China Business Summit 2020: Panel – Building a bridge to China (video)
Building a bridge to China: Panel discussion at the 2020 China Business Summit
E-commerce clearly came into its own during the Covid-19 crisis. But will the trend accelerate? And what will it take to reinstate safe travel between New Zealand and China in the Covid-19 era? Those were the questions we asked experts about and talked about the strategies the tourism and education sectors were to employ to keep the Kiwi brand upper mind until air links could be restored. We also learned about how the ‘Southern Link’ initiative between China-NZ-Latam was proving its worth.
- Adrienne Young-Cooper, Acting Chair, Queenstown Airport
- Lisa Li, Managing Director, China Travel Service
- Rachel Maidment, Executive Director, NZ China Council
- Pier Smulders, Country Manager, New Zealand at Alibaba
- Professor Jenny Dixon, Deputy Vice-Chancellor (Strategic Engagement), University of Auckland
Moderated by Tim McCready
Agribusiness: Government agencies stellar job keeps agri exports flowing (NZ Herald)
There is a massive opportunity in front of us to capture premiums. Without doubt, our brand story is at an all-time high at the moment because of what we’ve done with Covid.
NZTE chief executive Peter Chrisp says the impact of New Zealand’s Covid-19 lockdown had immediate consequences for its customers — New Zealand exporters.
“I’ve always worked hard. I’ve never worked this hard,” Chrisp said at an interview at NZTE’s Wellington head office.
Even prior to the coronavirus pandemic hitting New Zealand’s shores, the agency was heavily involved providing support to its customers exporting to the China market.
“China is such a big market for New Zealand with many of our customers,” said Chrisp. “They needed to know what was going on and were desperate for insights. We had 65 people in China – we had to get them working from home. They were keen to contribute and lean in to support customers.
“So that was the beginning of it, and then it just unfolded, into Italy and South Korea.”
When New Zealand entered the alert level four lockdown phase, one of the immediate issues Chrisp’s team needed to face was how to support airfreight. With passenger traffic severely limited, there wasn’t a functioning airfreight market, which many of our high-value exports — including seafood and honey — depend on.
NZTE co-ordinated around 200 charter flights to key export markets, including Shanghai, Los Angeles, Tokyo, Singapore and Australia: “We got good backing from the ministers and the Ministry of Transport. We underwrote the capacity of the plane — the last 20 per cent of the plane.”
He said if a chartered plane wasn’t full it wouldn’t leave. The underwrite didn’t have to be used very often, but it was an important mechanism to provide certainty to exporters that their goods would make it to market.
In the medium term, a new initiative with funding allocated from the May budget will focus on supply chains, building firm capability in freight and logistics and helping to build capability within export firms.
Another of the initial challenges for exporters was ensuring sufficient cashflow for business continuity. NZTE formed partnerships with Deloitte, PwC and KPMG to provide a business continuity service for around 500 of its customers.
“From that, they got a bit of a plan about how to respond immediately, how to get their cash under control and what to do with their working capital and inventory,” Chrisp explained.
He said that while many exporters might be dealing with the current environment, they are starting to ask questions about the sales funnel and how to fill it long-term.
“I’ve been talking to some specialist manufacturers who would normally sell mostly through attending conferences, relationships with procurement mangers, and foot traffic. They are now wondering how they reach their customers.”
Many are turning to digital – which Chrisp said is one of the biggest things NZTE is engaged with at the moment. This will include scaling up e-commerce capability to provide digital commerce content, tools and advice to more exporters.
Keeping track of its current suite of clients, NZTE has developed a heat map that runs a ruler over companies and considers which companies that are thriving, surviving, or struggling.
Chrisp said this gave the agency a good feeling for where the hotspots were, and at the start of the crisis it was the export-dependant specialist manufacturing firms that he was most concerned about.
He said that though a lot of the customers of specialised manufacturing firms were considered essential overseas, they weren’t here — which had made things difficult.
The heat map is now showing around 32 per cent of companies thriving, 60 per cent surviving and about 8 per cent struggling.
“The thriving companies are across categories like food, manuka honey, nutraceuticals. But even in tech you’ve got companies involved with education software or gaming software that are doing well,” though Chrisp noted, you’ve also got people struggling in those categories as well. The Ministry of Foreign Affairs and Trade (MFAT) has developed a trade recovery strategy to address that. MFAT says the next phase of New Zealand’s response is recalibrating New Zealand’s trade policy for a new international environment.
The strategy, launched by trade and export growth minister David Parker, has three pillars: retooling support for exporters, reinvigorating international trade architecture, and refreshing key trade relationships.
NZTE will play a key role in this — in particular, Chrisp said it will be the custodian of the retooling pillar.
“The Government knew it couldn’t just rebuild New Zealand with a domestic fiscal spend. You need an international export recovery leg — and I think you need an investment recovery leg as well.”
Some of the $216 million funding boost it received through the Budget will be used to significantly increase the number of exporters that receive intensive support from NZTE. The agency says that collectively these exporters directly employ over 200,000 people. About 75 per cent of these firms are expected to be SMEs with 50 or fewer employees.
“We will have more customer managers that can deal with more New Zealand companies and services — and more boots on the ground in premium international markets,” Chrisp said.
Business development managers in key offshore markets will be particularly important for exporters while international travel remains restricted. It is envisaged that this team will be able to carry out additional functions for companies in-market – including meeting customers, vetting new employees, and selecting distributors.
Another portion of the funding has been allocated to expand the International Growth Fund, which helps reconnect companies with international markets and supply chain partners, as well as explore new opportunities.
Chrisp said he is keen to uphold the sense of the opportunity in front of New Zealand — particularly in the food and beverage sector.
“We’ve had food and beverage manufacturers in New Zealand that responded very well during Covid.
“The opportunity to be the most keeps agri exports flowing sustainable food producer on the planet is quite a niche — quite an exciting niche.”
One area that Covid-19 might help New Zealand is by spurring the acceleration of the shift from volume to value. Chrisp said food and beverage is at the sharp end of that.
“There is a massive opportunity in front of us to capture premiums. Without doubt, our brand story is at an all-time high at the moment because of what we’ve done with Covid. There is an opportunity to double-down on that brand story and those sustainability settings.”
“The health competitor advantage — growing food and beverage out of this healthy country and the intersection of innovation with our food and beverage story and our agritech sector, there’s some really great things that we can accelerate and advance around this.”
But, said Chrisp, a key challenge for New Zealand will be keeping the New Zealand brand alive in international markets over the next 12 months without international travel.
NZTE is working on strengthening New Zealand’s brand in priority markets by maintaining, promoting and broadening New Zealand’s brand appeal, particularly while the tourism sector is recovering.
Chrisp said it will re-emphasise New Zealand’s reputation for safety, trust, resilience, ingenuity, sustainability and high-value goods and services using the highly successful New Zealand Story strategy.
“When you think about who is probably likely to carry the New Zealand brand story, it is probably food and beverage and tech, because there are such good stories wrapped around those products and services.
“If our food comes out of a Covid-free country, it’s good for human health and it’s got a story wrapped around it about the quality of the country — that’s a particularly good story that will resonate in premium markets.”
Chrisp said it comes back to the underpinning values of kaitiaki — our role as guardians of people, place and planet and protecting what is precious over generations. We think that Covid has demonstrated that story.
“Our high integrity, high transparency, our very low corruption and our ingenuity — they are underpinning values that we think will resonate well on the international stage.”
Agribusiness: FarmIQ software platform a bonus for farms (NZ Herald)
The FarmIQ farm management software platform is in use by over 4000 New Zealand livestock and dairy farms to support farm assurance, compliance, sustainability, productivity and traceability.
Most recently, it is now meeting new demands faced by the industry post-Covid.
The platform was developed as part of the FarmIQ Primary Growth Partnership (PGP), a seven-year programme that began in 2010 with the aim to create a demand-driven, integrated value chain for red meat that could grow the value of the sector by 50 per cent by 2025.
FarmIQ’s software is now jointly owned by Pamu Farms NZ, Silver Fern Farms, Farmlands, Veterinary Enterprises, and recently received investment from MSD Animal Health.
The agriculture industry is being disrupted by the rapid emergence of digital technologies, along with increasing compliance and regulatory requirements.
FarmIQ’s platform brings together all farming data into one place, helping farmers to run more productive, profitable and sustainable farming operations.
It combines detailed animal records with information about land, feed and people.
While some farmers solely use the platform for its recording and communication efficiencies, others use it to compare and learn from the results of changing practices like planting crops or mating hoggets at different weights.
FarmIQ chief executive Darryn Pegram says the only way you can meet today’s increasing demands is through digital technology.
FarmIQ’s software pulls together all farm information into a single dashboard.
By sharing farm data with vets, processors and regulators, FarmIQ is able to create value for the entire supply chain.
An example of the benefit of this was during the Mycoplasma bovis outbreak. A number of FarmIQ’s farms were able to use records dating back 18 months to identify the movements of their stock.
With this proof, the Ministry for Primary Industries was able to significantly reduce the necessary stock cull on these farms.
There is also a growing awareness and demand from consumers about their food choices, seeking traceability of food across the supply chain.
In major markets around the world, customers are prepared to pay a premium for sustainable food grown and produced in New Zealand. This is only expected to increase in a post-Covid era.
“By treating compliance as a by-product of productivity, it makes compliance easy and improves the quality of information that flows through the entire ecosystem,” says Pegram.
“FarmIQ allows producers to help tell the New Zealand provenance story on the world stage, while also demonstrating the integrity of its supply chain.”
He says the pandemic has accelerated digital transformation in agriculture and highlights the need for digital transactions.
“This is likely to continue to escalate, as demand and requirements for biosecurity and remote assurance steps up.”
Pegram says that FarmIQ’s software platform has the potential to create new value for farmers the world over, and the recent investment in the company by MSD Animal Health — a division of global healthcare company Merck & Co — is recognition of the considerable potential the FarmIQ platform has for use in global markets.
“We often field inquiries from farmers and agribusinesses in Australia and other countries that don’t have comparable products.
“We can see that as software becomes an increasingly important part of hardware offerings, we’ll have new opportunities to reach foreign farmers.”
Pandemic pivot
FarmIQ’s platform was able to help the industry quickly respond to the Covid-19 pandemic during New Zealand’s alert level four.
During New Zealand’s strict national lockdown, Synlait was able to continue audits on its farms with FarmIQ providing remote visibility of what was happening on-farm.
“Synlait were able to maintain their very high standards of food integrity while keeping their farmers, staff and auditors all remote from each other and safe from the spread of Covid-19,” says Pegram.
“The process also offers efficiencies and is popular with farmers as less time is spent on farm looking at records.
“Synlait completed the audits with a short physical visit once lockdown was over.”
While designed for farms, the FarmIQ team are using their software in their Wellington head office. All staff and visitors use the Safevisit app they developed with Farmlands for contact tracing.
“We knew FarmIQ was a fantastic biosecurity tool,” says Pegram. “But we didn’t really imagine it would be called on as a holistic solution for animals, plants and people too.”
Vision week day one – Opportunity NZ: why a vision is necessary (NZ INC.)
Visionweek NZ 2020 kicked off today, asking us to imagine if New Zealand’s five million-strong population set a vision for our future that ensures New Zealand’s long-term sustainability, productivity, resilience and high-quality outcomes for all people, communities and the environment.
The week-long programme features prominent New Zealanders, including Xero founder Rod Drury, Sir Stephen Tindall, economist Shamubeel Eaqub, Rocket Lab’s Peter Beck, former NZ chief science advisor Sir Peter Gluckman, Spark CEO Jolie Hodson and Auckland Transport’s chair Adrienne Young-Cooper.
The organisers say Covid-19 has created the conditions to reset our path, to take advantage of the huge opportunities that eliminating Covid provides, and to address some critical areas like climate change, equality of opportunity, and mental health where urgent action is needed.
Visionweek founder Paul Blair says, “A vision can create the ‘north star’ that links our team of five million, but it needs to quickly translate into a multi-decade, multi-partisan nation-building plan. Our plan needs to realise New Zealand’s untapped potential and put people, purpose and planet at the heart of transforming Kiwis lives for the better.”
Each day this week is focused on a different theme. Today’s is ‘Opportunity NZ: why a vision is necessary.’
Sir Stephen Tindall says the real opportunity is for us to come up with strategies that leverage our strengths. He notes our energy is 82 per cent renewable which is something the rest of the world is hugely jealous of.
“I’ve kind of seen with my involvement with both Rocket Lab and Team New Zealand, that if you use what I would call 21st century technology, and we actually gear up as a country to actually utilise and leverage that, we could do so much more than we’re doing right now,” he says.
Sir Stephen Tindall
“I’d love to think that every New Zealander thought through the sustainability lens and how much we could leverage that to our benefit, because there’s huge corporations around the world that want to invest in that. They want to impact investing into green things. We could be the microcosm of that in New Zealand, for them to learn how they can do it in their country.”
Panuku’s corporate responsibility advisor, Tessa Meyer, was recently awarded the New Zealand Green Building Council (NZGBC) Future Thinker of the Year for 2020.
Tessa Meyer
She says tackling the pandemic and climate change at the same time is daunting, and while it may be tempting to go back to normal, we have an extraordinary opportunity to use the resources that are at our disposal to tackle both challenges at the same time.
“I really hope that we can readjust some of our priorities,” she says. “Putting a green recovery, ahead of a simple financial recovery and investing in infrastructure that helps accelerate our de-carbonization and promotes environmental and social resilience. In 10 years’ time I would really like to look back on what we have done with this opportunity and know that we spent it on the right things.”
Professor Paul Spoonley says New Zealand is a small, relatively nimble country and is able to react to and develop new policies to address some of the negative consequences of Covid-19.
“It is an opportunity for us to really consider what a 21st century New Zealand might look like and to begin to shift resources and support and policy in ways that, privilege, the new way of doing business of living in this century.”
Professor Paul Spoonley
He says that baby boomers are now politically very significant and determining policy, but we’re not giving enough space and air time to some of the subsequent generations.
“I’m feeling excited, because I think there is a moment now when we begin to talk about our systems, our policies and the way in which we are going to operate in the future in a way that probably we would never have had without the pandemic,” he says.
Sir Peter Gluckman says the dynamic digital sector and entrepreneurship means that our geographical position in the world is not as disadvantageous as it used to be, because we are now more connected.
“We showed we can work very well in a virtual world, in a digitally connected world,” he says, pointing to Rocket Lab and Weta Workshops as examples.
Sir Peter Gluckman
Considering a Māori world view, Kono chief executive Rachel Taulelei says “while there is not necessarily one view, there is a commonality in and around values and the way that we might think intergenerationally.”
She describes it as being hardwired for collective responsibility for people.
“We have a particular relationship obviously with our land and our water. We revere them and we view them as our tupina, our ancestors. So, we love and care for them in a way that we might a brother or sister or a grandparent or any other relation in that respect.”
Rachel Taulelei
Visionweek has been made possible by the support of multiple partners, including Sustainable Business Council, Internet NZ, the Construction Sector Accord, EECA, Business New Zealand, the New Zealand Infrastructure Commission, the Ministry for the Environment, Infrastructure New Zealand and ASN Media.
All New Zealanders are invited to share their thoughts, using the hashtag #visionweeknz, so that as many viewpoints as possible can be integrated into the final report.
-Tim McCready
Auckland’s infrastructure projects must go on: Phil Goff Q&A (NZ INC.)
Phil Goff speaks with Tim McCready about the impact of Covid-19 on Auckland’s infrastructure plans.
In February this year, Auckland Council was focused on the challenges ahead of a city enjoying relentless growth: building transport infrastructure to relieve traffic congestion, coping with the highest ever level of building consents, and dealing with environmental issues including water quality and climate change.
Just two months on, those issues haven’t gone away, but Auckland Council is now facing additional challenges in the wake of Covid-19.
Financially, there will be an unprecedented loss of revenue in the coming financial year of between $250m and $450m. Much of the lost revenue is not through rates, but from the loss of its dividend from Auckland International Airport, reduced fare revenue from Auckland Transport, lower regional fuel tax and less development contributions.
Auckland Mayor Phil Goff says the depression in the 1930s saw the Government pull spending back so much that while it balanced its books, “the cure killed the patient”. He is determined to keep Auckland’s infrastructure projects going as much as possible:
“There will likely be a reduction of infrastructure projects in the coming year, maybe $300m worth, but we will still be spending a whole lot more than we have on average over the last five years on an annual basis,” he says.
“We want to make sure that we’re still creating that infrastructure that the city has been waiting so long for, that it so desperately needs, and which is going to be a core part of actually stimulating the economy, getting jobs going, getting income going and helping to secure recovery.”
Here’s what Goff had to say on a few big issues facing New Zealand’s biggest city:
Work has started back on the City Rail Link now, but we’ve heard that the cost is likely to blow out – do you know what the scale of that will be?
The month-long closure of the CRL is likely to cost probably around, or something in excess of $30m. That’s never welcome, but we had no choice in the matter.
We have a new challenge now – getting some of the specialist staff that we need to do the work internationally, at a time when our borders are closed. I’ll be making submissions to Ministers – obviously we’d need to follow a quarantine process, but we really need that international staff in to not further delay the project.
There is an opportunity here to potentially speed up the CRL project by starting work at multiple sites. We are already doing that to a certain extent now – working on Aotea Centre, working on Karangahape Road, Mt Eden and continuing with the tunnel. If the Government is able to bring some of its capital from its shovel-ready project into CRL, then rather than this being a setback, it could be a chance to advance our programmes.
Auckland Council has submitted 73 priority ‘shovel-ready’ infrastructure projects to the Government’s Infrastructure Industry Reference Group. What do you hope they will achieve for Auckland?
It enables us to create the infrastructure that we desperately need as a city, so that’s something that’s worthwhile in its own right. But we have premised these projects around projects that are ready to go, we’ve consented them, we’ve often done the procurement for them, and we can get them up and going as quickly as possible to create jobs, generate income and help stimulate the recovery that our city and our country desperately needs.
Auckland is uniquely well-placed to assist the recovery of New Zealand in that regard. We’ve been professional in the way that we’ve put the projects up, there are 73 projects, we’ve said 30 are priorities. We know that we can expect a fair share of the money, we are ready to go and we can assist the Government with its recovery objective.
There has been some criticism that the projects put forward haven’t been transformational enough and don’t represent the once-in-a-generation opportunity that this situation has provided. What would you say to that?
We followed the Government criteria – the Government provides the money, they set the criteria. But I reject the criticism anyway – there is a whole lot in our submission which is about mode shift. It’s about bringing forward projects that will assist public transport, that will assist walking and cycling, that will get busways underway. Those are projects that meet our environmental and our transport objectives – reducing traffic congestion, reducing carbon emissions. These are the sort of things that we need to do for the long-term future, as well as needing to deal with the immediate ramifications of Covid-19 and the recession it’s causing.
Will Council be looking at ways to speed up projects – expediting things like resource consent?
There are things we have changed already. For example, noise controls have been lifted – maybe to the detriment of people who live in hearing distance of some of these construction projects, but it means they can work a slightly longer day and a longer working week. We will all have to give up something in order to achieve the wider objective. That is an example of how we have already changed the resource consent requirement to try to facilitate the construction industry getting back on its feet more quickly. The noise might go on a bit longer, but it means the project will be done more quickly, and that disruption will end more quickly, so there is a benefit there as well.
Compulsory water restrictions for Auckland are almost certain with the region’s storage dams dropping below 50 per cent. Around $2.3 billion is due to be spent over two decades on capital works to accommodate Auckland’s growing water consumption – should Council be doing more now to future-proof Auckland’s water supply?
The potential necessity for water restrictions in Auckland is due to the significant lack of rainfall we have experienced since summer. Rainfall levels in January and February have been the lowest on record. Coupled with the very long hot summer and higher demand, the water supply lakes have fallen below 50 per cent full compared with an historical average of around 75 per cent. In addition to this, the long-range weather forecasts do not predict any significant rainfall. Watercare is running a public media campaign to encourage people to reduce usage and are maximising the take from the Waikato River.
In terms of infrastructure, Watercare is continuing to upgrade the Waikato water treatment plant so it can process an additional 25 million litres per day —this work is deemed an essential activity and is due to be complete in around three months. Watercare has also submitted a project through the “shovel-ready” process which proposes the construction of a second water treatment plant and new boost pump station that will increase water treatment capacity by 75 million cubic metres a day and increase pipeline conveyance capacity from 150 to 225 million cubic metres per day.
This project is worth around $300 million to $350 million and will be critical in addressing long-term water resilience in Auckland.
2021 was shaping up to be a banner year for Auckland – with the America’s Cup, Apec, and many other international events. What impact will Covid-19 have on this?
I’m not sure yet what impact this will have on Auckland 2021 – we don’t know yet when our borders will be opened up. We’re hopeful that with the success of New Zealand and Australia, maybe we can open a trans-Tasman border, maybe we can get those tourists back in at least from Australia and maybe the Pacific.
But you take something like the America’s Cup, it’s due to start with the Christmas race in December of this year – will we be ready to have an influx of tourists from around the world? I don’t know the answer to that.
We are keen to see the race and we do want those superyachts here – they bring a lot of money to the country. But we’re also keen to get the economic benefit that covers the cost of the infrastructure that we’ve built to enable to race to take place. We want the tourists to come and enjoy the race and enjoy New Zealand. At the same time, there will still be the benefit that we will be projecting our city and country to the world if the race takes place. That is important as well.
I’m not pushing the Government to do anything that is against health advice. The health and wellbeing of us as New Zealanders comes first. But when we can reopen those borders, having those events in our city, and in New Zealand will give the boost that the tourism and the accommodation sectors need to recover from what has been a bruising period for them.
It feels a little like Apec has been doomed from the start – with the convention centre fire and now Covid-19. What do you think the appetite will be for people to travel – particularly for the Leaders’ Week in November next year? Will we see a mass delegation of world leaders emerge in Auckland?
The leaders won’t want to put themselves at risk. Covid-19 makes no exceptions – we’ve seen prime ministers – Russian and British – come down with the disease. We don’t want people coming to the country to put us at risk if Covid-19 has not been properly dealt with by that time.
Apec in Chile was put off last year, I suspect it’s in real doubt for this year in Malaysia. I think the leaders, if it’s safe to do so – for them and for us – will be ready to come together and have that interaction face-to-face which has been an important aspect of Apec.
Is there anything you’ve seen from the alert level four restrictions that you might like to retain? Personally, I have enjoyed the fact that Cornwall Park has closed its gates to traffic – there has been plenty of space to spread out.
Can we learn things from it? Of course. In every crisis, there is a threat and there’s an opportunity. I think we will see opportunities out of this, things that we can do better.
One of the things we saw was that when you get cars off the road, the air quality is probably the best that Auckland has seen in a generation. And the quietness of the city – we won’t get back to that, but people are saying, gosh, I can hear the birdsong again.
One of the things we can keep is the flexibility around working. If it is possible for people to work effectively from home, why not give them the chance to do that, maybe several days a week? People want to have the social interaction, but they can spend time at home, as well. They can work more flexibly, and that more flexible working I think will be great for things like traffic congestion, efficiency, and people being able to enjoy their working week more.
A bit more amorphous but nonetheless important – He waka eke noa – we are all in this together, and being kind to people, being considerate. We probably haven’t seen this since the war, when people said: “hey, we’re in the same battle together and we are looking after each other.” I hope that we can retain that sort of sentiment going forward.
© NZ INC.
Pandemic pivots: The best of NZ business showing resilience in the face of adversity (The Spinoff)
Non-essential business has taken a hit over the past month, but innovative New Zealand companies are finding the silver lining.
Restrictions imposed by the Covid-19 lockdown have caused some businesses to consider closing up shop for good. While some have taken this route, others have used the restrictions forced upon them to pivot into areas they hadn’t before – either because they had never needed to, or they had never considered it.
One of the best examples of this is Nanogirl Labs, run by one of New Zealand’s best-known science communicators, Dr Michelle Dickinson. It was quickly apparent to Nanogirl Labs that its “old” business – live stage shows and performances at schools around New Zealand – was not viable in the near future.
“I looked at our staff, I looked at my husband and business co-founder and we knew there was a big decision to be made: accept defeat and wind the business up, or fight for something we believed in,” said Dickinson.
Within three days her team developed an online learning platform for those same kids they would normally reach through their shows who now needed to stay home. Each weekday, a “science adventure” is delivered to teach STEM (science, technology, engineering and mathematics) to New Zealand’s next generation using common household items. On top of that, Nanogirl Labs maintained its “buy one give one” model – meaning those who wouldn’t have been able to afford to take part can.
Waikato brewery Good George moved early to produce 1,000 litres of hand sanitiser from a distillery it had been using to make spirits. Co-founder Brian Watson says they had the idea after having trouble sourcing the liquid gold for its own staff: “We had our whisky and gin programme going for a while and we thought: the world needs hand sanitiser more than it needs gin and whisky right at the moment,” he said.
Similarly, dairy giant Fonterra made 250,000 litres of ethanol available to companies making hand sanitiser and has also increased the production of ethanol at one of its plants. Chief executive Miles Hurrell said in a webinar this week that this came at “a significant cost to our business, but we knew it was the right thing to do”.
Steve Nathan, chief executive of timesheet company TimeHub, says he was inspired by British technology company Dyson, which repurposed some of its production from vacuum cleaners to ventilators. He said it made him wonder, “How can we not pivot, but rather repurpose what we have for our new normal?”
His team created MyVisitorLog, an online service that allows customers to use their own device to record when they visit a business. This will be a long-term requirement for contact-tracing purposes – particularly for restaurants, cafes and bars – and this tech will allow it to happen contactlessly.
Responsive retailing
Supermarkets were among only a handful of retail outlets allowed to open during the alert level four restrictions and as such have been innovating since the beginning of the lockdown.
Foodstuffs has been trialling a virtual check-in for customers, where shoppers text the supermarket to be put into a queue and are sent a reply when it’s their turn to shop. This has made social distancing easier – customers can queue in their car – but has also meant that shoppers like me who live close to one of the supermarkets participating in the trial can queue virtually from home (and then get to the supermarket at pace to meet the 10-minute allowance!).
Clickandcollect, set up by George Czabania, automatically collates click-and-collect slots for all supermarkets across New Zealand, allowing customers to more easily hunt out available times (which have been incredibly scarce during lockdown).
Another website, How Long is the Line, built by developer Gareth Hayes, crowdsources queue times at supermarkets, helping customers avoid an unnecessary two-hour wait in their attempt to locate flour (often unsuccessfully). Customers feed data into the site to approximate the number of people waiting in the queue – the more people who update the site, the more accurate it is.
Countdown opened New Zealand’s first dedicated online store in Auckland to respond to the massive 300% surge in online shopping demand. The 8,800-square-metre store is located in Penrose, and is operating 24 hours a day, seven days a week to fulfil more than 7,500 orders per week.
The shift to alert level three has spurred on further innovation in retail, as brick-and-mortar stores look for ways to adapt that will allow them to continue to trade when restrictions won’t allow foot traffic.
New Zealand Made launched a custom website to help New Zealand retailers that have inventory ready but haven’t been able to open to take orders until now. These retailers were ready and waiting to send orders out at 11.59pm on April 27, as soon as the level four restrictions end. #ShopKiwi, New Zealand.
The Warehouse Group recently announced it is allowing contactless click-and-collect from The Warehouse, Warehouse Stationery, Noel Leeming and Torpedo7 outlets from this week.
“We wanted to offer Kiwis another way to shop safely as we transition into alert level three,” says The Warehouse Group chief executive Pejman Okhovat.
“While we can’t open our stores during this time, we can offer another safe and secure way for Kiwis to shop our complete online range that’s free, except for oversize items, and easy to use.”
It’s also trialling drive-through shopping at four of its Auckland outlets, which will also allow access to orders made through online retailer TheMarket. Bolstering its online offering, TheMarket has partnered with grocery and ready-made meal businesses Foodbox, HyperMeat and Jess’s Underground Kitchen for this initiative.
Meals on wheels
New Zealand’s largest online restaurant table booking website, Restaurant Hub, has launched a new service to enable customers to order click-and-collect meals from restaurants. The service has had a huge amount of interest, with 140 restaurants and cafes opting in over the first weekend.
Uber Eats’ refusal to reduce its standard commission charge of 30-35% has caused public outrage. Responding to this, prime minister Jacinda Ardern encouraged New Zealanders “who may be looking forward next week to accessing takeaway food to look at your favourite local eatery – and I do encourage you to support local businesses – and just look at whether or not they offer delivery directly themselves”.
Tim McLeod says the desire to help his favourite cafes and restaurants caused him to “pivot away from my day job” as a digital tech consultant and create Eat Local NZ as an Uber Eats alternative. He says the platform will charge restaurants just 5% commission and will pay drivers more than Uber Eats.
Car rental business Snap Rentals pivoted by bringing its usual services to a complete standstill. It launched an app that pairs its rental cars with its staff to perform personal grocery shopping services for customers. Chief executive Jamie Bennett says the delivery service has been so popular that he has had to take on new staff. He expects the service to continue even after restrictions ease up, in parallel with its car rental business.
The era of the webinar
A plethora of webinars have been set up to help New Zealand businesses use the time they may not be able to work for their businesses to instead work on their businesses. The Icehouse, NZTech and many others have created great resources. I have curated a list of upcoming webinars (using the help of crowdsourcing) here.
My favourite has been a series being run by the Trans-Tasman Business Circle, which has attracted fantastic speakers to discuss “resilient leadership in challenging times”, ranging from ANZ’s Antonia Watson to the Reserve Bank’s Adrian Orr and Auckland mayor Phil Goff.
In a similar vein, Manaaki has tapped into a network of successful New Zealand business experts – both local and offshore – and paired them up with New Zealand businesses needing help and advice, all for free.
Manaaki released a video love letter to small businesses featuring prominent New Zealanders including Jacinda Ardern, Stuart Nash, Stan Walker, Joseph Parker, UFC world champion Israel Adesanya and New Zealanders of the Year Jennifer Ward-Lealand and Lance O’Sullivan – all showing support for the platform and small business owners.
“We will not stand by and watch it happen. We are Manaaki – your support network of business experts. Give us your questions and frustrations, opportunities, fears. Share your burden, and together we will find solutions.”
We’ve got to think
While not strictly business-related, this deserves an honourable mention simply because of its mental health benefit.
I live close to Auckland’s best (personal opinion) and largest park: Cornwall Park. While the park is usually open to traffic and acts as a reluctant thoroughfare between two busy suburbs, for the duration of the lockdown the entry gates have been locked to cars and the gates throughout the park left open to minimise the need to touch anything.
This has created a huge open space with roads, footpaths and the many fields available for pedestrians, runners and cyclists to spread out and physically distance themselves – a much-needed reprieve for those of us subjected to hours of indoor Zoom conference calls.
A team of five million New Zealanders has united against Covid-19 and made it through level four with amazing levels of compliance. As we transition to level three, it’s my belief that many of our businesses will come through stronger than ever – because they used the time provided by the lockdown to work on their businesses.
In almost any New Zealand business presentation, there are two phrases that are commonly used.
One is the Māori proverb: “He aha te mea nui o te ao? (What is the most important thing in the world?). He tāngata, he tāngata, he tāngata (It is people, it is people, it is people).”
Another is one made famous by the father of nuclear physics, New Zealander Ernest Rutherford: “We haven’t the money, so we’ve got to think.”
Covid-19 is testing all businesses, but over the course of New Zealand’s lockdown, the spirit behind these two quotes has really shone through.
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Auranga is a master-planned community being developed in Drury West, situated on the edge of the Manukau Harbour’s Pāhurehure Inlet.
It is the flagship project of Ma Development Enterprises (Made), and one that founder and chief executive Charles Ma has been working on for over six years — initially buying 4ha of land and then subsequently raising the capital to acquire a further 80ha.
Ma was born and raised in Auckland, and is a graduate of civil engineering and commerce from the University of Auckland — along with an impressive string of professional courses from Stanford, Harvard, Oxford and London business schools.
He is listed on the University of Auckland’s 40 under 40 list, having already racked up an impressive resume in private equity and development.
Ma says the Auranga master plan will deliver 3000 homes, with future growth in Drury West allowing for over 12,000 homes and up to 50,000 residents.
Though his financial backers prefer to stay anonymous, he says Made has the capital available to continue to grow the project and see his vision realised.
A master-planned community
Ma has a clear vision for what he wants Auranga to achieve:
“My vision is an intensely personal one, emanating from my desire to add to human worth by creating places that foster and share social equity.”
What he says may sound idealistic, but it is obvious in the way he is designing Auranga that he truly believes it is possible. He says developing communities that have a positive impact on people’s sense of belonging, and that connect people, place and purpose, is at the core of his urban design philosophy.
“I’m a believer that we need to rethink the concept of property development and the role of the developer in society.”
Auranga’s master-planned community consists of the initial 3000 dwellings, a village centre and a retirement village. Other amenities include exercise spaces, playgrounds, a 5km coastal walkway and vast tracts of open space.
Ma’s passion for developing an ecosystem is evident in the detail. Auranga will have narrow single-laned roads, with median strips that are planted with trees. “We’re trying to create streets for people — not roads for cars,” he says, pointing to the wide footpaths, dedicated cycle ways and limited parking on streets.
“There are certain things you can do to make streets far more attractive to walk on. One of the things we struggle with in most subdivisions is you see a lot of metal — cars moving at high speed. We want it to be effortless for you to be able to walk in the space and feel safe.”
Ma says 75 per cent of residents at Auranga will live within 500m of local shops, and the “serious open space we have committed for public space means people will be able to get around without ever seeing a car”.
Creating culture
Ma says countering fragmentation is a major goal of the Auranga development.
“While others talk about affordable housing, we’re talking about affordable living: how do people get around and have an affordable mortgage and an affordable life?
“Otherwise you can have an affordable home but you’re struggling to make life work.”
In order to build that lifestyle and culture from the outset, Auranga completed extensive developments before the first residents moved in. These include 3.5km of coastal walkway (of a planned 5km), pedestrian and bike walkways, a coastal jetty for swimming and kayaking, exercise park, playground and a dog park. Auranga’s retirement village is now open, and toward the end of this month the first KiwiBuild residents are due to move in.
Ma says that usually in these sorts of developments you would expect affordable housing to be the last housing available.
But Made is rethinking this notion — even by name.
“We call it champion housing, not affordable housing,” he says. “We want to have champions living in Auranga from day one — building the community, and creating a resident’s association.”
Housing at Auranga starts from $599,000 up to around $2m.
“We like diversity, and we think diversity is essential for culture building — both in terms of ethnicity as well as income background.”
An inbound destination
Ma says the location of the project — close to State Highway 1, State Highway 22, Auckland Airport and with connections to Britomart and Manukau by rail, Auranga is well-placed to support full job sufficiency within the precinct.
He predicts Drury will play a significant role as a regional centre, serving southern Auckland, northern Waikato, Hauraki, and beyond, including key commercial, retail and public services.
“What we need to consider is that Drury will end up being a massive job centre — it is not a typical sprawl development where you will need to travel somewhere else.”
He believes Drury will inevitably become an inbound destination, where people come in to work, rather than needing to leave for the Auckland CBD or elsewhere.
Planning for the future
Over the next five years, additional infrastructure projects planned for Auranga include a pre-school and primary school (2022), secondary school (2026), eco-islands (2023) and new railway stations (2024).
Ma says collaboration and openness with central and local government, iwi and communities has been key to bringing together and advancing the development. He says bringing everyone on board so that they buy into the vision he has for the development has been critical, and describes iwi as one of the project’s greatest champions.
Ma reckons if you start a project well, you have a greater chance of it ending well.
“For me, I’m passionate about starting well. After that, people just follow the culture.”
He hopes that Auranga will set the tone for what future developments in Drury, Auckland — and even around the world — could look like.
“I want to create a place that is so good, that it becomes a blueprint for future communities.”
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At last night’s highly anticipated Deloitte Top 200 event, the winners of 11 award categories were unveiled.
The prestigious black-tie event recognises and honours outstanding performance among New Zealand’s largest companies and trading organisations. Held at Auckland’s Spark arena, there was a record turnout — with 1100 of New Zealand’s premier business leaders, politicians and media in attendance.
Mainfreight took out the top award, recognised as the Deloitte Digital/Marsh Company of the Year for its outstanding achievement over the past year and for being among New Zealand’s most globally successful businesses.
The logistics and transport company has been a frequent sight at the awards over the years. It was a finalist for Best Corporate Strategy and Most Improved Performance in 1996 and 2005, won awards for Best Growth Strategy in 2007 and 2012, and was previously awarded Company of the Year in 2011.
This year, the panel of high-profile judges — convened by NZME Head of Business Content Fran O’Sullivan — said Mainfreight was a deserving winner, recognising that it has reported one of the standout financial performances of the year, with strong growth in operating earnings in the international regions it operates in.
“These results demonstrate that Mainfreight is growing its market share in those large markets, underpinning growth in group profits for the year of 26 per cent and on total revenues of just under $3 billion,” said the judges.
Given Mainfreight’s long-running success, it is plain to see why managing director Don Braid was crowned Executive of the Decade. He has been a previous recipient of the coveted Executive of the Year award in both 2008 and 2011 — one of only two executives to have achieved this in the history of the Deloitte Top 200 awards.
The judges said Braid, who has been at the helm of Mainfreight for all of the past decade, is an outstanding leader with vision, drive and humility. He set Mainfreight on a course to expand internationally in the highly competitive global supply chain logistics business and has successfully delivered on that strategy with outstanding performance.
Outgoing Mercury head Fraser Whineray, who is about to begin a challenging new role as chief operating officer at Fonterra, was named this year’s Deloitte/ServiceNow Chief Executive Officer of the Year.
The judges said he has not only delivered record earnings for Mercury along with solid dividend growth, but also re-positioned the company around its 100 per cent renewable generation position while undertaking an active capital investment programme especially around wind generation.
The only award that is given without finalists — the NZ Herald Premium Visionary Leader — went to former Labour Cabinet Minister and Wellington Mayor Dame Fran Wilde. The judges say this prestigious award recognises Wilde’s ability to see opportunities and take on tough issues — and her passion and energy to make New Zealand a better place.
The judges say Wilde’s contribution to the country has long been underrated: “She does things that are worthwhile. She sees opportunities that are good for the country and the community and is prepared to invest time and effort to help out, paid or unpaid.”
After having been a finalist in the category last year, David Pilkington was named Hobson Leavy Executive Search Chairperson of the Year. He currently chairs the boards of Port of Tauranga, Douglas Pharmaceuticals and investment firm Rangatira.
The judges say he is an inclusive chair, facilitating an environment to get the best out of people, and was selected “due to his track record of success as a chair over a long period”.
Grant Ellis of Restaurant Brands — the company which operates the KFC, Carl’s Junior, Pizza Hut and Taco Bell brands in New Zealand — was awarded University of Auckland Business School Chief Financial Officer of the Year. The judges say Ellis, who has run the financials for over 20 years, has been a key part of the management team and helped drive its growth strategy. “The success of that has resulted in Restaurant Brands delivering top decile shareholder returns of over 30 per cent per annum for the past 10 years,” they say.
The Warehouse Group took out the OneRoof.co.nz Most Improved Performance award this year, impressing judges with its significant growth in revenue, profits and gross margin — and share price — in the 2019 financial year.
They say its performance is due to the successful execution of its business transformation programme in a changing and challenging retail environment.
Datacom was recognised with the 2degrees Best Growth Strategy award. The judges say the longevity and dexterity of the information technology services firm was recognition of its ability to thrive when competing with traditional global players — accumulating an enviable record of 21 years of continuous revenue growth.
Datacom were winners again in the Eagle Technology Young Executive of the Year category, with enterprise portfolio manager James David recognised for his huge vision, passion and outstanding leadership potential.
The judges say David “provides a great example — integrating and celebrating his Māori culture within the corporate world,” adding that he is very focused on bridging that cultural divide to change the country for the better.
Downer’s continued commitment to the Te Ara Whanake programme and its intent over the past five years to increase diversity throughout the company, saw it recognised with a win in the Diversity and Leadership category.
Air New Zealand took out the MinterEllisonRuddWatts Sustainable Business Leadership award. A new category in the awards this year, it recognises businesses working toward creation of long-term environmental, social and economic value.
The judges say while they acknowledge the airline’s environmental impact, they applaud it for introducing measures in areas where it can, and for having a strong impact in social and governance aspects of the category.
The Deloitte Top 200 Index consists of New Zealand’s largest entities ranked by revenue. These entities include publicly-listed companies, large unlisted entities, NZ subsidiaries and branches of overseas companies and the commercial operations of Māori entities. It also includes producer boards, co-operatives, local authority trading enterprises and state-owned enterprises.
The financial figures for the Top 200 as well as New Zealand’s Top 30 finance companies have been produced in full toward the back of this report — showing revenue, profitability, efficiency and more.
These numbers offer an insight into how the biggest companies in New Zealand operate and are accompanied by explanations and insight from the Herald’s team of business reporters.
The high-level story for the Top 200 this year is continued growth. Total revenues rose by 4.0 per cent compared to the 2018 figure. This increase also drove an increase in underlying earnings (EBITDA), which rose by 5.7 per cent. Total profits after tax were also up 6.3 per cent year-on-year.
Eighteen companies made their debut on the Top 200 Index this year. Most notable was Lotto NZ, which entered the Index at the highest rank (37th) with revenue of $1,113m.
Year-on-year asset growth for the Top 30 finance companies outpaced last year’s figures, up 4.0 per cent. Cumulative profits also increased by 8.3 per cent.
Despite a difficult year, ANZ continues to sit comfortably at the top spot with $159.0b in assets, outranking its closest competitor BNZ by $59.0b. There has been a reshuffle of rankings between the biggest banks. BNZ has overtaken Westpac to rank second this year, increasing total assets by 4.9 per cent.
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New Zealand has an electricity system that is largely based on renewable energy. Because of our existing competitive advantage in wind and hydro power, many leaders in sustainable transportation predict hydrogen will only play a small role in New Zealand’s fleet.
A recent report by Z Energy shares a similar perspective, noting: “Z’s view is that hydrogen is more suitable for decarbonising high-utilisation, long-range use cases such as trucks, ferries, trains and buses, while battery electric will be the better choice for the shorter-range fleet.”
Adoption of electric vehicles (EVs) here is rapidly increasing — from 210 cars in 2013 to 10,000 in 2018. The benefits from EVs include lower emissions, quieter running, and the fact that they can act as a flexible storage solution for intermittent renewable energy.
And it is not just electric vehicles. The Global Battery Initiative, a World Economic Forum initiative, has called batteries a “backbone technology” in the transition from fossil fuels to a low-carbon future. Batteries — and particularly lithium-ion batteries — are powering anything from toys to cameras, e-scooters to e-bikes, trains and even electric vehicles.
But one of the major challenges faced by the industry is how to treat these batteries at the end of their useful life.
Further compounding this is the fact that New Zealand’s uptake of electric vehicles is heavily reliant on the introduction of second-hand vehicles. Cars are imported with semi-depleted batteries — they will reach the end of their useful life sooner than new cars.
This means the requirement to innovate to meet this challenge is especially front of mind for New Zealand — something that has been recognised by the Battery Industry Group (B.I.G), a cross-industry collaboration launched last week.
The group acknowledges the current “linear” system — extracting materials from the ground to make a battery, using the battery once and then putting the ‘waste’ battery into land fill — is not sustainable.
Made up of over 80 businesses — including a core delivery team of Vector, Eunomia Research & Consulting and WasteMINZ, with funding from Vector, EECA and the Motor Industry Association of New Zealand — the group will design solutions to reuse and recycle the large batteries found in electric vehicles or in stationary energy storage.
They note that a commercially sustainable model will require a shift across the entire system, and aim to propose a “circular” product stewardship scheme for end-of-use and end-of-life battery management to the Ministry for the Environment within the next 12 months. It will include recommendations on consistent safety guidance for the handling, storage and shipping of used large batteries.
Vector says the move acknowledges the important role businesses can play in not only front-footing the e-waste challenge, but also acts as a catalyst to accelerate New Zealand’s transition to a low-emission circular economy.
“Vector recognises that electrification of transport presents a significant opportunity to help
New Zealand achieve a zero-carbon future,” says Vector Group CEO, Simon Mackenzie.
“The research in the New Energy Futures Paper tells us that there will be between 500 and 1000 EV batteries coming to the end of their lives by 2020, potentially rising to 17,000 by 2025 and a staggering 84,000 by 2030.”
He says that while batteries will be key to powering New Zealand’s new energy future, they contain valuable materials that come at an environmental and social cost. It’s clear that we must work collaboratively with others to ensure we have a proactive, robust plan in place to make the most of battery capacity, as well as mitigating any risks from their disposal.