The Profit - November - February 2018

INSPIRING BUSINESS IN HAWKE'S BAY

NOVEMBER - JANUARY 2018

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NEW PORT OF CALL FOR GARTH COWIE

WCO

WHAT’S IT ABOUT?

NEW CHAIR AT UNISON

CHURCH ROAD SCOOPS WINE AWARDS

NEW-LOOK TERMINAL SET FOR TAKE-OFF

YOUNG LEADER TAKEN TOO EARLY

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CONTENTS PRO FEATURES Garth Cowie signs off Phil Hocquard is new Unison chair Hot Desking hits HB Icehouse update Coffee innovation is full steam ahead WCO – what's it about?

Church Road scoops wine awards Craft Beer is fizzing

INSPIRING BUSINESS IN HAWKE'S BAY

NOVEMBER - JANUARY 2018

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NEW PORT OF CALL FOR GARTH COWIE

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WCO

WHAT’S IT ABOUT?

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CHURCH ROAD SCOOPS WINE AWARDS

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YOUNG LEADER TAKEN TOO EARLY

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Business Hub | Hawke’s Bay

PRO EXPERTS 32 33 34 35 36 37 38 39 40

Pro Primary by Emma Doran Pro Finance by Tobias Taylor Pro RMA by Cam Drury Pro IT by Simon Fletcher Pro Education by EIT Pro HR by Kimberly McKay Pro Legal by Edward Bostock Pro Property by Paul Harvey Pro Business by Susie Clifford

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Pro HB – What’s happening in the Bay Pro Q & A George Reedy

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NOVEMBER - JANUARY 2018

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EDITORIAL Hawke’s Bay lost one of its most promising up-and-coming business leaders in late September.

Nic Magdalinos was the managing director of Paris Magdalinos Architects (PMA) and he died suddenly at the age of 36 years. His funeral was one of the largest I’ve attended and the sombre mood was accentuated because of the huge loss of talent.

It was a talent that was still to reach the heady heights many expected. That’s not to say he didn’t reach for the stars, because he did achieve much more than many double his age, but as one of his colleagues said in a tribute, Nic still had much more to give.

I pondered his passing while driving home from the funeral and as I drove through Napier and past many of the buildings and facilities that PMA designed, it dawned on me that this larger-than-life character’s loss would have a major impact on the business, social and community landscape of the region.

Editor Damon Harvey damon@theprofit.co.nz

THE

Nic featured on the October 2011 cover of The Profit.

He was one of six up-andcoming business people HAWKE’S BAY’S who featured in the YOUNG BLOOD magazine.

In 2008 and just 26 years of age Nic was thrown into the hot seat of running his father ALSO IN THIS ISSUE : Paris’s architectural firm following his passing.

He wasn’t an architect Nic Magdalinos but instead had business acumen and a personality that would quickly create lasting “We have also taken the time to reaffirm business relationships. who we are as a practice and the vision and In the story he admitted that it was a values we have.” challenging and rewarding time in taking Nic also talked with pride about some of over the responsibility of the firm. the local projects PMA was working on, “In any crisis you need to keep your head some of which are now completed and and determine the best way to advance. It one that was particularly close to Nic’s was an incredibly emotional time for the heart, Waiohiki Marae, will now surely office as a whole, however it galvanised be completed. us and focused our attention,” Nic said at I spoke to Nic just two weeks prior to his the time. death. He called me early one Saturday “... and the heavy legacy of Paris to ensure morning and like usual he was talking at that we succeeded. All of our staff performed a million miles an hour. This time it was magnificently, and our greater client about the announcement of the Hawke’s base gave us an opportunity to deliver Bay Airport expansion. It was a project the goods.” he was looking forward to being involved Now the firm is in the same situation but in; he reminded me of the important role riding on Paris’s architectural flair and Nic’s PMA had in the design of the airport and business acumen, the business will continue he talked candidly about his vision for to be successful. the airport.

As Nic said in 2011: “The business has The airport expansion, designed by PMA, is recorded growth over the past three years featured on pages 28 and 29. despite the tough economic downturn, we In this issue we also look at the achievements have done so by deploying the plans that we of Garth Cowie, who is stepping down as had set strategically, and through being able the chief executive of Napier Port after 18 to review and adapt those plans to suit. years and we talk to the new Unison chair “We can better our business and it has Phil Hocquard. involved reviewing different markets, Enjoy the read. continued professional development of staff and investment in technology.

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Local businesses back Black Sticks Business support in CHB & Wairoa MPs outline election goals Solid profit for Hawke’s Bay Airport Our expert columnists

EDITOR/PUBLISHER: Damon Harvey 06 878 3196, 021 2886 772, damon@theprofit.co.nz, Twitter – @profithb

THE PROFIT is independently owned by Attn! Marketing PR and is published four times a year. Copyright ©2012: ATTN! Marketing PR

CONTRIBUTORS: Simon Fletcher, Jess Radich, Susie Clifford, Paul Harvey, Emma Doran, Kimberly McKay, Edward Bostock, Roger Wiffin, Catherine Wedd, Simon Hendery and Anna Lorck.

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NOVEMBER – JANUARY 2018

PRO HB

Inspirational Youth Programme Launched Conrad Waitoa has developed a programme to help keep more Maori students in school and achieving in their chosen career.

The programme Inspire in Education was created after Conrad observed the number of Maori students, particularly Maori boys, not achieving national standards.

A pilot programme, was launched at Havelock North Intermediate earlier this

year and is focused on a student's strengths and weaknesses and identifying career and education goals.

Conrad now hopes to expand the programme to other schools.

Inspire in Education focuses on teaching children about themselves, what they enjoy, what they were good at and what they needed a helping hand with.

He hopes that the programme will also guide Maori students away from drugs, alcohol and gangs and to decrease the rate of youth suicide.

Conrad is self-funding the programme and hopes that it will eventually be supported by the Ministry of Education. www.inspireineducation.co.nz

Napier Port Announces New Chief Executive

New Chair for Power Consumers Trust

Todd Dawson has been appointed as Garth Cowie’s replacement.

Todd comes to Napier Port from Kotahi Logistics, where he has been for the last five years, the last two as GM of BoxConnect, leading their strategic programmes and implementation of new ventures and strategic partnerships.

He has over 20 years’ experience behind him and has previously held senior roles at IBM and Toll New Zealand.

Todd will start in his new role in January after relocating from Auckland, and says he is looking forward to the new challenge.

“Napier Port is a vital link between central New Zealand businesses and world markets, and has a special place in the

Diana Kirton is the new chair of the Hawke's Bay Power Consumers' Trust.

In what was a hotly contested election Diana has been rejoined by Ken Gilligan and Helen Francis and joined by newcomers Kevin Atkinson and Barbara Arnott.

The trustees are required to conduct a review of ownership of shares in Unison every five years, and there’s likely to be submissions early next year.

Shareholders will have the opportunity to have their say on continuing ownership and use of the dividend.

history of Hawke’s Bay. It’s an exciting time to join, and I’m delighted to have been appointed to the role.”

Napier Port Chairman Alasdair MacLeod welcomed Todd to the role.

“It has been a lengthy process, and we’re pleased to have found the right person for the role. Our congratulations go out to Todd and we are looking forward to welcoming him and his family to Hawke’s Bay.”

In 2012, the Regional Council formed a stakeholder group to look at the best way to manage the waterways of the Tutaekuri, Ahuriri, Ngaruroro and Karamū catchments.

The project quickly became known as TANK. In 2018, the TANK Plan will give clear direction to consent holders and other water users. It’s an opportunity to balance water use and environmental protection. The rivers and aquifer have to come first, but water users should also be able to rely on safe, secure water when they need it.

Who gets the water? Learn more: hbrc.govt.nz search: #tank

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HB

World Class Primary Health Facility for Hastings Hastings is set to have one of New Zealand’s largest and most modern primary health facilities by January 2019.

The Hastings Health Centre’s new multi-milliondollar primary health centre is under construction on the former Bunnings site on the corner of St Aubyn Street and King Street, relocating from its current site in Queen Street.

Hastings Health Centre Chief Executive Andrew Lesperance says the new health centre will be one of the most advanced primary care medical facilities in the country, providing better access to a range of services usually accessed outside of the hospital environment, including urgent and after-hours medical care.

“This is a very exciting development for primary health and is the result of years of planning to get to this stage. We are creating a world class health campus where there will be more family doctors and nurses and a wider range of diagnostic and support services available in one easy to access central location.

“The growing population of Hastings has driven the need for bigger and more accessible facilities and our current site in Hastings is stretched with more demand for family healthcare than we can comfortably accommodate,” he said.

Other health provider services such as pharmacy, laboratory, radiology, audiology, physiotherapy and podiatry will be tenants as well as a café, all situated on the ground floor with the new Hastings health facility.

The health centre site will cover 7,650m2, including a building area of 3900m2 spread over two and a half levels, as well as 143 off-street car parks. It will have three road frontages - Nelson St North, St Aubyn St West, and King St North providing excellent access and high visibility.

Hastings Health Centre Chairman and pharmacist Paul Messerschmidt says there has been a 25 percent increase in patient throughput to the urgent care service at the Hastings Health Centre in the last year.

NZ Digital

“The world class facilities will ensure there is better integrated health care across a range of specialities, ensuring that our patients can continue to see their own family doctor as well as accessing urgent medical care and a wide range of specialist support services,” said Mr Messerschmidt.

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Profit Havelock North’s Ultimate Week promotion The revamped Marine Parade HB Arts Festival Havelock North winning best suburb in NZ

Loss Some of the GPs from the Hastings Health Centre visit the new site in St Aubyn Street. Back – Dennis Wales, Andrew Heslop, and Graeme McCrory. Middle – Andrew Lesperance, Colin Jones, Charlotte Ross, Richard Jamieson Front – Alan Wright, Paul Messerschmidt, Gwenda Ward, Alma Del Rosario and Louise Haywood.

Websites, Digital Marketing & Strategy

Nic Magdalinos Tukituki’s election outcome (I’m biased!)

Scaremongering during the HB Power Consumers election

Artist impression of the new Hastings Health Centre.

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NOVEMBER - JANUARY 2018

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Hauora Heretaunga Medical Director Dr Kiriana Bird (centre) discusses the benefits of some new equipment with Nurse Jamie Hanley (left), Mr Reedy, and Nurse Practitioner Haeata Climie.

PRO Q&A

Reedy and willing to make a difference George Reedy is the chief executive of Te Taiwhenua o Heretaunga, a charitable trust that provides a wide range of health, social and education services to over 10,000 whanau. The Profit put a series of questions to George.

What’s your background?

I grew up in Tikitiki, up the East Coast, surrounded by uncles, aunts and grandparents. That gave me a solid start in life. I was secure in the knowledge of who I was, and who was there for me.

Stratco Napier (06) 843 6159 stratco.co.nz

Who has been the most inspirational person in your life?

school bus was waiting for me. That was the value she put on education.

One of my earliest memories is of my mother piggybacking me across a floodgate spanning a flooded stream.

It was quite a dangerous exercise really, but my mother was determined to get me across because, on the other side, the

My parents, Te Moana and Apikara Rangi, worked hard. To them, education was the ultimate goal, the gateway to everything they didn’t have. That’s why I never got a day off school just because the stream was flooded. It’s an ethos that

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Q&A

has always stayed with me. It’s why I’ve spent the past 20 years working in Māori development.

What career path have you followed?

After school, I spent a bit of time fencing, then went into the forestry service before getting a cadetship with Māori Affairs. They introduced me to accountancy and I realised I was really good with numbers. I went on to do a degree in accountancy and become a Chartered Accountant. That was my pathway into senior management.

Since then I’ve had many roles in a range of sectors, including Government and Māori economic and development initiatives. My focus is on growing sustainable businesses using information technology combined with a strong emphasis on quality of service and product.

What is a stand-out feature of your role?

TToH is values-based. That’s a lot more than a mission statement on the wall.

We really do underpin everything with cultural values. They shape our world view, our business operations, and the way we function on a daily basis.

As Chief Executive, it’s an important part of my role to maintain that.

For example, our staff are 80 percent Māori, and one of our key goals is to promote the development of a skilled Māori workforce.

Out in the community, we’re engaged with 10,000 whānau. About 75 percent of them are younger than 25, and many are living in challenging circumstances, focused on day-to-day survival. That’s their reality.

TToH’s reality is the need to connect with whānau, and support them into a space where they can start to take control of their own lives and move forward.

What is Te Taiwhenua o Heretaunga?

Te Taiwhenua o Heretaunga is a Charitable Trust, governed by a board

of trustees elected by the 14 marae of Heretaunga.

The organisation started 32 years ago, becoming an Incorporated Society on September 19, 1985. Its base was the tractor shed at Waipatu marae. It had $60 in the bank and one part-time employee. The office was the boot of a Toyota Corolla.

Today, TToH owns a substantial campus in Orchard Rd. It was once the DB Heretaunga. Now it’s home to our medical and dental centre, mental health centre, purpose-built childcare centre, and our central daily operations.

This includes the administration of a large portfolio of health, social and education contracts applied across a large geographical area - from Mahia to Wellington and across to Wanganui.

We have 270 employees, which probably makes us one of Hawke’s Bay’s larger employers. It might sound like a platitude, but the staff really are the foundation of TToH. They’re dedicated, selfless, and I think they really don’t realise how good they are at what they do.

What are your plans for the future of Te Taiwhenua o Heretaunga?

The long-term sustainability of this organisation is crucial for the people of Heretaunga. We are here for them in ways that no other organisation is, or can be.

We’ve never received a cent of Treaty Settlement money. We are where we are today, turning over $20 million a year, through sheer hard work. We will continue to do that, but while we remain dependent on government contracts, there’s always uncertainty. I want TToH to become less dependent on contracts, and more financially independent.

I look at the needs of our people out there, and they’re the same as everyone else’s – warm, secure housing, affordable and effective healthcare, social connection, jobs, good incomes, education and hope for the future.

There’s too much of that missing from the picture at the moment.

So we’re thinking about wider horizons, and for a start, that’s probably going to mean we step into the social housing space. Every indicator for high-needs and poor social outcomes begins with poor housing.

I also want big changes in the way that successive governments shape their policies and contracts around Māori support.

Mainstream contracts come out of centralised policy, one size fits all.

Too many are process-driven boxticking exercises that are never going to achieve fundamental, long-lasting change for whānau. But trying to change bureaucratic thinking around that is huge. It’s a real mind-shift. To say, fund us for an agreed set of outcomes, and let us do it our way, involves high levels of trust.

What TToH achievement are you most proud of ?

Late last year we introduced a new system of workforce organisation, in the form of multi-skilled, integrated teams.

Each team has the capacity to create individualised, wraparound packages of care and support for whānau, depending on their circumstances. They can also draw on other teams with relevant skills to help that whānau.

So we’ve gone from mono-skilled teams working within their own contract silos, to teams with the ability to create a holistic, integrated plan that includes tackling the underlying issues affecting whānau.

This system is producing exponentially better outcomes for whānau, and efficiencies for TToH. Why have five cars up the driveway when one, with two people in it, can do the job.

What do you enjoy doing in your spare time?

My heartfelt thanks go to Iron Māori, who taught me how to swim. Now I go swimming and biking and walking all the time. I love it. You might see me walking on Te Mata Peak from time to time.

recruitment intelligence 11 Donnelly Street, Havelock North, Hawke’s Bay. TEL. 06 877 6637

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NOVEMBER - JANUARY 2018

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Port boss weighs anchor after 18 years PRO

Feature

Ahead of his retirement in December, Garth Cowie reflects on his experiences as CEO of Napier Port.

WRITER: SIMON HENDERY

Garth Cowie

Back in 1999, Garth Cowie “traded oysters for red wine” when he left the top job at South Port in Bluff and headed north to become chief executive at Napier Port.

“At the time I most probably thought I was getting the raw end of the deal but I’ve certainly found that the lifestyle and the growth prospects here were significant, compared to Bluff, and the port has gone from strength to strength since then.”

Garth retires as CEO in December after overseeing 18 years of growth and significant development at Napier Port.

When he announced his decision to leave in April, port chairman Alasdair MacLeod said Garth should take great pride in a number of achievements under his watch that have positioned Napier Port well for the future.

“He’s developed an outstanding senior management team and a motivated and dedicated staff across the board – across our marine, cargo handling and support functions. They are pushing industry boundaries nationally and internationally in health and safety, technology and logistics,” Alasdair said.

“Napier Port’s relationship with customers and suppliers is strong and the company is forging partnerships for collaboration across the globe. We are heading towards a healthy profit this year and we are currently planning for a wharf development that will see Napier Port significantly increase its capacity.”

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When Garth arrived from South Port in 1999 – after five years as the Southland facility’s CEO – Napier Port was handling about 67,000 twenty-foot equivalent (TEU) containers a year. This year it will handle more than 288,000 and volumes are forecast to continue growing over coming years.

Cargo and log volumes have also increased markedly and Garth says significantly, the growth has been achieved on virtually the same physical footprint the port had when he arrived.

A key highlight over his time leading the company has been Napier surpassing Wellington and Port Chalmers to become the country’s fourth largest container terminal.

While the port industry has a history of strong union involvement, Garth says another highlight has been a change of culture to a more constructive, open and transparent relationship across the organisation. This was highlighted after last year’s Kaikoura earthquake which brought significant extra work to Napier, meaning the peak season arrived in December rather than March.

“It meant a huge change and our people had to adapt and be flexible to rise to the challenge. Our staff were working flat tack for six rather than three months of the year.

We couldn’t allow people to go on leave so they had to reorganise their holidays and that sort of thing. So it’s the people who have really made all the difference over my time and that will be the thing I miss the most –

the day-to-day contact and the relationships with the people here.”

Another highlight has been the port’s consultation over its upcoming $100 million-plus 6 Wharf development, which has involved feedback from more than 2000 people.

Born and bred in Invercargill, Garth studied accounting at university and began his working life as an assistant auditor with the Government Audit Office. In 1979 he became the accountant for what was then the Southland Harbour Board.

He was the harbour board’s secretary when it morphed into South Port in 1988, and took up the deputy chief executive role followed, in 1994, by the CEO role which he held for five years before heading north to Hawke’s Bay. Garth says there were a number of factors behind his decision to step down after 18 years running Napier Port. One was Prime Minister John Key’s departure last year.

“He picked his own time, and didn’t have to.

That started making me reflect that there is a right time for the chief executive to retire.”

Then long-serving port employee Graeme Hart passed away in January, aged 67.

“He didn’t get to enjoy the retirement that was coming. Both of those were triggers for me to think about what my future was going to be.”

PRO

Feature

Having turned 60 himself, Garth says he was also mindful of the major expansion work being planned at the port.

“With the development that we’ve got coming up, if I was going to stay I would need to stay to see it through, which is probably about another four years. I thought that was going to be too long and I really needed to make a decision to allow the new CEO to come onboard early enough to work through and understand it completely by the time the full business case was developed.”

While he is looking forward to stepping aside from the heavy demands of a CEO role, Garth will continue to chair a committee overseeing Hastings District Council’s water services change programme and will be looking to pick up other governance roles or advisory work.

18 years of growth at Napier Port Garth Cowie has been CEO at Napier Port since 1999.

During that time the port has: • become the country’s 4th largest container terminal;

• increased log handling throughput from 250,000 to more than 1.6 million tonnes;

• increased cargo volumes from 2.1 to more than 3.9 million tonnes; • developed an empty container depot in Pandora; • increased container volumes from 66,455 to more than 288,000 TEU • partnered with Ports of Auckland to this year; establish Longburn Intermodal Freight Hub; • reported continuous year-on-year growth; • purchased land at Whakatu for a future inland container hub; • built 4 Wharf; • replaced its tug fleet with high-power purpose-built Voith tugs to cater for the next generation of larger vessels using the port.

“And hopefully my golf handicap might start to come down, slowly.”

Taking change lessons to council water role Garth Cowie’s retirement as port CEO won’t see him disappear from the public spotlight. As well as planning to take up directorships, he will continue to oversee changes to Hastings District Council’s water services operations in a role set to continue through until at least the middle of 2018.

In July he was appointed as external chair to lead the council’s change programme in the wake of the 2016 Havelock North gastro crisis. He heads a committee implementing the findings of an independent review of water services and the outcomes of the Government’s inquiry into the contamination.

“I live in Havelock. I’ve got a vested interest in making sure that when we turn the tap on we don’t get sick. Safe drinking water is a right,” he says.

The committee’s role includes working through all of the independent report’s recommendations, including around changing the culture within the council’s water services operation.

“The council have seen what’s happened in the change process here at the port. They would like to see some change in terms of their culture and they’ve asked me to lead that process as an independent chairman.

It’s not just the water department’s culture.

The new norm will affect the whole of the Hastings Council,” he says.

“Chief executive Ross McLeod and his senior management team at the council are absolutely committed to the outcome – my role is about providing some leadership and oversight and a sounding board for the team.”

He says his experience from the port is that changing the culture within an organisation takes time and additional resource will be required to achieve the desired outcomes.

“The willingness of current people to change, adapt and learn and take responsibility is key, and that is already there in the water department. We’re a long way along the track in terms of the ‘new norm’.”

NOVEMBER - JANUARY 2018

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New chair looks to re-calibrate” Unison’s business strategy WRITER: SIMON HENDERY

Unison Group’s new chairman, Phil Hocquard, is planning a strategic review of the business’s future direction – but don’t expect a major shift away from its core business of electricity generation.

Phil, who has already spent eight years on the Unison board, stepped into the chairman’s role in August.

He replaced long-serving chair Kevin Atkinson who retired in July after 19 years as a director of the company.

Phil says the transition – which came after Unison announced a 65 per cent increase in net profit after tax for the past year – had been a smooth one.

“It’s going pretty well. I’ve slipped into the driving seat and there doesn’t seem to be too much wrong with the motor. There’s been plenty of effort put in by previous board members and that will continue, so there’s plenty to work with.”

New Zealand

Phil Hocquard

But with a relatively new board now in place, including three members appointed in the past couple of years, it is “time to re-

THE

“The key thing we need to remember is we are providing an electricity service to the consumers in Hawke’s Bay – that’s our core business and our core task – and the other stuff is about generating additional revenue to make that work even better.”

That “other stuff ” includes Unison’s fibre business, its contracting services business and ETEL, the transformer manufacturing company it acquired in 2009.

While ETEL was a capital-intensive business, it had some exciting opportunities ahead of it, particularly in and around Indonesia following its 2016 purchase of a majority stake in Indonesian transformer business Lucky Light Gobalindo.

Given that electricity revenues are regulated, from a strategic perspective, ETEL provides Unison with “a good, strong, long-term, stable source of additional revenue that is related to our core business – all the power companies use transformers,” Phil says.

Shared space for future-focused businesses.

Ahuriri - Havelock North - coming soon to Wellington & Auckland CBD

www.techcollective.co.nz 10

calibrate and look at where we’ve come from and how we utilise what we’ve already got so as to do better in future,” he says.

NOVEMBER – JANUARY 2018

P: 06 877 2226

E: info@techcollective.co.nz

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“It’s been a good investment. It’s continued to grow and it’s been a good part of our profit over time and will continue to be so.”

Contracting opportunities are another potential growth area. Unison is contracted to manage Central Hawke’s Bay’s network and has recently had crews working on a major network upgrade being undertaken by Aurora Energy in Otago.

Further potential contracting work was on the horizon, Phil says, providing a further source of revenue that will assist in developing the scale necessary to provide valuable skill development opportunities for Unison staff.

Meanwhile, Kevin Atkinson has swapped his chairman’s role for a seat on the Hawke’s Bay Power Consumers’ Trust following an election where debate among candidates focused on whether the Trust should review how it distributes its annual dividend cheque from Unison.

Phil says the allocation of dividend proceeds is a matter for the Trust.

“My focus, and the board’s focus, is on running the business as profitably and efficiently as we can, and returning as much as we can to the shareholder while maintaining and improving the network sustainably. It’s in the trustees’ court as to what they think is best to do with the money earned by the company.

The trustees are obliged to review the options available to the shareholder consumers they represent and to consult with the consumers on those from time to time.”

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Unified approach needed to attract new businesses to Hawke’s Bay Phil Hocquard says Hawke’s Bay has top-class infrastructure but needs a unified approach to marketing the region if it wants to attract more national and international business here.

Phil grew up in Gisborne and studied law at Victoria University in Wellington before moving to Hawke’s Bay to start his legal career at Bannister & von Dadelszen in 1976.

The father of six was a partner at the Hastings firm for more than 20 years before retiring in 1999 to set up his own mentoring and consulting business.

He is a life member of the Hawke's Bay Chamber of Commerce and a past chairman of the Hawke's Bay Development Board and Havelock North High School Board.

Phil is currently chairman of Mission Estate Winery and Lowe Corporation, as well as Unison Group, along with some other private entities.

In his view, Hawke’s Bay itself needs to realise that it has great existing infrastructure – not only a great electricity network but also one of the country’s busiest ports, one of

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its busiest airports and sufficient scale to offer services and a lifestyle comparable with any other city in New Zealand outside of, perhaps, Auckland.

The region should not be backward in more effectively selling the region’s strengths to national and international decision-makers who have the power to bring industry and commerce here.

“What’s lacking is the way we express ourselves to the rest of New Zealand and the world. The fact that we’re made up of different communities is a strength rather than a weakness, and together we comprise a very significant population base with all of the assets and infrastructure necessary to grow strongly,” he says.

“We’ve got so much to offer – with a significant rural, industrial and commercial heart and great lifestyle opportunities – and yet we seem to so often get left out in the cold because we appear to others as two small cities (sort of distant cousins) rather than as one quite big city made up of complementary communities offering a range of opportunities and great links to the rest of New Zealand and the world.”

Kirsty Miller BBS ANZIV MPINZ

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Chris Hope B.Com MPINZ

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We have experienced Valuers whose expertise in their field can give you independent and professional advice to help you make prudent property decisions.

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NOVEMBER - JANUARY 2018

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Hawke’s Bay Opera House strengthening underway: Strata Group director Guy Lethbridge (centre) with colleague and structural engineer David Plowman (left) get a progress update from Gemco project manager Eddie Holmes (right).

BUILDING OWNERS ON SHAKY GROUND WITH NEW LEGISLATION Due to the new earthquake-prone building legislation, building owners across the country could be facing a mandatory structural assessment to determine whether or not their buildings are earthquake prone.

No longer will owners of older buildings be able to postpone structural assessments as the new legislation gives clear guidelines on time frames. Local councils are required to assess their building stocks to determine if they consider a building to be potentially earthquake prone based on a set of assessment parameters, such as age, building material, location and size. Once a letter of notification is received, owners will have 12 months to engage a structural engineer to undertake an assessment.

Hastings District Council has indicated they will start sending out letters in 2018. Napier City, Wairoa District and Central Hawke’s

“In an already busy construction environment, getting through the volume of expected assessments will be challenging.”

Bay councils have yet to confirm time frames but they too have a deadline of 2022 to complete their reviews.

Gerard van Veen of Hastings District Council has stated that the new profiling rules effectively reduced the number of potentially earthquake-prone buildings in Hastings compared to the old policies.

“Initial estimates identified 1,200 buildings, which has now reduced considerably under the new legislation.”

Strata Group director Guy Lethbridge has been involved in seismic assessments and upgrades since the 2007 Gisborne earthquake and says the extended time frames for the council profiling, structural assessments and even the 7.5-to-15-year time frames to upgrade reflect the pressure the new policies will put on the councils and the engineering and construction industry.

With tenants now more aware of building rating, it is rare for landlords of older buildings not to be asked for an indication of building strength.

Guy Lethbridge

“National franchises have already set minimum thresholds for buildings they currently or intend to occupy, so knowing your building strength will become a landlord expectation.”

The assessments are required to report the existing building strength as a percentage of an identical building constructed to

As a guide to building owners, potential earthquake-prone buildings include:

Buildings that are excluded from the profile include:

• unreinforced masonry buildings (URM – red brick buildings);

• buildings already strengthened to at least 34% NBS before 1 July 2017; and

• buildings constructed pre-1976 that are three or more stories, or are 12 metres or greater in height above the lowest ground level; and

• buildings that have been issued a s124 notice; the TA has previous assessments that meet the required standards or are in a subset of special buildings with special study showing that they are not earthquake prone.

• pre-1935 buildings that are one or two stories or ‘other’, which is identified by means other than profiling.

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• timber-framed buildings;

modern day standards. Any building with an outcome of less than 34% is likely to be rated as earthquake prone and will require strengthening to achieve an outcome of greater than 34% NBS.

Guy says most of the post-1931 earthquake Art Deco buildings in Hawke’s Bay will contain unreinforced masonry and owners of these buildings should expect a letter from council.

“While a strength outcome of, say, 35% will deem the building not earthquake prone, tenants are typically targeting a higher threshold of 67% NBS.”

“We would encourage building owners to do their own assessment based on the profiling parameters. If you are unsure then contact your council or an engineer for advice.

The new legislation, Building (Earthquakeprone Buildings) Amendment Act 2016, came into effect on 1 July 2017 and with it came extensive criteria of what a Detailed Seismic Assessment (DSA) report must cover.

“In our experience, many building owners have not taken the news that their asset will require capital investment well; however, once the reality has set in that an upgrade is mandatory then they take a fresh new look at the building.

“The new reporting structure means more consistency in evaluating and reporting earthquake-prone buildings. In the past, engineers have been criticised for a spread of assessment outcomes on the same building and it is hoped that under the new regime, this range of outcomes will be reduced.”

“Many of the older building stock are no longer fit for purpose and finding new tenants is difficult. By incorporating some layout changes and external facelift work as part of the upgrade, the building will stand out from its neighbour. We work with our clients to get the building ready for market.”

The Act states that councils will be required to identify priority buildings such as schools, hospitals and emergency response buildings by 1 January 2020 and if assessed as earthquake prone, then any improvements must be carried out within 7.5 years. All other buildings, such as commercial buildings, are to be identified by 1 July 2022 and rectified within 15 years.

Residential buildings are not included in the assessment criteria.

Strata Group has been involved in assessments across the East Cape and has observed that the Napier and Hastings building stock is better than the surrounding districts.

“The 1931 earthquake and subsequent fire destroyed many of the older buildings in Hawke’s Bay and the replacement buildings were of a higher standard. Buildings in other areas still have pre-1931 building stock, which generally result in lower strength outcomes.”

Key Take Homes for Building Owners • Do your own assessment to see if you are likely to be in the council catchment.

• Plans are gold. Source all documents relating to your building prior to contacting an engineer; the best place to start is the property files at your local council.

• If a currently practicing engineer has worked on your building then he or she is the best person to contact first.

The 20-strong Strata Group team has already completed a large number of building assessments, both under the previous Act and now under the new amendment. Strata Group has assessed buildings such as the Hawke’s Bay Opera House, which is currently undergoing strengthening, as well as Napier’s Civic Administration and Library buildings.

“These high-profile cases have prompted a great deal of debate around true risk and perceived risk. The Building Act has given engineers an assessment benchmark, an assessment process and specific reporting parameters. We hope the public don’t shoot the messengers if the news isn’t good.”

Guy says building owners who don’t know the strength of their buildings potentially reduce options around sale and purchase, refinancing, tenant lease negotiations, insurance premiums and general peace of mind.

“We appreciate that potential unforecasted costs of hundreds of thousands of dollars to upgrade your building is a bitter pill to swallow, but the option to bury your head in the sand is no longer available.”

Guy’s parting advice is that building owners who think their building will be profiled as potentially earthquake prone should talk to a local structural engineer and get an indication of time and costs of an assessment. The risk of not doing this is you may be at the end of the queue and that could present a risk of losing your tenant. www.sratagroup.net.nz

• Consider the life cycle of your building. Look at the condition of your building and any parts that you can incorporate deferred maintenance works during your seismic upgrade.

• Think about any parts of your building that are not fit for purpose and may detract from the marketability.

These areas can potentially be modified during the seismic upgrade.

STRUCTURAL & CIVIL ENGINEERING CONSULTANTS WHO SPEAK YOUR LANGUAGE With offices in Hawke’s Bay, Christchurch and Queenstown, we have you covered. u u u u u

Structural & Civil Engineering Advanced Seismic Upgrade Solutions Land Development & Subdivisions Project Management & Lead Consultancy CAD Drafting & Design

Where Engineering, People & Great Ideas Come Together 308 Queen Street East, Hastings 4122 | P 06 876 7646 | E admin@sgl.nz | www.stratagroup.net.nz

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Site class testing using seismics.

In Courtney Place (left) and in a basement (below).

Can be done anywhere, simply and effectively.

Dig below the surface reveals the true story There’s an old saying ‘don’t judge a book by its cover’ and that’s the same when it comes to the strength of a building.

Just because a building looks stunning, doesn’t mean that it will withstand a major earthquake.

“If you go and look at the Christchurch and Kaikoura earthquakes there was no fatalities due to geotech risk, although building damage due to geotech was estimated to be about fifty percent of the $40billion loss (MBIE, 2017).

The building may be structurally strong, but unless there’s a good understanding of what lies beneath the ground’s surface, then your investment as well as people’s lives may be at risk.

Hawke’s Bay is regarded as a High Seismic Risk Area but Cam says the risk of death from a building collapsing due to instability below the ground is probably pretty low.

Cam Wylie of Geotechnical engineering firm RDCL said it was about time that the amended Earthquake Prone Building legislation considered that it was just as important to have geotech as part of the seismic assessment.

“Previously geotech was not compulsory but it is now via the Detailed Seismic Assessment (DSA) and that’s a big change. In the past, the view has been that if the building is structurally ok above the ground then that’s enough but what’s below the ground has quite a bit to do with it."

RDCL, based at Business HQ in Hastings, just next to structural engineering firm Strata Group, are experts in understanding what’s below the ground and how that has an impact on what’s above it.

The firm has been involved in many strengthening projects around the country and local projects include the Flaxmere Aquatic Centre, Heinz Wattie’s administration building and the Hawke’s Bay Showgrounds grandstand.

Cam says the DSA is strictly about life safety from an earthquake and that there was no demonstrable loss of life due to geotechnical issues in the recent New Zealand earthquakes.

Damage due to geotechnical conditions may be widespread, but this is not the same as life and is not considered in the DSA process.

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“We don’t think people in Hawke's Bay will die due to geotechnical risk, because if you go and look at a building and say what’s going to happen … is a mountain going to fall on it the answer is generally no, is the ground going to liquefy, maybe but it’s very unlikely that the liquefaction is going to result in the building failing completely.”

RDCL’s favoured approach to assessing the geotechnical risk is to work closely with the structural engineer, something that’s pretty easy when Strata Group are just next door.

Cam says it’s important that geotechnical and structural engineers are in sync.

“That’s the key because the structural engineer needs to understand geotech, but just as importantly the geotech needs to understand the structural engineering.

RDCL’s team of geotechnical engineers use state-of-the-art technology, including Downhole Geophysics, Surface (Seismic) Geophysics and cone penetrator test (CPT) for precision site testing and evaluation.

RDCL usually starts with a dashboard investigation before undertaking a CPT, which is a probe pushed into the ground to measure the relative strength, and help identify the risk of liquefaction and the bearing capacity of the soil.

As the assessment develops, particularly in Wellington, subsoil class might become

important in the structural assessment. In that case the intensity of the investigation might require more specialised methods.

“When an earthquake strikes it hits a building like a wave, putting it into motion and it will react depending on what’s the subsoil below.

If it’s rock (site class A) the load is low and then it goes up accordingly with site class D or E of deep soil being a big jump. This can have a major impact on the building ability to perform”.

If the assessment requires an understanding of site class, RDCL uses geophysics to collect high quality seismic data using surface, sownhole or cross-hole techniques.

In HB not many buildings have been assessed by site class. RDCL has assessed some buildings close to Napier Hill, and a couple in Hastings. That’s because the depth to hard rock (basement) and which drives the site class is generally very deep in the province, and the work is most generally done for high cost or high importance (with post-disaster function) structures.

“At the end of the day we are not wanting to make a mountain out of a molehill. For a couple of thousand dollars we can do a quick CPT and an assessment for your DSA. “If you then want to strengthen your building, which is when the costs might really climb, then you then might come back to the Geotech and your geotechnical work at that stage might change.

"Just how that changes will determine the complexities of the building. It’s about the right investigation at the right time which can save you a lot of money." www.rdcl.co.nz

Co-working comes to a town near you

Ahuriri 2 Bridge Street Hot Desks: 12 Meeting rooms: 2 Phone booths: 2

Collaborative modern work spaces with the benefit of flexibility prove to be a smart move for local businesses.

Looking for somewhere to work that’s better than the kitchen table or the spare bedroom?

In the days when long term commitment isn’t in vogue, hot desking is the perfect answer to working in a buzzing environment with a collective of other businesses – whether that’s a sole operator or a small team.

Hot desking is spreading across Hawke’s Bay with the Tech Collective opening collaborative work spaces in Havelock North and Ahuriri.

The Tech Collective is the brainchild of well-respected property developer Wallace Development Company, who has reacted to the latest trend in how people work, especially small businesses. It also has Tech Collectives opening soon in Auckland and Wellington and has plans for more in other regions, including a further Collective in Hastings. The Tech Collective is managed by a dedicated property management team.

Mike Walker of Wallace Development Company says the Tech Collective is quickly proving to be a popular alternative for small business owners and sole contractors, who do not want to be fixed to a long-term lease.

“This is proving to be popular for those whose work takes them across the region. We believe facilities in Auckland and Wellington for meetings will also be well received.”

Wallace Development Company has converted about a quarter of a commercial complex in Napier Road, Havelock North into a co-working space.

Already the space is in demand from graphic designers, sales reps and IT specialists. The 120m2 space has room for up to 14 hot desks, a client meeting room as well as a private phone booth. The modern funky set up includes polished concrete floors, stylish plywood desks, planter-box dividers, a bar leaner and a north facing deck The award-winning Hawthorne café is a short 30m walk while the newly redeveloped Village Green is just across the road.

The Ahuriri Tech Collective space in Bridge Street is part of a much bigger commercial business complex which boasts the likes of

New Zealand

hip tech companies such as Xero, NOW, Webfox and Re-Leased among others.

The complex also has the popular Adoro café, off-street leased car parking and outside ‘chill out’ spaces.

“The Ahuriri site is a little bit different as it’s got some larger businesses on-site that enhance the vibe while the sea side retail and hospitality of Ahuriri is a short walk away.

“We believe our contemporary work space concept will attract more and more companies to work effectively in locations beyond the main centres.”

“There is a trend towards co-working whereby you only need to bring your laptop or PC in and everything else is taken care of. There’s wifi, a quality printer and private meeting spaces.”

“There’s also a real collaborative environment which you don’t get working from home. It provides the opportunity to bounce ideas or problems with others and is also a vibrant social setting.

The financial cost is low at just $95 + GST a week all-inclusive, all you need to bring is your computer and mobile phone! A major point of difference is that you can utilise the meeting and kitchen facilities at the other locations if you are a part of the Collective.

Havelock North 17 Napier Road Hot Desks: 14 Meeting rooms: 1 Phone booths: 2 NOVEMBER - JANUARY 2018

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Sprayshop moves to next level Greg Deck grew up in the world of horticultural spray technology – his father Miles founded Croplands in Wellington in 1972. Some 40 years later and Greg manages the national Croplands (now Australian-owned) warehouse and call centre from his Omahu Road premises, adding significant value to the established on-site sprayshop and workshop which services the needs of Hawkes Bay’s leading orchardists and viticulturists.

The business has grown and expanded rapidly and Greg knew he needed an external perspective to keep him accountable. He joined the Icehouse Owner Operator Programme, based at the Hawke’s Bay Business Hub, and hasn’t looked back.

Kate de Lautour caught up with Greg and began by asking him what was happening in the business when he joined The Icehouse...

There was a lot going on! We had bought the Sprayshop business in 2009 with 5 staff. In 2010 we got the contract to operate the Croplands warehouse for NZ and the following year we were operating the nationwide call centre. It was a great move for the Sprayshop, allowing our customers to access all the parts, as they needed them without any delay. Of course, our staff numbers increased, we needed a new website, we rebranded, our processes needed updating and I was heading home at night and “talking shop” with my awesome wife and business partner Katie which wasn’t ideal!

In my head it was work 24/7 and I needed to make some changes.

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Empowering Business in the Central Region

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So, you joined The Icehouse Owner Operator Programme, what was your initial impression?

At first there was a lot to take in, with heaps of practical learning in the workshops and accountability in the one on one coaching but there was a brilliant group of other business owners with me and although we were from totally different businesses, we were all facing the same sort of challenges. All of a sudden, things started kicking into action. I was setting goals and reaching them, I started communicating better, writing a vision to share with the team, running regular meetings in a more valuable way, with better processes for the meetings. It’s not rocket science but I just wasn’t doing it. I learnt so much from the others on the programme as well and seeing them make difficult decisions and overcome challenges made me think I can do that too and I’m not the only one having to tackle tough decisions. It was inspiring.

Once you had all this in place how did it enable you to move to the next level?

I started planning better. We had a capacity issue and to keep up I was looking at new building ideas then a warehouse opportunity came up. My numbers stacked up and we moved in. This meant we doubled the workshop capacity allowing us to service more

sprayers before spring. We have a number of customers who are expanding their businesses and we knew we wanted to be able to keep up with their requirements – one grower has gone from 30 sprayers to 60 sprayers in the space of three years!

Getting into The Icehouse encouraged me to hire a 2IC and that’s working really well and has allowed me to focus on the business rather than just in it. We are now at 10 staff including Katie and myself and it’s likely we will need to hire another two staff members in the coming 12 months. We have had six mechanics working through the season and we may well need another permanent mechanic – and they’re not easy to find.

What’s next for the business?

There’s no doubt the horticulture industry is booming throughout New Zealand and we want to invest in our infrastructure and our people so we can support this growth. We have two staff enrolled for the Icehouse Effective Leadership Programme in 2018 which will give them the skills they need to grow with us. We are continuing to work with facilitator Michaela Vodanovich, to ensure we stay on track and stay accountable.

Greg Dick (left) now has a 2IC which has allowed him to focus on the business rather than just in it.

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STEAMING SUCCESS FOR BAY-MADE DESIGNER ESPRESSO MAKER When the Newton team took to online capital-raising platform Kickstarter in September seeking seed funding, it took them just 23 minutes to secure the $10,000 they were after.

Hayden Maunsell and Alan Neilson

WRITER: SIMON HENDERY

Production of a unique Hawke’s Bay eco-friendly coffee machine is underway after the team behind the award-winning project took just 23 minutes to raise the required start-up funding online.

Designing and manufacturing the Newton Espresso maker has been a labour of love for two EIT staff members – 63-year-old Alan Neilson and Hayden Maunsell, 31 – who say their differing “old school, new school” approaches have enabled a best-ofboth-worlds outcome.

The project began with a conversation about making a new coffee machine, one that would produce a great crema without compromising on design or the environment.

Design sketches drawn up by Hayden were adapted into working prototypes by Alan and the ensuing collaborative design process of testing ideas and materials, developing and refining, has evolved the Newton into a quality functional apparatus.

The Newton – a modern take on the leverpress machine that calls on established principles of coffee extracting – is described as offering the perfect balance between a “sculptural art piece” and a “domestic tool”.

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unlike many espresso machines on the market, creates zero waste and does not use electricity.

The Newton’s minimalist design, considered aesthetics and pop of metallic burnt-orange colour are features that have seen it honoured in recent design awards. It was named winning design in the HOME New Zealand Design Awards from Fisher & Paykel and was recognised at the Designers Institute of New Zealand Best Design Awards, picking up silver and bronze awards in the Designed Product and Colour categories, respectively.

When the Newton team took to online capital-raising platform Kickstarter in September seeking seed funding, it took them just 23 minutes to secure the $10,000 they were after.

At the same time, the Newton was put to the test and received “rave reviews” at a Kickstarter launch event attended by about 120 people at the Hawke’s Bay Business Hub in Ahuriri.

Craftsman Alan completed an apprenticeship in toolmaking at a cycle and lawnmower manufacturing company and went on to do prototype research and development in that field.

His diverse skills in crafting and engineering also saw him working with exceptional accuracy restoring medical and scientific

The Newton in action

antiques in London. He is a self-taught wood turner, winning many awards and accolades both in New Zealand and overseas.

His other achievements include restoring his 100-year-old home and making furniture, cabinetry, fittings, jewellery and toys for his home and for his family.

Hayden completed an apprenticeship in refrigeration engineering after finishing school, working in that field for eight years before completing a Bachelor of Visual Arts and Design followed by a Masters of Art and Design.

Demand for the Newton has now seen the team expanded to include professional photographers and videographers Josh Neilson (Alan’s son) and Steph Everson, along with graphic designer Tara Cooney. www.newtonespresso.co.nz

BUSINESS PROFILE PROFILE BUSINESS S WA

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ENABLEBUSINESS & KNOWLEDGE ACCOUNTANTS:

Championing the Success of Businesses in the Bay Two of Hawke’s Bays’ most innovative accountancy firms — enablebusiness and Knowledge Accountants — have joined forces to deliver even more value to their clients.

Well-known Hastings accountant Cedric Knowles and his team at Knowledge Accountants Ltd have merged with enablebusiness Hawke's Bay – and the new two-partner firm is looking forward to an exciting future.

“We’re rapt to have Cedric and his team on board,” says Sam Ogle of enablebusiness.

“Our two firms are very similar – we’re both passionate about the Bay, and we share the same philosophy. We believe accountancy is more than just ticking-the-boxes and filing tax returns on time…it’s about bringing those wider business skills and proactive advice that will really add value.”

Cedric has been running Knowledge Accountants for 10 years; while enablebusiness started in the Bay nearly four years ago, and is headed by Sam Ogle.

The two Directors also have a similar approach when it comes to their client relationships, adds Cedric.

“Most of our clients have been with us for many years. It’s important to build that strong relationship, so you actually enjoy working together. It doesn’t hurt to bring a sense of humour either.”

Growing client base

The two firms have a similar client base – mostly family-owned businesses in trades, manufacturing, export businesses, professional services, and horticulture/ viticulture. Although proudly Hawke’s Bay-

based, they also have clients based throughout regional New Zealand, Australia and even the Chatham Islands.

Cedric says the feedback from his clients about the merger has been “overwhelmingly positive”. The merger will deliver several benefits for the newly-expanded client base.

“From our clients’ perspective, we now have an even broader set of skills and expertise in-house,” says Sam. “When it comes to solving client issues, two heads are better than one. We also bring different skills to the table. For instance, Cedric is experienced in forensic accounting and providing expert witness services.”

Moving forward, the firm will host business education events that encourage clients to network with each other, and potentially forge new business alliances.

Value-added packages

As a national group of accountancy professionals – located in Auckland, Wellington and the Hawke’s Bay – enablebusiness offers a full range of accountancy and business advisory services.

They specialise in providing clients with affordable fixed-fee packages, specifically designed for the SME-sized business.

There are three types of packages – each with affordable ‘no surprises’ fees – to suit the business at every stage of growth. To help with cash flow, payments can be made by monthly instalment.

“Our philosophy is that we like to quote everything up-front before we do any work… just like our clients have to do in their own business,” says Sam. “The Basics” is a cost-effective package covering annual returns, GST, tax compliance,

as well as phone and email support. The “Enabler” and “Enabler Ultra” packages are aimed at business owners who are ready for the next stage of growth. They include a business plan, followed up with business coaching quarterly or monthly management reporting, and annual integrated forecasting.

Advice on HR and people management can also be provided.

Outcome focused business plans

Their business coaching and advisory services are a key point of difference from the traditional accountant’s offering. enablebusiness offers business planning to set goals and objectives; supported by regular business coaching.

“This is not the kind of business plan you file away in a draw to collect dust,” says Sam. “It’s a punchy two-pager that’s entirely outcome focused. We tell clients they can laminate it and put it on the dash of their ute – to remind themselves daily what they need to be doing, and why.”

The plan has 12-month objectives, broken down into 90-day tasks. The coaching sessions keep the client on track to their goals, and accountable to themselves.

“The coaching is about making sure the business plan gets executed. It’s a bit like having a mini-Board of directors – a trusted team who are helping you solve problems and overcome roadblocks, while keeping you on course to achieve your goals.”

• LIKE TO KNOW MORE? Get in touch with Sam or

Cedric from enablebusiness on 06 929 9172. Or visit the website at enablebusiness.co.nz.

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WCO?… WTF? The prospect of a water conservation order (WCO) on the Ngaruroro and Clive rivers has the region’s primary sector and local councils up in arms, with hundreds turning up for an anti-WCO rally in September. So why has the order been proposed and what could it mean for Hawke’s Bay? What is a WCO?

A Water Conservation Order is put in place to protect rivers or other water bodies that are deemed “nationally outstanding” – in the same way national parks are safeguarded.

An application seeking a WCO for the Ngaruroro and Clive rivers – two water bodies with significant economic, recreational and cultural importance – was made in 2015 and then referred by then Conservation Minister Nick Smith to a “special tribunal” for consideration. If approved it would be the country’s 16th WCO and the first to be granted in about a decade.

Who made the application and what are they seeking?

The application has been made by Fish & Game, Forest & Bird, local hapu Ngāti Hori ki Kohupatiki, Whitewater New Zealand and Jet Boating New Zealand. The organisations are seeking a WCO covering the entire Ngaruroro River, including its tributaries and connected groundwater, and 7kms of the Clive River and its connected groundwater.

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WRITER: Simon Hendery

While it is up to the special tribunal to set the conditions if it decides an order should be made, the applicants are seeking measures to “protect water quality” and a range of specified “restrictions on alterations of river flow and form”.

Who opposes the WCO and why?

A wide range of primary sector businesses and organisations, along with a number of individuals, have formally opposed the application which they say will have a devastating impact on Hawke’s Bay’s economy by reducing the availability of water for irrigation.

What do the councils think?

Napier City Council, Hastings District Council and Hawke’s Bay Regional Council have all opposed the WCO. HBRC says that while the significant values in the Ngaruroro River warrant protection, it does not believe the WCO “is the most appropriate tool to do that”. It says the order as written would place constraints on groundwater takes during dry summer months that are dramatically more severe than those currently being contemplated by TANK, a community-led consultation process reviewing the way land and water resources are managed.

While the WCO would not change existing water take consents, they say the proposed river flow restrictions would force a reduction in allocations when consents come up for renewal.

While in the last eight years there were an average of 10 irrigation ban days per year, modelling shows that under the WCO that would increase to an average of 27 days and in an extremely dry year there would be upwards of 90 irrigation ban days.

At the same time, they say, those reductions would not substantially improve river flows over summer.

What is the TANK process and how does it fit in?

Irrigation NZ says water from the Ngaruroro irrigates around 7300 hectares but reduced takes under the proposed order would leave only half that area with sufficient water. That would put 1,800 jobs at risk – about half the total number supported by irrigated land in the catchment.

The TANK Group, whose community and stakeholder members include three of the groups applying for the WCO, has for some time been reviewing the way land and water resources are managed in the Greater Heretaunga and Ahuriri area.

TANK encompasses the Tutaekuri, Ahuriri, Ngaruroro and Karamu catchments (hence the name), plus the Heretaunga Plains aquifer system.

PRO

Feature

Left: The WCO Rally. Above: The Ngaruroro River.

Right: The Clive River.

Drifting towards a WCO decision Supporters of the WCO say TANK has been moving too slowly and there is no guarantee it will result in an outcome that protects the rivers as effectively as the WCO would.

But opponents say that as a local process, TANK is a more appropriate forum to resolve local water allocation issues than a Wellington-driven conservation order.

What happens now?

The special tribunal has split the hearing into two parts.

The first part, beginning November 14, deals with the upper reaches of the Ngaruroro.

The second phase, related to the lower catchment, is not scheduled to begin until at least May 2018. It has been delayed because in May the TANK Group is expecting the results of a significant scientific study into the catchment’s river and groundwater systems which will provide significant data for the tribunal to consider.

2015 December – Application lodged.

2016 July – Environment Minister Nick Smith accepts the application and refers it to a special tribunal for consideration.

2017 Aug 24 – Public submissions close, with 388 submissions received.

Sept 19 – Anti-WCO protest draws 400 vehicles and 1000 people to Clive.

Nov 14 – Hearing begins in Napier, set to continue until December 19.

Once it completes the submissions process, the special tribunal will write a report recommending whether or not the WCO should be granted, and if so, on what terms. That recommendation can be challenged through the Environment Court, after which the Environment Minister has the final say on whether the order goes ahead.

2018

With an Environment Court appeal appearing likely, regardless of what decision the tribunal reaches, a final outcome of the WCO process appears likely before 2019.

Late 2018 – The special tribunal likely to release its decision, which can then be appealed through the courts.

January 11 – Hearings resume.

May – TANK research into the catchment’s river and groundwater systems due. Once it is available, the hearing will resume.

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Who is on the Special Tribunal?

The application for a water conservation order is being considered by a five-member panel.

• Richard Fowler (Chairman) – a senior Wellington lawyer specialising in resource management law who has been a commissioner in numerous Resource Management Act hearings and chaired two previous special tribunals.

• Alec Neill – a solicitor with RMA and local government expertise, he has also chaired previous WCO special tribunals and was a member of the 2014-15 board of inquiry into the Ruataniwha dam.

• Dr Ngaire Phillips – an environmental scientist and hearings commissioner with expertise in ecology and environmental toxicology.

• Dr Roger Maaka – the former head of EIT’s Māori division and a hearings commissioner who has also sat as a commissioner on the Waitangi Tribunal.

• John McCliskie – an agribusiness specialist and former chairman of Nelson apple producer Heartland Group.

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The WCO Rally.

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Vietnam has some incredible landscapes, from the limestone karsts of Ha Long Bay to the braided waterways of the Mekong Delta. Even the cities are beautiful with imperial gates covered in carved dragons to iconic colourful hanging lanterns. Vietnam is BEAUTIFUL – no matter how you look at it.

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Eating on the street is by far the most exciting and accessible way to truly experience daily life in Vietnam.

The highlight of my recent holiday was a street food tour in Hoi An - through little alleyways and streets we would not have discovered on our own with the most fabulous eating places. We tried dishes we’d never have thought to try too. A must do.

If you only visit one country in South East Asia – Pick Vietnam! Vietnam is more than a country with a war history. The people are super friendly, the food is amazing and top that off with beautiful scenery and culture – you really shouldn’t miss out on this gem! I’d love to chat to you about YOUR next Vietnam adventure.

PRO

Arguments For and Against

Feature

Our livelihood depends on the health of our rivers Annabeth Cohen is the Freshwater Advocate for Forest & Bird, one of the five organisations applying for the WCO.

WCO would impose unnecessary hardship Bruce Mackay is a member of the TANK collaborative water management stakeholder group.

If this Water Conservation Order application is accepted in its current form it will decimate primary production in Hawke’s Bay. Its use of the terminology “hydraulically connected groundwater to the lower Ngaruroro and Clive rivers” means it includes all the water in the Heretaunga aquifer that supplies our towns and cities, our industries, and our food producers.

It proposes to increase the minimum flow at Fernhill from 2400 litres/sec to 4200 litres/sec. This will see the number of days water use is banned increase from the current level of 9-10 days in an average year, to perhaps 25-30 days per year, and as many as 90 days in a dry year like 2012-13. The difference, however, is that rather than just bans on surface or surface connected consents as they are currently, these bans would impact everyone, including residents of our towns and cities, because they would apply to all water use except drinking, cooking and washing.

Without the ability for growers to irrigate for a third of an average growing season, Hastings’ status as the fruit bowl of New Zealand will be put at risk, while all the water that currently makes us prosper flows out to sea.

The application also seeks to restrict any river channel modifications.

This would have a big impact on the current Ngaruroro gravel extraction programmes, an integral part of the ongoing flood protection work that ensures the safety of our people and properties.

The current management of the river by the HBRC is working well and is getting better. There is a real sense of achievement coming out of the TANK process where all our community’s values are recognised and appreciated. It is a process that both respects the wishes of our whole community, and adapts as things change. If a Water Conservation Order is granted, it can never adapt to change.

It is true that the lower reaches of the river are more degraded than the rest of the river, but a diverse range of fish species still survives there. The whole river is a wildlife corridor from the mountains to the sea, and deserves protection in its entirety.

Disappointingly, some irrigators are staunchly opposed to the WCO being placed on the lower section of the river, which they take water from.

The fact is WCOs exist on rivers where there are thriving agricultural economies. The Mohaka, in northern Hawke's Bay, and the Rangitikei in Manawatu both have WCOs. A WCO cannot revoke existing consents for water takes. It seeks to preserve the river in the state it is in now. It is true the Hawke's Bay Regional Council has significantly over-allocated water in the region and will have to reduce takes to meet recent rules set by central government, but this is nothing to do with the WCO application.

In fact, the regional council announced an effective moratorium on new water takes earlier this year, as it grapples with this issue.

Our application for the WCO describes the significant environmental, cultural and recreational values of the Ngaruroro, along with suggestions for how these values can be protected.

Anyone with a view on if and how the Ngarururo should be protected can make their case as part of the WCO hearing process.

The WCO process complements that of the local TANK water advisory group, with the WCO hearings being scheduled so that TANK's groundwater research will be available in time to inform the WCO deliberations.

Ultimately, the livelihood of our communities depends on the health of our rivers. Too many rivers have been lost to decisions that are detrimental to sustainable economies, and devastating to our native wildlife.

Forest & Bird believes it’s our collective responsibility to give the environment a place in water management decisions. The WCO process is an opportunity for open and honest conversation about how best to do that.

ATTN14PRO17

The main reason river flows decline in summer is because it isn’t raining in the ranges. Bans on irrigation as they are currently imposed have a negligible impact on river flows. Bans on any current abstraction when we have science telling us the current levels are sustainable will only result in unnecessary hardship.

The Ngaruroro River ecosystem has been known to be frequented by nearly a hundred bird species, more than half are native and many travel from Australia, the Pacific or the Arctic to rest, feed or breed in this catchment. As it stands more than a quarter of the Ngaruroro birds are at risk or threatened with extinction. While the Ngaruroro still has native fish species recent years have seen too many of these species numbers decline and recognised as being "in trouble", rather than "doing ok".

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Paul Robinson, Vineyard Manager and Richard Painter, Winemaker Te Awa Winery

HB WINE AMONG MOST DISTINCT AND DIVERSE IN WORLD Hawke’s Bay wines are in the spotlight as some of the most distinct and diverse seen anywhere in the world, according to Hawke’s Bay A&P Bayleys Wine Awards chief wine judge Rod Easthope.

Chardonnay was once again typically strong with Hawke’s Bay continuing to produce the country’s best. This year the category trophy was awarded to Clearview Estate for its Endeavour Chardonnay 2015.

Mr Easthope said 2013/14 will be remembered as incredible vintages, but 2015 has proved it is every bit as good.

Te Awa’s Single Estate Gimblett Gravels Hawke’s Bay Merlot Cabernet Sauvignon 2015 took out Champion Wine of the Show

The development of Hawke’s Bay’s red varietals this year is also exciting chief judge Rod Easthope.

“Great wines have an amazing juxtaposition of freshness, balance, poise and intensity of flavour and this wine has that in spades”.

“The emerging red cultivars has always been a fun class to judge however this is the first year we’re seeing Hawke’s Bay’s Tempranillo, Marzemino and Cabernet Franc hitting their straps. In past vintages people have dipped their toes tentatively into those cultivars but now they look to have a real place here.”

“So much was made of the 13/14 vintages but to have four vintages now ‘on the hop’ producing excellent wines, people are starting to look to Hawke’s Bay as a region producing many different cultivars of worldclass pedigree. In my opinion, that’s been our biggest success story.”

“Classic Bordeaux style in flavour, Te Awa’s Merlot Cab Sav oozes structure and texture with its base notes of cassis, blackberry and plum but its floral/dried herb, spicy lift is what really sets it apart,” said Rod Easthope.

Taking out Reserve Champion Wine of the Show was Church Road’s McDonald Series Syrah 2015. Far from mimicking the variety’s French origins, Hawke’s Bay’s Syrah has established its own distinctive ‘stamp’.

“The Syrah category is always a real draw card and one I can emphatically say Hawke’s Bay leads in. Church Road’s Syrah has balance and power yet the dollop on top of that is its marked black pepper, aniseed and spice. A delicious wine.”

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“Hawke’s Bay used to stick to its knitting with the classic varieties from France, now we’re seeing a more adventurous approach with what we can produce. I think we’ll see steady growth with our emerging reds as they take a permanent foothold in the Hawke’s Bay terroir.”

Once again, the awards revealed just how strong Hawke’s Bay’s 2015 vintage was, with eight of the 18 categories taken out by the year’s stellar harvest.

“What stood out for me this year was seeing the 15 and 16 vintages really shining through.

RESULTS CHAMPION WINE OF SHOW Te Awa Single Estate Gimblett Gravels Hawke’s Bay Merlot Cabernet Sauvignon 2015 RESERVE CHAMPION OF SHOW Church Road McDonald Series Syrah 2015 CHAMPION COMMERCIAL RED WINE Clearview Estate Cape Kidnappers Hawke’s Bay Merlot 2016 CHAMPION COMMERCIAL WHITE WINE Church Road Pinot Gris 2017 CHAMPION EXPORT WINE OF SHOW Villa Maria Cellar Selection Hawke’s Bay Merlot Cabernet Sauvignon 2015

Trophy Partnership Evolves like Fine Wine The Hawke’s Bay’s A&P Bayleys Wine Awards 13-year partnership with trophy designer David Trubridge keeps evolving like fine wine.

“Over the years we’ve created bowls of various sizes, wine glasses, a recycled glass leaf and for the past few years, a stainless steel wine bottle.

While the trophies themselves may have changed in design over the years, one detail remains the same; the award’s stylised grape leaf motif.

“The trophies have this consistency and overall look which makes them unique. It’s unusual in awards to have the same motif running through every single trophy, so we’re very proud of that.”

It’s a symbol that’s become uniquely recognisable to the awards and something David Trubridge wanted to establish from the outset.

“When we were first asked to design the trophy in 2004, I wanted to create an identity which could evolve with ongoing awards.

With 13 Champion Wine of the Show trophies and well over two hundred category award trophies, the work has become a creative legacy.

“Every year since, we have designed a different Champion Wine of the Show Trophy - all incorporating the same lattice leaf work.

Since partnering with the Wine Awards, the world renowned artist and his team have been approached to design other award trophies – a part of the business he sees expanding even more.

“Our core business will always be lighting but we design six other awards now around the country, so it has opened another market for us which is exciting.”

For him personally, there’s one trophy that stands out from the rest.

“One of my favourites was a large bowl in 2005, which required technical experimentation with laser cutting of steel.

Makiko Smith with David Trubridge

“Laser cutting usually happens on flat work but I had to develop a way to cut on the curved surface of the bowl.

“The leaf motif lacework around the edge of the bowl was extremely intricate and technically challenging to get it fitting and looking right, so in terms of artistry, I got the most out of that one for sure.”

“Today, designer Makiko Smith, who has been with us for eight years, creates the designs and Andrew Robertson is tasked with our wooden assembly. Our steel work is contracted out to Ross MacKay who used to share our workspace in the old freezing works.”

OUTSTANDING WINE OF PROVENANCE Sacred Hill Vineyards Sacred Hill Riflemans Chardonnay 2005, 2010, 2015

MERLOT Villa Maria Reserve Gimblett Gravels Hawke’s Bay Merlot 2015 (Trophy)

OTHER PREMIUM RED VARIETALS & BLENDS Church Road McDonald Series Tempranillo 2015 (Trophy)

BEST STUDENT WINE Kaoru Mizuguchi, Hyota Sato, Chris Borain, Juji Masuo 4 Little Pigs Merlot 2016

RED BLENDS CABERNET SAUVIGNON DOMINANT Beach House Cabernet Sauvignon Cabernet Franc Malbec 2015 (Trophy)

CHARDONNAY Clearview Estate Endeavour Chardonnay 2015 (Trophy)

HAWKE’S BAY A&P SOCIETY YOUNG VINTNER’S SCHOLARSHIP Sanne Witteveen HOUSE OF TRAVEL HASTINGS AND HAVELOCK NORTH HAWKE’S BAY CELLAR DOOR OF THE YEAR Church Road Winery

RED BLENDS MERLOT DOMINANT Te Awa Single Estate Gimblett Gravels Hawke’s Bay Merlot Cabernet Sauvignon 2015 (Trophy) SYRAH Church Road McDonald Series 2015 (Trophy)

SAUVIGNON BLANC AND/OR SEMILLON Te Awanga Estate Quarter Acre Sauvignon Blanc 2016 (Trophy) PINOT GRIS Church Road Pinot Gris 2017 (Trophy) VIOGNIER Decibel Hawke’s Bay Viognier 2016 (Trophy)

PREMIUM WHITE VARIETALS Askerne Gewurztraminer 2016 (Trophy) SWEET WINE Te Awanga Estate One Off ‘One Oh One’ Noble Gewurztraminer 2016 (Trophy) ROSE Left Field Left Field Hawke’s Bay Rose 2017 (Trophy) SPARKLING Alpha Domus Alpha Domus AD Cumulus Methode Traditionelle 2015 (Best in Class) PINOT NOIR Osawa Wines Osawa Prestige Collection Pinot Noir 2014 (Best in Class)

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Over 450 guests enjoyed a fantastic evening at the Hawke's Bay A&P Bayleys Wine Awards held at the Waikoko Gardens in Hastings.

Sponsors

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Airport Expansion Set For Take Off

A major redevelopment of the Hawke’s Bay Airport is underway that will ensure the terminal is fit for purpose after a 37 percent increase in passengers over the last two years.

The airport is flying high at the moment, having reported a record net profit of $1.7m on a turnover of $6.1 million for the year ended June 2017. The Airport Company achieved all its financial performance targets, with revenue up 16 percent from the previous year.

Construction will be in full swing over summer, with a temporary arrivals hall being set up in the area formally used for rental car parking to enable a new arrivals area to be built at the southern end of the terminal.

Hawke’s Bay Airport chief executive Nick Story says strong passenger growth and the resulting demands on existing airport infrastructure is the catalyst for the multimillion-dollar expansion.

In the last two years passenger movements have risen 37 per cent to 652,000 passengers.

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There was an 11 percent increase in aircraft movements for the year with a total of 14,256.

“We have had exponential growth over the last couple of years due to a significant increase in airline capacity, driven by the arrival of a second airline in Jetstar and Air New Zealand switching to larger capacity aircrafts, all of which has created competition for passengers and enabled growth of the region’s business and tourism sectors.”

The expanded terminal will increase in size from 2,500 m2 to 3,800 m2 to accommodate the growth in passenger movements and visitors to the airport.

“The airport is a major gateway for the region, so as well as catering for increased passengers and visitors, the expansion is also about enhancing their experience,” Nick says.

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Left and above: artist impressions of the new expansion.

As The Profit was going to print, the lead construction contractor was due to be confimed. A local project manager, Steve Birkhead, has been involved through the final design stages of the project and will continue in this role through to the terminal being fully operational in early 2019.

“The airport is a major gateway for the region, so as well as catering for increased passengers and visitors, the expansion is also about enhancing their experience,” – Nick Story

The staged construction project will see the new check-in area constructed at the southern end of the terminal, followed by a central area with a large cafe accommodating 110 people, visitor seating and new bathrooms.

will not require any financial support from current shareholders Napier City Council, Hastings District Council and the Crown.

Stage 3 will be a new automated baggage handling system at the northern end, a dedicated arrivals gate, new offices for Air New Zealand, Jetstar and Sound Air, as well as a substantially expanded Air New Zealand regional lounge and rental car concierge area.

The new-look terminal has been designed by local architects Paris Magdalinos Architects.

PMA architect Chris Ainsworth said the terminal has been designed in the shape of a Kuaka (godwit) bird in flight.

During construction Air New Zealand will relocate its regional lounge to a pre-fabricated building to be situated in the current staff car park area.

“A key consideration of the brief was to tell the story of the Hawke’s Bay area, which had to be integrated into the building’s architecture and not simply applied later on by using artwork. It is important to tell our story, in what is one of the key gateways into the Hawke’s Bay.

“We are aiming to keep the airport operating on a business as usual basis. There will be disruptions but our aim is to ensure everything runs as smoothly as possible.

“We will have something exciting to look forward to in 2019, a larger, more functional and vibrant terminal.”

Nick says the design enables future growth with the majority of the complex design elements in the centre of the building, making additional expansion to the north simple and cost-efficient.

The project is to be internally funded by Hawke’s Bay Airport Limited, enabled by the airport company’s strong financial performance, and

“The Kuaka achieves some amazing feats, flying over 8,000 kilometres every year to Alaska, which is pretty incredible for such a small bird,” says Chris.

The Kuaka-inspired shape will be further showcased inside the terminal using a modern approach to traditional Maori carving.

A new entranceway to the airport is also progressing well and under development at the intersection of Watchman Road, SH2 and Meeanee Quay. This project will be completed by August 2018.

We’ve got more tarmac for you to park on Hawke’s Bay Airport is growing and to cater for the growth we’ve added 140 new car parks.

Additional car parking is planned with the revenue generated from the price increase set to deliver customers with a higher level of service.

Watch this space for further announcements

From September 1st until the completion of our upcoming terminal expansion we have reduced the price of our Secure Carpark to match that of the Main Carpark.

This means when you visit the airport you can park anywhere (Main or Secure Carparks) for the same price.

0 to 15 minutes - FREE 15 minutes to 5 hours - $3 per hour Every 24 hours - $15 per day After 5 days - $10 per day

For more information visit www.hawkesbay-airport.co.nz NOVEMBER - JANUARY 2018

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BAY BEER FANS SPOILT FOR CHOICE AS LOCAL BREWERS GET CRAFTY

Chris Ormond

Feature

BAY BEER FANS SPOILT FOR CHOICE AS LOCAL BREWERS GET CRAFTY WRITER: Simon Hendery It took a while to take off, but the Hawke’s Bay craft brewing industry is now going from strength to strength as demand grows for fresh, local beers.

There’s plenty of fizz in Hawke’s Bay’s growing craft beer scene at the moment – just ask Giant Brewing’s Chris Ormond and Matt Smith of Brave.

Chris is shifting Giant’s production facility from the back corner of the Origin Earth cheese factory on the outskirts of Havelock North to its own space in the heart of the village. While Matt has moved Brave from his garage to a brewing facility in Hastings, which doubles as a off-licence and bar.

Giant’s move to a larger, more prominent site is just one example of the growth that’s evident as Hawke’s Bay’s craft beer industry continues to go from strength to strength.

that but next year, we’ll look to add an offlicense so we can also do flagon filling and bottle sales,” he says.

It’s almost three years since Chris, a journalist by trade and long-time home brew enthusiast, launched the Giant label with two hands-off partners, including brother Tom who runs Havelock North's Hawthorne Coffee.

Since those early days, the Giant Brewing label has popped up in a growing number of bars, cafes and shops across Hawke’s Bay and as far afield as Auckland and Blenheim.

The growth of the business has seen it morph from a part-time interest to a fulltime gig for Chris this year and Giant’s success reflects premium beer’s growing popularity in the region.

The new Donnelly Street location – expected to be up and running by the end of the year – will give Chris more room to brew and also paves the way for plans to sell his beers directly to the public.

“In the last three years the Hawke’s Bay craft beer scene has really developed. It’s come ahead in leaps and bounds. When we started there wasn’t a huge amount of craft beer in a lot of the boutique cafes and restaurants,” Chris says.

“Our bread and butter is wholesaling to mainly local customers. We’ll continue to do

“I talked to quite a few of them and most were keen to get some Giants in the fridge

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and they showed a lot of support, and a lot of the ones we started off with are still buying the beer on a weekly or fortnightly basis and it’s gone down really well.”

Chris says 90 per cent of Giant’s business is from repeat customers who re-order on a weekly or fortnightly basis and he’s keen to keep it as a “boutique” operation.

“In the last three years the Hawke’s Bay craft beer scene has really developed. It’s come ahead in leaps and bounds.

When we started there wasn’t a huge amount of craft beer in a lot of the boutique cafes and restaurants,” Chris Ormond – Giant Brewing

“World domination is certainly not on the agenda. We just want to really get the Hawke’s Bay side of things going as well as we can, get off-license sales up and running, and maintain the good out-of-town customers we’ve got.”

Matt and Gemma Smith

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“I’d like to keep things reasonably small.

I’d like to see us as a Hawke’s Bay brewer in the first instance – doing some keg and bottle sales outside Hawke’s Bay but keeping it at a nice manageable level where it’s a lifestyle as much as a business,” Matt Smith – Brave Brewing

Giant’s steady growth off the back of the local beer market demanding more sophistication and variety is echoed by developments across other Hawke’s Bay players in the craft beer industry, which includes Fat Monk Brewery, Roosters Brew House, Hawke’s Bay Independent Brewery, Zeelandt Brewing, Godsown Brewery and Napier Brewing Company.

Brave – a hobby that got out of control

Matt, who founded Hastings-based Brave Brewing with wife Gemma three years ago, says he’s been blown away by the success of what he calls “a hobby that got out of control”.

“We started in my home garage, alongside a full-time day job, and just chipped away at it

slowly. Without taking on too much risk and debt at any one time, we upgraded in small steps when we needed to.”

Now Brave has a brewery, cellar door and tasting room at a Warren Street space it shares with Carr’s Kitchen and is brewing its full capacity of 1,000 litres of beer a week.

That will change early next year when a new brewing kit arrives and Matt will be able to quadruple the size of the batch he can brew at any one time.

Matt was stoked to pick up seven medals and the trophy for Best in Class in the US Ale category at this year’s Brewers Guild of NZ Awards, announced in October.

“To be recognised alongside some of the really good, well-established breweries who

have a bit of a team behind them, and rostered brewing shifts and fancy equipment and all that sort of thing. It’s pretty cool to be in the same sort of league as them.”

Like Chris, Matt says his future plans are focused on primarily serving the local region.

“I’d like to keep things reasonably small. I’d like to see us as a Hawke’s Bay brewer in the first instance – doing some keg and bottle sales outside Hawke’s Bay but keeping it at a nice manageable level where it’s a lifestyle as much as a business,” he says.

“I don’t have any aspirations for us to become a big million-litre-a-year type of place. I’m quite happy being a smaller player.” *The Profit will take a look at other developments in Hawke’s Bay’s vibrant craft brewing scene in the next issue of the magazine.

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Primary

ory Services itment & HR ess Administration

Call: 06 871 0450 How does accurate data collection drive decision making on farms

By Emma Doran | Farm Services Technician at Rural Directions Advisory Services.

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Every farmer makes decisions every day.

The challenge that lies before us is what information are the decisions founded on - can we do it better?

Historically decisions have been founded on instinct and often the most successful farmers tended to be the ones with the best instinct. Those that could somehow understand where the markets were going and what the grass growth was doing or who had the best guesstimation of an animals weight at the sale got themselves in the position to act on their information. That was their point of difference.

Today we have the privilege of information systems, predicted forecasts (with accuracy challenges I do admit), forward contracts, grass growth predictors, smart phones, smart scales and many other tools. Data now drives decisions and farmers that adopt the technology have a better than even chance of outperforming those that just rely on instinct.

The blockage of fast decision making today is a symptom of the added task of data interpretation, we are just too busy doing operational stuff. Farmers are very busy operational people and most of them are in the profession for just that reason, because they love practical farming. We agree in the practice of the collection of electronic, cloud based and real time data and that it is a new behaviour kindly bestowed upon us as farmers, we however firmly believe we need meaningful outcomes from this practice.

Our view is that generally we are good at

putting stuff in but bad at extracting it out we are so busy ‘doing’ we sometimes miss out on the opportunity that has been created by all of our hard work getting the business in great shape.

I liken it to getting a boat up on the plane; the majority of the energy is used in getting onto the plane, when up on the plane the boat is much more efficient and responsive to change. We need to mode our farming businesses like a well-moded boat. (Moded is a slang adopted from the Americas Cup, a well moded boat is a boat that is trimmed, agile, efficient and fast, like the Kiwi boat) So what is the value in collecting farm data?

In our view data is a vital part of farming and takes the guess work out of operational planning. Data management can be difficult when a huge amount of information is thrown at farmers. There is also the challenge of turning raw data into operational use.

Gathering farm data allows you to gain accurate information at a seasonal level, farm level, block level and even down to paddock level. This information can then be used to drive animal production, fertiliser requirements and environmental management, to name a few. It allows you to be tactical, responsive and agile.

Over time historic information can be built up to provide trends and relationships which offer confidence in decision making and allows different seasons to be compared.

Accurate information provides evidence to

make decisions, this leads to more efficient, profitable and practical farm businesses.

Farm Data Management Systems allow information to be collected on farm and recorded in one place. This enables all information to be accessed from one system.

Having data centralised to one system gives businesses ownership of their intellectual property, de-risking their exposure should there be a change of personnel. We think that businesses are too valuable to let this intellectual property walk out the gate one day or die with the property.

Having electronic data recorded in one place has other benefits, on-going live updates allows ease during compliance, auditing and regulatory processes. Relevant information can be easily accessed and translated into other documents. In the end we report to the consumer and one day that consumer will ask for verification and authentication of a product we have supplied, we had better have that information at our fingertips if we are to retain them as a customer.

Accurate farm data is vital information that can lead to smarter decision making.

Rural Directions Advisory Services bridges the gap between the science behind the resource and the practicality of farming systems, while operating with 100% independence.

Our Certified Senior Land Management Advisors have a wealth of knowledge in Farm Environmental Management Planning, Nutrient Budgeting, Land Use Project Planning, Soil and Herbage Testing and Analysing and Soil Mapping.

To contact the advisory team email us at advisory@ruraldirections.co.nz

Advisory Services Recruitment & HR Business Administration

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Call: 06 871 0450

PRO

Finance

Goals-based Investing – A New Approach to an old Question

By Tobias Taylor | Head of Wealth Management AdviceFirst

When discussing a client’s financial planning needs, and specifically what portfolio to establish, an adviser is required to navigate through the client’s specific needs and goals. This is with an ultimate view to provide a portfolio from within the specific discipline and processes that will meet the client’s expectations, while importantly avoiding as much risk as possible.

While focusing on the growth of a portfolio is primarily what an adviser is often engaged to do, especially with historic low bank rates as we face now, a better and more client centric approach is to ensure the clients goals (fiscal or not) are incorporated into their financial plan.

Investing for sustainable, long-term wealth creation in a changing investment environment requires a different way of thinking. Success in today’s market calls for a more flexible approach and the ability to respond swiftly to change.

Traditionally, this has been done by aligning these clients’ needs and goals to a risk profile. In turn, this risk profile is aligned with a Strategic Asset Allocation (SAA) where a mix of asset class sectors been applied.

that Goal-based products will provide a natural transition out of the multi-sector funds once income is started to be drawn. This will form a part of the advice process and KiwiSaver Scheme and fund selection process.

For example, a balanced portfolio has 60% growth assets (shares etc) and 40% income assets (bonds and cash etc). Another layer on this is where fund managers see the market as it sits and apply tilts that underweight or overweight certain assets; this is called the Dynamic Asset Allocation (DAA). Again, for example, a Model Portfolio, for a Balanced Investor, has 57% growth assets and 43% income assets; in effect, a 3% variance.

While there has been a trend to low cost passive funds in what has been an extended bull market, we see clients now looking to better downside protection in an uncertain market.

This process has allowed financial planners and investment advisers to construct a portfolio that sits within their allowed variances of the SAA, while still trying to construct a portfolio with sub-asset classes to meet their goals. This also requires the adviser to be in tune with their client.

While many of these features can be achieved via the portfolio construction and the review / rebalance process, there is a ground swell of movement where such funds can build in the rebalancing function for the client. While these solutions may not make up the entire client portfolio, they certainly may be incorporated into the wider asset management structure.

What is also appealing for some investors, in some cases, are Absolute Return funds. Absolute Return is the return that an asset achieves over a certain period, expressed as a percentage that an asset achieves over a given period. Absolute Return differs from Relative Return because it is concerned with the return of an asset and does not compare it to any other measure or benchmark. Therefore, the saying “you can’t eat relative returns” rings true.

In practice, an Absolute Return fund invests into asset classes its sees appropriate for the time. While it may have an SAA, its DAA may vary totally and as such, it may be a highly traded fund.

Therefore Goals-based funds tend to have a lot more focus on protecting downside risk. This is particularly important for retirees because we all saw what happened in the Global Financial Crisis with more traditional balanced funds. They followed the market straight down . With the growth of KiwiSaver account balances to a point where they provide meaningful income levels for their clients, I see

In AMP Capital’s article – An Introduction to Goals Based Investing, they say that “The goals-based approach to investing is different as it represents a real shift in the way financial advice is given and the way investment solutions are designed. You could say it’s about turning financial advice and investment products on their head. However, it is important to note that the principles of diversification and risk management are still an important part of the portfolio construction process”.

Investing for sustainable, long-term wealth creation in a changing investment environment requires a different way of thinking. Success in today’s market calls for a more flexible approach and the ability to respond swiftly to change. This means a more dynamic approach to asset allocation and a focus on specific outcomes so investors can achieve their investment goals.

A good adviser will seek the appropriate mix for their client based on their goals. A Goals-based approach is built around helping people accomplish their goals, rather than focusing solely on investment management and performance. Therefore, you can assume that a goal-based fund may indeed be part of the appropriate mix for clients moving forward.

Tobias Taylor is the Head of Wealth Management for AdviceFirst, a nationwide financial services provider with offices across the New Zealand. Based in Hawke’s Bay, Tobias is also a practicing Authorised Financial Adviser (AFA) and Certified Financial Planner (CFP).

Your Adviser has a disclosure statement that is available on request and is free of charge. The information in this article is of a general nature only and is no substitute for personalised advice. If you would like advice that takes into account your particular financial situation or goals, please contact your Financial Adviser. The opinions contained in this document are the opinions of the author and are subject to change without notice. Past performance is not indicative of future performance and is not guaranteed by any party. While care has been taken to supply information in this article that is accurate, no entity or person gives any warranty of reliability or accuracy, or accepts any responsibility arising in any way including from any error or omission.

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PRO RMA

Working together is a better solution

By Cam Drury | Principal planner Stradegy

Water Conservation Orders (WCO's) are mechanisms under the Resource Management Act designed to recognise and protect outstanding values of particular bodies of water.

Commonly associated with movements in the 1980’s to protect the country’s most wild and scenic rivers from hydroelectric dam initiatives, they are legal instruments that can be used to set rules that Councils must abide by.

A WCO is the highest level of protection that can be afforded to any water body, and are focused purely around preserving outstanding natural values for all freshwater fish, wildlife and outdoor recreation.

There are a number of WCO’s around the country applying to different water bodies in different ways.

With such a pure focus a WCO can have significant influence on the content of Regional Policy Statements and Regional and District Plans, as well as resource consent processes. Criticised in some circles for being too narrowly focused and lacking the ability to weigh and balance competing interests, this is essentially their purpose as a tool to identify the water bodies or stretches of water bodies that warrant the highest level of protection without compromise.

The WCO for the Ngaruroro and Clive rivers lodged by the New Zealand Fish and Game Council, Ngāti Hori ki Kohupatiki, Whitewater New Zealand, Jet Boating New Zealand and the Royal Forest and Bird Protection Society of New Zealand, seeks the protection of the entire length of the Ngaruroro River and its tributaries, together with groundwater that is hydraulically connected to the lower Ngaruroro River. A total of 7km of the Clive River is also included.

The application states that the water bodies have certain outstanding values including: •

Significance in accordance with tikanga Maori;

•

Cultural and spiritual purposes;

•

Habitat for rainbow trout;

•

Angling, amenity and recreation;

•

Habitat for avifauna;

•

Habitat for native fish;

•

Boating amenity and recreation;

•

Wild, scenic and natural characteristics; and

•

Scientific and ecological values.

Protection of these values is sought through a number of conditions applying to different stretches of the water bodies, including minimum flows and allocation limits for existing and new water takes.

In principal, the WCO does not seek to change the existing 2,400l/s minimum flow at Fernhill as it applies to existing resource consents to take water, but does seek to introduce a new minimum flow of 4,200l/s for any new takes.

Potential implications of the various conditions are complex to understand though, and there is concern among some parties that 34

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Water Conservation Orders This map provides the approximate locations of the fifteen water conservation orders in New Zealand. This map is for informational purposes only and is not intended to be definitive.

This map provides the approximate locations of the fifteen water conservation orders in existence in New Zealand. This map is for informational purposes only and is not intended to be definitive.

many groundwater takes in the region will have restrictions placed upon them in a similar manner as direct river takes, and that this may really affect the water security and resilience of many operations.

Consideration of the WCO is very different territory to the type of processes we have become familiar with over the last few years.

Essentially all the same parties are involved, but in this case the parties who are often the submitters are the proponents.

The manner in which the proposal is to be considered is also different. While collaborative policy development initiates such as TANK, plan change processes and resource consent application processes entertain the weighing of competing environmental, cultural, economic and social interests, WCO’s are much more focused around environmental outcomes.

There is certainly a place for this, but one can’t help being a little concerned about how far reaching potential outcomes maybe from both a geographic and regional productivity perspective.

If one was to strategically limit the potential of the region, for whatever bizarre reason, we would unreasonably limit access to water, set overly conservative instream water quality standards, force unsustainable change at an unreasonable rate, introduce poorly conceived land use controls, fuel the urban and rural divide and assume prescriptive regulation rather than partnerships will better achieve environmental performance.

Clearly no one who is passionate about our region would set out to achieve this, but in determining what we want, perhaps we should be very aware of what we don’t want.

Cam Drury is the principal planner at Stradegy. To contact Cam email him at cam@stradegy.co.nz. Stradegy provide expert services in the field of Planning and work closely to coordinate across a range of supporting consultant disciplines across the region.

PRO IT

Android or Apple?

An age-old question… perhaps not but the answer can be polarising.

By Simon Fletcher | Spark Business Hub

For the un-initiated Android and Apple are both operating systems that are leaders in mobile phone, tablet and PC operating Systems.

Android is now owned by Google and has been the market leader in the mobile phone space for a long time and continues to rise.

Its market leadership is larger due to range and price of devices rather than being better or worse than Apple.

Apple is well known and its founder Steve Jobs has been called revolutionary. He has brought to market some outstanding innovations, none more revolutionary than the Ipod. But Apple has struggled to push the envelope since his death and some have seen this as the end of Apple… I’m not so sure.

From an individual user’s perspective does it really matter what OS you use?

I must confess at this point I am un-ashamedly an Android user with Apple always following behind the flagship Samsung models. But things have changed, the phones really can’t do much more than they do now. The iPhone 8 does look like its caught up to the Samsung 8 (excluding face recognition) in feature and design.

Looking at the best option, Apple has always touted its security and application development as a serious point of difference. Android has always had the freedom to push the envelope in phone features and design particularly with its open source environment. I think we are at the point, certainly in mobile phone features, of being at the peak and only incremental changes are likely going forward.

What is really the best OS?

For me this means considering true mobility. Mobility is ultimately the freedom to do what we want to do anywhere we want without the constraints of traditional desktop.

If we take a step back, Android was created to be open source and that meant it grew faster than any other OS, it meant it could be rolled out and deployed on multiple device manufacturers free of charge.

This is where Android for some was a free spirit and a symbol of all that was right and true about the internet. Many manufacturers jumped on board and offered options across all mobility devices.

Apple on the other hand was slow to keep pace and that was due to the control Apple put in place to be part of the Apple eco-system.

But this meant that as a rule, things sort of worked first time with Apple as opposed to Android. One example might be Apple TV. I have Chromecast on a couple of devices and if used frequently it works really well. It is wireless, discreet (hide in a USB port behind the TV) and I see this as a big advantage over Apple. But I have found that the less it is used the more I have to reset and reconfigure.

My experience with Apple TV though has been seamless. Plug it in and away you go, also it works really well when doing presentations.

Android does run on a number of plug and play devices but you need to know what your doing. Don’t get me wrong, Android can do what Apple can do except it just isn’t as easy for your average user.

"What is really the best OS? For me this means considering true mobility. Mobility is ultimately the freedom to do what we want to do anywhere we want without the constraints of traditional desktop."

So I think Apple win, this in part because they do everything for you.

It is easier for them because they don’t have the multiple devices and systems that Android have so they can deploy so much easier than Android. They have a good robust Device Management System for deploying devices throughout a workforce and updates can be pushed out across the workforce.

They also invest significantly in partner programs upskilling their partners on the key benefits of Apple. This isn’t something Android hasn’t done and probably never will due to its open source architecture.

So the advantage is a much better informed partner channel and support networks. This is very important to business as it directly reduces downtime and associated costs. It also means the applications recommended do tend to work well and are relevant to your industry.

A final point to consider is Google and Android probably know more about you than anyone through the data they collect. They use this to further enhance customer experience and while I don’t get concerned with this for some it really is an issue. Apple on the other hand don’t share your information and they don’t capture the same amount of data like Google because they use their own browser and maps.

The main advantage though for Android is its cost to deploy because you have a huge range of devices to choose from at all price points and this can be hard to beat. If you have a larger workforce it becomes difficult to argue for Apple particularly if your deployment is in a harsh working environment (due to the frequent replacement of devices).

So my call at the moment as I sit here with an iPad and Samsung S8 is that Apple appears better.

Of course, this is only my view and yours may differ but I’m going to try and go completely mobile with Apple over the next little while to test this hypothesis, see if I can really drive my business from the Apple ecosystem through mobility devices and applications.

I will keep you posted.

Simon Fletcher is the owner of the local Spark Business Hub and has over 20 years’ experience in the Utilities and communications industries.

Email Simon at simon.fletcher@hubhawkesbay.co.nz NOVEMBER - JANUARY 2018

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Education

IT Event Sparks Creative Response Hawke’s Bay’s recent GovHack event challenged some of the best and brightest minds in the IT sector to come up with creative mock systems based on national data.

Hawke’s Bay’s GovHack was well supported by the industry, educators and territorial and local authorities, with the Hawke’s Bay Regional The word hack originated when computing Council, Napier City was still in its infancy, and it technically Council, Hastings District means working with and creating code. It’s Council and Gisborne only in recent times that it has become a District Council all taking widely-used slang term for breaking into an part.

IT system.

Hosted by EIT and held Based on the original meaning of the word, on the Hawke’s Bay GovHack is staged in countries worldwide. campus, its participants In New Zealand, it is a Government included students enrolled initiative. in EIT’s Schools of The annual event mobilises small teams Computing and Business’s EIT lecturer in information technology Dr Thomas of competitors who, working to a 46- bachelor and master Hartley (right) with students who took part in GovHack. hour deadline, tap into national and local degree programmes. government data to brainstorm and then One of the organisers, Dr Tom Hartley says The three teams taking part each developed produce a project. GovHack didn’t do EIT was very excited to be involved. a theme. any “hacking” that involved breaching “It gives our students an opportunity to government security systems.

Asked about ‘pain points’ involved in work on real-world projects alongside moving to New Zealand to study, one of No hard and fast rules apply for format, Government and private sector people using the teams, which included international but the most common outputs are web real data in a controlled environment. students, developed a web app that addressed applications, mobile applications and “That it’s a collaboration disguised as a the difficulties of pinpointing affordable visualisations. competition with prizes awarded adds a accommodation close to a shopping Eight GovHack events were held in New special attraction to our students. It’s a real centre and public transport and allowed Zealand this year, from Whangarei to challenge with real rewards.” connections to local ethnic communities.

Dunedin.

Having arrived in New Zealand the day before the Govhack event, Sebastian Pfaller a member of this winning team. Studying for a master’s degree in computer science at Regensburg University of Applied Sciences in Germany, he found it a good start to his exchange year at EIT. “Students organise a similar event at our university but it doesn’t use government Fit study around your work, home data. I haven’t taken part in those, so this and family - and achieve a NZ was pretty interesting for me, meeting a lot Certificate in only four to five months. of new people, including other international TEAM LEADERSHIP students, on my first day here.”

PROJECT MANAGEMENT Another group considered atypical possible FIRST LINE MANAGEMENT causes of auto crashes and progressed from there to investigating whether ENROL NOW - flexible online learning, information about recalls for used models full or part-time options, starts monthly. of cars imported from Japan was being THE EXPERIENCE YOU NEED communicated to New Zealand owners. & THE SUPPORT TO SUCCEED A third team, which included four students from EIT Tairāwhiti and a Gisborne District Council staff member, worked on an app that would alert East Coast communities to business.eit.ac.nz | 0800 22 55 348 | mishaps such as flooding and storm threats in their region.

Real life, real learning, real business

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PRO HR

Are You a Good Leader?

By Kimberly McKay | BDO Central

If you are a business owner or manager you are responsible for leading others in pursuit of the organisation’s success. Whether it’s a small business with a few employees or a large entity with multiple divisions, if you are the leader of a team you are having an impact on a daily basis by what you do, or don’t do. I rather like this quote; “All leaders lead by example…. whether they intend to or not.” (Source Unknown) It’s important for leaders to take time out occasionally to reflect on how well they are doing at being the boss. In a large organisation there is generally data and processes available to help with this. There are likely to be higher levels of management or a board of directors that will go through a structured performance review process with you that also requires some personal reflection. This may also include some 360 degree feedback from peers and staff that provide you with insights about your leadership. There may be periodic staff engagement surveys that provide feedback about aspects of leadership. You may have access to turnover data, exit interviews and other useful indicators of the effectiveness of your people management and it is paramount that you use these information sources to mold your leadership approach.

Contrastingly, in a small business you probably won’t have the types of processes in place that a large entity typically would and it’s likely you will have less opportunity for reflection as small business owners are often busy with operations, marketing, finance, HR and all the things small business owners need to do. So how can you get some insights to develop your leadership skills?

• If you have performance reviews for your staff use the opportunity for 2-way feedback and ask about what you can do more of or less of to help them in their work.

• Consider using a business mentor as a sounding board about your leadership style and to provide suggestions for

Qualities of a Good Leader Sense of Purpose

Help people to feel part of something bigger and to understand the ‘why’ for your business. What does the business aim to achieve and why is it important for your customers, for the community etc. Translate this into meaningful goals for people to strive for.

Clear Expectations

If people know what is expected they will generally try to deliver it.

Explain the reasons behind expectations and ensure good communication if there are changes.

Autonomy

Where possible give people freedom to work the way they work best.

Autonomy creates engagement and ownership and encourages people to find better ways of doing things.

Opportunity for Input

Make it easy for people to make suggestions, show ideas are valued and if they can’t be acted upon, explain why. Staff who make suggestions care about the business – show your appreciation.

Consistency

Employees are demotivated if they perceive there to be unfair or inconsistent treatment. At times there are good reasons to treat people differently. Ensure there is good communication about the reasons for decisions.

Feedback

Provide constructive feedback when needed, ensuring you do it in private. Make it timely and specific. Don’t let concerns fester. Give praise regularly – too often. everybody wants their efforts to be appreciated and recognised, even in small ways. You can never say ‘thank you’

Show you care

Connect with people at a personal level; ask about their wellbeing, family and interests as well as their work. Support people to grow and develop their career, even if that may be outside the business.

improvement and contribute ideas to help you through challenging situations. Just having these conversations makes you reflect on how you are doing.

• Try to fit in some learning opportunities for yourself to get inspired, be exposed to new ideas, keep up to date with emerging trends, or learn from the experience of others. Training and ongoing development is just as important for leaders as for your staff. This could be a seminar, conference, academic course, on-line learning, or speakers at local business events.

• Endeavour to set aside time for personal reflection. What is it that your staff have been telling you? What tasks do you need to follow up on in order to provide your team with sound leadership and ensure they feel valued and listened to?

When you are able to set aside some time for personal reflection regarding your

leadership and the productivity of your team try some of the tips above of some of the things a good leader provides, adapted from an article by Jeff Haden, entrepreneur and author. Consider how you are performing in these areas – there may be one or more aspects that you could consciously plan to do more of, changes you could easily implement, or even ‘big picture’ elements you may want to think further on to have a positive impact on the people working for you.

Kimberly McKay is a Human Resource Consultant with BDO Central (NI). She has extensive experience assisting both small and large employers with all aspects of their HR needs. BDO Central are Chartered Accountants and Business Advisors, with offices in Napier and Palmerston North. BDO is able to support clients with a comprehensive suite of accounting, information systems and HR services. The firm is an independent member of BDO New Zealand and part of the global BDO network. www.bdo.co.nz NOVEMBER - JANUARY 2018

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PRO Legal

Where there's a will, there's a way

By Edward Bostock | Bramwell Bate Lawyers

On death a person’s assets form their “estate” which is subject to the wishes or intentions of the deceased’s Will or if they do not have a Will by the “rules on intestacy.”

While many would acknowledge that they should have an up-to-date Will, it is surprising how many people do not have a current Will or one at all.

Regularly reviewing your Will is as important as initially making one to ensure that your Will reflects your current circumstances and any changes in your life such as the death of a close family member, the creation of a trust or establishment or entry into your own business.

Some matters to consider when creating or reviewing a Will are: 1. Identity of your Executors and Trustees Who would you like to administer your estate or are those currently selected still appropriate?

2. Funeral directions Do you wish to make such directions or change any existing directions?

3. Changes in your personal circumstances Unless your Will was made in contemplation of marriage then any Will you have will be automatically revoked when you marry.

6. Death of a family member or beneficiary For obvious reasons this may necessitate a change to your Will.

7. Setting up a family trust If you have or have set up a family trust you will need to ensure that your Will reflects this and (if appropriate) refers to it.

8. Gifts to charities or organisations You may wish to leave money to a favourite charity or organisation.

9. Specific gifts If you want to leave an important item such as jewellery or a family heirloom to a particular person then this should be specified in your Will.

If you die “intestate”, i.e. without a Will, then your estate is subject to the “rules on intestacy” which prescribes to whom, and in what proportions, your estate will be distributed, which may not reflect your wishes.

To help illustrate the point, let’s consider an example: John and Jane are married, with a son and two daughters. John and Jane have a jointly owned home and a joint bank account. John also has his own construction company.

John’s son, James, operates the business with him and it is John’s wish for James to take over the business from him when he retires.

You also need to consider your Will if your relationship ends. If you separate with the intention of ending the marriage, provisions in your Will relating to your spouse will remain valid until the marriage is legally dissolved (that is, you are divorced), only then the gifts are null and void.

John dies unexpectedly and he does not have a Will.

4. Changes in assets and liabilities For example, if you have acquired a new asset, such as a business, then you may wish to give the business (or the shares) to a specific person. If you don't make a specific direction then (if you have a Will) it will simply form part of your estate and go to the beneficiaries.

Jane will receive all of John’s personal possessions (basically everything other than land, buildings and money) and shares valued to $275,000.00, which is made up of:

5. Changes to your family If you have had children then you may wish to appoint a testamentary guardian.

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The home and bank account will pass to Jane by survivorship, however the business will fall into John’s estate and be governed by the “rules on intestacy”.

The business is valued at $515,000.00.

• The legally prescribed set amount of $155,000.00; and • A 1/3 of the balance of the estate of $120,000.00.

WHILE MANY WOULD ACKNOWLEDGE THAT THEY SHOULD HAVE AN UP-TO-DATE WILL, IT IS SURPRISING HOW MANY PEOPLE DO NOT HAVE A CURRENT WILL OR ONE AT ALL.

James and his two sisters will each receive shares valued to $80,000.00 (being the other two thirds of the balance of the estate).

This does not reflect John’s wish to pass the business to James and in addition leaves control of the business to Jane (53.39%) while James (and his two sisters) would only have 15.53% each. Significantly James would only be a minority shareholder and would not be able to prevent the business being sold by his mother and sisters.

Finally, another advantage to having a Will is that it usually costs more and takes longer to administer an intestate person’s estate.

If you do not have a Will or have not reviewed your Will for several years then I advise that you discuss this with your lawyer sooner rather than later.

Edward Bostock is a Director at Bramwell Bate Lawyers in Hastings. To contact Edward, email edward@bramwellbate.co.nz

PRO

Property

Changing buyers bring changing values

By Paul Harvey | Williams’ Harvey Registered Valuers

The ‘leaky homes crisis’ is an ongoing construction and legal predicament in New Zealand. A perfect storm of trending building design features and the use of untreated timber culminated in many homes built between 1994 -2004 that suffered from weather-tightness problems. Hawke’s Bay has its share of homes built in this era but to date there has been relatively little impact on the value of these homes when they have come to sell.

"Earlier this year, our office valued a home with a monolithic cladding system. There were no signs of the home leaking, however (in a strong market) the home sold for 11.26% below our valuation."

There are many reasons why homes from this era were leaky. A major one was the increase in the use of cladding systems such as fibre cement sheet and EIPS1, more commonly known as monolithic cladding, that relied on a paint finish as the primary defence against water ingress. Such cladding systems allowed for little construction or thermal movement so that fine cracks that appeared insignificant, and would have been relatively insignificant in traditional claddings such as weatherboard, allowed continuous ingress of moisture into the framing which were ideal for rot. A further exacerbating factor was the change to the New Zealand Standard for Timber Treatment in 1995, allowing the use of untreated Pinus radiata timber for wall framing. As this timber has little natural resistance to rot when wet, damage occurs more quickly.

Hence, nearly a decade on it appears there continues to be a stigma associated with homes built in this era, especially if they display cladding and design features associated with weather tightness issues.

Therefore, any home with a monolithic cladding became a red flag for buyers, especially in the bigger city property markets. We are beginning to see this stigma shift to Hawkes Bay homes built in this era as we see more buyers from out of town enter the local property market, irrespective of any weather tightness issues or their actual condition. Not only has our office had this experience, we have also had feedback from Real Estate Agents who confirm that over the past 18 months it has become increasingly difficult to sell property with this cladding type. Furthermore, it is having a definite impact on the consideration vendors are receiving. However, how much of an impact remains to be quantified?

In late 2016 researchers2 from Massey University released a paper entitled Leaky Building Stigma: Can it be Eliminated by Remediation. The purpose of the study was to examine whether meeting the regulatory standards for remediation work eliminated the negative stigma effect on remediated properties or whether the stigma remained. The study’s findings indicated that for monolithicclad dwellings, the price discount due to leaky building stigma is significant. Depending on the severity of the leaking problems, there is about 11% reduction of value, on average, for general market stigma and an additional 5% -10% for post-remediation stigma.

Earlier this year, our office valued a home with a monolithic cladding system. There were no signs of the home leaking, however (in a strong market) the home sold for 11.26% below our valuation. As a Trustee I am also involved in a sale of a property with a monolithic cladding system. The house has not sold yet and is not leaking but certainly carries the stigma of such. We have had two contracts fall over due to outside advisors strongly recommending their clients seek a home with a different cladding type. Based on both offers to date it would suggest a 9.5% reduction on valuation however this

may yet be greater as the home has not sold yet. Therefore, the above research may prove to be relatively accurate in its estimates of value discounts.

Whilst Hawke’s Bay has had its share of properties affected by the ‘leaky home’ syndrome, it has not been on the same scale as that of other cities, especially Auckland. It remains to be seen if our out of town buyers will continue to influence the perceived stigma of homes built in this era on our local property values.

1

Externally Insulated Plaster System Song Shi, Iona McCarthy, Uyen Mai

2

Paul Harvey is the Director of Williams’ Harvey Registered Valuers. He has a diverse and broad knowledge of the HB property market. To contact Paul, email: paulharvey@williamsharvey.co.nz NOVEMBER - JANUARY 2018

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Business

Addressing partner misalignment

By Suzie Clifford Associate with BDO Central (NI)

Whether you want to grow, to retain market share or even explore exit options, it's important that you have a good idea of what's going on in your business now.

And, for those business that don’t have their own existing board structure, getting access to independent expert advice to facilitate that process can be very difficult.

Sometimes this can be difficult when you have more than one stakeholder, as is the case with many small to medium sized businesses with multiple owners.

Which is where a simple diagnostic questionnaire can be useful. We’ve developed such a questionnaire based on our many years’ experience working alongside owner-managed Small Businesses and have put it into a Business Review package.

Certainly, it is important to have different skills and ideas in business – but these need to eventually come together if you want to move forward.

If your business is suffering from misalignment, it's going to be difficult to achieve the goals you've set.

Over the years, we've seen a lot of businesses striving to move forward. Generally we have found that the business owners acknowledge that they will need a plan. They have all the information available, but they don’t have time to look at where their business is currently sitting, let alone react to it.

A lot of issues with the business are generally known issues but remain unresolved because one of the most important things they don’t find time to do is come together to strategise.

At a more fundamental level this is about a misalignment of core values, the elements that form the foundation of a business’ vision, identity, culture and brand, and underpin all decision-making.

One of the first steps to moving forward is gauging the degree of alignment amongst your different partners on key issues. The idea is that once these have been laid out on the table, you'll be able to have a real discussion and eventually come to resolutions on how to move forward.

So how to measure alignment when you’re already challenged in finding time to come together?

There’s a short diagnostic questionnaire and a longer one that takes around an hour which really drills down into the nitty-gritty of your business. The questionnaire will work best if each stakeholder does it independently, and from there, the key issues currently facing your business become evident – and the degree of alignment on each one.

That feeds into a diagnostic report. The areas of pressure could be anything from tax, wanting to sell, not making enough money, not getting on with your fellow partners, having no succession plan, disagreement over investments in new technology - the list goes on.

I can cite two cases of businesses that have been through this process. One was a medium-sized business operating in the IT space. They had two shareholders, one minority and the other majority, but there was serious misalignment on who their target market actually was. The Business Review program was used to agree on a target market (in this case they decided there were more than enough consumers in New Zealand and so stopped chasing deals in Australia) and since then they've gone from strength to strength.

Suzie Clifford is an Associate with BDO Central (NI).

She has extensive experience assisting both small and medium sized entities with a wide range of advisory services. BDO Central are Chartered Accountants and Business Advisors, with offices in Napier and Palmerston North. BDO is able to support clients with a comprehensive suite of accounting, information systems and HR services. The firm is an independent member of BDO New Zealand and part of the global BDO network. www.bdo.nz

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Ultimately, it comes down to the age-old issue of too much working in the business not enough on the business - a self-replicating cycle that’s magnified when multiple partners are involved.

The reality is that the solutions can be easy once the issues are diagnosed. Particularly with the wealth of digital tools we have that facilitate realtime business information and communication.

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The other case involved a husband and wife partnership. The program helped them realise that they wanted to leave the business, so had to make sure it could still run without them.

We helped them to clarify which parts of the business needed work and so their exit strategy was successful.

The important thing about this process isn't just getting a report, but working on a very targeted solution.

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"One of the first steps to moving forward is gauging the degree of alignment amongst your different partners on key issues. The idea is that once these have been laid out on the table, you'll be able to have a real discussion and eventually come to resolutions on how to move forward."

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