cent of The study showed that the biggest driver to those able to take on apprentices were unaware incentivise companies to take on an apprentice of how the apprenticeship system works, and 11 is management support – such as a recruitment per cent have unqualified staff who could do an service to provide a pool of suitable candidates, apprenticeship but were unwilling to do so. help with supervising and online systems to “What is clear is that without some track their training – as opposed to financial sort of intervention, the number entering incentives or subsidies. apprenticeships is likely to remain static, leaving Of the companies able to take on apprentices, a dedicated few training for the needs of the offering management services alone increased whole nation,” said Blakey. their likelihood to take them on by 35 per cent, “But with the right support, more companies compared to just a further 8 per cent with would be likely to take on an apprentice, enriching government subsidies. their own companies and building a more highly Competenz CEO John Blakey said skilled, highly productive environment sectorapprenticeships in this sector presented an wide.”
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“An Afternoon with Dick Smith”
conic Australian entrepreneur and adventurer Dick Smith will be the keynote speaker at a one off seminar taking place in Queenstown on Friday September 14. The seminar, ‘An Afternoon with Dick Smith’ is intended to provide a forum for the discussion of some of the challenges facing business and society over the coming years and will give audiences the chance to gain greater insight into the mind of a man renowned as one of Australasia’s most progressive thinkers. The founder of Dick Smith Electronics, Australian Geographic Magazine and Dick Smith Foods, Smith is well known for his outspoken views on ‘extreme capitalism’, limits to growth and foreign ownership of agricultural resources. He is a staunch advocate for supporting local industries as opposed to selling ‘off the farm’ and importing cheap foreign goods that destroy local industry and economies. As well as being a successful businessman and iconic character Dick Smith is an avid adventurer achieving many aviation firsts such as flying solo in a helicopter around the world as well as the first to successfully complete an eastwest crossing of the Tasman Sea by balloon, from New Zealand to Australia against prevailing winds. Other notable awards include: Australian of the year, Adventurer of the year, and he was awarded the Lindbergh Award for his life time achievement of a balance between technical advancement and environmental preservation.
w w w .s t a p l e s r o d w a y. c o . n z
Known for being a bit of a practical joker, (stunts have included an ‘attempt’ to tow an iceberg from Antarctica to Australia to obtain more fresh water) he has a serious side and is committed to raising awareness and offering advice to a growing list of socially and environmentally aware organisations and groups. More recently he was recognised by Stanford University in the US for his work in educating the public and students about issues such as overpopulation, unconstrained consumption and unsustainable growth. ‘An Afternoon with Dick Smith’ will be hosted by leading business and environmental commentator Rod Oram and will also feature Sam Johnson who coordinated the Student Volunteer Army following the Christchurch Earthquake. For more information visit: www.tomorrowsbusiness.org www.nzmanufacturer.co.nz
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NZ Manufacturer June 2012
OPPORUNITY HAMILTON
The great leaders are like the best conductors - they reach beyond the notes to reach the magic in the players.
– Blaine Lee
Purification technology uses current to clean water
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new water purification technology which removes contaminants in water while simultaneously disinfecting it against microbial contamination has been developed by the University of Waikato with the support of WaikatoLink, the University’s commercialisation company. The new electrochemical PEFT Cell technology which applies a low voltage current to contaminated water to remove contaminants is being developed for residential, commercial, horticultural and agricultural use. Nigel Slaughter, General Manager Commercial at WaikatoLink says, “Our initial focus for the technology is the removal of contaminants to provide clean and safe rural domestic drinking water supplies. Scale up for animal watering will also be a high priority. Our research indicates there is a good market opportunity for a low cost water purification platform that is a compelling alternative to existing solutions.” The PEFT (perforated electric flow through) cell works by applying a low voltage current to contaminated water that is forced through a novel perforated electrode system. Contaminants such as iron, manganese, arsenic and microorganisms are subsequently removed by a combination of oxidation, coagulation and precipitation. This is brought about by the generation of chlorine from naturally occurring chloride ions present in water and the high electric fields produced by the cell. Jessica King, Commercial Manager at WaikatoLink says the technology has a number of advantages over some existing solutions which can be bulky, expensive and maintenance-heavy. “While other electrochemical systems can provide chlorine
$92,500 KiwiNet PreSeed investment supports development of new water purification platform by the University of Waikato and WaikatoLink
University of Waikato researchers Dr Hilary Nath (left) and Associate Professor Alan Langdon with their PEFT cell.
on demand for water treatment purposes, they operate as offline devices using concentrated brine solutions and require specialised metering devices. Our system also minimizes the risk of harmful byproducts forming that can result
from standard chlorination. This is due to the synergy between the high electric fields and the electrochemically produced chlorine which achieves markedly increased specific toxicity of the chlorine.” The technology draws on ten
years of academic research at University of Waikato’s Chemistry and Engineering Departments under the direction of Associate Professor Alan Langdon and more recently through the doctoral research of Dr Hilary Nath. KiwiNet has supported the project with a $92,500 PreSeed investment, from their PreSeed Accelerator Fund (PSAF) from the Ministry of Science and Innovation, to take the initial lab-scale proof of concept to a working prototype to demonstrate the potential. WaikatoLink has matched this with a further investment of $92,500. Mr. Slaughter says, “The KiwiNet PreSeed funding allows us to really tackle the high risk aspects of the project by undertaking rigorous technology development and gaining early industry input. The idea is that by the end of the project we will have a proven prototype and some good test data which will make the project ready for angel or industry investment so we can take the product to market.” The group is working with two New Zealand companies to manufacture prototypes. To develop this platform technology beyond the KiwiNet project, WaikatoLink is seeking partnerships with companies that have water quality issues with iron and manganese and/or microbial contamination. A prototype was on show at one of two University of Waikato stands at the recent Fieldays; the university is a strategic partner at Fieldays. Founding KiwiNet members include WaikatoLink, Plant & Food Research, Otago Innovation Ltd, Lincoln University, AUT Enterprises, AgResearch, University of Canterbury, Industrial Research Ltd and Viclink. Support is also provided by the Ministry of Science and Innovation.
Tech roadmap equips businesses for growth
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reating a technology roadmap has become a vital part of business growth, according to experts at Opportunity Hamilton’s Fibre and Technology Forum. More than 100 business owners recently attended an event at Wintec House to learn how to best use evolving technology, including ultrafast broadband, to grow their ventures. Forum delegates heard how creating a technology roadmap and being technology literate are becoming vital for business success. New Zealand Computer Society director and Hamilton IT expert David Hallett fronted the forum, advising business owners to learn how to navigate the specialist areas
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within the IT sector for best business growth. “There are 86 specialities within the sector and creating a technology roadmap is a way to work out which of these will actually help your business reach its objectives,” David said. Digital Hamilton manager Nicola Browne (right) said encouraging and educating business owners to be confident, forward-thinking technology users was another aim of the forum. “The way we connect and grow our client and consumer bases is changing and so is the way we communicate and compete. This can be scary for some businesses so the challenge now is to make new technology relevant and accessible
to everyone,” Nicola said. Case studies of Hamilton businesses Mum2Mum and Staples Rodway showed how investment in new technology was saving money and improved business almost immediately. Mum2Mum, a specialty baby wear business, incorporated VoIP telephone technology and saved hundreds of dollars each month on phone calls while Staples Rodway’s transition to a paperless office was saving space and easing staff workload. Most businesses spending on new technologies gain the investment back “almost immediately,” she said. “Then the real savings start.” The forum, a partnership between
Opportunity Hamilton, Wintec and Prima Group, was the first in a series designed to educate the public on the benefits of ultrafast broadband and related technology. Health and digital communication forums are in the pipeline with dates yet to be confirmed. nextSTEP Visit: www.ighamilton.co.nz.
NZ Manufacturer June 2012
The light at the end of the tunnel has been turned off due to budget cuts. – Anon
W
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OPPORTUNITY HAMILTON
Global growth event outstanding success
aikato’s Innovation and Growth Conference is being hailed an “outstanding success”, with more than 200 delegates and business leaders attending the inaugural global growth event. Conference manager Nicola Browne said the event, held at the University of Waikato on June 11, exceeded expectations and gave the region’s innovators and entrepreneurs access to tools and relationships conducive with global growth. “The conference owes its success not only to solid and practical programme content but because it attracted the right mix of delegates. It’s great to see the Waikato business community participating in something that will help them grow, network and do better business in the future,” Nicola said. The Opportunity Hamiltonorganised conference featured a lineup of globally regarded innovators including Manchester Science Park chief executive Jane Davies and Coca Cola Global client director Kevin Malloy. Jane, who oversees a community of successful and innovative United Kingdom companies, encouraged delegates about the benefits of doing business in Waikato. “Now more than ever it is possible to build a globally successful company from New Zealand. You really have the best of all worlds – the New Zealand lifestyle and the advantages of being globally competitive,” she said. Jane outlined her key contributions to global business success – people, finance, services and knowledge. “Innovation is not just about new science but around how to do things differently with existing technology. That sort of innovation is just as valid,” she said. Waikato global innovators Guy Howard-Willis, of Torpedo7 Group, Rod Claycomb, of Quantec, Geoff Furniss, of BBC Technologies, Jeff Howell, of Zealong Tea and Drs Peter Kouwenhoven and Peter Urich, of CLIMsystems gave
delegates lessons learned on their own road to success. “This whole event has been about learning and growing by using the lessons learned by others who have made it on the world stage. From the feedback we’ve received I can safely say we have achieved that,” Nicola said. The use of the latest smartphone technology enabling attendees to access digital information of other delegates gave the conference a point of difference. “This technology means delegates were able to make useful, long-term connections in the leadup to the conference and afterwards. They can search other profiles and stay connected,” Nicola said. Social media was another hot topic of the day with Cocoa Cola Global’s Kevin Malloy outlining the dramatic change forecast for media planning by 2020. “Understanding how to reach people and consumers is a lot more complicated than it has ever been. Marketers are now required to think things through in quite a different
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Jane Davies, Manchester Science Park; Hamilton Mayor Julie Hardaker and Peter Maxwell, Waikato Innovation Park.
way,” Kevin said. The future communications model relies firstly on earned relationships, followed by owned assets and paid communications, he told delegates. “Communications planners have gone from having a few media choices to having more than 250 different options for communicating. Moving forward, all communications
will be centred on an understanding of mobility,” Kevin said. Organisers are hoping the conference will become an annual event. “With the amount of support and great feedback it is obvious there is a demand for an event to get people’s innovative juices flowing. We are investigating ways to ensure this happens,” Nicola said.
four regional business associations, the Major Companies Group, Export NZ, more than 70 affiliated industry associations and Buy NZ Made. The group’s goal is New Zealand’s prosperity through successful business. Phil works with government and other key decision makers on issues of concern to business and the economy. Those attending the event, to be held at the Bill Gallagher Centre at Wintec from 4.30pm, will have an opportunity to ask Phil questions. Regional Business Partner Waikato allocates government business support in the region. The programme has allocated tens of thousands of dollars to increase business capabilities and millions of dollars to research and development in the region. Waikato Engineering Careers
Association is a member-funded organisation formed in 2003 by Hamilton manufacturers concerned at a shortage of skilled engineers. nextSTEP RSVP to info@rbpwaikato.co.nz by July 13.
BusinessNZ head to speak
ore than 150 business people will gather to hear BusinessNZ chief executive Phil O’Reilly speak in Hamilton on July 18. As head of New Zealand’s largest business advocacy group, Phil represents thousands of businesses of all sizes. He will discuss Business in New Zealand - where to from here? Event hosts Novell Gopal, of Regional Business Partner Waikato, and Mary Jensen, of Waikato Engineering Careers Association, said the free event is an opportunity for businesses to hear from an insightful leader of global standing. “Phil brings a valuable message on how business capability and the right connections create prosperity. He knows what New Zealand is about when it comes to business.” The BusinessNZ group includes
Phil O’Reilly
robyn@rbpwaikato.co.nz
www.nzmanufacturer.co.nz
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NZ Manufacturer June 2012
MANUFACTURING TECHNOLOGY
Excellence is not a skill. It is an attitude. – Ralph Marsto
Solidtec supports cable car manufacturer to take on the world
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“
f you have the inclination we have the solution” says the team from Access Automation Limited. The company is a Wellington based niche manufacturer of inclined lifts – which are also known as cable cars. Over the past 18 years, Access Automation Ltd cable cars have become a common site around the steep hills of Wellington and its products are now beginning to appear in Australian cities. Central to the operation of the business is SolidWorks 3D CAD software, which is supported by Solidtec Solutions Pty Ltd. “Our starting point on a job is a 3D site survey. From this data we then fully model the rail layout and overall job using SolidWorks. The resulting 3D CAD model is invaluable in communicating with clients, council planners and our NZ based manufacturing staff, explains Mr Phillips- Brown. The equipment can be installed relatively quickly on site as the rail structures are bolted and not welded – a bit like a giant Meccano set. “We use Solidtec Solutions for our SolidWorks technical support
CAD model of commercial installation in Vietnam
and ongoing staff training” says Mr Phillips-Brown. “Solidtec have been very responsive in providing support, training and local networking meetings. This is important to us as 3D CAD makes up such an important part of our business operation.” Solidtec Solutions CEO, Shane Preston, says “At Solidtec, we want to ensure that our customers are getting the absolute most out of
Construction of Vietnam job 12 m high foundation frames.
KEVIN KEVANY
09 520 5206 kevwrite@xtra.co.nz www.nzmanufacturer.co.nz
PETER ISSAC
06 340 8134 peter.isaac@xtra.co.nz
DAVID BURKE-KENNEDY 09 473 8635 dbk@compublicity.co.nz
the SolidWorks software, and the training and support package our subscription services provide. If our cusomters succeed, we succeed. It is great to see our customers getting so much value from Solidtec subscription. We’re infinitely proud to have companies such as Access Automation as a customer, and excited that we can help them design such innovative and interesting products.” Access Automation’s General Manager, Darin Phillips-Brown, is very enthusiastic about growth potential for the company, especially in the Australian and Asian markets. “We have developed some great inclined lift technology over the years, that allows us to
virtually eliminate access problems on many steep and difficult sites. This technology combined with the relatively high Australian dollar and property prices makes us believe that there is huge potential in that market. We are currently looking for Australian companies to market our products there”. A key aspect to the success of Access Automation is its commitment to finding high quality custom design solutions for their clients. The company has developed rail systems that can turn and follow the natural topography of the land and so provide discreet and convenient access options for property owners who live on steep sites. The lift cabins can also be custom designed to meet individual customer requirements and development styles. For example, on one commercial development in Vietnam, the cars have been designed to look like local fishing boats. Access Automation Ltd technology has been utilized by some of the most prestigious hotel and resort operators in Asia including, Ritz Carlton, Bulgari, and Pansea. “It doesn’t matter if the job is in Wellington, Sydney or Phuket, once we have the job modelled in SolidWorks, we can then manufacture the kit-set based components in Wellington with total confidence.”
A commercial installation in Vietnam with custom boat style car design
SANDRA LUKEY 021 2262 858
sandra@shinegroup.co.nz
BRENT WHYTE
0061 2 9439 9329 bwhyte@whytepr.com.au
JULIE HANNAM
07 929 4970 julie@writewell.co.nz
NZ Manufacturer June 2012
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MANUFACTURING TECHNOLOGY Productivity doubles Nelson developed camera streets ahead W
Don’t count every day of the week; make every day of the week count. – Mark Amend
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Andrew (left) and Chris Rodley of Snap Information Technologies Ltd.
Nelson company has developed a product that has the potential to be the best time-lapse camera in the world. Snap Information Technologies Ltd has just announced a limited pilot launch of the new SnapitHD? series of live, immersive* cameras. CEO Chris Rodley says once installed, the snapitHD? camera captures live images of a 360° panorama, which can be displayed on websites and distribution channels online. He says the primary applications for the new camera include tourism promotion, project management, construction time-lapse, monitoring and surveillance. “Because there are no moving parts on the camera, multiple users can view the content at the same time and all be looking in different directions,” he says. “With a 360° SnapitHD camera you can capture what would normally take four or more fixed cameras, the camera can then be mounted in the middle of the action rather than off site. This means construction project managers for instance, do not have to secure permission to install cameras on neighbouring buildings, which is a big plus.” Another application for the camera is for tourism operators. Chris says while the camera itself will never be a tourist attraction, it’s attracting interest all over the world. “An accommodation operator installed one of our cameras as a point of difference from his competitors. Within a few weeks he’d taken a booking for 28 people for seven nights, after the images were viewed by holiday makers in London.” The SnapitHD series of cameras is designed and made in Nelson by Chris Rodley and his brother Andrew. They provide high quality
images using dynamic image processing with a high-zoom capability. The new online camera player lets users interact with a whole day of footage, which makes it useful for applications such as charting progress on building sites. The SnapitHD camera has had exposure online via websites including metservice.com, Trademe Travel, Youtube, Facebook, Google Maps and Earth, regional tourism sites, newspapers, TV3, radio stations and others. The company obtained Ministry of Science and Innovation (MSI) R&D funding through the Nelson Regional EDA to help develop the 360° live network camera. Earlier this year they took the prototype to the world’s largest consumer electronics show in Las Vegas. At the show the brothers made their pitch to everyone from the GM of Dreamworks to US rock band, Linkin Park and are now discussing projects with them. Chris says overall they’ve received huge interest in the camera. “It’s been great – there are live cameras installed at sites all around New Zealand, showing images online from some of the best locations in the country,” he says. “We’ve also been busy working with TV3 for the past few months developing a time lapse generator for incorporation into their TV weather presentation software - it was exciting to see it launched recently with a beautiful time lapse from the Nomad’s backpackers Queenstown SnapitHD Cam.” Chris says the 360° camera with time lapse came from a desire to immerse the user in the location they are viewing - something that hasn’t been done like this before. Panoramic camera specifications and ‘Content as a Service’ details available on request.
By Sean O’Sullivan
illy McGregor is General Manager and Layton Whale, Production Manager, of Rose and Heather Furniture. Willy McGregor has been with Rose and Heather for seventeen years. Rose and Heather manufacture designer furniture from solid 20,000 old reclaimed Kauri. A comprehensive range is manufactured for every room in the home. When you buy Rose and Heather you buy a highly crafted piece made by traditional joinery methods that in time will become an antique and family heirloom. All manufacturing is carried out in Auckland and Rose and Heather have their own design stores and retail outlets in Auckland, Sydney and Melbourne. Mr McGregor said that “six years ago we were struggling to be competitive, simply because the time we were taking to manufacture our product was far too high. At the time there was nothing management could do about it and it was not for lack of trying. Our tradesmen and staff filled in their work diaries and time sheets confirming the times that they took on each job each day and myself and other management were not able to properly analyse or sensibly question or act on the times reported.
months. The results have been remarkable. “ Initially when they put the system in, a number of tradesmen of many years’ service advised management that the budgeted times on some jobs could not be met. In some cases they were shown reports of targets being not only met but significantly beaten by one and two year apprentices. There was no further discussion. When the system was first put in, when a job ran significantly over budgeted time, the issue was able to be proactively and positively discussed with staff. Where staff had issues and needs (for example training or improved systems) management was able to support staff – but after that support there were no excuses and staff had no option other than to improve their performance to meet and beat the budgeted times Now staff have positively embraced not only the system but the culture. Management has witnessed no negative issues from any of the staff. Actually, there was a young woman on the floor and her times on jobs were significantly better than most of the men. Most of the company’s budgeted times have been revised, based on her actual times on jobs.
“In 2006 we invested in Empower time tracking software. This was new technology at the time. We brought five old PCs for the factory floor, two PCs we put in the machine shop, two PCs in the assembly shop and one PC in the paint shop. Our staff ran the cat five wires to each PC in the factory so this cost was about $1200. The time tracking software was about $13,000. “Over two years our weekly production slowly but consistently increased to the point that it more than doubled and over this same time our staff number dropped back twenty percent. Overall this was a 120% increase in factory productivity. The software paid for itself fully within three to four
Staff are now a lot more time conscious and job focussed. Having accurate budgeted and actual times down to each Product, each Process and each staff member has enabled management to thoroughly and continuously review the way manufacturing takes place. Management and staff continually review times and contribute ideas for better, smarter, quicker processes and manufacturing. The company has benefitted enormously from this review and continuous improvement process. All newly recruited staff come into a culture in which all factory staff and management are committed to “needing to meet, and ideally beat, the budgeted times”. www.nzmanufacturer.co.nz
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NZ Manufacturer June 2012
DEVELOPMENTS
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The tragedy in life doesn’t lie in not reaching your goal. The tragedy lies in having no goal to reach.
– Benjamin Mays
Textiles energy efficiency to improve
he energy efficiency of New Zealand’s textiles sector is set to improve thanks to a new programme. The EECA Business Textiles Sector Energy Efficiency Programme will be delivered by industry organisation Textiles New Zealand. The programme seeks to improve the competitiveness of the sector, which faces strong competition from low-cost producers offshore, through a range of energy efficiency initiatives that will reduce energy costs and enable increased productivity. It will partly fund energy efficiency assessments and resulting energy efficiency opportunities for textiles firms including carpet, footwear and apparel manufacturers. The programme will fund at least 10 projects during 2012-13 from total EECA funding of up to $128,000. It follows a successful EECA-funded textiles industry pilot programme under which five firms averaged energy savings of 14% in 2010. EECA Business Manager Rod Treder says there are significant opportunities for the textiles sector
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The signing of the Textiles Programme agreement. Pictured are Claire Cilliers, CEO Textiles NZ; Mike Bourke, EECA Business Sector Relationship Manager (back right), Rod Treder, EECA Business Programme Manager ñ Industrial (front right) and Textiles board member Clifford Heath.
tumble drying, washing and air conditioning; other technologies specific to individual textiles
businesses are also eligible. nextSTEP E-mail info@textilesnz.org.nz
Real work spells equality
ane Griffin loves going to work. It’s an opportunity for him to be independent, contribute to society and he is proud of his job. It’s not an opportunity that has always been available to everyone with a disability. It makes him “feel good to have a job and be able to work hard”. It has helped him mature and gain skills that he can transfer into his personal life. He now manages his own finances and has learned to trust. His position at Altus Enterprises gives him a lot of responsibility. Working conditions for people with disabilities have come a long way from the “sheltered workshop” which Altus started as in 1963. These did little to further the employment options of people with disabilities. Society as a whole perceived these environments to be a segregated option where “real work” did not actually take place. The long-awaited and welcome repeal of the Disabled Persons Employment Promotion Act in 2007 required sheltered workshop providers to truly reflect on what it is they are offering to people with disabilities. Now in their 50th year of providing service to people with disabilities in the greater Auckland region, one of New Zealand’s www.nzmanufacturer.co.nz
to become more energy efficient. “The companies we worked with during the pilot found there was scope for efficiencies across the board – particularly in thermal energy and compressed air systems. “Many of these initiatives provided a financial pay-back within a relatively short time after which savings were locked in, improving productivity and competitiveness long-term,” he says. Textiles New Zealand Chief Executive Officer Claire Cilliers says improving energy efficiency can provide a competitive advantage for New Zealand firms. “Regardless of whether they are focused on the domestic market or exporting, energy efficiency can reduce costs for New Zealand textile manufacturers. “Increasingly, environmentally aware consumers at home and abroad are seeking out products that are sustainable produced,” she says. In addition to energy efficiency assessments, funding is available for energy efficiency projects involving process heat and boiler management, heat recovery systems, water heating,
biggest social enterprises, Workforce Industries, has rebranded as Altus Enterprises. Now all of Altus’ employees are on individual employment contracts and are rightly afforded the same employment rights as the rest of the workforce. Furthermore, Altus compete for, and win, work on an equal basis as their commercial competition. Employing a total of 240 people – 210 of whom have a disability the Altus team undertake a variety of light manufacturing, labeling, assembly, office services, shrink wrapping, food handling and bottling across two sites in Mangere Bridge and Henderson. They count some of New Zealand’s biggest organisations amongst their customers. Customers like Air New Zealand who have outsourced the refurbishing and repackaging of approximately 12,000 headsets per day to Altus. They also work with SME’s such as Oakdale Organics, who produce organically certified seedlings. Altus employees fill their seedling trays and do other production work for them. Both of these companies understand the benefits of partnering with an organisation like Altus, outsourcing their non-core operations – allowing
Tane Griffin from Altus Enterprises refurbishing headsets for Air New Zealand
them to focus on their competitive advantage and what is going to take their business to the next level. Of course the additional benefit of working with Altus is the fact that these organisations are assisting people with disabilities to enjoy the benefits of work. There is currently a huge focus on corporate social responsibility, triple bottom line reporting, and the need for business to engage with their communities. Altus’s customers know that by using them they are fulfilling their need to connect with
communities. Altus employs a team of 210 people with disabilities – people who are incredibly proud to work there and are absolutely committed to doing the best for their customers. Altus manager Paul Stoneman says, “the great thing about using Altus is that our customers can fulfill their organisations commitment to giving back to the to the community but at the same time get the work that they need doing done on time, to the right quality and at the right price. It’s a win –win”
NZ Manufacturer June 2012
Don’t bother just to be better than your contemporaries or predecessors. Try to be better than yourself. – William Faulkner
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DEVELOPMENTS
KiwiNet backed breakthroughs award winning innovations
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cientific breakthroughs at the University of Canterbury backed by KiwiNet, a collaboration focused on research commercialisation, are resulting in spin-out companies with award winning innovations. A wall climbing robot and battery technology for the green car market are two of the recently awarded innovations from University of Canterbury spinout companies. Invert Robotics was named the winner of the Ministry of Science & Innovation Start-up Award at the recent HiTech Awards for its remote controlled wall-climbing robot. The robotic platforms allow inspection and repair work on industrial equipment to be carried out in risky environments such as milk powder silos or driers which may contain toxic gases. The innovation draws on research developments in remote robotic inspection technology at the University of Canterbury which is being commercialised by its Research & Innovation unit, in conjunction with powerHouse Ventures. The University of Canterbury is a member of KiwiNet which comprises six universities and three crown research institutes working together to better leverage the combined capability of New Zealand research organisations to achieve greater commercial outcomes for the country. Dr Nigel Johnson, Director of Research & Innovation at the University of Canterbury, says, “KiwiNet has really helped us move our research into the commercial space and our award-winning innovations are really testament to that support. We’re also seeing the effects of this support with our increasing flow of ideas which will lead to our next wave of innovations.” Dr Johnson says KiwiNet has not only provided critical investment through the Ministry of Science and Innovation’s PreSeed Accelerator Fund, the investment committee has also provided invaluable guidance on commercialisation pathways. He says that being able to tap into the hard-won knowledge and networks from other KiwiNet members has also been enormously valuable. “Through KiwiNet we’ve been able to really stimulate input into our portfolio. By employing PreSeed funds to do the important early work we’ve been able to explore the commercial potential of new ideas. This early work is crucial as it allows us to find the market opportunities that best exploit the scientific breakthrough and develop the technology for that application,” he says.
Invert Robotics received an investment of $118,000 from the Ministry of Science and Innovation’s Pre Seed Fund via KiwiNet, with matching funding from the University of Canterbury and powerHouse Ventures. The funding was used to develop robots for a broader range of applications than was previously possible. Auto battery innovator ArcActive, another recent award winning University of Canterbury spin-out company, won the CleanEquity 2012 conference award for Excellence in the Field of Environmental Technology Research in Monaco in April. Early in its commercialisation, as a University of Canterbury project, it received support via a $225,000 KiwiNet PreSeed investment from Ministry of Science and Innovation to prove the technology. This early support was critical in identifying electrodes for batteries as a key application for the technology. As ArcActive continued to develop its battery technology for the start/stop auto market followon investment was provided by investors and the Ministry of Science and Innovation. The company’s award in April coincided with its public launch which followed several years operating in stealth mode. “We need to celebrate these successes and keep working on finding the next wave of success stories. These successes are the result of a lot of hard work put in by many people over time,” says Dr Johnson. Andrew Turnbull, a KiwiNet Investment Committee member, says, “Universities and Crown Research Institutes are a rich source of research breakthroughs and the key is to not just take a great idea and develop it into a technology, but to develop something that is valuable that industry wants to be part of. “KiwiNet is creating more good news stories for commercialisation in New Zealand. Along with successes
James Robertson, Chief Executive, Invert Robotics with its award winning wallclimbing robot.
like Invert Robotics and ArcActive we’re seeing an increasing flow of ideas and successes from other KiwiNet members. “Collectively KiwiNet members represent over half a billion dollars
of research spend and by working together we are demonstrating that we can increase the scale and impact of scientific and technology based innovation in New Zealand,” says Mr Turnbull.
The robotic platforms allow inspection and repair work on industrial equipment to be carried out in risky environments. www.nzmanufacturer.co.nz
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NZ Manufacturer June 2012
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NZ Manufacturer June 2012
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eecabusiness.govt.nz/industrial
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NZ Manufacturer June 2012
ANALYSIS
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To me, there is only one form of human depravity - the man without a purpose.
– Ayn Rand in Atlas Shrugged
Manufacturing as a Career
study published by the National Association of Manufacturers and the Manufacturing Institute, titled “Keeping America Competitive”[1], states that “today’s manufacturing jobs are technology jobs, and employees at all levels must have the wider range of skills required to respond to the demands of an increasingly complex environment.” The study goes on to say that among companies involved in skilled production (whose employees are machinists, craft workers, and technicians), 51 percent report shortages and see increased shortages ahead. A U.S. Bureau of Labour Statistics report shows that shortages of skilled workers are most serious for machinists, craft workers, technicians, electricians and engineers.
In the USA they face the challenge of presenting manufacturing as a career direction for young people. Readers, feedback to me how it is for your company and what can be done about it. – Doug Green, editor.
The opportunities
1. Demand — The need to replace 10 million manufacturing workers in the U.S. certainly confirms that there will be many manufacturing jobs available in the next 15 years, and perhaps even more jobs if America can maintain its number one position and find a way to grow manufacturing. 2. Clean, high technology environment — Many students, parents, and teachers still identify with the old vision of a manufacturing plant as a dirty, grimy, and dangerous working environment where workers do low-skill and backbreaking jobs. But this vision today is far from the truth. As manufacturing has continuously automated over the last 40 years, there are few low skilled jobs left and many of the modern plants look more like laboratories then manufacturing plants. Manufacturers need people who can operate, maintain, and troubleshoot this high tech equipment. 3. White collar jobs — Many young people think that manufacturing is only about blue-collar jobs in the shop. But this is not true, as many types of manufacturing have as many white-collar jobs as bluecollar jobs. There is design engineering, production control, purchasing, sales, marketing, and general management jobs. So if there are so many job opportunities, why don’t we just announce the opportunity www.nzmanufacturer.co.nz
to parents, community colleges, universities, high schools, and grade schools? Then get industry and the government to support a massive education and training initiative – much like putting a man on the moon.
However, there are obstacles to consider:
1. Manufacturing’s image — The single biggest problem is that American manufacturing has a bad image. Many students and citizens still see manufacturing as a world of dirty, dark, sweatshops offering long hours and low pay. Students use adjectives like boring, repetitious, and dangerous to describe their pre-conceived notion of manufacturing work. A whopping 61 percent said they seek a professional career, far surpassing other issues, such as pay (17 percent), career growth (15 percent) and physical work (14 percent).”[2] The perception by high school and college students is that there seems to be no sense of loyalty from manufacturing companies and very little security. 2. Parents — They have not viewed working in a factory as an acceptable career goal for at least 30 years. Regardless of the emerging manufacturing job opportunities, most parents still want their kids to go to college and get a white-collar job. They still see college degrees as the key to getting their children a piece of the American Dream.
3. Teachers and counsellors — Many of them see manufacturing as a dead-end career path. They hear reports on the news all the time about plant closures, layoffs, and outsourcing. Both teachers and counsellors are in a position to recommend career paths at an early age, and most would not recommend manufacturing because of their perceptions. 4. Vocational training — The community college problem is that many of the vocational courses are not sufficiently financed, “as a result of community college funding formulas established by state legislatures that limit the number of technical non-credit courses. Only four states provide equal per-capita subsidies for all students.”[3] 5. Advanced technical training — One of the biggest issues in trying to convince young people to make manufacturing a career is the advanced training needed for manufacturing workers in the 21st century.
Is a manufacturing career a good option?
There are many programs to try and interest young people in manufacturing. However, to get young people to become interested in a career in manufacturing, it will take a lot more then promotions. Apprentice type training with long OJT training — I think that the advanced training needed is some variation of the old apprentice
By Mike Collins
program. This type of training takes several years of classroom education and several years of on-the-job training. The problem is that many manufacturers (particularly large manufacturers) have been very reluctant to invest in this type of long term training. Shop classes — I think the best thing we can do to interest both grade school and high school students is to bring back shop classes to these schools. This will be a real challenge, because it appears that the schools are going to focus on the new STEM learning and there probably won’t be enough money for both programs. Vocational class credits — Just getting a degree in general subjects like history, psychology, or business may not get someone a job. The last census showed that general degree graduates had entry level wages of $30-35,000 per year. We need an education system that is open to the idea of including careeroriented classes and skill training into the education curriculum. What is needed is theoretical knowledge combined with practical training in manufacturing systems. Yes, I mean giving people credit for skill training no matter what degree they are pursuing. This could help students with college degrees get a white-collar job in manufacturing and help manufacturers replace the retiring skilled workers. Since large manufacturers have focused on lowering labour costs and getting rid of unions for the last 30 years, paying more to get the right people will test their resolve. Career — To recruit the necessary people, manufacturing really needs to describe the opportunity as a career – not just another job. I think this will take a long-term commitment to job security for the recruits. It may also require offering internships and scholarships to help pay for education and training. Young people need to know that a career in manufacturing has great future potential. The big issue is not promoting this career to young people. It is about money and investment. -abridged [1] Keeping America Competitive, How a Talent Shortage Threatens U.S. Manufacturing, National Association of Manufacturers, 2003, Washington DC. [2] Nuts and Bolts and Foundation for Fabricators and Manufacturers Association [3] Keeping America Competitive, N.A.M. 2003.
NZ Manufacturer June 2012
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ATEED.CO.NZ/FASTTRACK www.nzmanufacturer.co.nz
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NZ Manufacturer June 2012
WORKSHOP TOOLS Upgrade a good idea E ngel vipers are powerful, efficient, intelligent - linear robots from Engel Austria. The company is offering a special ‘efficiency bonus’ when you upgrade your old linear robot for one of their new viper robots. Engel viper robots offer maximum stability, impressive dynamics and maximum user friendliness.... but wait, there’s more The new viper combines all of these things with ease: it saves weight, thanks to its innovative design using laser-welded steel sections and convinces users with a substantially higher load-bearing capacity.
More efficiency thanks to intelligence
Thanks to clever software such as vibration control, or mass identification, it automatically reduces structure-borne vibration, even with longer axis dimensions, and optimises its movements and dynamic values to achieve better efficiency. The impressive results: ultra-fast cycle times and maximum productivity accompanied by low energy consumption.
Other benefits include lightweight and powerful, maximum stability and dynamic values despite a low weight and substantially improved manipulation weight. The innovative design using laserwelded steel sections makes this possible. Your economic advantage: smaller robots and lower cost of investment for high manipulation weights.
More intelligence: More efficiency
Clever software ensures faster cycle times, improved productivity and a longer working life due to gentler handling of mechanical components. Mass identification identifies the manipulated mass “online“, adapts the dynamic values to match, and thus ensures optimised acceleration “vibration control“ reduces structure-borne vibration, even for longer axis dimensions “efficiency control“ optimises robot movements for maximum productivity while consuming very little energy. It is convenient to use, thanks to a multi - turn absolute stroke transducer and pneumatics
Remember, the difference between a boss and a leader... A boss say “Go” A leaders say “Let’s go.”
– Anon
Scanner inspects small welds
T configuration at the display and has intuitive controls for standard sequences. It is also convenient thanks to easy extensibility of the automation due to a powerful Ether-CAT based bus system The Engel viper has met the mark. Although it has only been on the market for a few months, its high performance capability and operating efficiency have won over customers who would still have purchased it even without a new Engel machine. It can be used on an Engel injection moulding machine or on an injection moulding machine of another manufacturer. And as a replacement for an older robot. nextSTEP: Visit: www.techspanonline.com
he new small-bore pipe scanner is low-profile and manual and can be used on pipe diameters ranging from 0.5” to 4” nominal pipe size and can operate in areas of limited access with an envelope of just 0.5”. The Bracelet is designed to be sure-footed, practical and easy to use. It fits securely to the pipe by means of the bracelet mechanism. Together with the rubber wheels, this provides a sure grip to prevent the scanner slipping during a scan whilst the integrated miniature, splash proof encoder, running on the surface of the pipe, provides positional feedback to the instrumentation. The Bracelet can operate either with a single phased array probe for pipe-to-fitting inspections or, with the extended bracket, can be configured for dual-sided inspections. It offers quick and easy probe and wedge interchange and is compatible with industry standard small bore phased array probes and flaw detectors.
Quality laser marking on a full range of metals Powered by
LaserStyle software Graphic Level, the LS100 Ex Fibre solution is ideal for marking industrial parts, identification plates, rating plates, trophies & awards, tankards, gifts, jewellery. Easy to set-up in a factory, workshop, office or retail outlet. Phone: +64 9 478 8422 www.tilt.co.nz • sales@tilt.co.nz www.nzmanufacturer.co.nz
coasttocoastcosumables.co.nz
NZ Manufacturer June 2012
WORKSHOP TOOLS
Putting off an easy thing makes it hard. Putting off a hard thing makes it impossible. – George Claude Lorimer
UV-A torches ideal for inspection
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he budget-priced, compact Opti-Lux 365 Series UV-A (365 nm) LED torches, are ideal for NDT inspection. All torches meet ASTM UV-A wavelength and intensity specifications for MPI. They come complete with a certificate of compliance for wavelength and output measurements. The standard-intensity models produce a maximum UV-A intensity of 4,500 µW/cm? to address aerospace industry concerns. The high-intensity versions produce a nominal steady-state UV-A intensity of 10,000 µW/cm? at 15 inches (38 cm).
The Opti-Lux 365 is extremely compact and lightweight, reducing user fatigue. It provides a steady beam profile that surpasses those of more expensive lamps. The anodised aluminum lamp body minimises corrosion and withstands heavy use in the field. Its “instanton” operation means no warm-up time is required to reach full UV-A intensity. The flashlights come complete with a lanyard, belt holster, two rechargeable batteries, two-position smart charging cradle with AC power cord, and UV-absorbing spectacles. All components are packed in a hard carry case.
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DP3000 Duratomic for challenging hole making
P3000 is a new Duratomic grade that provides a balance of heat resistance, wear resistance and strength that make it ideal for hole making in a wide variety of materials. Developed for use with Perfomax indexable drills, the grades properties allow it to provide reliable, cost-effective and productive performance, even in challenging situations such as angled entrances and interrupted cuts. Available in all Perfomax insert geometries and sizes, DP3000 increases tool life and allows for the use of more aggressive cutting data. The grades balance of toughness and strength originate from increased cobalt content near the surface of the insert, coupled with a Duratomic coating comprised of titanium carbon nitride (TiCN) and aluminium oxide (Al2O3). All Perfomax drills feature strong square inserts which offer high stability. Their low friction coating and unique chip flute design
optimises chip removal rates to boost productivity and process reliability. The tools’ versatility helps to reduce inventory and production costs. The proprietary Duratomic process involves manipulating elements at an atomic level to create a harder, tougher and smoother insert surface. This creates direct benefits in the areas of productivity, surface finish, tool life and overall cutting capability. In addition to increasing the physical durability of the insert, Duratomic technology also provides superior thermal control to maximise process stability.
Email: sales@sew-eurodrive.co.nz • Web: www.nz.sew-eurodrive.com
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NZ Manufacturer June 2012
DEVELOPMENTS
A good leader is not the person who does things right, but the person who finds the right things to do.
– Anthony T. Dadovano
Companies need to look overseas for M&A opportunities
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ew Zealand companies need to be more active in undertaking cross-border mergers and acquisitions if we are to fully capitalise on our intellectual property, our clean-green image and the other advantages we have as a country. Recent research from the latest Grant Thornton International Business Report shows that an increasing number of businesses worldwide are looking to grow through mergers or acquisitions both domestically and cross-border, a factor not reflected in New Zealand. Martin Gray, Head of Lead Advisory for Grant Thornton New Zealand, said that New Zealand was on a par with the global average (30%) when looking at companies planning to grow through acquisition in the next three years, but below the global average (24% compared with 33%) for crossborder acquisition. “With our size, geographic isolation and intellectual property,
it is imperative that we are above the global average when it comes to cross-border acquisitions. We need to be involved in those parts of the value chain that provide the greatest margin for the value we bring to the table. “Where is the New Zealand strategy to help our companies acquire businesses internationally so that they become more involved in this chain, thereby reaping larger profits? “For New Zealand our stars are aligned when you look at our products, our position in the market and our intellectual property in sectors experiencing strong growth,” he said. New Zealand companies seeking revenue and value growth identified three key drivers for attaining these goals: building scale (61%), accessing new geographic markets (59%) and acquiring new technology or established brands (41%). Gray has worked with a large number of New Zealand corporates
on their international expansion, particularly into Asian countries. With over 25 visits to China alone he has first-hand insight into how Asian countries value New Zealand’s products and services. “Just look at how overseas companies are able to come to New Zealand and buy our companies for higher prices. Ratherthan complaining about what these companies are willing to pay, we should spend more time exploring why the price is higher and position ourselves to participate in a greater share of margin throughout the global value chain. “Strategic acquisitions internationally are an enabler of these goals,” he said. The research showed that despite the on-going global economic challenges, business appetite for M&A has improved markedly over the past 24 months. “Naturally, domestic M&A remains high on the agendas of business leaders but it is
the upswing in interest of overseas expansion that is encouraging from a global experience. We just have to make sure that New Zealand companies are part of this growth trend.”The IBR revealed some interesting regional variations. The regions most interested in making an acquisition in the next three years are North America (37%), UK & Ireland (36%) and the BRIC economies (35%). This compares to only 28% in mainland Europe and 25% in Asia Pacific and in particular companies in the troubled economies of Greece, Ireland and Spain where only 16% indicated an interest in M&A activity in the coming three years. “Following the financial crisis of 2008, the flow of economic power from ‘west’ to ‘east’ has undoubtedly sped up. Corporates in mature markets appreciate that M&A remains a vital strategic tool to enable them to benefit from these trends. We need to do this here,” he said.
with all due care and attention toward rebuild and supporting documentation with identification of components parts was prepared to support reassembly in India. SPI had some 120 staff involved in the project over a period of 10 months and the project was completed with virtually no health and safety incidents. The complete structure is now ready for shipment to India and a dedicated ship will be used to collect the power plant from the deep water Northport at Whangarei.
While SPI sees a bright future within the Northland area, which has been very recently enhanced with the announced Refinery NZ upgrade plans, which SPI is hopeful of being involved heavily in, it now plans to extend its focus beyond the Northland area, across New Zealand and overseas and is committed to building its capability for future large scale shutdown, infrastructure and plant shutdowns and has Recently appointed a new General Manager, Paul Hebberd to drive this development.
Marsden Point skyline changes
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outh Pacific Industrial Limited who’s head office and manufacturing site is based in Ruakaka, Northland, have in the past managed a range of high profile projects including the Point Forward Project at Refining NZ’s Marsden Point site, the manufacture of OffShore patrol vessel modules for Tenix (BAe) and the Laminated Veneer Lumber Project for CHH. Their most recent achievement however, is without doubt the largest, this being the dismantling of the Marsden B Power Plant which again demonstrates the capability of this highly customer, quality and safety focused company. The oil fired Marsden B Power Plant, originally built in the 1970’s was mothballed, prior to
www.nzmanufacturer.co.nz
commissioning, in 1979 and was never operational. The plant was sold to an Indian company in 2008 and SPI were successful in securing the contract to project manage, dismantle and pack the plant for shipment to India, where it will be rebuilt and operated. Ross Mackenzie, SPI’s Managing Director believes that the dismantling of the power plant is the largest project of its type managed in New Zealand, involving in excess of 4000 Tonnes of steel, with a structure height of over 54 metres. Large specialist cranes of up to 250 Tonnes capacity with an 80m reach were employed on site along with a range of other SPI equipment. As opposed to a demolition, the structure had to be dismantled
NZ Manufacturer June 2012
PRODUCT NEWS
Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you’ve got. – Peter F. Drucker
Test laboratory ensures product safety
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n advanced environmental test laboratory has been established to ensure lighting and Projecta battery products are safe, durable and meet the latest regulations. The new laboratory is equipped with the latest test rigs, including a High/Low Humidity Test Chamber, Thermal Shock Test Chamber, Rain Simulation Chamber and a Dust Test Chamber, which have been designed to meet and exceed the most stringent tests required by international vehicle and equipment manufacturers and to ensure total product reliability. The new division will take an active role in looking at product lifetime costs, with accelerated aging tests among many other tests, ensuring long-term product durability and reliability that is
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important to both the industry and customers. Internal product development engineers and industrial designers, plus international suppliers ensure all products are completely suited to the harsh environments encountered in this part of the world and to ensure they are fit for purpose. With temperature ranges beyond the automotive industry requirements, tests such as High/ Low temperature performance, temperature/humidity cycles testing, condensation, material durability as well as PCB solder joint durability, adhesive bonding, rain exposure and car wash tests, dust exposure plus shock and impact tests are now in process. The new testing laboratory is the latest step in further lifting the performance of Nava and Project
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Two of the testing chambers in the new Environmental Test Laboratory used in the development of Narva and Projecta products.
products. The company has also set up a fully equipped automotive photometric and optical laboratory that is regarded as one of the most advanced in the South Pacific region, together with the latest fully
equipped research and development department. These new testing facilities will ensure those products continue to meet the expectations of customers operating in a variety of demanding environments and work places.
Flexible transducer Press brakes at entry level prices revolutionises inspections
new flexible ultrasonic transducer which can squeeze into corners and conform to curved surfaces is set to revolutionise the inspection of composites and components with complex geometries. The Flex transducer series has already proved a success during trials within the aerospace sector, where composite materials are commonplace. The transducer is made of a thin but durable piezo-electric material that is soft enough to bend and can be shaped to suit curved geometry. By using a soft backing layer, the flexibility of the crystal is retained. At around 3mm high, Flex transducers are low profile. The Flex transducer series
include single element (FFSC), dual element (FFTC), composite single element (CFFSC), and composite dual element (CFFTC) variations. Standard Flex transducers are 5MHz or 10MHz at sizes of 6mm, 10mm, 15mm and 20mm diameter. They can be used with any standard ultrasonic instrument.
We specialise in:
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urma’s entry-level AD-E series of press brakes has been superseded by the new AD-R range – with no increase in price. Available from Leabourn & Rose Ltd, the new AD-R machines use the same frame as the manufacturer’s top-of the-range models, so they offer greater daylight (530mm), stroke (365mm) and throat depth (410mm) than the previous AD-E models. Bending lengths vary from 1,250mm to 6,050 mm. The respective bending force is 60 to 400 tones. Features of these press brakes include particularly long double guides for easy and accurate moving of the top beam, CNC operation of the back gauge in the X axis, easily adjustable sliding front arms that offer “finger – tip” lateral adjustment, and Euro-style top and
Design CNC Folding
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Laser cutting Welding
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bottom tool holders. Manual or motorised crowning is available on all machines. Control options comprise the Durma CNC Easy Bend, which offers a simplified screen format and a minimum of keys, along with easyto-follow bending steps. It is also possible to upgrade to the Durma CNC advantage; this offers automatic bending sequences, off-line programming, motorised crowning and up to 85, 12-step programs. Also available is the CYBELEC DNC 880s control unit. This features a 10in TFT colour screen, a 2-D display with multisimulation capability, and Windows XPe for multi-tasking and file management. nextSTEP Contact: andrew@leabourn-rose. co.nz Tel (09) 274 6186
CNC punching Finishing
“We now offer high speed cutting on the very latest fibre laser machine.”
REPLIKA Manufacturing NZ Limited
15 Maurice Road, P O Box 12-200, Penrose, Auckland, New Zealand sales@replika.co.nz www.replika.co.nz Mobile 021 889 223 Phone (09) 636 0155 www.nzmanufacturer.co.nz
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NZ Manufacturer June 2012
PRODUCT NEWS
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People who never do more than they get paid for, never get paid for anything more than they do.
– Kemmons Wilson, Founder, Holiday Inns
Battery chargers have enhanced durability
wo 7-stage automatic battery chargers have features that are ideal for small and large automotive workshops. The 12Volt, 7Amp IntelliCharge model is a sophisticated and compact charger, fitted with
protective rubber moulded end caps for enhanced durability and protection, designed for the rigours of workshop environments. With multi-chemistry settings for charging Wet, Calcium, AGM or Gel batteries, it is ideally suited
From page 1
Revolutionary wind power invention receives international recognition
Another feature of GVT is that it can handle more turbulent air. This means that wind turbines equipped with the GVT technology could be built on the edges of existing wind farms in places previously thought unsuitable. The result would mean significant increases in energy generated from an existing wind farm using the same infrastructure. “Developing our technology in New Zealand has been difficult, says Mr Jegatheeson. “It’s been a struggle to find funding because there are not many local investors prepared to take the risks associated with developing a new technology – even though the potential is huge. “We are currently trying to raise funds to build a large GVT
transmission and test it in a full size working wind turbine. A major New Zealand power company has offered us a turbine for the trial, but the problem, as always, is the funding. We now have to look overseas and have interest from China and the UK at present. That’s the reality of developing such challenging technologies in a small country,” says Mr Jegatheeson. “Wind power is growing at a phenomenal rate worldwide and it would be nice if a New Zealand invention could be powering the wind turbines of the future.” GVT has far reaching capabilities beyond wind power and can also be used for wave power and heavy transport.
for starting, marine and deep cycle batteries. The power supply mode retains vehicle computer settings when changing a battery and it can also run 12V appliances, making it a very versatile piece of equipment. The charger is shock- and dustproof for the toughest of environments and is aimed at batteries used with small passenger vehicles through to heavy-duty 4WD’s. The second charger, the powerful 12Volt 25Amp model, is also fitted with protective rubber moulded end caps for superior durability and to prevent the charger from slipping off or damaging the vehicle’s duco. With multi-chemistry mode capabilities for charging Wet, Calcium, AGM or Gel batteries this charger is ideally suited to a wider range of workshop
applications, covering vehicles and craft from motorcycles, jet skis, passenger cars, caravans and boats, to tractors and larger equipment. The Projecta Intelli-Charge 25A charger maintains a constant voltage on a battery so that it protects the integrity of the battery while carrying out diagnostic work. Its output can be easily adjusted, making it an ideal choice for a busy workshop handling a wide variety of batteries, right up to, and including, large truck batteries. Both battery chargers feature world-class, 7-stage quality charging to maximise a battery’s performance and life, and are competitively priced in the New Zealand market. They also benefit from a two-year warranty.
Safety switch provides an integrated solution
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he Allen-Bradley 440N-Z SensaGuard Non-Contact Switch with a magnetic integrated latch combines a noncontact interlock switch and door latch into one integrated solution. It replaces separately mounting an interlock switch and door catch in lightweight guard doors. The switch features the latest RFID technology for coding, inductive technology for sensing and output switching signal device (OSSD) safety outputs. It is available with a uniquely coded sensor and actuator to help protect against operators or maintenance
personnel defeating the switch, helping to enhance safety. In addition, an LED on the switch provides diagnostic status.
sales@hiq.co.nz
www.hiq.co.nz
sales@leabourn-rose.co.nz www.nzmanufacturer.co.nz
NZ Manufacturer June 2012
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BUSINESS NEWS
There’s an enormous number of managers who have retired on the job. – Peter Drucker
New Competenz Board appointments
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ike Simm has been appointed Chair of the Board of Competenz, the Industry Training Organisation for the Engineering, Manufacturing, Baking and Food and Beverage Manufacturing industries. Mike Simm has been a professional director since 2002 and is currently Chair of Brightwater Group Ltd, a Nelson-based engineering contracting company, and Deputy Chairman of Far North electricity company, Top Energy Ltd. He also is Director of Security North, Selwyn Properties
and several smaller entities. Mr Simm is passionate about business – and developing the skills businesses need to be successful. He is active in youth development and transitions from school to work, particularly through is work as Trustee of various community trusts including Enterprise Northland and Northland Youth Development Trust. Mr Simm trained as an accountant and worked at Rheem in both New Zealand and Australia and at McConnell Group before becoming Executive Director
and shareholder of Fullers Bay of Islands. After selling Fullers in 2001, Mike was active in the tourism industry serving as Director for NZ Maori Arts and Crafts Institute, NZ Tourism industry Association and Deputy Chair of Jason Travel Media. Mr Simm is also joined by two new directors, Kelly Smith and Tom Barratt. Ms Smith brings 20 years’ experience in the fast moving consumer goods industry to the Competenz Board. She is the founder and Managing Director of Biz Advisor, a consultancy firm for
services and ventures as well as improving the performance of their people and teams. Sir Ray was a winner at the awards in 2008, when they were known as the Bayer Innovators Awards. Bayer is once again the main sponsor, in partnership with Idealog Magazine and Ideas Accelerator.
Award categories for 2012
Entries open for New Zealand Innovators Awards
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ne of New Zealand’s best known innovators, Sir Ray Avery, is calling upon kiwi innovators and innovative organisations to get recognised. As ambassador for the New Zealand Innovators Awards, which are now open for entries, he sees recognition as a key component in advancing innovative ideas and technologies. “I encourage you to enter the Awards. I did, and I won, and it changed everything. Get out of the laboratory, or your shed, and encourage others to do the same thing so we can all celebrate how clever we are as Kiwis on the world stage - it’s our time to shine”, says Sir Ray. The New Zealand Innovators Awards celebrate and recognise great kiwi innovations, inventors and organisations that have invested in developing new products,
The awards are a great way of celebrating innovation across a broad spectrum of areas, disciplines and industries. We have many innovative organisations here in New Zealand, so as a nation we need to shout about our success loud enough for the rest of the world to hear,” says Louise Webster, owner Ideas Accelerator and awards director. Enter now or to nominate someone for entry into the awards, go to www.innovators.org.nz
• Innovation in Design & Engineering • Innovation in Environment & Agriculture • Innovation in Health & Science • Innovation in Hospitality, Food & Beverage • Innovation in Information Communications Technology • Innovation in Manufacturing • Innovation in Marketing & Communications • Innovation in Media, Music & Entertainment • Supreme New Zealand Innovator • Emerging New Zealand Innovator • Most Inspiring Individual • People’s Choice Awards
Key dates
• Entries open 12 June • Official launch event 19 June • Entries close 13 August • Finalists announced in September • Awards event in October
Mike Simm
small to large FMCG companies specialising in Sales and Business Optimisation and has a background in sales and marketing in Griffins Food Ltd and Goodman Fielder Baking. Helping organisations in a time of change and contributing to the development of skills in industry are Mr Barratt’s interests. He also brings a wealth of experience in the engineering and manufacturing sectors to the Board. He started work as an engineering apprentice and worked as a Mechanical Engineer and Regional Engineer for Coal Corporation of New Zealand before moving to Du Pont and his current position as the Managing Director of Degussa Peroxide Limited. Three long standing members remain on the Competenz Board: Peter Herbert, businessman and active member of engineering associations; Diana Hudson, Managing Solicitor at the Otago Southland Employers Association; and Bill Newson; National Secretary for the Engineering, Printing and Manufacturing Union (EPMU). Competenz covers 15 sectors within manufacturing and the collective experience of the Board, along with a considerable level of governance experience, will stand Competenz in good stead in a time of change.
www.nzeco.govt.nz www.nzmanufacturer.co.nz
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NZ Manufacturer June 2012
ENERGY REPORT
A consultant is someone who takes the watch off your wrist and tells you the time.
– Anon
A model of clean tech achievement
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enmark recently released their Energy Strategy 2050 document From Coal, Oil and Gas to Green Energy, in which the Danish Government commits to a goal of 100% renewable energy by 2050. Add to that a commitment to a 30% carbon emission reduction by 2020, and you start to see that the real story here is about the fantastic business opportunity that Green energy presents. Denmark makes the distinction that their Energy Strategy isn’t just a target; it’s a
strategy to meet their commitment. The document is structured around a ‘background’ statement or goal with a parallel “What the government will do” statement, making it very powerful. The great thing about that for technology developers in Denmark is the certainty this approach provides, which allows them to commit resources to R&D and in positioning their companies for the future. It is interesting that at a time when we consistently hear that the effects of the global financial
crisis mean that there is no money for many projects, countries like Denmark are powering forward to ensure their future energy security. Danish electricity consumers already experience the highest level of security of supply in the European Union. What makes Denmark especially interesting, is that their population isn’t that much bigger than ours; but what is different is that they have over 700 clean tech companies and that 12% of their total exports come from energy technologies. In the
generation have not been available,” explains Powerhouse Wind Director, Bill Currie. “Household wind power generation has largely been limited to turbines built, installed, and maintained by enthusiasts. We have used our experience and expertise to develop a wind turbine purpose-built for use in a domestic environment, aimed at providing a customer experience similar to that offered by existing home appliances.” Otago Polytechnic’s research and development centre, Innovation Workspace, will manage the project, which involves the review and further development of the turbine’s mechanical, electrical, electronic and software components. It will also work with Powerhouse Wind to establish and monitor test sites across New Zealand and help create commercial market opportunities. “Powerhouse Wind has a longstanding relationship with Otago Polytechnic,” says Innovation Workspace Manager, Eva Gluyas. “Our track record is one of creating successful commercial solutions and we’re thrilled the company has chosen to work with us again. We have extensive project management
and design capabilities, and a great development workshop facility. We also offer strong connections with the industrial and manufacturing sectors throughout Otago and New Zealand.” Powerhouse Wind’s directors and partners believe this joint project is a great opportunity to create an expertise base. “While there will be many challenges, the combination of a startup company with prototyped technology, an academic institution with great expertise and development resources, and the very capable engineering suppliers in Dunedin and New Zealand, creates a vehicle that can make the remaining development to market for Thinair rapid and thorough,” says Bill Currie. The Ministry of Science and Innovation’s Technology Transfer Voucher scheme is designed to create lasting partnerships between companies and research providers, and improve access to expertise and development resources for companies developing commercial technologies. Otago Polytechnic is one of the scheme’s 14 accredited research and development partners.
Funding advances production of revolutionary single-blade turbine
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revolutionary single-blade wind turbine designed for domestic use by Dunedin’s Powerhouse Wind Limited will be developed for production and sale in partnership with Otago Polytechnic, thanks to a $368,000 grant from the Ministry of Science and Innovation’s Technology Transfer Voucher scheme. Co-funded by the Ministry and investment being raised by Powerhouse Wind, the project will see Powerhouse Wind work with Otago Polytechnic to develop its innovative Thinair turbine from a promising field test prototype into a fully-developed product ready for market. Traditional wind turbines are constructed with multiple blades attached to a fixed hub; Thinair’s patented single-blade teetering hub design allows the blade’s angle to change in response to variations in wind speed. As a result, it makes more efficient use of strong and gusty wind, is protected from damage in extreme wind and is considerably quieter than traditional turbines. “Until recently, reliable turbines for small-scale wind power
NZ MANUFACTURER • July 2012 Issue • Features Opinion Manufacturing Profiles Letters to the Editor Politics of Manufacturing Trade Fair World Diary of Events World Market Report Q/A Export News Business Opportunities Commentary As I See It Business News Appointments Around New Zealand Australian Report New to the Market Lean Manufacturing Equipment for Sale Recruitment Environmental Technology Manufacturing Processes www.nzmanufacturer.co.nz
New Zealand context, that would mean exports of $5.3B per annum. Those 700 companies do not operate in a vacuum; they draw support from 46 research institutions and clear government actions to support their continued development. 3% of Denmark’s GDP is invested in Research and Development, but it isn’t just this that is driving innovation in the clean tech space, it is the green growth ecosystem of support that has been carefully nurtured by government over many years. What is needed in New Zealand, if we are to ever get part of the clean tech market pie, is a quantum change in what we are doing. The old incremental, little bit here and little bit there, just isn’t going to cut it in this race, the competitors are global, some are large and some are small, but all are moving quickly. If we start with the goal of 700 successful, exports oriented, clean tech companies, then what is it we need to do to achieve that goal? Like Denmark it reaches right into government strategy with what ‘the government will do’ to help achieve goals. That doesn’t mean that clean tech industry doesn’t develop without government as a key partner in strategy and enabler through action, it just means that a green growth ecosystem is unlikely to develop and that growth will be slower and we all know what happens to the slow. As it says in their Energy Strategy 2050, “Demark will harvest opportunities for green growth and employment.” It’s time we set some serious goals, so New Zealand Industry has an environment and the support it needs to achieve the high value exports we need and the high value employment that goes with them.
www.nzmanufacturer.co.nz
Manufacturing Technology Workshop Tools Manufacturing Heroes Lean Manufacturing Advertising Booking Deadline –16th July 2012 Advertising Copy Deadline – 16th July 2012 Editorial Copy Deadline – 16th July 2012 Advertising material is to be sent to: Max Farndale, P O Box 1109, Hastings 4156, Hawke’s Bay Email: max@nzmanufacturer.co.nz Tel: 06 870 4506 / Mobile 027 628 2033
Editorial material to be sent to : Doug Green, P O Box 1109, Hastings 4156, Hawke’s Bay Email: words@xtra.co.nz Tel: 06 870 9029 Fax: 06 878 8150
At NZ MANUFACTURER our aim is to keep our readers up to date with the latest industry news and manufacturing advances in a tasty paper morsel, ensuring they do not get left behind in the highly competitive and rapidly evolving manufacturing world.
NZ Manufacturer June 2012
WEB MARKETING
Change is not only likely, it’s inevitable. – Barbara Sher
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Getting your web site higher in search engines
his is the first of regular columns by Russell Holland - evangelist with EC Web Sites – see www. ec2.co.nz Search Engines work by looking at your content on your web site – so it follows that the more content you have the better chance your pages will be listing higher for more search terms. While it is tempting to be short and concise when writing for the web, the more words you use to describe something the better when it comes to encouraging those search engine robots to your web site. Consider the words that your target market would use when searching for your products or services – there’s little point calling yourself a Barrister or Solicitor when your target customers will be searching for “lawyer”. For products make sure that you include manufacturer product numbers or catalogue numbers as this is often what people will be searching for. Don’t forget to include the “AKA” or “also known as” terms, as some markets or industries refer to different terms to describe the same process or tool.
Case studies and testimonials reinforce your quality statements and why people should engage with you –they also can contain great search engine bait. Ask your suppliers for information product sheets and have these available on your web site. The search engines will see these – and although not as good as unique content – can help your web site to be found for those words contained in the product information sheets. Links to your web site will also help with the ranking of your pages – the more links into your web site the better – consider
The more words you use to describe something the better when it comes to encouraging those search engine robots to your web site.
your Chamber of Commerce, your Industry Associations and your suppliers as well as any paid advertising you undertake such as Yellow Pages or Finda or
ManufacturersSuccessConnection.com Let me know at rus@ec2.co.nz for any IT topic that you would like to see covered in future articles or with feedback.
Better business utilising MSC There are lots of ways of offering key business information and services and I would like to think that The Manufacturers Success Connection (MSC) which I founded recently, can do this for your company. In these times of economic uncertainty we need all the tools and information we can get for our forward planning and development. And for these reasons MSC has come about.
Picture This If your company has excess stock, unused equipment & machinery lying around or components that need a new home’ MSC can help you clear it… You have upcoming events? MSC can publicise them to a captive audience and assist in their success… Its free to list… You are a manufacturer or you know of or are a manufacturer who’s story should be told or has an opinion about the state of the market… You are a manufacturer who wants new markets for new products then MSC can put you in touch… You are a contract manufacturer and find it difficult to promote your expertise and services… You want to join an association which represents your areas of business – we can put you in touch with the right one… New Zealand is a great networking country. And the best way to network is to be part of Manufacturers Success Connection… Join today, its completely free and you will receive: The digital edition of NZManufacturer emailed to you each month – free. Resource material from industry experts emailed to you regularly Manufacturing is the back bone of the country and together we will have a brighter business future. Max Farndale, The Manufacturers Success Connection.com
www.nzmanufacturer.co.nz
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NZ Manufacturer June 2012
EXPORT NEWS
Leadership is Action, not Position.
– Moi
Exporter guide fo
Mitigating Buyer Nonpayment Risk
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ypical terms of trade sought by Indian buyers range between 30 – 90 days1. If an exporter cannot negotiate advance payments, then the NZECO recommends seeking letters of credit as a means of securing payment, particularly if it is a new business arrangement. If an exporter is unable to negotiate a letter of credit or other forms of documentary collection, then the NZECO recommends an exporter obtain trade credit insurance on any open account trade. The primary benefit of trade credit insurance is covering the risk of non-payment due to certain commercial and political events. It is also a good way of ensuring due diligence is undertaken on a Buyer – if a trade credit insurer declines cover on commercial grounds, then this should be a warning to an exporter looking to offer credit. Another benefit of trade credit insurance is that it may enable a proven exporter to obtain a trade finance facility from its bank to help fund the period between paying its suppliers upon shipment of the goods and receipt of the final payments.
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Enforcement of Contracts
xporters should be aware that a condition of most trade credit insurance policies (including the NZECO’s short-term trade credit policy) is that in the event of non-payment owing to a dispute between exporter and buyer, the exporter must first obtain a binding legal judgement that validates the debt owed to the exporter. India’s legal system is relatively impartial but there can be long delays. Enforcing contracts in India is particularly challenging. The World Bank estimates that filing for, obtaining, and then enforcing a court judgement on average takes 1420 days to complete, involving 46 procedures and costing 40% of the claim2.
Economic and Financial Issues
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rade credit insurance may also cover the risk of non-payment due to the imposition of foreign exchange controls that prevent a foreign buyer from converting local currency into foreign currency to make its payments. This currency transfer and inconvertibility risk is relatively low in India, in part due to India’s large foreign exchange reserves. India has been prone to volatile currency fluctuations, and there was sharp currency depreciation in late 2008 and early 2009. The Indian rupee has stabilised over the last 12 months and settled between a range of 1 USD to 44 – 47 Indian Rupee.3 However there is a higher risk of currency volatility and depreciation over the short to medium term, due to India’s balance of payment vulnerabilities. In the medium to long-term, economic growth is forecast to remain positive underpinned by foreign direct investment (particularly in infrastructure projects) and favourable demographics (including a rapidly increasing middle class).4 However, India’s strong inflation is the core domestic risk facing the Indian economy5. Inflation is likely to remain high in the foreseeable future which, combined with increasing debt-servicing costs, will increase Indian companies’ operating costs and squeeze their profit margins. This may increase the risk of payment delays to New Zealand exporters.
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Advance Payment & Performance Bonds
xporters that negotiate advance payments from their Indian buyers, particularly companies supplying capital goods or services, may face a counterrequirement to have their New Zealand Bank issue an “ondemand” bank guarantee. These guarantees (often called advance payment bonds) protect an Indian buyer against loss in the event they pay a deposit and
1 Dun & Bradsheet: Country RiskLine Report, September 2011 2 World Bank “Ease of Doing Business in India 2011” (http://www.doingbusiness. org/data/exploreeconomies/india/) 3 As at September 2011. Source: OTC Interbank, www.TradingEconomics.com 4 Standard & Poor’s “Research Update: Unsolicited ‘BBB-’ Rating On India Affirmed On Continuing Fiscal Consolidation; Outlook Stable” dated April 2011 5 Dun & Bradsheet: Country RiskLine Report, September 2011 www.nzmanufacturer.co.nz
the NZ exporter fails to meet their contractual obligations. Similarly an Indian buyer, particularly Government or public authorities, may require a performance bond to be issued by an exporter. These bonds are a percentage of the contract amount and run for the contract’s duration. Because of the “on-demand”
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nature of these bonds, an exporter’s bank typically seeks full cash collateral before issuing the bonds, which in turn may adversely affect an exporter’s available working capital. If an exporter faces such a bond(s) and is at lending limits with their bank, the NZECO may be able to provide its Contract Bond Guarantee
Cash flow crisis cripplin
hristchurch businesses are struggling with a cash flow crisis that threatens to cripple the region’s efforts to rebuild according to Lock Finance, which has specialised in business financing since 1889 and has a significant number of Canterbury clients. Lock Finance CEO Simon Thompson, who is also a part time consultant to the World Bank, explains: “Almost a third of our clients are based in the Canterbury region and a significant challenge for many of them is balancing the payments that need to go out with the timing of the work coming in.
“The time taken by the EQC to approve work, together with the policies adopted by some major contractors mean that there is sometimes a gap of six months or more between money going out on wages, materials and running costs, and the money coming in for work completed.” Business Mentors New Zealand Canterbury Coordinator Jill Taiaroa agrees that the mentoring service is seeing cash flow related distress among SMEs in the region: “There is a delay running through the whole system that is causing the problems. There are so many people
NZ Manufacturer June 2012
BUSINESS NEWS
You may delay, but time will not. – Benjamin Franklin
or India
to assist an exporter’s bank to issue a bond. The NZECO is New Zealand’s export credit agency. It sells a range of Government backed trade credit insurance and financial guarantees that complement the private sector. Our products can cover repayment and performance risks which may enable exporters to secure and fund
export sales. The NZECO works closely with exporters, their banks and international buyers. If you have any questions please contact the NZECO at +64 4 917 6060 or eco@treasury.govt.nz
ng Christchurch rebuild in the chain, from the EQC, the larger players and then a lot of sub contractors, that there are inevitable long delays which impact on smaller companies’ cash flow making it very difficult for them to retain staff until the work is approved.” Simon Thompson visits the region at least once a month and reports that on his last trip he met one client with a drainage contracting business who had a lot of work being processed by EQC but was unable to use those prospects as business finance equity and consequently was losing his best workers to projects in Queensland.
Another client has 4,000 driveways and 300 swimming pools to repair; work which will keep his business occupied for years, but the growing gap between commission and payment meant that the poor cashflow was threatening the viability of the company. “It will get better as time goes on, but in the meantime some of these companies are on a knife edge just managing to pay their staff and keep going. Unlike some of the bankers and other financiers we do understand the order flow and the business cycle, says Simon.”
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Get your kids a trade
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By Doug Green
anufacturing needs dedicated people for growth and to ensure that New Zealand continues to have a robust manufacturing sector and skilled trades people for tomorrow. Look at it another way, when you visit a trade show, or exhibition, or fieldays you will see on display products that are not made in New Zealand so other countries have strong manufacturing sectors. We don’t want to be a nation of merchants do we, where everything we buy is made overseas?
In fact, there are some people who think only of oil and grease and dirty hands in the workshop and do not consider this to be a proper career path for their siblings. Times have changed; there are now cleaner workshop environments. Companies use sophisticated machinery and software and the smell of oil in some places is nowhere to be seen! The more people we have who are as dedicated as the Germans the better the future of our manufacturing sector can be.
However, it is important to realise that products the country buys are made overseas because of wage rates, availability of raw materials and the sheer strength in numbers of countries who can turn products around faster with ease. A country like Germany is proud of their manufacturing sector; people take pride in being an engineer as can be seen in the way they have revitalised industry since the Second World War. Let’s face it, they had to do something but the absolute dedication German companies have is par none and they are easily the leading lights in manufacturing in Europe. Here in New Zealand, however, it may not be the same. People entering the work force may not see engineering and manufacturing as the path to follow. This may be in part because of advice coming from family members
The chosen career in electrical or mechanical engineering is a rewarding one offering a real future for a young person. Other technology, however, can get in the way. Computer software development, web design and the perceived advantages of sitting on the internet all day, sending messages to friends, is not necessarily going to make Johnny any money. Or give him a future. In a world where we continue to lose key staff to Australia let’s back the horse up a bit and think things through. There is always going to be a steady population in New Zealand who ever goes overseas. There is always going to be a new house built and the need for an electrician, painter or a builder. Know where this is going? Encourage the teenagers to get a skill. They will be a lot better off than living in a sporadic bubble focussing on the keyboard. www.nzmanufacturer.co.nz
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NZ Manufacturer June 2012
A LOOK BACK …
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Never interrupt your enemy when he is making a mistake. – Napoleon Bonaparte
Factories that changed the world
t’s worth looking back at the factories that have, for various reasons, changed the course of manufacturing and, in doing so, history. Some factories, like Ford’s Highland Park Plant, are notable for their assembly line innovations, while others, like the Triangle Shirtwaist Factory, changed conditions for American workers because they were so catastrophically bad. Here’s a look at some of the factories that changed the world:
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Portsmouth Block Mills
arc Brunel devised equipment for mass-producing pulley blocks for England’s Royal Navy, whose huge sailing ships depended on them to raise and lower sails and other rigging. Once installed at Portsmouth Block Mills, Brunel’s pulley sequences could be operated by unskilled workers, and at ten times the speed of production. By 1808, at the height of the Napoleonic Wars, the plant was producing 130,000 blocks per year.
The Venice Arsenal
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uring the Renaissance, the city-state of Venice was a trade superpower that did business with Asia and the Middle East. Then as today, superpowers who relied on trade needed a dominant navy. And that’s where the Venice Arsenal came in. Using unique mass production methods to assemble the galleys that dominated the Mediterranean, the arsenal pioneered standardisation of parts and perfected a continuous flow process, a distant, Italian cousin of Henry Ford’s production line. The arsenal completed nearly one ship a day at its peak in the 16th century.
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The Springfield Armoury
he Springfield Armoury was the primary centre for the manufacture of U.S. military firearms. It became a global site for innovation because of Thomas Blanchard, who pioneered the assembly line style of mass production and the invention of interchangeable parts while working for the armoury. His signal invention, the Blanchard replicating machine, was a lathe that could produce precisely matched gun barrels quickly and efficiently. The armoury is now a national historic site.
info@chemz.co.nz
www.nzmanufacturer.co.nz
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Thomas Edison’s Menlo Park Laboratory
ot a factory in the traditional sense but, an “invention factory.” Edison’s first workshop was built in the tiny village of Menlo Park in what is now (appropriately enough) Edison, New Jersey. The workshop itself was a breakthrough -- the world’s first commercial research and development facility. Over the years, it produced the phonograph, the movie camera and the first practical incandescent light-bulb.
NZ Manufacturer June 2012
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DEVELOPMENTS
Losers make excuses, winners make changes – @sisumarlin
Self-made man wins exporters’ champion award following year for services to export. Since then he has led trade missions to China, Vietnam and Malaysia, and addressed countless occasions to encourage businesses and inspire students. Sir Ken is a real Kiwi bloke who loves his family, rugby, yachting and beer. Tonight’s award acknowledges Sir Ken’s ongoing service to New Zealand business from exporters themselves, who know how hard a life of business travel can be on families, and how resilient and generous Ken himself always is. The company winners were:
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orty years after starting out in business, self-made man Sir Ken Stevens has won the inaugural award, Exporters Champion for Exemplary Services to Export, at the Air New Zealand Cargo ExportNZ Auckland Awards 2012. A ‘this is your life’ presentation acknowledged Sir Ken from childhood through to starting out in business in his late 20s with two small children, and growing it - Glidepath – forward to today’s global success. Sir Ken was New Zealand 2007 Export Champion and knighted the
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Supreme Award and Winner of the Westpac Exporter of the Year Award 2012 (Total sales over $35 million)
Temperzone Ltd who designs and manufactures air conditioning systems for commercial, industrial and residential applications. Other finalists in this category were:
Jack links NZ Ltd manufacturers of beef snacks that are a good source of protein and iron, with fewer calories, fat and carbs per serving than most other snacks. GMP Pharmaceuticals Ltd manufactures natural health
products of Australia and New Zealand origin such as complementary medicines, dietary supplements, functional foods and infant formula. QBE Insurance Exporter of the Year (total sales under $35million) (A company recognised for excellence in building extraordinary and sustainable export growth.)
Canary Enterprises Ltd manufacturers of value-add dairy and selected non-dairy products, such as butter medallions, butter sheets, clarified butter and apricot cream cheese disks. TNT Express Emerging Exporter of the Year (A company recognised for excellence in getting started to secure a sustainable export business.)
Madeblunt Ltd who designs and markets innovative umbrellas using patented technology trademarked as the “Blunt umbrellas” brand. Endace Hi-Tech Exporter of the Year (A company recognised for excellence in building extraordinary and sustainable export growth, working in the areas of electronic, computer software and hardware, IT systems or other products based on these technologies.)
Orion Health Ltd, a major software developer, providing world class leading healthcare integration software and clinical workflow solutions to hospitals and other health organisations worldwide. Baldwins Intellectual Property Best Use of Commercialisation of Innovation (A company recognised for excellence in the commercialisation of innovation to achieve a profitable and self-sufficient business.) ENSID Technologies a global pioneer of polymer RFID (radio frequency identification) transponder tags manufactured using patented plastic infusion technology for tracking animals, fish and much, much more.
BDO Deal of the Year (A company recognised for the strategic planning that underpinned the successful deal, and which received recognition for the innovation, tenacity and calibre of the deal executed since January 1st 2011. The market position achieved since is critical.) Compac Sorting Equipment designs and builds highly sophisticated turnkey solutions and equipment for sorting and packing a wide variety of fruit.
Australia our largest export market
here are plenty of companies constantly looking for ways to break into export markets. And there is no better destination than Australia.Our products are primarily exported to China, Japan, Australia; USA and Europe in smaller quantities. And these markets may increase further through Asia with current negotiations underway for a trade agreement across a nine country cluster. However, through it all there has always been Australia and New Zealand’s exports to that country began to gain greater momentum on the signing of the CER agreement in 1983. Australia is New Zealand‘s most significant trading partner. The main exports Australia buys from New Zealand include petroleum, crude and refined products which increased by 13% in 2011 plus dairy, wine and fruit and vegetables. Australia in 2011 bought 26% of our agricultural products Australia is also the key destination and source when it comes to direct investment. Fiftyfour percent of New Zealand’s direct investment abroad is in Australia, and 36 percent of all foreign direct
investment in New Zealand comes from Australia. Australia continues to be New Zealand’s principal market, receiving 22 percent ($10.3 billion) of New Zealand’s exports for the year ended June 2011. New Zealand’s second-largest export market, China, continues to grow rapidly. Exports to China have increased $1.5 billion (37 percent) from the year ended June 2010 and account for 12 percent of total exports, worth $5.6 billion. The United States is the third-largest export market, receiving 8.5 percent of total exports, worth $3.9 billion. Exports to Asia-Pacific Economic Cooperation (APEC) economies accounted for 71 percent of New Zealand’s total exports and were worth $32.5 billion in the year ended June 2011. Exports to the European Union accounted for 11 percent ($5.2 billion) of total exports. However, Australia is the lifeline. A brother across ‘The Ditch’, a friend in need and a friend we have depended upon now for many years. New Zealand companies treat Australia as home, head offices are located and re-located there and it is also good to hear of Australian
– By Doug Green
companies opening branches in New Zealand. What we understand - without taking Australia for granted - is that Australia is there for the long haul
and as we continue to seek mutually beneficial business agreements then some certainty exists for New Zealand in these trying economic times. www.nzmanufacturer.co.nz
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NZ Manufacturer June 2012
BOOKS
If at first you don’t succeed, try management. – Anon
Boomerang
By Michael Lewis
T
his book is a sort of sequel to Lewis’ The Big Short, which came out in 2010. Lewis visits Iceland, Greece, Ireland, Germany (which is relatively healthy but where the banks had a wide exposure to dodgy subprime-based financial instruments leading up to the crash in 2007), and California. Why California? Because Lewis thinks it is the metropolitan liabilities in the US which are dragging down the economy. So he visits the worst state - financially speaking - and the worst city in that state: Vallejo. There he finds a bankrupt city council operating on a shoestring because pay claims from the arms of public security - police, fire brigades - have pushed the city to its limits, and beyond. The city is so poor that the mayor only has money to pay for one admin staffer, and when she goes to the toilet during the day she has to lock the mayoral offices. Boomerang is aimed at crushing economic stupidity in each of the localities it concentrates on. There’s a diabolical undercurrent in Boomerang that tends toward
the cynical and is, for this reason, unsettling. You get the feeling that Lewis is a bit tired of having his worst suspicions constantly reconfirmed by way of the arrant idiocy of so many people in so many places around the world. Whether it’s the insular and closeknit financial community in Iceland, that brought the country past the verge of bankruptcy, the corrupt and every-man-for-himself Greeks who refuse to pay their taxes and whose political leaders cooked the books for decades in order to be allowed to join the Euro club, or the credulous Germans, who took a rating agency’s triple-A rating at pure face value and so endangered Europe’s biggest economy. Oh, and the Irish? They just seemed to believe in fairies. In the end, the book is philosophical, if not downright pessimistic. Our bodies and minds, having learned for millennia to expect scarcity, can hardly bear the burdens of surplus. We are used to getting as much as we can. But there is now a requirement for a different, more consultative and less confronting paradigm. It’s up to us how we manage our economies in future but, says Lewis, the health of an economy depends on how each individual in it behaves. It’s no use blaming our masters, he says. We’re all accountable.
Paul@tooley.co.nz
Walmart in China Edited by Anita Chan Cornell University Press
W
almart and “Made in China” are practically synonymous; Walmart imports some 70 percent of its merchandise from China. Walmart is now also rapidly becoming a major retail presence there, with close to two hundred Walmarts in more than a hundred Chinese cities. What happens when the world’s biggest retailer and the world’s biggest country do business with each other?
In this book, a group of thirteen experts from several disciplines examine the symbiotic but strained relationship between these giants. The book shows how Walmart began cutting costs by bypassing its American suppliers and sourcing directly from Asia and how Walmart’s sheer size has trumped all other multinationals in squeezing procurement prices and, as a byproduct, driving down Chinese workers’ wages. China is also an inviting frontier for Walmart’s global superstore expansion. As China’s middle class grows, the chain’s Western image and affordable goods have become popular. Walmart’s Arkansas headquarters exports to the Chinese stores a unique corporate culture and management ideology, which oddly enough are reminiscent of Mao-era Chinese techniques for promoting loyalty. Three chapters separately detail the lives of a Walmart store manager, a lower-level store supervisor, and a cashier. Another chapter focuses on employees’ wages, “voluntary” overtime, and the stores’ strict labour discipline. In 2006, the official Chinese trade union targeted Walmart, which is antilabour in its home country, and succeeded in setting up union branches in all the stores. Walmart in China reveals the surprising outcome. Contributors: Diana Beaumont, co-editor of China Labour News Translations; Anita Chan, University of Technology, Sydney; David J. Davies, Hamline University; Nelson Lichtenstein, University of California, Santa Barbara; Scott E. Myers, Monterey Institute of International Studies; Eileen Otis, University of Oregon; Pun Ngai, Hong Kong Polytechnic University; Katie Quan, University of California, Berkeley; Taylor Seeman, Hamline University; Kaxton Siu, Australian National University; Jonathan Unger, Australian National University; Xue Hong, East China Normal University; Yu Xiaomin, Beijing Normal University.
permabond@homershams.co.nz
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NZ Manufacturer June 2012
BOOKS
First rule of leadership: everything is your fault. – unknown
The Prosperity of Vice: A Worried View of Economics By Damel Cohen
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he Prosperity of Vice begins with a quote from The Future, “Give me back the Berlin Wall/Give me Stalin and St Paul/I’ve seen the future, brother: it is murder”. Damel Cohen believes that the comforting idea that globalisation will lead the world to a more peaceful future is misconceived. He notes that for many centuries the Malthusian principle kept prosperous societies in check, but we now believe, or act as if we believe, that we may all become more prosperous indefinitely. This may turn out to be wrong for two principal reasons. First, there is the Easterlin paradox. Human happiness tends to depend more on growth rates than on levels of income, and on relative rather than absolute prosperity. At present, China, India and others are engaged in a process of catch-up, but gradually the pace will slow as they begin to approach Western levels of wealth. That will create tensions in those societies,
which may lead them to a more confrontational approach. China’s “peaceful rise” may have a built-in time limit. Second, now that everyone wants to get rich in the same way, the world looks very small. Resource depletion and climate change will require us to develop alternatives to energy-rich growth, but progress towards equitable policies on emissions has proved very difficult. It is not clear how these tensions will resolve themselves. They may come to generate armed conflict. Cohen dismisses the notion that an interconnected world is necessarily one in which conflict is less likely. There is little evidence that the intensity of global trade is correlated with peaceful coexistence. The First World War followed a period of intensifying globalisation: “to the extent that trade may enable one nation in a state of latent war with another one to diversify its supply sources, it may contribute to making new wars possible”. Is there a solution? Here, after 180 intellectually exhilarating pages, things become a little less clear. The solution may lie in cyberspace. The new age of global communication may give us the means to manage the anticipated ecological crisis and “to transform the norms of Western consumption in such a way as to make them compatible with their becoming generalised to the rest of the world”.
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The Snowball, Warren Buffett and the Business of Life
H
“
By Alice Schroeder
umility disarms.” That’s Alice Schroeder’s take on Warren Buffett, and after reading her biography of the famed investor, I don’t think she could have put it better. As gigantic as Buffett is to the world of investing and business, “humility” may come as a surprise to those foreign to the Oracle of Omaha. But in the pages of our most comprehensive account of Buffett yet – The Snowball, Warren Buffett and the Business of Life – Schroeder, the former Wall Street stock analyst turned writer, doesn’t just give us Warren Buffett the businessman and
rock-star investor. Through the 707 pages of a declaration on life that is Snowball, a project that took five years of research (quality time with the man himself, including complete access to all his work), Schroeder makes you feel on the same level as Buffett – a man whose modesty bleeds through the page. The Snowball in the book’s title refers to how Buffett’s business started small, but built momentum over the years, much like compound interest. “I packed my snowball very early,” he told Schroeder, “and if I had packed it ten years later, it would have been way different than where it stands on the hill right now.” With every anecdote highlighting Buffet’s intriguing rise as one of the wealthiest men in the world, Schroeder captivates and pulls readers in by presenting the real Warren Buffett, the man behind the Moody’s manual, the man who loves Cherry Coke, potato chips, hates Chinese food, cheers on Nebraska Cornhuskers college football and loves to play bridge. But as rich as Buffet is, and always wanted to be as a boy, accumulating wealth was more of a game to him, a way for him to measure his “inner scorecard” – Buffett’s personal measure of success. Midway through Snowball, it becomes clear that this is not a book about business so much as it is a book about life – and how it should be lived. “Treat your body like the only car you’ll ever own: Baby that car, garage it every night, buff every dent, and change its oil every week,” Buffett says.
Wednesday 4 July 2012 GUIDED TOUR AND PROCUREMENT DISCUSSION Don’t miss this exclusive IEDA site tour. During the visit Procurement Manager, Gary Ewen will provide an overview of the company’s policies on procurement. NZ Steel tour standard requirements will be emailed to attendees. Venue: New Zealand Steel, Mission Bush Road, Glenbrook Time: 11.45 for midday until around 2.00pm, Wednesday 4 July For more information please contact Tony Andrew, IEDA, by email or Tel: 09 292 8083. INDUSTRIAL & ENGINEERING DISTRIBUTORS’ ASSOCIATION OF NEW ZEALAND P O Box 37555 Parnell Auckland 1151 www.ieda.co.nz email: info@ieda.co.nz
www.bnzba.co.nz
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NZ Manufacturer June 2012
FRONT & CENTRE
Get the right people on the bus and in the right seat. – Jim Collins
Big first year for Productivity Commission
T
he Productivity Commission reached its first birthday in April, and is looking back on a hectic but rewarding first year. They have made a promising start with two inquiries now finished and two more underway. The role of the Productivity Commission is to find ways to boost New Zealand’s productivity through: • carrying out inquiries requested by the Government; • conducting research; and • promoting understanding of productivity issues. Their work is largely at the ‘framework level’ considering whether laws, policies, regulations and institutions best support the wellbeing of New Zealanders. This is different to workplace or individual productivity, which some understandably (but incorrectly) assume is the focus given their name. The Productivity Commission’s challenge is to present compelling advice, research and information on what will work to improve productivity, and as a result, the wellbeing of New Zealanders.
Insights into housing affordability and freight transport
The Commission finished its first two inquiries earlier this year. The Government is now considering the recommendations of both reports.
Housing affordability
The Commission found excessive costs, inflexibility and a lack of customer focus in almost every aspect of central and local government interaction with the housing sector, which is impairing affordable housing. In particular: • the current approach to urban planning puts constraints on the supply of land for housing and there is a disconnect between councils limiting expansion on urban fringes while at the same time imposing conditions that effectively restrict intensification within cities; • there are costs, delays and uncertainties associated with statutory and regulatory processes at every stage of the housing supply chain, from the release of land through to final code compliance certificates;
www.bossgroup.co.nz
• the high price of land has driven up house price increases and discouraged the building of modest, more affordable houses; • there are difficulties in achieving scale in housing development, partly due to the small size of residential construction firms, but the lack of large sites for residential development are also a significant barrier; and • there are disconnects in public policy relating to the provision of social housing. Social objectives risk being lost, and, as currently funded, the community sector is unlikely to meet the expectations of it.
International freight transport services
Freight costs affect the profitability of our exports, and the price we pay for imports, and matter more for New Zealand than most countries given our remoteness from the rest of the world. The Commission’s key recommendations to improve productivity in the freight sector are: • greater use of ‘facilitated discussion’ models to help coordinate investment planning; • better governance of ports and airports. Councils should also be clear about the objectives they wish to pursue through port ownership, and what degree of ownership is necessary for those objectives. • require shipping companies wishing to collaborate to fix prices or limit capacity to demonstrate to the Commerce Commission that there will be a public benefit which will outweigh any anticompetitive effects; • build more productive workplaces at ports; however government policies aimed specifically at workplace relationships at ports are not warranted as the current regime provides an adequate framework for reaching
Murray Sherwin, Chair, Productivity Commission.
agreements conducive to higher productivity; and • to develop a richer set of performance information. For example, the Ministry of Transport should measure and publish assessments of the productivity of ports across various dimensions.
Local government inquiry
The Government has released the terms of reference for the local government inquiry and the Commission will be releasing an issues paper shortly. The inquiry sits within the Government’s Better Local Government reform package and the final report is due by 1 April 2013. The Commission has been asked to look at what local government regulates, how they do it, and to identify improvements, particularly in regard to whether regulations are best made and implemented locally or nationally.
30 years of CER
The issues paper for the transTasman study, jointly run with the Australian Productivity Commission, was released in April. The final report is due to respective governments by 1 December 2012. The study is to identify reforms that will boost productivity, increase competitiveness and drive deeper economic integration between Australia and New Zealand.
www.specialistrentals.co.nz Visit us at www.carbidenz.co.nz
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NZ Manufacturer June 2012
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REAR VIEW
The key to successful leadership today is influence, not authority. – Ken Blanchard
Does austerity pain actually deliver long-term gain?
A
n Oxford Universityled study examining the consequences of the ongoing fiscal squeeze in Western economies is looking to the past to inform the present, with two academics from Victoria’s School of Government providing a New Zealand perspective. Headed by Professor Christopher Hood, the Gladstone Professor of Government at All Souls College at Oxford, the study is comparing periods or episodes of ‘fiscal squeeze’ across countries at different points in history to consider how austerity variously affects constitutional, political and economic development. Academics from Britain, the United States, Canada, Sweden, Argentina and New Zealand are exploring whether austerity requires a reversal of normal political and bureaucratic routines; what shapes cutback choices when expenditure needs to reined in; how governments shift or avoid blame from voters; and what the medium to long-term effects of such cutbacks are. Using the “mother of all budgets” in 1991 as the point of departure for a New Zealand case study, Victoria University’s Adjunct Professor Robert (Bob) Gregory and Dr Chris Eichbaum will examine the
Dr Chris Eichbaum
implications of the fiscal constraints in the early 1990s. Dr Eichbaum says that the research will be of academic significance, but will undoubtedly also speak to issues confronting policymakers in the here and now. “We can see from developments in the Eurozone, and in Greece and Spain in particular, that that the policies of austerity have a direct and material impact on the economic and social circumstances of citizens, and also on political stability, sentiment and action. “A policy prescription which has credibility with finance markets and those that advise them, such as credit rating agencies, may well be a necessary condition when it comes to charting a path to recovery. But it is by no means a sufficient one. Policy credibility needs to be twinned with popular or democratic legitimacy. That doesn’t mean a situation in which no one loses— but it does mean ensuring that there is a mandate and understanding of the need for policies that may involve pain, whether in the short or medium term. “What we are seeing in Europe is a debate over the relative merits of austerity programmes and those kinds of programmes that seek to re-balance economies (and firms and households) using economic growth as the lever. These are challenges associated with governance.” Dr Eichbaum says that public spending in New Zealand is clearly under pressure as the Government works towards the target of a modest fiscal surplus by 2014/15. “The government of the day has an interest in getting value for money in the short-term, but it also has a stewardship interest to maintain and even build capacity for the medium to long-term. One early lesson to be
Adjunct Professor Robert Gregory
drawn from the case studies already discussed by the researchers is that policy decisions taken in periods of fiscal squeeze may well have longterm and sometimes unanticipated consequences.”
The study is funded by the UK’s Economic and Social Research Council and the British Academy, and research findings will be presented at a conference in London in 2013.
The policies of austerity have a direct and material impact on the economic and social circumstances of citizens. EMAIL: scott.ellery@gallagher.co
www.nzmanufacturer.co.nz
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NZ Manufacturer June 2012
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your company’s developments are being read about around the world. www.nzmanufacturer.co.nz
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