NZ Manufacturer April 2011 by NZ Manufacturer

NZ Manufacturer April 2011 April 2011

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Business News

Growing the pie for New Zealand

Metals Chairman draws line in sand

Page 5

www.solidtec.co.nz

Auckland Manufacturers Supporting growth and productivity in the manufacturing industry Page 13

Page 12

Innovation grant saves jobs

he recent $321 million Government package aimed at driving research and development (R&D) for New Zealand businesses has already pulled one company out of closure. This is an encouraging outcome of the grant and has reinstated hope for business growth during the second half of the financial year. FRAMECAD Solutions was one company awarded funding for R&D. From this funding the company created a new product which required supply from Pyramid Engineering, a manufacturing company specialising in metal presswork, robot and precision welding, and CNC (computer numerical controlled) machining. From this, Pyramid Engineering was lifted out of recession. Turnover has increased by 30 per cent and the company has doubled its number of employees.

“I pulled all 20 of the guys into the lunchroom and said, ‘I’m sorry, there are going to be shorter hours and redundancies. And we are all going to have to go down to a fourday week,” says Les Osbourne, Managing Director at Pyramid Engineering. In the current bleak economic climate this positive step brings relief for many companies and their staff with flow on affects assisting other businesses. “We’ve been collaborating with these groups on research and development projects for some time now and I think the results speak for themselves,” says Mark Taylor, CEO of FRAMECAD Solutions. The development of the new product has also allowed FRAMECAD to export to over 60 countries and achieve over 20 percent growth last year despite the worldwide recession.

Making the most of synergies

pportunity Hamilton is the newest member of the Waikato Engineering Careers Association (WECA). Opportunity Hamilton chief executive Sandra Perry and WECA careers co-ordinator Doug Downs agreed the connection between the organisations is a positive step towards a closer working relationship on issues effecting WECA members. “There is no doubt that we are facing a skills shortage and when organisations like WECA and Opportunity Hamilton work together, more can be done to combat it. It’s about using collective knowledge to our best advantage,”

Sandra Perry with WECAís Doug Downs. Sandra said. WECA membership fosters networking opportunities and opens the door to better synergies flowing between the organisations, Sandra said.

Forres McPheat and new Filtercorp headquarters.

Family connection a breath of fresh air! By David Burke-Kennedy

hirty-four years after he started making industrial filters in his garage in Auckland’s Devonport, Filtercorp’s Forres McPheat will become chairman of the largest filtration and flexible connector manufacturers and exporters in the country. From April 1, son Kevin will take over as GM of Filtercorp International. His brother Blair will be GM of BFM Global, a familyowned business that started from grassroots in 2006. Both are also Directors. Filtercorp was established in January 1977 after McPheat resigned from a sales role with another filter distributor, looking for a career change.

When he told clients he was leaving, they urged him to continue in the filtration business on his own. In a single week they gave him $57,000 in orders to start up – immense business at the time. With the Clean Air Act 1973 requiring manufacturers and processors to address environmental concerns, McPheat saw the future. He borrowed $5,000 from the bank, and began manufacturing from his garage. “I used the floor of a neighbour’s rumpus room to cut filter material,” he laughs, “and an $1100 Holden station wagon was the ‘sales office.’” By June, he had worked his way into premises in Glenfield. Continues page 7

• Email: sales@sew-eurodrive.co.nz • www.nz.sew-eurodrive.com www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

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NZ Manufacturer April 2011

CONTENTS Advisors

www.nzmanufacturer.co.nz

DEPARTMENTS

BUSINESS NEWS

Professor Guy Littlefair MSc PhD CEng MRSNZ is passionate about

• Growing the pie for New Zealand.

manufacturing and is constantly striving to improve training methods for students. He is Head of the School of Engineering at Deakin University in Australia.

• Planning for the worst.

HAWKE’S BAY

Napier company exports electronics to Asia.

BUSINESS NEWS

Metals Chairman draws line in sand.

AUCKLAND MANUFACTURERS • Management style suits Transfleet. • Bounce your needs off “can-do”.

Page 8 – OPPORTUNITY HAMILTON – Waikato is a smart move.

➡

5 10 12 13

• Honeylands supply niche markets worldwide. • East Tamaki initiative to stir things up. • Plenty of energy at Viking Plastics.

DEVELOPMENTS

22 25 29 31

ANALYSIS

Bruce Goldsworthy ➡ 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.

• Canterbury punching above its weight.

• EECA welcomes policy statement on renewable electricity The boardroom under scrutiny.

BUSINESS NEWS

• Is your business worth more dead or alive?

Page 23 – PRODUCT NEWS – Techspan and Social Media. Lean times call for thinner sheets.

➡

Chris Whittington

Technical Director with Camplex NZ Ltd. An experienced Graduate Mechanical Engineer with extensive experience in both Product Design and Manufacture. Considerable recent experience in both rapid prototyping and reverse engineering.

• Manufacturing graduates receive recognition.

MANUFACTURING TECHNOLOGY Turning designers into machinists.

REAR VIEW

John Walley

Is the Chief Executive of the New Zealand Manufacturers and Exporters Association. John consults to a number of overseas companies and is a Chartered Engineer, a Fellow of the Institute of Professional Engineers NZ, a Fellow of the Institute of Management NZ and a Member of the Institute of Electrical Engineers UK.

Vishnu Rayapeddi ➡

Free Trade.

Page 28 – MANUFACTURING HEROES – Moving in together pays off.

Vishnu is the founding director of Productivity Solutions Limited, a Lean and Supply Chain Management consulting company aimed at helping its clients create and sustain World-Class Operations. PSL offers Lean and Competitive Manufacturing programmes in association with NZTE, CMI Consortium and HERA.

Hans Frauenlob

➡

Is New Zealand Trade and Enterprise’s Director – Specialised Manufacturing, with responsibility for NZTE’s Specialised Manufacturing team.

Page 30 – LEAN THINKING – Some “lean” Bodek wisdom on competing globally.

sales@plasticweldingtools.co.nz

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.

www.plasticweldingtools.co.nz www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

EDITORIAL

When in doubt, mumble; when in trouble, delegate; when in charge, ponder. - James H. Boren

Manufacturing growth in Auckland

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

ur largest city – our Super City – firmly places manufacturing as key for the nation’s economy. No doubt about it, when you have a city of this size in a small nation like New Zealand then there are allowed to be expectations that its manufacturing efforts are key to the nation and GDP. You will find in this issue of NZ Manufacturer (starting on Page 13) a new section, Auckland Manufacturers, in which we are profiling busy companies, companies on the move, companies succeeding (looking to get ahead) in these challenging economic times.Doug Burt of Eric Paton Limited, whom a lot of you will know, has an article in this section (Page 19) in which he talks about the need for a strong and healthy engineering sector it If manufacturing in New Zealand is to rebuild and play its part in lifting our standard of living. We also profile ABB, who from their base in Napier, Hawke’s Bay is thriving as a power electronics specialist delivering high technology power conditioning equipment to some of the world’s most hi-tech production lines, primarily in Asia. Our Manufacturing Hero story(Page 1) tells how thirty-four years after he started making industrial filters in his garage in Auckland’s Devonport, Filtercorp’s Forres McPheat has become chairman of the largest filtration and flexible connector manufacturers and exporters in the country. Initially Forres used the floor of a neighbour’s rumpus room to cut filter material and an $1100 Holden station wagon as the sales office. So the company is not doing too badly when it is considered how they started out. This is another example – one of many – of a New Zealand manufacturer who rolled his sleeves up and did it! A bit of patience, heaps of determination and resilience. … I bet your company has a similar story to tell me.

Doug Green

Peter Isaac, Guy Littlefair, Nick Inskip, Kevin Kevany, Michael Henstock, Catherine Beard, Vishnu Rayapeddi

SALES & MARKETING NZ ADVERTISING MANAGER

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, Cape & Bay, The Mirror, Asia Manufacturing News. Plus contracted publishing services. ISSN 1179-4992

Vol. 2 No. 2 April 2011

CO-PUBLISHER – MAX FARNDALE www.nzmanufacturer.co.nz

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.

NZ Manufacturer April 2011

Achievement is largely the product of steadily raising one’s levels of aspiration … and expectation. - Jack Niklaus

BUSINESS NEWS

Growing the Pie for NZ or sell out to overseas interests?

011 will most likely see a major ownership change within Fitzroy Engineering Group. With a work force of around 400, the largest of HERA’s fabrication

members, has announced the conditional change in majority ownership from long term owner/ director Peter White Robinson to Malaysian company Dialog, with

Fitzroy Engineering Group has new owners

s of 1st December 2010, Peter White-Robinson has signed a conditional sale and purchase agreement to sell his shares in Fitzroy Engineering, Fitzroy Engineering Australia and his shareholding in Fineline Services to Dialog Group Berhad of Malaysia (90%) with current Fitzroy Engineering Group Managing Director Richard Ellis owning 10%. The sale will become unconditional on the 31st of March. Fitzroy Engineering was established in the late 1950’s and Peter White-Robinson has been the sole owner since 1992. Under Peter’s guidance and wealth of engineering and business experience the company has grown dramatically to be one of New Zealand’s largest heavy fabrication and multidisciplined companies, attracting key maintenance contracts, and key involvement in some tremendously exciting engineering accomplishments. Dialog Group Berhad (Berhad is Malay for ‘Ltd’) was founded in 1984 and has grown into one of Malaysia’s leading integrated specialist technical services providers to the oil, gas and petrochemical industry. Dialog is listed on the Main Board of the Malaysian Stock Exchange and for 2010, reports revenue of approx $NZ474m. Dialog currently employs approximately 1,600 people and the Fitzroy Engineering acquisition will bring that number to over 2,000. Based in Kuala Lumpur, with offices and facilities in Malaysia, Singapore, Thailand, Indonesia, Vietnam, China, Hong Kong, Australia, Saudi Arabia, United Kingdom and USA, Dialog (www. dialogasia.com) has business

Peter White-Robinson interests and customers throughout the Asia Pacific region, the Middle East, Europe, Africa, USA and South America. Peter White-Robinson says the Fitzroy sale to Dialog “is a fantastic opportunity to strengthen and grow the Fitzroy brand”, and Peter is immensely proud that the company will continue to move forward under the Dialog group of companies. Dialog are a very similar company to Fitzroy Engineering in that they are heavily involved in the hydrocarbons engineering sector, and have maintenance, construction and fabrication divisions. Dialog sees Fitzroy Engineering as being a leader in heavy fabrication with a very good reputation in the Australasian market, and able to enhance the Dialog maintenance and construction divisions. Dialog has a very strong forward order book and is looking to Fitzroy Engineering to support the execution of this workload.

a 10% share remaining with the current New Zealand Managing Director, Richard Ellis. Peter retains ownership of Fitzroy Yachts. Following the sale of Robt. Stone to Tenix in 2007, this is the second sale of key heavy engineering assets into foreign ownership, and as an industry sector we have to ask ourselves in what way this impacts on our overall capabilities and capacity? Tenix is an Australian company and it took less than three years to have the name of the original company founders ‘Robt Stone’ disappear as a brand. However, we understand the New Zealand business is enjoying significantly increased access to business opportunities, especially overseas, that include the development of new capabilities, particularly in the area of design and new services. As a result, the New Zealand workforce numbers, while changing depending on projects on hand, had an increasing trend and the management notes that investment from the parent company into plant and equipment was readily forthcoming. Management also noted that the New Zealand operation had gained from the adoption of larger corporate business practices through a more formal approach on tendering procedures and risk management. Succession planning and the ownership issues which can occur are a key concern of many businesses and as owner of Fitzroy Engineering Group, Peter White-Robinson will have been carefully considering his options for some time. Changing the ownership of a 400-staff business is a massive challenge and the likelihood of getting value from an exclusively new Kiwi owner was always low. What Peter achieved in the proposed ownership change is probably the best outcome for both him as an owner and the New Zealand workforce that make up Fitzroy Engineering. It is heartening to note that new owners Dialog have indicated that they see Fitzroy Engineering adding value to their

by Dr Wolfgang Scholz business and that they are acquiring expertise and capability they do not currently have. They fully recognise the skills base and know-how residing within their new Kiwi asset and expect to leverage from this significant new additional business. Having a 10% NZ ownership left with the current Managing Director, Richard Ellis and an overlap in company directorship with Peter White-Robinson staying on another year, combined with the commitment given to the New Zealand staff by the new owner to build the New Zealand business, suggests a positive future path for the company. In any deal with heavy foreign ownership, we have to accept that profits will go overseas, however, we also have to see the benefits from employment opportunities due to the international connection to a growing Asian market and if this investment wants to be long-term sustainable, it has to be one which invests also in technology and innovates. The sale to Dialog has the potential to provide Fitzroy with access to markets and the capital to pursue larger contracts to fuel its growth and development. As for the staff at Fitzroy and interaction with industry and HERA, it will be business as usual for now.

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NZ Manufacturer April 2011

BUSINESS NEWS

What we actually learn, from any given set of circumstances, determines whether we become increasingly powerless or more powerful.

Planning for the worst

he recent terrible earthquake in Christchurch continues to resonate around the country and around the world, and will for quite a long time. Thoughts and sympathies go to all people affected by this disaster – there are so many. This event, in the most dramatic way possible, reminds us of the importance of business continuity planning (BCP). A solid business continuity plan is your business’ roadmap to recovery when the unexpected happens. It can be a very reassuring ‘friend to lean on’ in times of crisis, when stress levels are highest, and urgency to act is extreme. Most businesses have insurance to cover the financial costs of a disaster. Most also have disaster recovery plans – a strategy for how they will recover key business functions in case of an unexpected interruption to their premises. But does your recovery plan factor in the impact on your people? In my experience, and what we are seeing again in the aftermath of the Christchurch earthquake, is the most challenging part of the business to recover isn’t premises or machinery – it’s your people. I’d like to share some learnings from this disaster and others that might help your business if the unexpected happens. There are two dimensions to this. One is how people can respond during the crisis event itself, and the other is life after the immediate crisis is over, but the after-effects linger. Let’s look first at response to the immediate crisis, when you are looking to get the business operational again as quickly and safely as you can. Most BCP plans rely on various people to lead different actions. They also usually rely on the availability of communications equipment like phones, mobile phones, and computer systems. When an actual crisis hits, people’s thoughts naturally and correctly turn to their own safety and security, and that of their family and loved ones. No matter how many simulations you walk through, in the event of an actual crisis someone will not be able to do what they are expected to do. This could be due to inability to communicate with them, or their inability to focus on business needs over family needs. Good BCP plans anticipate this, and have multiple staff members trained and potentially able to lead recovery efforts, rather than relying on a single person. Good plans also anticipate that www.nzmanufacturer.co.nz

a degree of ‘on the fly’ decisionmaking will be required, so they make provisions for how this can occur, but in a way that is still controlled and authorised. For example, management may need to make immediate calls on capital, leasing and other one-off operational expenses, outside the parameters of ‘normal’ shareholder/board meetings and policy guidelines. A good BCP anticipates this, and can put different emergency authorisation guidelines in place immediately (including the communication of those new authorities to relevant suppliers and business partners). A learning from the February 22 earthquake is the immense and immediate power of online and social media tools to establish the basic ‘is everyone ok?’ first response to a disaster. Most BCPs (including ours at New Zealand Trade and Enterprise) rely on a ‘call tree’ approach to inform staff of the situation. This of course relies on the availability of telecommunications locally, so BCPs also have scenarios of what to do when there is no local telecommunications available. What happened spontaneously and immediately during the February 22 event was the creation of many different ‘people finder’ applications, using existing social media or online platforms like LinkedIn, Facebook, Google, or TradeMe to help connect people with people. Few BCPs I’ve seen (including ours) factor this in to their communications/outreach plan in a ‘no local telecommunications available’ scenario, and I think will be one of the big revelations of this event when we look back on it a few years from now. After the immediate crisis and basic operations are restored, there are medium-term issues to

This event, in the most dramatic way possible, reminds us of the importance of business continuity planning (BCP).

consider. Again, some of these can be anticipated in a BCP. Operationally, there will be productivity and cashflow challenges. Some things in your recovered operation are likely to be different, whether it’s a new piece of machinery, different premises, temporary staff, or the ability of your business partners to work with you as they normally would. Your staff are also likely to be less productive as they deal with their own personal fallout from the crisis. The human impact of sudden www. change shouldn’t be underestimated – once the adrenaline rush of getting the business operational again passes, a period of adjustment to baskiville. the ‘new normal’ will affect different parts com of your team in different and unexpected ways. The other challenge will be restoring the confidence of your customers in your ability to serve them. We are seeing this as one of the major challenges post February 22. Most Christchurch businesses resumed operations and production almost immediately, yet their customers, particularly overseas customers, are doubtful and sceptical that this can be possible.

- Blaine Lee

Hans Frauenlob, Director Specialised Manufacturing, New Zealand Trade and Enterprise Government is working to convey messages to the international marketplace that New Zealand business remains capable and operational, but at an individual business level, anticipate having to invest time, resources and effort into shoring up the confidence of your customers and business partners that you are, demonstrably, ‘back in the game’. Having a robust BCP in place is like insurance. The cost and effort seems excessive when everything is ‘normal’, but in times of crisis, trying to recover without it is extremely difficult. If you’re a manufacturer lucky enough to be unaffected by the February 22 earthquake, use that good fortune positively. As a tribute and a sign of respect to your fellow Christchurch manufacturers who were affected, take a look at your own BCP, and honestly ask yourself ‘how ready are we to deal with a crisis?’.

NZ Manufacturer April 2011

DEVELOPMENTS

In business, words are words; explanations are explanations, promises are promises, but only performance is reality. - Harold S. Geneen

From page 1 In 1985 a factory in Beach Haven became home. And this year Filtercorp moved into a large modern warehouse, manufacturing and office complex in Northcote – with BFM Global taking over the old Filtercorp building. Forres estimates Filtercorp has the majority share of its New Zealand air filtration market sector as well as exporting to over 40 countries. And he expresses immense pleasure at having two sons follow in his footsteps – they were children when he started out. Kevin joined the company in 1993 after serving his apprenticeship as a BMW technician. Being a mechanic, he decided, wasn’t his future. Prompted by Forres he studied for his NZCE. Blair joined Filtercorp “when he was 10!” his father jokes. As a schoolboy he accompanied Forres on delivery trips, worked for the company during school holidays, and went full-time after completing his education. It was his idea that led to the family forming BFM Global. Forres had returned from a South Island trip where the Fonterra Edendale Site Manager had asked for a “dust free factory.” By that he meant somehow eliminating the dust leaking out of their flexible connectors. Connectors are typically made from flexible fabric and link and reduce vibration between “moving” plant and stationery machinery. “The conventional method of using hose clips to attach them to the outside of a sleeve practically guaranteed leaks,” Forres says, “And they could burst under pressure, contaminating product and the atmosphere.” “It was a long time health and safety issue for factories – especially those in bulk powder processing,

Family connection a breath of fresh air!

(Left to right) Blair, Forres and Kevin McPheat and BFM connector. food and pharmaceuticals handling, and other dust generating processes.” But Blair had woken up early one morning with the idea of a “clampless” connector that didn’t need hose clips. Instead, he rationalised, sew a spring band into the cuff at each end of the sleeve. The cuff would expand from the inside to out. The more pressure it came under the better it would seal. Metal rings at the end of the

“I used the floor of a neighbour’s rumpus room to cut filter material,” he laughs, “and an $1100 Holden station wagon was the ‘sales office.’”

connectors would enable them to be “snapped in” to spigots welded to the machinery to be “connected.” It was the world’s first “snap in” connector. “My ‘mock up’ looked terrible,” Blair says. But for 18 months he trialled the concept until it gained international patents. “Testing wasn’t always that straight forward,” Forres recalls. “We lost a few nights’ sleep when we saw Blair walk past the office with a full petrol can and discovered he was ‘explosion’ testing,” he says. “We put a halt to that before he blew himself up – and gave the job to Industrial Research to test and certify results.” In 2007 the “BFM Connector” attracted the interest of a Dutch company that builds dairy and pharmaceutical processing plants world-wide. That prompted the McPheats to look for overseas distributors, landing their first order from the giant Tetra Pak group in Holland.

NZ MANUFACTURER • May Issue 2011 • 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

Blair worked closely with NZ Trade & Enterprise which he says was the best move he ever made to help BFM break into global markets. “It’s not easy to be a young New Zealand company trying to find overseas distributors who will perform,” he says, “especially with something new and unique.” Within 3 years the fledgling manufacturer had distributors in the UK, USA, Australia, Argentina, Denmark, Germany, Canada, Singapore, South Africa, South America, the Netherlands, Italy and Spain. Filtercorp in Auckland and Christchurch is the New Zealand BFM distributor. Blair is working with NZTE to get distributors in other countries as quickly as possible as the connectors are now bolted into overseasproduced machinery that goes virtually everywhere. China and Japan will come on line April 1. The company is also targeting the world’s aggregate, concrete, plastic and petro chemical industries. The McPheats stress to other would-be exporters, the value of working with NZTE and the importance of trade shows. “It’s also vital to do homework and make sure that the people attending those shows actually are potential buyers,” Blair says. “It’s easy to waste time and money standing at some show with no-one interested in what you’re doing!” Forres attributes growth to an additional factor: financial control. He cites Filtercorp’s policy of putting away money for tax, development, and shareholders’ dividends.” As the second generation of McPheats takes over management, the dividends seem certain to keep flowing!

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Prefab Construction Manufacturing Heroes Horticulture and Robotics Auckland Manufacturers

Advertising Booking Deadline –13th May 2011 Advertising Copy Deadline – 13th May 2011 Editorial Copy Deadline – 13th May 2011 Advertising material is to be sent to: Max Farndale, P O Box 1109, Hastings 4156, Hawke’s Bay Email: mediahb@xtra.co.nz Tel: 06 870 4506 / Mobile 027 628 2033

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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.

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NZ Manufacturer April 2011

OPPORTUNITY HAMILTON

We will either find a way, or make one.

Passionate about car parking

ust 18 months ago Waikatobased Car Parking Technologies was being run from founder Paul Collins’ home. Now the company, formerly Meter Eye, has listed on the Australian stock exchange with the support of the man behind $6 billion business phenomenon Computershare. “It’s certainly been an exciting ride” says Collins, who retains the managing directorship of Car Parking Technologies. Computershare’s high profile founder Chris Morris is the force behind the ASX listing, which came after his shell company Empire Beer Group acquired Meter Eye and was renamed Car Parking Technologies. Since the listing Car Parking Technologies’ market value has risen to $75 million. Car Parking Technologies develops and markets a suite of wireless products including sensors, signs and camera systems which monitor the activity of vehicles in parking bays, and are used for issuing infringements or to guide drivers to available parks.

“These Car Parking Technologies guys in New Zealand remind me of myself when I was young; they’re passionate about car parking,” Morris said. The idea behind Meter Eye’s Smart Parking Systems stemmed from founder Paul Collins frustration at trying to find a parking space in Hamilton one day in 2002. One year later, together with wife Jo, he started up Meter Eye. In seven years the growth of the company has been spectacular, largely due to an aggressive product development philosophy. The company’s unique partnership with Britain’s largest car park manager, Town and City Parking, sees it receive an ongoing share of the revenue from parking infringements from sites in which there technology is installed. Town and City Parking controls in excess of 1000 car parks throughout the United Kingdom. “We already have a presence with local distributors throughout Australia, New Zealand, Middle East and Asia but this investment means we now have the capital to

tackle the lucrative UK market. The parking industry in the UK is huge so it’s a big growth area for us,” said Car Parking Technologies’ chief financial officer Richard Ludbrook. Shopping malls, airports, retail parks, and car park operators throughout the world use the company’s solutions for car counting and guidance, with overhead bay indicators and digital signs displaying the number of available parks. The system also includes sensor units installed in each bay, which detect the presence or absence of a vehicle and monitor how long it has been parked in that bay. This information is then relayed via the company’s wireless network and is instantly available to the

“It’s certainly been an exciting ride”

-Hannibal

client via leading edge web based software which provides reporting and statistical analysis on usage rates, occupancy, average stays, infringement rate. New Zealand councils including Hamilton have used the system for short term parking analysis and a permanent system has now been installed in central Taupo for over a year. Opportunity Hamilton chief executive Sandra Perry said Car Parking Technologies is a business reaching the “heights of global success”. “We worked with them early on with networking opportunities locally, to help showcase their products in Waikato. We could see that it was a world class company then and to see them come this far is just fantastic,” Sandra said. Instrumental to the company’s success has been the relationship with several key New Zealand manufacturers including Nautech Electronics in Auckland, as well as Hamilton’s Active Plastics and Novel Ways, Hi-Tec Aerials in Christchurch and KTL Signs in Wellington.

Technology programme links professionals in New Zealand and South Africa

aikatoLink, the technology transfer company of the University of Waikato, and the Department of Science and Technology (DST), South Africa are sharing commercialisation expertise and building global linkages through a Technology Transfer Internship Training Programme. WaikatoLink’s five week technology transfer intern programme, designed to enhance technology management capabilities and commercialisation skills, has its third intake of interns from South Africa, who all have roles in technology transfer at publically financed institutions. Duncan Mackintosh, Acting Chief Executive, WaikatoLink says, “Leveraging real world experience is a great way to build technology management and commercialisation skills. Interns gain experience first-hand through working with Waikatolink licensing and technology transfer professionals on projects in WaikatoLink’s pipeline or by working on their own technology www.nzmanufacturer.co.nz

transfer office projects.” McLean Sibanda, Chief Executive Officer of The Innovation Hub and former Group Executive Commercialisation at the Technology Innovation Agency in South Africa and advisor to the Department of Science & Technology (DST) says, “We want to make the most of the intellectual property and innovation in our publicly funded institutions to help drive economic transformation. To achieve the best commercialisation outcomes we’re boosting our technology transfer functions and adopting the best processes and customising them for the South African Research environment. WaikatoLink is a top performer internationally so we’re very keen to understand their processes.” Two groups of interns from South Africa interns have already successfully completed the experiential training programme, designed in association with the DST, which covers the operations of a technology transfer office and the technology commercialisation

process from initial invention and opportunity identification by inventors through to a successful commercialisation outcome which will generate return for stakeholders, and transfer knowledge. Learning modules include market research, technology development, intellectual property management, deal preparation and the investment ready process, venture management and post deal support, strategy and business development, accounting and finance, marketing and public relations, and relationship and network building. Following the residential programme interns continue to access WaikatoLink mentors virtually. Organisations can also adopt WaikatoLink IT systems and processes, customised to suit their environment. Mr Sibanda says, “The intern programme is proving to be a successful capacity building initiative for South Africa’s newly established National Intellectual Property Management Office (NIPMO) and our research institutions. Interns

are learning the nuts and bolts of IP based commercial opportunities with particular emphasis on commercialisation of publicly financed R&D and reducing IP leakage from the country. Increasing opportunity identification and deal flow from institutions will dramatically improve the returns on innovation and create valuable new companies, jobs and revenue streams.” Representatives from WaikatoLink will visit South Africa later in the year to continue the exchange of knowledge and to further develop key connections. Mr Mackintosh says, “The collaboration is proving to be very mutually beneficial. We’re learning a great deal from our South African counterparts and we’re forging some great connections. We’re looking forward to our upcoming visit and hope to work on more joint initiatives together in the future.” WaikatoLink’s Technology Transfer Internship Training Programme is open to local and international organisations.

NZ Manufacturer April 2011

The only way around is through. -Robert Frost

OPPORTUNITY HAMILTON

Calling all manufacturers – Waikato is a smart move

amilton, and the Waikato, is emerging as New Zealand’s location of choice for specialist manufacturers. Founded on the back of the dairy industry, the region is home to dozens of globally successful manufacturing businesses and its central location in New Zealand’s “growth triangle” makes it an ideal option for new business or those looking for relocate. Logistically, Hamilton is close to Ports of Auckland and Port of Tauranga, with the North Island main trunk rail link from Auckland to Wellington running through the city. The Hamilton International Airport underwent a $15.5 million terminal upgrade in 2007 and is New Zealand’s second busiest commercial airport based on plane movements. Hamilton itself was built as a highly specialised manufacturing city with its original purpose to service the dairy industry. From there the Waikato has grown into a region capable of serving many sectors with specialised manufacturing, in stainless steel and plastics production in particular.

By Sandra Perry, Opportunity Hamilton chief executive

The Opportunity Hamilton team, from left, business development manager Adrian Dixon, executive assistance Marianne Jones, communications manager Sally Birch, chief executive Sandra Perry, project manager Sandy Turner and business development assistant Robyn Robertson. It also offers great lifestyle options, with comparably inexpensive house prices, excellent education facilities and plenty to see and do. Manufacturing clusters based in Waikato demonstrate strength in numbers, with the Aviation Industry Cluster (AIC) recently producing its 1000th aircraft. The cluster’s vision to be Australasia’s centre for light aircraft manufacture, maintenance and airline pilot training is well on the way to being realised. Construction is due to begin on the AIC’s world-class specialist aviation paint facility at Titanium Park, near Hamilton airport, this year and is expected to attract other aviation refurbishment and manufacturing businesses to the region.

Forging links with high end manufacturers throughout New Zealand is a priority, in particular fostering strong supply chain relationships. Opportunity Hamilton, as the economic development agency

Founded on the back of the dairy industry, the region is home to dozens of globally successful manufacturing businesses

for the city, is a first port of call for businesses interested in such relationships, or for those wanting advice on relocating to the region. The agency is actively working to foster global and national business relationships and investment opportunities. In April Opportunity Hamilton will launch www.investwaikato. com, a website profiling the best businesses the region has to offer in sectors including specialised manufacturing, agriculture and innovation. nextSTEP For more information about moving to Waikato, or about establishing business links with the region, visit www. opportunityhamilton.co.nz or e-mail sandra@opportunityhamilton.co.nz

www.opportunityhamilton.co.nz www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

HAWKE’S BAY

To succeed in business it is necessary to make others see things as you see them.

- John Patterson

Napier company exports high technology

t may sound like shipping coals to Newcastle, but few will know that tucked away in the hub of Hawke’s Bay’s industrial area in Onekawa, Napier, is a thriving power electronics specialist delivering, high technology power conditioning equipment to some of

the world’s most hi-tech production lines, primarily in Asia. In May 2008, local business Vectek was acquired and integrated into a business unit of global automation leader ABB, which continues to support the business’ destined journey as a global market leader in

it’s specialty field. This highly innovative and skilled mix of R&D engineers and international marketers find themselves developing, manufacturing and marketing electronic solutions used to keep some of the world’s most

sophisticated factories protected from voltage sags and outages. This includes well known such as Samsung and LG. With the support of ABB, one of the world’s largest power engineering companies, the Napier team are now expanding into providing clever solutions for fast charging electric cars, connecting ships to port shore supplies and stabilising renewable power generation. The Napier facility has a long history in the New Zealand industrial market place, being originally involved in the design, manufacture and marketing of variable speed motor drives for industry. Over the last 12 years, the focus has been shifted to the challenge of solving global power quality problems. The practical Kiwi approach to innovation has meant markets needs have been indentified and products have been quickly developed to meet these needs on a global basis. This is much more involved that the number eight wire approach New Zealanders pride themselves on. ABB’s Napier marketers and engineers spend considerable time in the market understanding their target customers real problems and concerns. They can then ensure products are developed that offer benefits that really matter. This approach is essential when targeting niche markets from a remote location such as New Zealand. The benefits offered by ABB’s Napier manufactured products are considerable and include boosting productivity, reducing waste, and improving uptime of high technology production lines. They save energy in factories and manufacturing processes that improve efficiency and ultimately reduce cost. ABB is proud of the positive impact they have on the

Manufacturers of

Fine Wine

Cellar Door Specials now powerqualitynz@nz.abb.com www.abb.com/powerelectronics (energy storage & grid stabilization) www.nzmanufacturer.co.nz

T: 06 876 4363 E: estate@hettinga.co.nz

NZ Manufacturer April 2011

Productivity is being able to do things that you were never able to do before. - Franz Kafka

y electronics to Asia environment while also improving their customers bottom line profits. ABB estimates, globally, that by saving energy in the machines and processes that run our factories, it is possible to prevent the emission of 68 million tons of greenhouse gases annually. ABB’s Napier team is helping to contribute to this goal. So far, this local unit of ABB has installed more than 500 large scale, multi-megawatt Active Voltage Conditioners (AVC) into some of the world’s largest and most sensitive production facilities. To give some idea of the scale, this is enough capacity to condition the power supply of much of Auckland city. Building silicon chip and LCD flat panel display manufacturing plants is an expensive business with a typical facility costing 3 to 4 billion US dollars to build. ABB’s AVC power conditioners protect the hugely automated and robotically controlled process floors. It can take around 40 days to manufacture a silicon wafer covered in hundreds of chips (called die) and so these

wafers are very valuable. Each of the operations is at huge risk from electrical sags and surges that can shut down systems in the middle of a high volume production run, and in turn, result in product loss costing tens of millions of dollars. In today’s modern business world, datacenters must operate 24 hours, 7 days without interruption. This is another target market for ABB’s engineers. Computer systems and other electronic storage devices are susceptible to data loss due to power fluctuation. Products are being built in Napier that can prevent this loss and save energy when compared with traditional solutions. The unimaginable amounts of critical data processed every day, has high commercial value, and the importance of safeguarding this business is not taken lightly. Any interruption that results in down-time will typically cost thousands, if not millions of dollars in direct and indirect cost, including loss of reputation. Continues page 29

HAWKE’S BAY

ABB delivers high technology power conditioning equipment to some of the world’s most hi-tech production lines, primarily in Asia.

www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

BUSINESS NEWS

You can’t run a business without taking risks.

- Pablo Picasso

Metals NZ chairman draws line in sand

elivering the keynote address at the launch of Metals New Zealand Incorporated, in mid-April – which many see as one of the most significant industry developments in ages – Chairman Noel Davies said priorities for the new organisation started with government, included an ANZAC bridge for Auckland, amongst other projects – and looked for a fair hearing in the reconstruction of Christchurch. In a wide-ranging talk, Davies, an industry heavy-weight and chairman and director of many large organisations, including Hydraulink says: “The time has come to draw a line in the sand, get ourselves organised and do something about our situation. “If we want to tip the playing field back in our favour and overcome some of the issues we face, we need to have a united voice promote and grow this fantastic industry. It’s an absolute priority for us is to engage effectively with Government. “The situation at present is that, despite our obvious value to the economy ($2.3-billion annually and 26,000 jobs), the metals industry is woefully unrecognised and under-represented in the halls of Parliament. “What we want –and what we’ll be asking for – is an even playing field.” While it was early days for MNZ – “six years in the making” – it already had the support of memberbased organisations: Casting Technology New Zealand (CTNZ), the Galvanising Association of New Zealand (GANZ),HERA, Light Alloy Manufacturing New Zealand (LAM-NZ), Metal Roofing Manufacturers (MRM), the National Association of Steel-framed Housing (NASH), the New Zealand Stainless Steel Development Association (NZSSDA), Steel Construction New Zealand (SCNZ) and the Titanium Industry Development Association (TIDA). New Zealand Steel, One Steel and SAFE are Corporate Members plus seven affiliate members. He singled out the Heavy Engineering Research Association (HERA) director, Wolfgang Scholz for his role in establishing Metals New Zealand.

On representation with government “For example, there’s no Minister with direct oversight of the metals industry; whereas our peers in the forestry and agriculture sectors are obviously well-represented by the Honourable Mr David Carter, Minister for Agriculture, Biosecurity www.nzmanufacturer.co.nz

Noel Davies and Forestry and acting Minister for Economic Development, appointed to represent the government at our launch. “ While I’m not necessarily suggesting we warrant the creation of a whole new Ministry – and with the PM seeking a trimmed down public service that’s extremely unlikely – I am suggesting that we at least become more visible and more vocal, which will hopefully lead to greater recognition. It’s nobody’s fault but our own that we’re underrepresented with Government – in the past perhaps we’ve never felt a need and have chosen to just get on with our day jobs.” “We need to be more vocal with government regarding the procurement of products and services for large public projects. A case in point is the recent overhaul and conversion of the NIWA research vessel Tangaroa, which was awarded to a Singaporean company. [HERA estimates that this decision cost New Zealand 40 skilled jobs.] “One of the things we also need to do better is work with our government to help ensure that trade agreements and other economic partnerships work for us, as well as for the likes of the agriculture sector. With changing times, Davies said it was more important to build strong relationships with Ministers and officials. “ The Government is central to many things affecting our industry, such as compliance rules and standards, taxes and tariffs, building codes, public sector procurement rules including “Buy New Zealand Made”, research-funding and employment policies.” He said he wanted to focus on opportunities too, pointing to the “outstanding work from companies like D&H, Fitzroy Engineering, Flotech and the NDA Group to name but a few”. These needed to be celebrated along with other successes to grow the industry.

A strong voice on high-profile projects of national significance -- the Auckland Harbour ANZAC Centenary Bridge, the Marine Energy Centre and the Low Heat to Electrical Energy Projects – would all involve the use of metals-related products and services, and “we will seek to use these opportunities to our advantage”. “The other obvious project of national significance is the rebuild of Christchurch. The earthquake of Feb 22 was - and will continue to be for some years - a devastating event for the city and for New Zealand. And let’s not forget the earlier September earthquake as well. “Clearly the rebuilding of Christchurch, once it gets underway, will provide a much-needed boost for the entire economy and the construction industry in particular and therefore the steel industry too. “It may seem early days as the Government works through the process, but we’ve already seen the timber and concrete lobbies come out with their views on how the city should approach the rebuild and I’m sure you’ll agree that, so far, we have been conspicuous in our absence.” “Rest assured that we’ll be working with the steel guys to make sure we put our case. The evidence to date is that steel-framed buildings performed very well, as expected. We just want to make sure that we’re part of the conversation, have some influence in the decision-making and be part of the solution. “But I would note it’s important that in putting our case we are not seen to be taking advantage of this tragic event. We should never forget that many lives were lost. Neither should we be proposing that steel and only steel is the solution,” Davies says.

On the impact of imported products on local industry “They are often inferior in quality to their NZ-made equivalents and can require substantial re-work; carry delay-related completion penalties; and increased maintenance costs.

“We need to have a united voice promote and grow this fantastic industry.”

By Kevin Kevany

Therefore, looking at it from a whole-of-life perspective, they are frequently more costly than the New Zealand-made solution. According to Davies, other factors which gave overseas competitors a price advantage included: poor or non-existent health and safety regulations; poor pay and working conditions; lack of concern for environment impacts; government subsidies and incentives; and different interpretations of patent and intellectual property laws. “To quantify these costs let me quote you some figures calculated in 2009 by BERL (Business and Economic Research Limited) regarding the economic impact of imported steel products. Every $1-million of steel product imported, rather than manufactured locally, results in: * 10.4 jobs lost * $108,457 in forgone tax revenue * $207,762 of increased purchasing power lost * $128,685 in extra government welfare payments. “When you consider that in 2009 over $2.5-billion of fabricated steelwork was imported, the negative impact on New Zealand’s wealth and social-wellbeing is quite simply staggering.”

On sustainability

“What we say is that sustainability is about much more than just the environment. It’s about doing sensible things now to ensure our industry is there for the benefit of future generations. “A sustainable metals industry in New Zealand means the creation of new jobs and wealth; it means being an active and responsible part of the communities in which we live and work; and it means taking care of the environment as best we can. This is the sustainability story we want to tell.” The conference theme this year was Driving Productivity and Innovation.

NZ Manufacturer April 2011

– ATEED and NZ Manufacturer

Supporting growth and productivity in the manufacturing industry

anufacturing in Auckland is a key industry for the local and national economy. As such, each issue of NZ Manufacturer magazine will feature a special section within the magazine focusing on the businesses, subsectors and precincts that make up Auckland industry. It’s a chance to share information, feature businesses and support services, profile subsectors and highlight the significant contributions each make to the local and national economies.

Committed to industry success

In November 2010, Auckland and New Zealand’s first economic development and marketing agency was established. Auckland Tourism, Events and Economic Development (ATEED) is the interim name for the agency which exists to promote local and regional economic development in Auckland, New Zealand’s largest economic centre. The agency’s responsibility is to increase the economic outcomes for Auckland, providing a coordinated approach to growing Auckland’s business, export and visitor economy. Supporting growth and productivity in the manufacturing sector is fundamental to achieving these goals. Through the amalgamation of a group of diverse providers, the agency now has the combined size and momentum to coordinate support structures, business growth programmes, and facilities for businesses and industry sectors across the region to enhance growth and sustainability.

– covering the full spectrum of skills, premises, product development and markets. Statistics NZ classifies manufacturing under the following categories: 1. Food product 2. Beverage and tobacco product 3. Textile, leather, clothing and footwear 4. Wood product 5. Pulp, paper and converted paper product 6. Printing 7. Petroleum and coal product 8. Basic chemical and chemical product 9. Polymer product and rubber product 10. Non-metallic mineral product 11. Primary metal and metal product 12. Fabricated metal product 13. Transport equipment 14. Machinery and equipment and other 15. Furniture manufacturing. Although diverse, there are many similarities between subsectors. For instance, all need to manage compliance requirements ranging from the relatively straight forward to more complex. The majority are required to be skilled in export activities and distance market management. Businesses are consistently seeking innovation through new product development which requires skill and resource to take a concept design through to market. And of course, all are commercial entities needing to make a profit.

Harbour Bridge a necessary link to manufacturing in Auckland

Value chains

All companies require products and services to form, blend and create new products. One benefit of having diverse subsectors within Auckland’s manufacturing industry is that collaboration allows a company to create value for itself as well as companies they work with. The very act of purchasing products and services gives value to other companies and the region’s wider economy. Auckland manufacturing businesses – we want to profile you! One of the ways ATEED is supporting local industry is through a partnership with NZ Manufacturer magazine to profile Auckland manufacturers.

You will you gain profile from the print format and the digital copy of the magazine which is distributed to businesses nationally and internationally. Businesses can also distribute the digital copy to important contacts and clients. There is also an opportunity to get short digital video clips made for a discounted price. Each of these formats have specialist editors and production support to ensure your business is represented in a professional way. These video clips will appear on www.nzmanufacturer/videos. nextSTEP Please email your interest to ATEED Manufacturing Sector Specialist, Bessie Nicholls: bessie.nicholls@em.org.nz

A region wide industry

Manufacturing activity is spread across the Auckland region. Often found in industrial precincts, containing similar or mixed industry, each is unique. Some are located in long established industrial areas while others are just a few years old.

Manufacturing subsectors

Subsectors within the manufacturing industry are diverse

Supporting growth and productivity in the manufacturing sector is fundamental to achieving these goals.

VIEW THE MANUFACTURING THEATRE AT

www.nzmanufacturer.co.nz/videos

www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

www.nzmanufacturer.co.nz

www.chevpac.co.nz Sales@chevpac.co.nz

NZ Manufacturer April 2011

AUCKLAND MANUFACTURERS Management style suits Transfleet

Business is like a wheelbarrow--it stands still until someone pushes it. - Source Unknown

n the heart of Auckland’s heavy industry base at Wiri, just down the road from the Manukau Shopping Centre, is the privately-owned and run road transport engineering company, Transfleet. CEO Matthew Gillies took over the running of the business a few years ago and his father, still involved in a mentoring role, has left development of the business to the team around him. Over the backfence the new State Highway 20 linking with the Southern Motorway is ever present. Inside, the team of engineers, operating out of two workshops, build customised truck and trailer units, that will eventually cart everything from livestock and refuse. The team fabricate and assemble trailer chassis and gear frames, fit up trucks including fifth wheel turntables and guards, setup for bodies, sub frames and hydraulic components. In the other workshop aluminium and steel welders, cutters and a 9m long press build and manufacture truck bodies. On the other side of the Manukau Shops at AUT’s Manukau Campus, is the base for the AUT Centre for Innovative Leadership (CIL). Coming from a private leadership training provider I was initially contracted in by AUT University to set up a leadership development arm for the University. It was important to AUT that the Centre had a commercial focus with authentic and innovative principles, and so we have our home within Innovation and Enterprise, where AUT’s incubator, the Business Innovation Centre and its commercialisation company AUT Enterprises, are also housed. During 2009 CIL became operational, running its first week-long leadership course for senior executives, the Authentic Leadership Course, at Waitakere Estate. Participants come from all areas of business, both public and private. A common thread is the desire of their organisations to see growth through the development of authentic and innovative leaders. As CIL has grown it has developed a suite of public and tailored courses and workshops aligning with it. CIL markets throughout New Zealand but has a special place for the industrial heart at its base. After all, the Manukau Campus was once the headquarters of the pulp and paper giant Carter Holt Harvey. The lush grounds, once used by executives for golf during their lunch-hour are now used for team development exercises.

We don’t believe in the ‘falling back into my arms’” type of building trust, as it doesn’t calibrate with many of our clients. We get outside to give teams like Transfleet’s an opportunity to see themselves in action, in a no-risk environment. First we’ll do some work inside such as developing a Charter – which is like a guide for how we behave to each other - then head outside to experience it in action. As the planes rumble overhead, the groups work on challenging exercises, laughing a lot and solving some pretty simple looking, but complex problems. What they learn is less about the actual exercises, more a deeper understanding of their own, and ultimately each other’s preferences or styles of operating. We do a lot of sifting of what we think people are like, based on what we know superficially – gender, occupation or position – but much of it is preference based, unconnected to what they do. Matthew, for example is the CEO who needs, at times, to be overtly directive and give unambiguous instructions. However, we know that Matthew is introverted. Even that word probably brings up thoughts and feelings that aren’t true. For example, people often believe that introverts are shy. That’s not necessarily true at all. What it means for Matthew is that he is likely to process his information internally – so he might not appear to his team to say a lot at times, but when he does, it will be well thought out. This seems to suit Matthew’s team. On the other hand, I know I’m an extrovert – I do lots of facilitation so I need to have the ability think aloud – participants expert input and they don’t expect you to go away for half an hour to think about it. We challenge our leaders to ask themselves “What makes you a leader?” It’s a strength-based question that goes to the heart of

authentic leadership, by challenging leaders and teams to look at what they bring to a team like Transfleet, and build their leadership from that. As in many leadership teams, Matthew has colleagues who’s differing, but complementary strengths, work together, creating the environment and the processes to put those big rigs on the road. Some going right past the back fence as we talk! So does the “soft” looking leadership development have a place in manufacturing? We both say that it does – effective leadership is something that needs to be learned and whatever the work, those in our teams will work at their best when lead authentically with an understanding of not just the machines on the workshop, but those complex wires in our brains! AUT Centre for Innovative Leadership offers leadership and

By Stephen Drain, Director, AUT Centre for Innovative Leadership team development in two areas: Innovative Strategy and Authentic Leadership. Authentic Leadership offerings include the Authentic Leadership Course and the modular Authentic Leadership Journey, for CEOs the Wisdom Retreat for Senior Leaders and The Coaching Leader workshop. Leadership Team building and learning sessions are available from 2 and a half hours to modules taken over several months. Being part of New Zealand’s university for the changing world, the Centre balances theory and application with both public and tailored offerings. nextSTEP Contact: Stephen Drain,Director www.leadership.aut.ac.nz

Transfleet Equipment Ltd is a private family owned and run road transport engineering company based in Auckland. The company’s workshops are located south of Auckland in Manukau City, the base for the majority of Auckland’s heavy industry. Transfleet core competences revolve around the manufacture of transport solutions for the cartage of bulk products with a special emphasis on being leaders in aluminium body construction. Recent diversification has seen a stainless steel bulk tanker range and an aluminium monocoque livestock rig configurations being added to the product mix. Transfleet are one of only three trailer builders to have both a CM (Certified Manufacturer) and CE (Certified Engineer) on staff. nextSTEP Contact: Matthew Gillies CEO www.transfleet.co.nz www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

AUCKLAND MANUFACTURERS

Business has only two functions - marketing and innovation.

- Milan Kundera

Looking for solutions? Bounce your needs off “can-do”

t’s not often you come across a modern, technically-savvy company, focussed on innovation and providing product to two of the big names in a very sophisticated high-tech global industry – and they don’t even have a brochure or a website. Partners and co-directors, Graham Burrell and Grant Crowhurst bought National Springs and Wire Products NZ Limited in 2005 and moved it to the bottom of a cul de sac in Wiri, Auckland. And they haven’t looked back since. “Certainly 2010 was our best year; February this year our best ever month and March our second-best month,” says Burrell who takes care of the front-of-house business, while Crowhurst makes sure operations delivers on its promises. (He’s recently acquired an admin and computing assistant, so the website and brochure might happen “one of these days”. But at the rate they’re going, they are not a priority.) “The people who need us know where we are and how to get hold of us anyway,” reckons Burrell, “but we aren’t just being cocky; we are reliant on service to back our ability to innovate and specialise, while having the capability to do the long runs too. So far, our customers’ recommendations have kept new customers coming in.” Besides, industry experience

oneylands Naturally Limited is known for its creative, innovative packaging and quality of products supplied to niche markets worldwide. Established in 1989, this dynamic food manufacturing company is a market leader in supply of single serves to airlines, and high-end hotels, resorts, motels, lodges, bed and breakfast and farm stay clients - properties who pride themselves in offering superior, quality products to their discerning clientele.

elsewhere tells him that the majority of calls come from one-off potential customers who would be better served tossing the item they are trying to “fix” and buying another from the Warehouse/ Two Dollar Store. “It’s not economical for either them or us.” National Springs and Wire can, and do, produce anything from a single specialist spring/wire form to a production run of 100,000 plus. One of their local customers supplies nearly the total world market for a particular niche product. Nearly two-thirds of their production goes to the OEM sector. “You’ll see no Audis and BMWs (both park in the street) outside; we’re too busy reinvesting the money into the business -- people and machinery. That’s probably why our customers like our financial conservatism and tell us we have ‘the right attitude’.” There’s no question that they are up for a challenge: turning two

Joint directors of National Springs (left) Grant Crowhurst and Graham Burrell products into a composite; replacing plastic or other materials with metal; import substitution – all turn them (and their specialist machinery) on. As you’d almost expect, they haven’t applied for any government grants. “We’re too busy, and besides, from what we see, those all go to the multi-million dollar companies – the very ones you’d think could more than afford to re-invest in whatever it is they’re asking taxpayers for a handout to do,” Burrell says. Both see the arrival of Admin Assistant, Helen Marshall, who is currently integrating all their production and administration needs into a single system, as the beginning of a new era which will lift the burden on the two directors

and allow time for marketing. “We want to be associated with successful companies who need to leverage our innovation and technological skills. We are fortunate enough to have a stable, deep well of experience and we constantly get masses of input from our expert operations staff – literally thousands of ideas – which we want to tap, going forward. “Importantly, we aren’t looking to take over a customer’s whole account, just the niches which link their needs to our skills. So they don’t have to be concerned about rocking-the-boat with their existing suppliers, and disrupting their business,” Burrell concludes. nextSTEP Contact: 09 261 2300

Honeylands supply niche markets worldwide

briefs took into consideration persons with sight impairment, arthritis and airline seating constraints, the tamperproof foil design required a generous grip and the lids needed flexibility for ease of removal. Non-English speaking consumers are assisted by colour coded labels indicative of fruit content of the jams. Another recent success story is the introduction of Apple and Manuka Honey Syrup, a fabulous combination currently being introduced on Pacific Rim airline menus. Honeylands jams and spreads are created from the most succulent berries and fruits. The berries offer distinctive, rich flavours and carry the taste of ‘Summer’, whilst the ‘Tropical’ taste is derived from their Mango and Pawpaw jams. Honeylands famous Marmalade combines the zest of citrus peel with the sweetness of tree-ripened oranges. nextSTEP Visit: www.honeylands.com

“New Age” packaging

Honeylands’ 28gm PET jar packaging concept is “state of the art”, a unique, must see eye-catcher. Perceived at a glance as a traditional, yet inferior glass jar, this packaging innovation is designed for upmarket visual appeal, is easy to grip, lightweight and secure, already flying the skies and touching many people worldwide. Tourists globally sample Honeylands products, emailing, writing and telephoning to express positive and enthusiastic feedback. The company’s Research and www.nzmanufacturer.co.nz

Development Team think “outside the square” and are currently focusing on retail markets to allow new customers access to exciting, unique product for workplace, home and holiday consumption.

The long term success story is the stylist Premium Pottle (25gm) offering the broadest range of jams and spreads available from a New Zealand manufacturing company. The Pottle, foil and lid design

NZ Manufacturer April 2011

Business is a combination of war and sport. - Andre Maurois

AUCKLAND MANUFACTURERS

East Tamaki initiative to stir things up in the stainless engineering market

anufacturing “things” are stirring on the banks of the Tamaki estuary in Auckland south. That’s particularly so in the field of stainless manufacturing. And a very creative proposal for a network of small-tomedium expert engineering shops to combine in a centre of excellence. Allan Tucker a 40-year veteran in the industry, who’s done time with a number of the big names, currently takes care the machining and water cutting production in his son’s Pro Sheetmetals Limited. “There’s no question that the individual units clustered about us here are top-grade operations. Having been around as long as I have means I pretty much know who is capable of what. “There are local CNC shops which do truly beautiful work. Across the car park from us is a total professional who does great spark erosion of metal. We’ve got a topgrade water-cutting capability as well. “Make no mistake – this is not a desperate measure at all. I can assure you we went through the recession and continued on our growth path which started 10-years back. And, as I understand it, everyone else around here now is too,” says the incisive Tucker. He acknowledges that a number of firms were obliterated by the Fisher and Paykel decision to move offshore (they were in the neighbourhood); nearby Lion Breweries’ expansion, which largely ignored local expertise; and the short-term flirtation a number of Auckland firms had with Chinese stainless companies. “Don’t get me wrong. Some of their product is good. They just lack

consistency.” Consistency, quality and transparent pricing are the hallmarks of Pro Sheetmetals production. The company vision is: “To be a company others wish to be associated with”: like regular customer, PTL, down the road, which specialises in the design and manufacture of customised chocolate processing and bar manufacturing machinery -to the top chocolatiers in the world. Indeed there’s a large “melter” finishing on the floor as we visit. “Given all that quality, experience and a low-to-no staff turnover, why wouldn’t you want to deal with us and let us bring in the other known reputable talents in the neighbourhood? Especially, since we won’t be carrying the overheads of those overweight big operations around Hamilton,” Tucker says. He shrugs off the praise for his vision and fighting-talk as “commonsense”. “New Zealand manufacturing has to measure up to the challenges of globalism. We need to be even more focused on what the market needs, and have the courage to try it. No one’s being asked to give up their individual control or invest in a huge expensive property.” So what would the East Tamaki operations be getting into? Certainly not a sweat-shop or a cheap-‘n-nasty operation. Bossman and owner, Stuart Tucker is a perfectionist – a “fanatic”, according to his father. Everything that leaves the premises gets a quality finish even if the finish is not specified. If it is not “just right” it goes in the recycling bin. But, at the same time, nobody works over the weekends, so as to give regular breaks, “to maintain

Consistency, quality and transparent pricing are the hallmarks of Pro Sheetmetals production. our legendary energy and drive”. Even the shifts are staggered to help fathers to pick-up children after school. The eight staff includes two apprentices – “part of our ongoing commitment to the industry”. “Our latest is a young man of 24. Now that’s old for an apprentice, so he’s been trying for years to get a break. He’s impressed me with

his motivation and commitment, as a hand, so we’re going to give him a chance and I reckon he’ll bring it off,” says Tucker senior. You fully expect he will. Just another example of Pro Sheetmetals Ltd looking outside the square – having courage to try something new. nextSTEP Visit: www.prosheetmetals.co.nz

Manufacturing needs a strong and healthy engineering sector

eturning to work after an enjoyable Christmas break, I read with interest the lead article in the December 2010/January 2011 issue of NZ Manufacturer magazine. The article was caption “We can catch Australia - by manufacturing our way to success” and is reproduced on the next page with the magazine’s kind permission. The article appealed because it supports my strong belief that our manufacturing sector is a key component in building a strong and healthy economy. Quite rightly, the emphasis in manufacturing is placed on potential export earnings, but I believe that the other side of the coin, which is import

substitution, deserves the same level of recognition. While Eric Paton Ltd manufacturers a range of wood working cutters and heads for the domestic and international markets, our primary focus is on providing a general and precision engineering service to manufacturers. Within our company, it is this service that generates import substitution, through the remanufacturing and refurbishment of machinery and the manufacturing of replacement parts. Last year we ran an advertisement to emphasise the savings in both time and money that can potentially be gained by manufacturers if they use the services we offer, rather than follow the more obvious path of

ordering replacement OEM parts. If manufacturing in New Zealand is to rebuild and play its part in lifting our standard of living, a strong and healthy engineering sector will be required to support it. For Paton’s, 2010 was like the general economy – patchy, with a gradual improvement and I believe 2011 will see a continuation of the same. The situation would improve if more manufacturers took advantage of the time and cost savings that can often be achieved with the local sourcing of machinery replacement parts and refurbishment. This would result in a healthy engineering support structure for local manufacturers and help restore a more sustainable balance of payments situation for the country.

Doug Burt www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

AUCKLAND MANUFACTURERS

Business is in itself a power. - Garet Garrett

Low-profile but plenty of energy at Viscount Plastics

By Kevin Kevany

rive along Vesty Drive in Penrose, Auckland and you might just notice a low-slung modern building, just below the pavement line. At a glance, the Viscount Plastics building doesn’t tell you much about this highly successful business. The reception area does. Firstly, you can lift the phone, and the boss, Sean Delaney, will answer and take you through the strict security processing himself. He’s committed to it. While you’re doing that you notice the huge collection of awards for excellence across many industries and significantly, because they are in plastics, after all, environmental awards – something they are hugely proud of. Viscount and their UK mothercompany, Linpac, have pioneered and finally won the argument that plastic automatically loses the argument with timber and cardboard packaging. “Environmentalists and customers are beginning to understand the long-term recyclable benefits of using plastics – the plastic we use is recyclable (no waste to the tip, unlike cardboard, wire etc); lasts longer (most of our returnable crates last for years; versus a single trip); and are pretty much on par when it comes to environmental impacts at the time of manufacture (‘the resin is the key’),” says Delaney who has refocused the company on “the customer”, while still insisting on highest-quality product. Delaney, who took up his GM role in February 2008, is relatively new in the saddle and comes from the food industry; a sales-and-marketing man, firmly focussed on innovation and communication. (Every two months he does the “state of the nation” to the entire staff; three times in one day to accommodate shifts.) You quickly understand that things are on the up at Viscount, following a stutter in 2008, along with the rest of NZ industry. But he’s a bit weary, having flown backwards and forwards a number of times recently to steer their Christchurch factory through some “messy” times, post-quake. “It’s cost us more than $100K, but my focus is on our people and what Viscount can do for them. We’ve utilised our company nurse and brought in counselling services so as to understand (with individual’s consent) what we can do to lessen the impact of those two awful events on them,” says Delaney, who might be a “lean” manufacturing believer, www.nzmanufacturer.co.nz

but is really big on people. A walk around the massive production lines and warehousing, which stretches way back from the admin and management section on the road – which may be further increased with new plastic product launches in the near future; a product of years of research and interaction with the agriculture sector—and you experience the high regard this marketer is held in by the production staff. No “us and them” here. The customers clearly think a good deal of Viscount too. Who’s Who stuff: Zespri, Nestle, Fonterra, Goodman Fielder, Tegel, Inghams, Foodstuffs, Turners & Growers, Dulux, Wattyl, Talleys etcetera. They typically work with Business Development experts at Viscount to understand the nature of their need and costs. Designers, packaging and materials-handling boffins create prototypes and once

Thomas Stowers (left) with Sean Delaney, head of Viking Plastics perfected, go into production. A one-stop operation that ensures marketing confidentiality even where competing products are using, say, a similar rigid-wall bucket. “We’ve just produced 20,000 seats for the magnificent indoor-stadium in Dunedin. Previously we did North Harbour. Furniture, school desks, Ford roof-rails, Viscount can do a whole range of things you probably wouldn’t associate with

our local, high-quality, world-class design and manufacture,” says Delaney. Remember he is committed to doing more on the innovation front. And a pending seven-figure future capital investment may be on the cards. The last one gave Viscount national exclusivity with in-mould labelling. This next one is likely to out-perform that. nextSTEP Visit: www.viscountplastics.co.nz

Technology constantly changing our world

echnology has and is constantly busy changing our world, world views and marketing strategies. Social media has become the most important marketing opportunity and many Companies rely on Social networks to communicate their message, something nobody would ever envisage. Facebook has recently signed their 600 millionth sign-up worldwide. 44% of New Zealand has now signed up with Facebook, so it is essential to use these mediums if a company wants to reach new audiences. Our brains are wired to decode video and within the next two years 90% of everything on the web will be in video format. Video therefore has become the powerful tool to market company strategies, product and values. If you are serious to attract feet to your website and want to keep on updating your website weekly, you cannot afford not to have Videos and video clips on your website. InVesure Productions is a full TV /Video Production company that offers the latest technology in high definition and produce affordable videos for their diverse group of

clients. InVesure’s experienced and Award Winning team devote their personal attention to each client, no matter the size of the project. Exporters and Manufacturers need to utilize technology to communicate confidence and quality and what better way to do that than through a video. InVesure’s approach is to deliver a one-stop service that offers clients exclusive creative concepts, design and a high standard of delivery for all their audio visual needs. At the same time their expertise in marketing and public relations takes their project, product or brand to the next level; High Quality Video Production, Marketing and Event Management InVesure’s studio is situated in Auckland and is a fully equipped, High Definition facility offering two Avid Media Composer Suits, Extensive HD Stock Library, HD Sony Broadcast cameras and Complete Audio and Graphic post production, which allows us to deliver affordable quality to our clients. InVesure’s on -going innovation stems from a committed creative

team that is passionate about your business and they promise to deliver with integrity, commitment and excellence. nextSTEP Visit:www.invesureproductions. co.nz

NZ Manufacturer April 2011

www.ericpaton.co.nz www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

DEVELOPMENTS

Whenever an individual or a business decides that success has been attained, progress stops.

Punching above its weight

- Thomas J. Watson

Canterbury’s specialised manufacturing sector

rom Kiwi legends such as jet boat inventor Bill Hamilton to next generation entrepreneurs like Glenn Martin, designer of the world’s first viable personal flying machine, Canterbury punches above its weight in global delivery of smart, specialised manufacturing solutions. Once known primarily as a centre of farming excellence, Canterbury has maintained its edge in agricultural innovation while building capability in a diverse range of manufacturing sectors. That includes food processing, using the region’s famed expertise in electronics for machinery and equipment manufacturing, metal products, and printing, publishing and recording media. Manufacturing has grown to become the second biggest contributor to the Canterbury economy and the largest employer, providing jobs for 15 per cent of the workforce. i And don’t be fooled into thinking the recent earthquake has slowed growth in the sector. Cantabrians are a resilient lot and, additionally, most manufacturing operations are not in the Christchurch central business district which was hardest hit. Even those firms that did suffer damage are back to pre-earthquake levels of production. December 2010 results from the BNZ-Business NZ performance of manufacturing index confirm the buoyancy, with Canterbury shrugging off the effect of the September shake to increase activity by 11.5 points. Of course the exchange rate remains a concern for many businesses and manufacturers will always have to contend with the cost of freight, but generally the prospects for the sector in 2011 are good, particularly with the Rugby World Cup on the horizon. A number of activities are planned to help the manufacturing sector leverage off the event with the first taking place in Christchurch on 10 March. Canterbury’s legacy of innovation is due in part to the region’s vibrant tertiary environment being home to two universities (Canterbury and Lincoln) and hosting research sites for three crown research institutes (AgResearch, Industrial Research and Plant and Food Research). The ICT centre of excellence at Canterbury University - NZi3 – is a source of inspiration and ideas for the manufacturing sector but it is the university’s School of Engineering which is at the root of Canterbury’s success in incubating specialised manufacturing enterprises. www.nzmanufacturer.co.nz

Established 124 years ago, the school created a culture of making things to solve problems which has underpinned the region’s economic development for decades. Both Hamilton Jet and Martin Aircraft Company have drawn on expertise within the school as do many of the less well known businesses in the Canterbury region. One of the things that never ceases to surprise people both inside and outside the sector, is the number of small and medium sized manufacturing enterprises in Canterbury operating under the radar. No one in New Zealand can out manufacture Asia so, in order to excel globally, manufacturers in the region have developed expertise in selected niches. One example is The Glass Racking Company, formerly Metalcraft Engineering, which fabricates solutions for handling and transporting glass and windows. By focusing on a risky area other fabricators avoided and investing in research and development and smart design, founder Bryn Thompson has created a successful exporting enterprise. The company has offices in Melbourne, Perth and Seattle and took out the reader’s choice award for best new product in 2010 in the United States Glass magazine. It is also expanding into the United Kingdom and Europe through a joint venture with a UK company. But you don’t have to be small to be smart. Canterbury is also home to some of New Zealand’s oldest and most successful businesses, many of which have spawned the sector’s emerging high flyers. CWF Hamilton & Co (Hamilton Jet) and Mace Engineering are good examples but one of the most significant breeding grounds for new companies has been Tait Radio Communications Ltd (formerly Tait Electronics). Over the years, many graduates of the School of Engineering have joined Tait, gained experience, came up with ideas of their own and left to form new, spin-off businesses. Through recruiting and training, Tait has produced a generation of people with outstanding skills in electronics that are being applied to other products and sectors. Although smaller, Dynamic Controls is another star in the Canterbury manufacturing sector. The company is both a contract manufacturer and the world’s leading manufacturer of electronic controls for powered wheelchairs.

By Leone Evans and David Grant

Leone Evans

David Grant

Leone Evans is NZTE’s Director – Relationships and is responsible for managing key business relationships in the South Island (specifically Canterbury), and also managing NZTE’s Christchurch office.

David Grant is a Sector Manager with NZTE, with primary responsibility for specialised manufacturing in the wider Canterbury region. Both Leone and David are based in Christchurch.

It employs 190 staff in Christchurch, which is its research, development and design hub, and it’s been doing exactly what most business analysts say companies should do during a downturn – investing in R&D. Its track record in successful innovation has seen it recently receive $5.28 million of government funding to help it develop an exciting new product line that will keep it at the forefront of its global niche. The Christchurch Engine Centre, a world class centre for the maintenance, repair and overhaul of commercial jet engines, is a great source of engineering skills, employing 381 people and running an apprenticeship scheme to help replenish numbers. Owned by Pratt and Whitney (51 per cent) and Air New Zealand (49 per cent), the centre also gives the region a first class reputation internationally. Around 95 per cent of its work comes from overseas customers. It regularly wins innovation and excellence awards (one example is receiving the top accolade for trade

with the United States at the 2010 American Chamber of Commerce Success and Innovation Awards) and has an enviable reputation for outstanding quality, workmanship and industry leading turn time. The number of active networks in Canterbury is often cited as another reason the region has such a vibrant manufacturing sector. They work across the engineering, electronics, emerging technologies, plastics, wood products, aviation and marine sub-sectors, connecting companies to new innovations and talent. Steve Wilson, managing director of Talbot Technologies Ltd, last year’s winner of the emerging leader title at the New Zealand International Business Awards and one of Canterbury’s top business mentors, believes the region’s comparatively small size has been an advantage. Without having a large population on its doorstep, he says, manufacturers have been forced to think big, be innovative and export focused. He believes Cantabrians are also good at supporting each other. “We do it in sport and we do it in business. None of us are big enough to do it alone so we work together”. Good coordination between the agencies that support manufacturing businesses also helps. NZTE, the Ministry of Science and Innovation (formerly Foundation for Research, Science and Technology and Ministry of Research, Science and Technology), the Canterbury Development Corporation, the

Overall, there is much to celebrate in the Canterbury manufacturing sector.

Continues page 28

NZ Manufacturer April 2011

Unless a man undertakes more than he possibly can do, he will never do all that he can. - Henry Drummond

DEVELOPMENTS

EECA welcomes policy statement on renewable electricity

he Energy Efficiency and Conservation Authority (EECA) has welcomed the release of the National Policy Statement (NPS) for Renewable Electricity Generation. “Renewable electricity is good for the economy and good for the

environment,” EECA chief executive Mike Underhill said. “These benefits are articulated in the NPS so that they can be considered in all Resource Management Act consenting and planning processes.” “This policy direction will help

Lack of global market hampers NZ’s emissions trading scheme

ew Zealand’s emissions trading scheme would be fit for purpose if there was a deep and liquid global carbon market, but the existence of such a market is increasingly unlikely in the medium term, says BusinessNZ. In its submission to the ETS Review panel, BusinessNZ says there has not been much progress towards a global climate change agreement and little action by other countries to price carbon transparently and without offsetting subsidy policies. As a result, removing the

protections for consumers and businesses from the ETS in 2013 as scheduled is unlikely to be in New Zealand’s best interests. “More action by other countries is needed to keep New Zealand’s action proportionate to its fair share,” said Phil O’Reilly, BusinessNZ Chief Executive. “A new balance needs to be reached between the environmental benefits and economic consequences of the scheme.” nextSTEP Visit www.businessnz.org.nz

achieve the Government’s target of sourcing 90% of New Zealand’s electricity from renewable sources by 2025, provided security of supply is maintained. Last year 74% of electricity was from renewable sources.” The National Policy Statement for Renewable Electricity Generation released by the Minister for the Environment Hon Dr Nick Smith makes it clear that generating electricity using renewable energy resources is of national significance. It must be considered in RMA resource consent applications and must be provided for in drawing up RMA policy statements and plans. One of the major benefits of renewable electricity is its ability to

Renewable electricity is good for the economy and good for the environment.

meet electricity demand and reduce greenhouse gas emissions at the same time. Using natural resources rather than finite resources, and avoiding reliance on imported fuels to generate electricity are also important benefits highlighted in the NPS. An increase in New Zealand’s renewable electricity supply will also contribute to security of supply and electricity system resilience by ensuring that generation options are varied in type and location. “Using renewable electricity also has a number of wider benefits,” Mike Underhill said. “It reduces New Zealand’s climate change impact, improves our ability to meet international climate change obligations, and provides a branding opportunity for our exports. “EECA has been making submissions for councils to recognise the national significance of renewable electricity for a number of years. We are pleased to see this has now been formalised in the NPS, and we look forward to seeing these benefits recognised through local plans.”

visit www.eecabusiness.govt.nz/motorsystems

www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

ANALYSIS The boardroom under scrutiny N

Wise are those who learn that the bottom line doesn’t always have to be their top priority.

ew Zealand company directors – in both the private and public sectors – need to have a much more rigorous and focussed approach to performance if they are to add value, live up to their potential, restore investor confidence and lift New Zealand’s productivity. In short, we need to spark a revolution in New Zealand’s corporate governance culture – maybe not among all organisations, but certainly in those that are not really cutting the mustard! The Global Financial Crisis (GFC) and meltdown in New Zealand’s non-bank finance sector was immensely damaging and left investors with a jaundiced view of the markets, institutions, directors and regulators. Who can blame them? And, as recent economic figures indicate, we are not out of the woods yet. The extent of corporate and board failures in the USA is particularly sobering considering that it is less than a decade after Enron and the imposition of Sarbanes Oxley – designed to prevent a repeat performance. Yet, the GFC was a repetition, on a larger and more damaging scale, with little sign that the major regulators had any understanding of what was happening. This hangover risks spawning yet another generation of New Zealanders – like that following the 1987 crash – who are unwilling to put their savings into equity or securities investments. Property, with its low rate of

effective taxation compared with rates on income from simple savings products, is likely to remain as the default investment for most. A further challenge is New Zealand’s rate of productivity growth, which halved in the last decade from an already low level. The impact on incomes and living standards is clear and serious, as is the impact on output and employment in the vital Tradable Goods Sector where output and employment in the export industries and import substitutes industries stopped growing in 2004, and have been declining since. Company managers and directors must have a very focussed and strategic approach to these issues and develop a clear plan of action. * They must ensure that their organisation(s) continuously improves and increases its competitiveness. * They must exert a clear and strong influence on the policy environment within which they operate, recognising the vital importance of tradable goods and services, so that barriers and burdens are minimised and opportunities maximised. Fewer officials and politicians these days have worked seriously in business and are therefore lacking a real understanding of it. * They must also be more hardnosed about remuneration and performance, demanding that the entire board is working, adding value and earning its pay, and that management is also up to the mark. While “remuneration at risk” is a contentious topic, losing a significant

slice of reward for poor performance does tend to focus one’s attention. These are often tough issues, but if they are not faced up to, the consequences can be serious. Directors are typically best placed to judge board performance, but if they fudge the issue then they deserve the wrath of other stakeholders. The Government also has a role here. I used to think that markets function best without government interference – but the evidence seems to be strongly against that view now. Government must establish a framework within which high standards of governance are not only encouraged, but required – with serious consequences awaiting those who fail. The performance of SOEs and their boards is also worthy of close attention, given that they are not subjected to market forces and that returns on capital are not what they should be. Unlike a profession, the boardroom is one sector where you do not need a formal qualification. There has been much discussion about this, especially at the Institute of Directors, but at the end of the day Grant Thornton does not see merit in framing a qualification. We struggle to see how you can formally test an individual’s abilities to consistently make astute decisions on a wide range of issues, where experience is an invaluable resource. Requiring a formal qualification could exclude a great deal of serious talent. SMEs also need to be part of the Governance Revolution. The vast majority of domestic businesses are either owner operated or family

- William Arthur Ward

Kerry McDonald

Kerry McDonald, chairman of Grant Thornton New Zealand Ltd, looks at the performance, or lack of performance, of company directors. owned, and independent directors are a rarity, and often not even considered. That’s a serious deficiency. In my experience, once family or aging owners understand the improved performance that good, independent directors can provide, they’re enormously relieved to be able to bring someone on board, reducing stress and providing more freedom to get back to thinking strategically about their business, or fishing. Being a director is also more than just sitting around a board table. Directors must be out and about, walking around, seeing, questioning and talking, and, forming a view as to the culture, risks and performance of the business. All that is part of the rich tapestry of being a company director. Done well, it’s hard work, but extremely satisfying – making a real difference.

EMA and Export NZ to supply Certificates of Origin

nder an agreement with Independent Verification Services Ltd (IVS), the Employers & Manufacturers Association and Export New Zealand (EMA/Export NZ) have announced they now can supply Certificates of Origin to members and other exporters. IVS is an internationally accredited verification company duly authorised by New Zealand Customs to issue Certificates of Origin, which are a requirement of many countries seeking to ensure goods entering their countries originate in the country exporting them. “Certificates of Origin are, in particular, required by countries New Zealand has free trade agreements with,” said Bruce Goldsworthy, Manager of Advocacy www.nzmanufacturer.co.nz

Bruce Goldsworthy, EMA Manager for Advocacy for EMA. It’s written into all of our free trade agreements (FTA). For example, to receive preferential

customs clearance and FTA tariff reductions for China, each export consignment must be accompanied by a Certificate of Origin. “We are delighted we are working with IVS to supply our members and other exporters with this service,” Mr Goldsworthy said. Under the agreement, businesses will place orders for the Certificates of Origin on a website link from both EMA and Export New Zealand websites - www.ema.co.nz and www.exportnz.org.nz Chief executive of IVS, Peter Webb, said IVS is looking forward to building a long term relationship with EMA and Export New Zealand. “IVS is a well established and respected supplier of a range of internationally recognised documentation and provides export certification for many

Peter Webb, IVS Chief Executive household brand companies in New Zealand,” says Peter “We welcome this opportunity to expand the awareness of our services to EMA/ Export New Zealand members.”

NZ Manufacturer April 2011

PRODUCT NEWS

My father taught me always to do more than you gat paid for as an investment in your future. - Jim Rohn

Techspan and Social Media Screw compressors energy efficient

lastics & Printing technologies supplier Techspan has joined the online social media zone with their inclusion on Facebook and You Tube. Techspan now has its own Facebook page and You Tube channel where you will find news and information about the latest in Plastics and Printing technologies. Image galleries, Videos and news stories are all featured. Techspan released their new “e-commerce” website during 2010, which has made it quick and easy for customers throughout the Pacific Rim to access pricing and purchasing online. Even their News page is a blog so customers can interact with comments or ask specific questons about that new technology they are so interested in. Social media has been defined as “people talking to each other online”. Online social networks allow individuals to share information and keep themselves abreast of developments within their social circle, which may be a social circle dedicated purely to family and friends, or may be a circle of contacts which have a common interest or may be a network of business and professional connections. Social media are distinct from industrial or traditional media, such as newspapers, television, and film. They are relatively inexpensive and

accessible to enable anyone (even private individuals) to publish or access information, compared to industrial media, which generally require significant resources to publish such information. There are various statistics that account for social media usage and effectiveness for individuals worldwide. Some of the most recent statistics are as follows: • Social networking now accounts for 22% of all time spent online in the US. • A total of 234 million people age 13 and older in the U.S. used mobile devices in December 2009. • Twitter processed more than one billion tweets in December 2009 and averages almost 40 million tweets per day. • Over 25% of U.S. internet page views occurred at one of the top social networking sites in December 2009, up from 13.8% a year before. • Australia has some of the highest social media usage statistics in the world. In terms of Facebook use Australia ranks highest with almost 9 hours per month from over 9 million users. • The number of social media users age 65 and older grew 100 percent throughout 2010, so that one in four people in that age group are now part of a social networking site. nextSTEP Visit: www.techspanonline.com

oge has just announced the launch of the new CF series frequency controlled screw compressors. Part of the popular C series range, these new models provide a quiet, compact and energy efficient compressed air solution to the medium sized compressed air user with a fluctuating demand for compressed air. Like the recently extended C series up to 22 kW, the Boge CF series range has been engineered to generate high free air deliveries in continuous operation and in an incomparably efficient manner. For maximum operating dependability and efficiency all essential components have been integrated into the compact module. This minimises internal pipework and reduces flow losses. The new CF series is ideal where shift / production patterns create a fluctuating demand for compressed air. Built in frequency control continuously adjusts the volume flow to the actual demand ensuring minimised idling times and pressure fluctuations providing an energy efficient solution. Boge has set new industry standards with the CF series models in terms of low sound pressure levels - from 63 dB(A) - making them very quiet in operation as well as offering increased compressed air outputs. A compact design also keeps installation space requirements to a minimum with a required surface

CF series up to 22kW area of less than 1 square metre. The frequency controlled belt driven CF series models up to 22 kW are highly energy efficient, extremely quiet in operation and require only a minimum footprint. Available in the standard pressure of 8, 10 and 13 bar. Output capacities range from 0.47 – 3.62 m3/min and motor power 15 to 22 kW. The CF range is also available with an integrated refrigerant dryer (CDF). nextSTEP Visit: www.boge.net.au

Moulders provide fast changeover

EC-7460 dual-head blow moulding machines can be installed outfitted with a 6 inch smooth bore extruder with a 300 HP AC drive, dual 9KG series heads, XMB Navigator controls and a 1900 x 1550mm platen with 190 tonnes of clamping force. The machines run both high density and linear low density polyethylene. A key factor in the selection of the blow moulders is the accumulator head machines, which provide fast colour changeover. The GEC equipment allows products to be run on the same machine size, yielding a higher efficiency on an annual production basis. The GEC spiral heads also provide a quick colour or material change.

nextSTEP Visit: www.hbm.com.au

www.baskiville.com

www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

PRODUCT NEWS

When two men in business always agree, one of them is unnecessary.

- Ezra Pound

Lean times call for thinner sheets, thicker bends

ith the price of sheetmetal arguably at an all time high due to massive demand by Asia and the Middle East, it’s not just clever software-driven machines that positively impact profit margins. The simple act of reducing raw material costs has become the latest challenge for fabricators in Australia and New Zealand. And price reduction doesn’t have to rely on any hard bargaining – tooling technology is getting better and smarter and can now provide an edge.

By a year or two, Europe has encountered many of the challenges our sheetmetal manufacturers are about to face. One particular example from this continent is perhaps a lesson for our companies which may help them avoid any costly trial and error processes to reach a solution. This European company produces electrical enclosures and cable management systems using a typical turret punching/forming machine. It wanted to use the minimum material thickness in order to reduce

New range of plastic pop rivets

eading New Zealand Stockist of Plastic Hardware, Hi-Q Electronics Ltd, has recently added plastic pop rivets to their extensive range of Hi-Q Components. These pop rivets are made from two different materials, the round shaft which pops off on installation is clear Polycarbonate, and the securing rivet button that is left is black Nylon 6/6 material. This new range of plastic pop rivets will offer another alternative to Aluminium pop rivets which are already widely used to fix metal and other types of panels together. These plastic pop rivets are excellent for

fixing plastic panels together. The black plastic button colour offers designers a pre finished coloured button that can be used as a feature. Plastic pop rivets will also offer another fixing solution to avoid electrolysis, when fixing metal panels. The plastic pop rivets come in 12 different sizes, to suit mounting hole sizes, 3.3mm, 4.1mm, 4.9mm and 5.7mm diameter. This new range of rivets caters for chassis/panel thicknesses of 1mm to 12mm thick. nextSTEP Contact Hi-Q Electronics Ltd Email : sales@hiq.co.nz or Tel: 0800 800 293

the cost of the component. However, this item is part of a walkway used in a cable management system, so the component needed to be strong enough to be walked on, without deformation. So basically, the company needed to combine light weight material with structural strength and presented the applications specialists at MATE Tooling – represented in Australia and New Zealand by Maxitec with this very common, yet always challenging task of combining structural strength with minimum material thickness. The solution was to implement a non-spring loaded custom beaded emboss using the MATE tooling. A beaded embossing or bend is a common way to add strength to a sheet metal part. As the material is deformed, the effective material thickness increases to make it more stiff. One of the strongest natural shapes is a hexagon. This hexagonal solution using MATE tooling combines the natural strength of a hexagon with the functionality of beading tool into a non-spring loaded custom beaded emboss tool. The size of the hexagon shape is 1.968(50.00) across the flats. This size exceeds the design parameters for some brands of size-2 spring loaded tools, but the shallow height of 0.040(1.00), and the gentle angle of 60 degrees made this situation an ideal application for a non-spring loaded tool. The upper assembly is a two piece construction that includes the upper inverted die and a combined shank and alignment ring. The lower tool is a simple die with the profile of the emboss machined on the surface. As the sheet moves, it is stripped from the form on the lower tool. One of the challenges with this type tool is to ensure that subsequent cycles of the tool do not crush

The upper assembly is a two piece construction previous forms. Knowing that these forms would be used close together, MATE included a relief at the corner of each form. This relief prevents the previous form being crushed. The resultant form is strong, aesthetically pleasing, and provides good traction which is essential for this application. This application was successful because the customer and the tool supplier (in this case, MATE) participated in the design process by sharing all of the relevant information including: Material Type and Thickness – required to assure the correct geometry. Machine model – essential to ensure correct set-up instructions. Spacing – by showing the close spacing of the forms, MATE was able to include the appropriate relief within the upper tool. Including this information with every request for a forming tool will ensure swift and accurate process.

www.hydroflow.co.nz

sales@hiq.co.nz www.hiq.co.nz

www.apexvalves.co.nz www.theplumbersclub.co.nz

www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

You make the best products you can, and you grow as fast as you deserve to. - David Ogilvy

BUSINESS NEWS

Is your business worth more dead or alive?

ecently I asked if business owners had thought seriously about committing to a longterm lease in the business environment. Let’s go one step further; would your business be worth more to you Dead or Alive? It is a valid question in today’s market, because recessionary times generally flush out the underperforming, or less-thanunique, businesses from the market. We have had well over a decade of ‘good times’ and business owners who have established their companies during that golden period would never have seen an economic downturn. In many cases, they’re woefully unprepared for it. We have talked to a number of businesses over the last 18 months or so, when the DOA question has arisen. In the cases where the owners had taken my earlier advice, and not signed up to a long-term lease, they would be free to make the decision on the fate of their business purely on the numbers. Let me give you some real-market examples: Business operating in online marketing category: The market this business sells to is one of the hardest hit by current economic downturn and the business has not made a profit for three years. The owner has had to sell his house to prop the business up and his wife has taken on a job to pay their living expenses.

The business employs six staff all earning a lot more than the owner. The owner does not want to close down as he believes things will get better over the next two years. Wholesale and retail business, which imports a range of products and wholesales them throughout the country: The husband and wife team also run their own retail outlet that they work at full-time seven days a week, with two late nights. They earn $45,000 pa and their stock holding is $250k. The business, which is located in a very small town in the South Island, is worth less than $50k including stock. The couple would end up with more in their pockets if they had a closing down sale and sold off all the stock. A small engineering business operates in premises paying rent to their family trust at 50 per cent of market value. The business makes approximately $100k after a rental adjustment, and has plant with a sale value of $600k. Based on capitalised earnings’ methodology, the business is worth around $200k, including the plant at $600k. We advised the owner to close down and sell the plant for $600k, and then lease the building to a tenant who will pay the full market value of $100k pa. The owner did decide to close the business down as his bottom line had to improve by 200 per cent just for the business to be worth what the plant was valued at. He

sold the plant for $600k, collected all his working capital and put the money in the bank. After leasing the building at market rental, he was able to retire earning similar money to when he was in business but with none of the risk! Please forgive me if I sound like a doomsday prophet, but common sense should hopefully prevail with some business owners. Credit must undoubtedly be given to the tenacity that some of these owners demonstrate. But sometimes reality must be faced. The insanity clause is to continue doing the same thing in the same way and hope for a magically better result! Business doesn’t get better by right. Just because the market improves, doesn’t mean business activity improves for everybody. In the second case above, if the owners of the wholesale company sold their stock down at a 30 per cent margin, they would bank $325k before costs. But to achieve a gross sale cost of $325k, they would have to find a local buyer, or a party who would want to relocate to their community. Then the business would have to improve by about 150 per cent to achieve that result. The average house price in their community is somewhere around $150k, so a local would also need cash because their house would not be worth enough to borrow what would be needed to fund the

This article is the opinion of David Newport (pictured above), a director at business brokers Switch Business. purchase. In the first example the couple would still have the family home, if they he had closed the doors two years ago. Hopefully owners of SME businesses that are struggling mightily can get good impartial advice from their professional advisers. I think Kenny Rogers said it best in his hit The Gambler: “You gotta know when to hold ‘em, know when to fold them, know when to walk away and know when to run.”

Training critical for productivity improvements – new research

usinesses believe investing in better trained staff will improve productivity but in practice are more likely to change processes than people, according to a new research paper published by Industry Training Organisation (ITO) Competenz. The paper entitled ‘Perceptions of productivity – How medium-sized businesses approach productivity’ revealed the majority of respondents (37%) gave an unprompted response of ‘better trained people’ as a key way to improve productivity yet, when asked what they actually did, most went on to invest in changing business processes over training their people. “There’s a perception that it’s harder to train people than it is to change business processes, and clear evidence that businesses don’t know where to turn for guidance on training as a key part of the productivity improvement mix,” says Competenz chief executive, John Blakey. Last year Competenz commissioned a survey of 200 medium-sized firms employing between 20 – 50 people

to gauge their perceptions on how to boost productivity, and uncover what they actually invested in to make productivity improvements. The research findings suggested that an investment in people rather than processes is the key driver in improving productivity. Businesses that experienced high growth rates within the last two years favoured investment in people over high decline businesses who favoured investment in process. Ironically, high growth firms also experienced more actual business process improvements while high decline firms, who invested in changing processes more than in people, ended up with fewer improvements. “Industry feedback indicates that staff upskilling has the effect of promoting innovative behaviour while the investment in skills also creates employees who are more capable and able to adapt to new technology. “Investing in upskilling people should therefore be an attractive proposition for business owners,”

Mr Blakey said. “While investment in processes is important, investment in people is paramount for the long-term health of a business as well as reaping the full benefits of investment in processes.” Worryingly, the survey also found that 78% of respondents would seek advice on lifting productivity but did not know where to turn for help; the remaining 22% said they would not even ask for assistance for a range of reasons, including that it was unaffordable, unimportant or the firm was too small. The paper says New Zealand currently has no co-ordinated leadership from Government or the tertiary education sector around productivity improvement issues for businesses. “Companies face a confusing array of consultants, gurus and disparate agencies when they are looking for sound and objective advice on improving their staff and processes,” says Mr Blakey. “This presents a strong case for industry-owned training

organisations (ITOs) being tasked to present independent and wellresearched guidance.” The Government’s new Productivity Commission which became operational in early April could be good for industries if it provided leadership and direction. “The challenges faced by businesses to remain competitive have led to growing demand from medium-sized manufacturing employers for external support and advice on improving productivity and performance,” says Mr Blakey. New Zealand faces a major challenge to improve its global competitiveness and lift productivity rather than continue to lag behind producers such as Europe and Australia, and ignoring the issue will only put us further behind. “The effective development and utilisation of workplace skills is vital to improving New Zealand’s competitiveness and requires a focussed effort and strategic approach across training institutions, industry, unions and government,” says Mr Blakey. www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

DEVELOPMENTS

STAR shines bright in the online, self-training arena: cuts costs too

E john.powles@starcorp.co.nz www.nzmanufacturer.co.nz

hen a proven businessman -- “E&Y Entrepreneur of the Year 2003” -- and chairman and director of a multiplicity of local and international companies suggests you to take a closer look at the web-based STAR (Self Training, Assessment and Reporting) system he’s a director of, you take note. Noel Davies, an ex naval Lieutenant-Commander, started at the bottom and 21 years later, having worked his way through the ranks, reckoned by then his competitive nature would be better accommodated (and rewarded) in the commercial world. Today he remains best-known for taking over a somewhat deflated Hydraulink Fluid Connectors Ltd, in 1989 and growing it into one of New Zealand’s most successful industrial companies, specialising in hydraulic hose assemblies and hydraulic accessories. Industry sources have him as a proven leader, responsible for leading teams through periods of significant organisational change. And he has a passion for coaching sports and mentoring entrepreneurs in his carefully-managed spare time. Some of the administration and training consistency challenges he encountered expanding Hydraulink offshore brought STAR Corporation to his notice. There’s an element of “he liked the product (and service) so much, he bought (half) the company” to this story. “In my experience, STAR can change and simplify the way training is conducted in any organisation; significantly reduce costs (quick ROI); be flexible enough to respond to changing legislation and practice; and be available 24/7. Assessment results are instantly available “Because of those characteristics, adopters of the programme are innovating by it integrating all their training records and product manuals -- through to laying-off the responsibility for being safe on a construction site, for example, to contractors and visitors, without any additional costs or OSH responsibility attached. “When established, the system can be completely managed by the user, eliminating ongoing consultancy costs,” says Davies, co-author, with Dr Ian Brooks, of “The Guide to Successful Business Partnerships”. Basically, it rapidly becomes the central, online-source for all training resources; meaning it is easily accessible, up-to-date and accurate. Product and procedure manuals no longer become out-of-date, sitting

Noel Davies on shelves; forgotten and gathering dust. “A simple example is Fire Evacuation procedures. All personnel can be scheduled to re-sit a test on this procedure each year. Furthermore, simple analysis of the results will indicate which areas of the procedure require additional focus. “What most users find attractive is that significant changes to product specifications can be posted as a bulletin and you will receive confirmation that the bulletin has been read and understood, because you have a secure, stand-alone database on your own site.” It can also be personalised or branded to suit the company. Davies stresses the importance of having a discreet site with its own secure database. It is also sufficiently flexible to accommodate either “open book” or “closed book” assessments. Reinforcement by video or U-tube is easily added. Companies who hire across the growing multi-cultural population can be certain that, say, issues covered by changing OSH legislation can be simply and accurately accommodated in the flexible system. One of its many users has nearly half its workers not using English as a first language: material and questionnaires have been developed in both Mandarin and English. “The STAR system even produces a certificate of competence that either records the module just sat and passed or it can include all modules previously passed. In my experience that’s a superb motivator. “Which reminds me there are significant efficiency gains in areas like printing, travel and storage too, while providing certainty you have a constantly updated assessment of the retained knowledge and any weaknesses within your organization. Its is an affordable, reliable and simple tool for small-tolarge businesses,” Davies adds

NZ Manufacturer April 2011

When the product is right, you don’t have to be a great marketer. - Lee Iacocca

BUSINESS NEWS

Manufacturing sector graduates receive recognition

‘Roll of Honour’ graduate booklet has been established in recognition of the time, effort, and dedication learners put into completing their industrybased training and their employers for providing support throughout their learning journey. Industry-based training achievements are often overlooked when stacked up next to their university graduate peers, despite the comparable commitment learners must make to successfully complete their studies. “Gaining an industry-based qualification requires dedication and focus which deserves recognition,” says Competenz chief executive, John Blakey. “A qualification represents a lot of work dedication and determination on the part of the learner; and support, encouragement and skillssharing on the part of the employer.” Among an encouraging 883 graduates are 178 workers from the wider manufacturing industry who completed Level 4 national certificates in competitive manufacturing (100) and business

first line management (78). Along with their peers who completed apprenticeships in the mechanical engineering sector, and trainees from the food and beverage manufacturing sector, these graduates have proven they

have the knowledge, skills, and leadership capabilities that are essential for the continued growth of the manufacturing sector. Industry training organisation, Competenz, created and distributed the Roll of Honour to celebrate all

graduates who completed Level 4 or higher qualifications within their industry coverage in 2010. The Roll of Honour will be published within the first quarter every year to celebrate the previous year’s graduates.

www.eecabusiness.govt.nz/motorsystems

www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

MANUFACTURING HEROES

A hard thing about business is minding your own.

Moving in together pays off Y

ou know a relationship is getting serious when two people decide to move in together. The same can be said about business. Nine months ago New Zealand owned businesses TradeTech and Wire Solutions took just that leap when they joined forces and created the new brand, Fero. TradeTech, an importer and distributor of electronic parts and components to the manufacturing, audio video and electronic repair industry, is owned by brothers Roger and Greg Fulton. Roger is the Managing Director of TradeTech which, up until April last year, was based on Auckland’s North Shore. Wire Solutions manufactures and imports all wire-related products and provides repetitive assembly solutions and low pressure injection molding systems. The company, which is jointly owned by Greg, Roger and Grant Holmes, is located across the bridge and to the south in Mt Wellington. The two companies had a history of collaboration but the physical distance was holding the relationship back. The pair had toyed with the idea of sharing the same roof for some time; when space became available in the building adjoining Wire Solutions’ new premises, the businesses decided it was now or never. It was an undertaking not for the faint hearted, but TradeTech and Wire Solutions were committed. “There was simply so much to gain,” says Fero Managing Director Roger Fulton. “We moved in together and, initially, worked independently as two companies,” says Greg. “It allowed us to slowly marry our operations and our cultures.” From page 20

The primary drive was to create a more profitable business. Now together, they share overheads and, significantly, pool expertise, knowledge and experience. While the cost saving synergies weren’t as great as anticipated, the benefits of working side by side have made the shift well worthwhile. “With everyone working together under the same roof we have gained a far better awareness of each business,” says Roger. “The shift has created a more vibrant environment with more ideas bouncing around.” It’s also broadened the opportunities for both businesses: most manufacturers purchasing wire products from Wire Solutions also need electronics; similarly, most TradeTech manufacturing customers buying electronics require wiring and connectors. “We are passionate about supporting New Zealand’s manufacturing sector. The cross pollination of TradeTech and Wire Solutions has allowed us to provide our customers with more integrated electronic and wire technology, from concept to production,” says Greg.

The risks

Of course, while the opportunities were vast, the move came with some significant risks. For TradeTech it meant uprooting its successful operation on the Shore. “2009 was a year of solid performance. We’d developed a strong profile in the area, we had a great team and a very good culture,” says Roger. “We were concerned about the effect of the change on all these aspects. “What’s more, we still had 18 months left to run on the expensive lease of our building with no guarantee of finding a tenant to sublease the space.”

Punching above its weight

Canterbury Employers’ Chamber of Commerce and the Manufacturers and Exporters Association work closely together, meaning firms don’t have to waste time contacting multiple agencies to find support or advice to help them grow. Firms tell us this collaborative approach makes a difference. Overall, there is much to celebrate in the Canterbury manufacturing sector. Established players are doing well and there is exciting growth in areas that are becoming increasingly important to New Zealand such as clean technologies. Canterbury is producing eco light bulbs (Energy Mad), a roof rack billed as the world’s quietest and designed to improve fuel efficiency by reducing drag (Whispbar), rugged wind turbines for challenging conditions (Windflow www.nzmanufacturer.co.nz

Technologies) and world leading electric and hybrid buses that are on the road in some of the world’s great cities (Designline). And those brilliant ideas which wow the world and give Kiwis their reputation for innovation keep coming. The YikeBike, the world’s first super light folding electric bike, and the Martin jet pack were both designed in Canterbury and were both named by Time Magazine as top inventions in the last two years. The future looks very bright indeed. New Zealand Trade and Enterprise works with businesses in the manufacturing sector throughout New Zealand to help them identify new opportunities for growth internationally and to promote the sector’s strengths globally. nextStep Visit: www.manufacturingnz.org.nz

- Source Unknown

By David BurkeKennedy

For Wire Solutions, the smaller of the two companies, the greatest threat was losing its reputation as a specialist.

Customer perception

Ultimately, success hinges on communicating with customers – and it’s an ongoing process. The two companies, under the new Fero banner, continue to reinforce the ‘business as usual’ message and, at the same time, look for ways to demonstrate the value they can add to customers as a result of the union. “From the start we needed to be clear with Wire Solutions’ customers that we would retain our focus,” says Greg. “The difference is the extended scope of services that we can offer as a result of the combined resources.” TradeTech, on the other hand, faces a different challenge: when the company delivered the news to its local customers on the Shore they were, unsurprisingly, disappointed. And many still are. Roger acknowledges that TradeTech, now falling under the Fero banner, will need to work hard to win back the loyalty of those businesses. In the meantime, it also needs to firmly establish itself in the Mt Wellington business community.

Managing the move

The logistics of the shift for TradeTech were substantial: 30,000 lines of stock had to be managed and, significantly, many staff based on the Shore were now faced with a considerable daily commute. “We were very concerned about the impact of the relocation on these employees,” says Roger. “To them it meant an increase in travel costs and travel time.” In a bid to ease the stress on staff, TradeTech offered to increase pay to cover the additional travel cost for those affected and to reduce their working day by half an hour. “We were pleased that, as a result of these measures, we only lost two of our 25 staff in the move,” says Roger.

Outside in

It’s worth noting that TradeTech and Wire Solutions didn’t undertake this exercise lightly. “We have sought a lot of external support and advice,” says Roger. Change management consultants assisted TradeTech staff with the move; independent research was

commissioned to determine the market’s appetite for the proposed Fero offering; brand specialists helped to develop the Fero umbrella; and marketing and PR consultants have been retained to help build brand awareness. “We’ve grown from three and six million dollar businesses into an $11 million operation,” says Roger. “We’ve really shifted gear and it’s given us a new perspective.” The increased size of the business has introduced more complexity. To manage that Fero has invested heavily to upgrade its systems – engineering design, software, CRM, inventory control, account management and phone systems are all in the process of being upgraded. Nine months on there is clearly still a long journey ahead. That said, sales have already grown considerably and there are many exciting prospects being developed. Much of the excitement is around Fero’s Technology Partnership Programme. “We’ve become connectors,” says Roger. “Our increased diversity has given us greater expertise over a broader range of sectors. As a result we’re introducing customers and technology across many different industries. Fero has manufacturing customers across many industries including agriculture, marine, food and beverage, medical and telecommunications infrastructure. “We’re providing a network to help New Zealand manufacturers find New Zealand solutions.”

The Fero experience

Escea For several years Wire Solutions engineers have been working closely with Dunedin manufacturer Escea to design wire looms for its gas fires; TradeTech has been supplying transformers and components. Gallagher Hamilton-based electric fence company, Gallagher, has been dealing with TradeTech for 13 years purchasing cords, connectors, power supplies and cables. Temperzone TradeTech originally introduced Temperzone to Wire Solutions, who then became the industrial airconditioning company’s principal supplier of wire harnesses and connectors.

NZ Manufacturer April 2011

Never mistake activity for achievement. - John Wooden

MANUFACTURING TECHNOLOGY

FeatureCAM turns designers into machinists

etrology and healthcare specialist Renishaw has been able to improve greatly the productivity of its rapid prototyping department by turning its designers into machinists. The key to the transition was the introduction of Delcam’s feature-based programming system, FeatureCAM, in place of the department’s previous CAM software. “It is important for designers to appreciate the manufacturing techniques and capabilities that are available to them; this helps facilitate good ‘Design for Manufacture’ as well as reducing any unnecessary delays during the prototyping stages of manufacture,” explained

Senior CAM Development Engineer, Richard Turner. To achieve this, Renishaw has always encouraged designers to take a ‘hands on’ approach, even providing two Mazak Nexus machines for them to use for tooling and prototyping production. “However, the designers, being occasional users, found our existing CAM software too difficult to use so they all passed the work over to our small batch department or sent their designs out for machining. At times, it was taking up to six weeks to produce prototypes, which was obviously having a negative effect on our product development process,” explained Development Engineer, Chay Allen.

From page 11

Napier company exports electronics to Asia ABB already protects some of the world’s most critical data. Award winning New Zealand digital effects company Weta Digital – the makers of Avatar and other blockbuster movies - is now protected from the potentially devastating effects of unpredictable power grid disturbances by a uniquely compact and energy efficient technology pioneered by ABB’s unit in Napier. The world is increasingly looking towards renewable energy sources such as wind and solar for a clean and green sustainable energy supply. Unfortunately these generation sources come with some issues as the supply of power is variable dependent on wind or sunshine. ABB’s Napier team has developed new power technologies that allow this variability to be compensated for by connecting high technology batteries into the electricity grid. The ability to couple the latest Lithium Ion batteries will allow more penetration of renewable power sources reducing green-house gas emissions. These new technologies are receiving considerable international interest with rising fossil fuel costs and global warming forcing the world to find ways of generating power on a more sustainable basis. ABB has recently shipped its first Battery Energy Storage system to a wind farm integrator and has orders and interest from electricity utilities globally. Another recent development of note has been the delivery of ship-to-shore power systems for super yachts and container ships, with ABB systems now installed in major ports around the globe, including Gothenburg, Sweden.

Worldwide there is a growing requirement for large ships, when docking at international ports, to shut down their engines or switch to a cleaner fuel source to reduce pollution. To meet these demands, ABB has designed a range of high power ship-to-shore convertors that allow ships that operate at 60 Hz to connect to 50 Hz port power supplies. These systems provide the ability to shift power to and from the 60Hz to 50Hz grids, plus have the ability to run in parallel with onboard ship generation. Currently ABB is about to commission a 4MW system for a 160 metre long, ten storey Dubai based vessel, believed to be the largest luxury vessel of its kind in the world. ABB’s business unit in Napier provides numerous technologies that strengthen the value and efficiencies of the many industries their innovations support. “The world is becoming a smaller place and the market is so dynamic you have to work smarter, keep talking to your customers and understand what’s happening with technology. That is why we spend so much on R&D and innovating, not only in our design but our business approach to continue to deliver some of the world’s most powerful technologies”, say John Penny, General Manager of the Napier facility. ABB is a leader in power and automation technologies’ that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries. nextSTEP Visit: www.abb.com

The move to FeatureCAM began after another Development Engineer, Tristan Dover, visited the Delcam stand at the MACH 2008 exhibition. “I saw a fiveminute demonstration, which made FeatureCAM look PowerSHAPE and FeatureCAM are used to like the easiest CAM produce moulds for prototype plastic parts system I had ever Renishaw. seen. I downloaded the evaluation version began using Delcam’s PowerSHAPE and could remember enough from CAD software for prototype tooling. the demonstration to use it. Even “Most of the plastic parts are fairly without any training, I could small and we only need a few program as quickly as an experienced examples so we developed a system user on our existing system in a where new inserts could be used in head-to-head competition. I realised the same tool assembly,” said Mr. that FeatureCAM would be ideal for Allen. “With PowerSHAPE, we our designers and other casual CAM can quickly develop the core and users.” cavity from the part design and “Since we have adopted then machine the shapes into our FeatureCAM, staff with little standard inserts with FeatureCAM.” machining experience can be trained The benefits to Renishaw have to use the software in a day,” claimed come from a shortening of the overall Mr. Turner. “Even more importantly, development cycle since prototype FeatureCAM is so intuitive that they parts can now be produced in a day can come back to the software after a or two. The designers have more two-month gap and are still able to freedom to experiment because these use it.” shorter lead times mean novel ideas “We have set up FeatureCAM can be investigated more quickly. with the standard tooling package Furthermore, because the designers that we use on the Nexus machine have to think about manufacturing tools and we have added in the at an earlier stage in the development speeds and feeds appropriate for cycle, it is easier to convert from our range of materials; this has prototype quantities to full-scale made the system almost completely production. automatic,” explained Mr. Allen. The only problem has been for the “Some of our designers have no rapid prototyping team. Whereas experience selecting tooling or feed before the machine tools were rates, all things that come with usually available, the demand from experience, but with FeatureCAM the designers has now grown so that doesn’t matter as the software much that the team’s own engineers makes all the tooling choices for often can’t get access to them. you,” added Mr. Turner. nextSTEP After the success with Contact:chris@camplex.co.nz FeatureCAM, Renishaw engineers

www.cogita.com www.nzmanufacturer.co.nz

NZ Manufacturer April 2011

LEAN THINKING

High achievement always takes place in a framework of high expectation. -Jack Kinder

Some “lean” Bodek wisdom on competing globally

long with 30-40 others, I was fortunate enough to catch the (Godfather of Lean), Norman Bodek at a preview of his two-day workshop, in early April, compliments of Vishnu Rayapeddi’s Productivity Solutions Limited and Xelocity, sophisticated supply-chain practitioners. Those who attended couldn’t have read the preview piece he penned for our February edition, where he reported a roomful of top Canadian managers confessed to not training all of their employees for at least two hours a month, because he was quickly into that as an opening gambit. Turns out we had a couple, from what I could see, who did. It could also be seen as an endorsement of our integrity, i.e. we knew the question and still played it straight. He unashamedly trawls Japan for the latest breakthroughs in productivity, manufacturing processes, and latterly people motivation. Bodek, is a recent inductee into the Industry Week (US) Hall of Fame, for a major contribution in introducing the concept of TPS/ Lean, some three decades ago to the US, when Japan was routing their industry. Ironically, one of his bon mots revealed that the accredited originator of JIT, Toyota’s Taichi Ohno, had revealed to him that Ernest Kanzler, one of Henry Ford’s subordinates, had played a major role in developing the forerunners of JIT production methods. Of course, his latest discovery, the former Japanese junior high school track-and-field coach, Takashi Harada—“everybody can be successful” -- was very much the focus. As was Toyota’s Jidoka (“respect for people) which empowers workers to stop the production line to prevent a faulty product going through. Given he’s an American, albeit with a Japanese wife, I’d expected an evangelist with a pulpit pitch. Far from it. He’s more of a gentle raconteur with a mission; this time to spread the word on measured self-reliance. His message for New Zealand manufacturers: You can compete globally by getting your people smarter and trusting them to make the right decision at the right time to meet the customer’s need. But that requires you to care about “those people who bring value to the customer”. Respect, care and empowered self-reliance might sound a bit cheesy and the more cynical might be tempted to accredit Toyota’s www.nzmanufacturer.co.nz

By Kevin Kevany

John Garrard (Production Manager) and David Cooke (MD) of Cooke Industries. recent catastrophes as the backdrop for the “soft” approach. Be assured it’s anything but. And there’s a discipline underpinning it which would make a Samurai wince. “How come employees are able to make the right decisions and run their own lives on the weekend, but all week long are treated like robots?” Bodek challenges.

The store where he buys his clothes would not permit the staff to phone another branch to check for his size/ colour (lack of trust).

Bodek’s greatest strength is what he learns in exchange for teaching the various Japanese methodologies.

Examples of the good, the bad and the ugly filled the evening. The store where he buys his clothes would not permit the staff to phone another branch to check for his size/colour (lack of trust); Hino Motors has a unique “mistake board” adorned with smiling and unhappy face stickers – the smiles for those who made a mistake but have learnt how not to repeat it, and the turned-down mouth for those who made a mistake, and still don’t know how to fix it (it’s okay; help is at hand). And talking of robots, he cited the changes made at Canon. Previously 60 people had worked on each copier, for one-and-a-half- to-twominutes at a time, assembling 580 parts. Today, each employee makes seven units a day, signs their name on to it, resulting in improved productivity and motivation. “The copiers they produce each working hour have become their ‘babies’.” Bodek concedes things are different in Japan. “Nobody looks you in the eye in Japan, while in China everyone does.” Japan is more naturally team-oriented, than the West. Time to set your own goal and measure, measure, measure your progress.

Craig Fitzpatrick (Business Improvement Manager, Ballance AgriNutrients) and Jigs Jamnadas (Corporate Services Director, Xelocity.

NZ Manufacturer April 2011

The best job goes to the person who can get it done without passing the buck or coming back with excuses. - Napoleon Hill

Free Trade?

he Wall Street crash of October 1929 was the beginning of the ‘Great Depression’ that impacted on much of the world throughout the 1930’s and saw many governments take a protectionist stand towards their domestic economies. In the United States, the then President Franklin Roosevelt, signed the Buy American Act into law in 1933 which required the United States Government to purchase US-made goods wherever possible. Almost eight decades later, the mantra of free trade is widely trumpeted and protectionist measures are seen to be counter to the free flow of trade and commerce. Despite this, governments around the world are still bringing in protectionist measures to advantage their economies at the expense of others. A recent example, is the US Department of Defense Appropriations Act 2011 where, hidden in the section entitled ‘Procurement of Photovoltaic Devices’, it says “CONTRACT REQUIREMENT.—The Secretary of Defense shall ensure that each contract described in subsection (b) awarded by the Department of Defense includes a provision requiring the photovoltaic devices provided

under the contract to comply with the Buy American Act (41 U.S.C. 10a et seq.), subject to the exceptions to that Act provided in the Trade Agreements Act of 1979 (19 U.S.C. 2501 et seq.) or otherwise provided by law.” We don’t know if the inclusion of this requirement is a sop to domestic public opinion in the US, an effort to protect US industry, or a tilt at the fast growing Chinese photovoltaic industry, which is widely perceived as benefitting from an undervalued currency. What we do know is that this kind of requirement is not unique to the United States. Ontario in Canada has a generous feed-in tariff for renewable energy projects, but to qualify there has to be 60% local content. China requires that wind generators for domestic use are manufactured in Chinese factories and there are a range of other countries that have strong local procurement policies that either helps their industries compete or provide a domestic market for local industries to grow within. Many countries see the maintenance of their industrial capabilities as strategically important, both from a critical infrastructure perspective and from ensuring a capability base is available to support emerging domestic industries.

It seems that many countries that espouse free trade principals also aggressively support their domestic industries. In some countries, there is extensive support provided to manufacturers in the form of R&D undertaken by Universities and Government Institutions - while in others, grants, tax credits, subsidies and ready access to finance are available. New Zealand industry has a strong set of capabilities but is stymied by a domestic procurement culture of ‘buy cheap regardless of the eventual cost’, which often means sourcing product from places where industries receive government support. This hardly provides a level playing field for New Zealand industry. According to Yvan Guillemette of the OECD, “New Zealand’s living standards remain well below the OECD average. This is entirely attributable to persistently low labour productivity, which in turn is related to economic geography as well as structural policy factors.” As New Zealand industry increasingly has to compete in the international marketplace, improving productivity becomes critically important. Those industries offshore, which benefit from the support of their governments, can readily

REAR VIEW

Commentary by HERA Industry Development Manager Nick Inskip convert those benefits into profits, which are then available to invest in improved technology and R&D that in turn improve productivity. Countries that support their industries are typically pro-growth and the support they provide is part of their growth strategy. It’s time to recognise that a ‘free market’ is a means to an end and to compete in a free market, we need the right conditions for our productive sector. We should emulate our largest trading partners and the support they offer to their industry, unless of course we aspire to slipping even further down the OECD scale. If you have a view or comment about this commentary, contact Nick Inskip by email indev@hera.org.nz

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NZ Manufacturer April 2011

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