New River

Kemsol [Chemical Manufacturing Sector]

Fri, 03 Sep 2010 00:00:00 +1200

Chemistry gone green

Kristina Koveshnikova [NBR]

When Pete Vaughan started a chemical solutions business in his backyard in 1985, he decided the products must be “green” to protect his two employees — his sons — from toxic elements.

Kemsol, which was officially established in 1991, maintained this philosophy, becoming one of the early pioneers within the manufacturing sector in establishing environmental standards in New Zealand.

To “protect health without harming the environment,” the company has developed the Kemsol Green Range that meets or exceeds EU biodegradability standards, with several of its other products certified with the Environmental Choice label.

Kemsol national sales manager Deane Vipond said caring for the environment and people is one of the reasons why the company is thriving, while the chemical manufacturing sector is experiencing difficult business conditions due to lower demand and fierce competition.

The company, which has 30 national distributors and exports to eight countries including Australia, Chile, Germany, Korea, USA, Germany, the UK and the Pacific islands, reported consistent 15% year-on-year growth with 25% growth last year.

Due to increased revenues Kemsol, which now employs 24 fulitime staff, is planning to expand its business in its export markets, specifically Australia, and hire more staff locally.

The company has been named the top business operating in the chemical manufacturing sector in the National Business Review’s monthly Exciting Companies series with a 71.3 rating in surveys conducted by business strategy and consulting firm New River.

While in the survey it is closely loLlowed by Damar, Niwa and Ecostore, Mr Vipond said the company’s main competitors were the “big boys” including Ecolab, JohnsonDiversey and Jasol.

But while large multinationals may have more resources, Kemsol, with its family culture and a close knit team, can react faster in times of disaster.

Worldwide pandemics “opened up doors” for the business as it could deliver products faster than many other companies, Mr Vipond said.

“The bird flu three years ago and then the swine flu last year opened up a few doors for us, which allowed big companies to see how quickly we could react to market conditions. We forged some pretty good relationships because we could deliver.”

The market demanded large quantities of extremely specific products like non- chlorinated super sanitisers, alcohol based hand gels, bleaches and disinfectants, in a short frame of time, and while it took international companies two to four months to get orders in to the country Kemsol delivered within two weeks, MrVipond said.

“We aim for 97% of all orders dispatched within eight working hours out of our factory; we measure ourselves on that and have a bonus structure in place. We work [on the basis of] under promising and over delivering.”

Top 10 Chemical Manufacturing companies

Rank / Company / Excitement index

1 Kemsol 71.3
2 Damar 68.2
3 Niwa 61.0
4 Ecostore 57.0
5 Commodities NZ 56.0
6 Watergain 55.0
7 The Service Company 54.5
8 Resene Paints 54.0
9 Dow Chemical 53.7
10 Agpro 53.0

Source: Kemsol [Chemical Manufacturing Sector]

Trilogy [Cosmetic Sector]

Fri, 06 Aug 2010 00:00:00 +1200

Lipstick effect keeps skincare market glowing in recession

Kristina Koveshnikova [NBR]

While many businesses struggled during the global economic downturn, the organic and natural skincare market flourished, growing at double the rate of other similar markets.

Natural skincare company Trilogy, which has been named the top business in the cosmetics sector in the latest NBR monthly Exciting Companies series, had a 48% growth across its 16 export markets last year, with a 127% growth in Australia.

Co-founder and director Sarah Gibbs said the sector thrived worldwide during the recession due to the “lipstick effect” — in hard economic times people may cut back on big ticket items but they still like spending on little luxuries.

“The average cost of a Trilogy product is around $40 to $50 so you don’t have to mortgage your house to still get great skincare. And the other side to that — it is a personal item and it is a bit of luxury — you can treat yourself at an affordable level.”

The company was founded in 2002 by sisters Sarah Gibbs and Catherine de Groot and in eight years it expanded from a boutique local operation to an international brand.

Its range of 40 products is sold in more than 3500 stores throughout Australasia, Hong Kong, Japan, Korea, Singapore,
Ireland, the UK, the US and Trilogy is even sold at Scott
Base in Antarctica.

Trilogy was singled out by respondents in the Exciting Companies poll as one of the best in business for new and innovative approach, and effective promotions and PR. The company’s success has been also put down to being “very down to earth” and having “very good teamwork.” But with an excitement index rating of 72.5, it is closely followed by Antipodes International. Both companies are from Wellington and are both exporters.

No doubt the developing trend toward natural medicine, skincare and cosmetics around the world has played an important role in Trilogy’s success. According to British market research company Organic Monitor, the $449 billion industry is been steadily growing by more than $US1 billion a year.

But Mrs Gibbs said consumers’ newfound love for natural products does not equal success for each producer of natural cosmetics. “People are making more natural choice across many of their purchasing decisions.

“But that’s got to be backed by credibility and, if anything, I would say the functionality of our products is probably something what leads us and the added bonus of the fact that we are natural makes us more appealing.”

But although annual growth rate of natural and organic cosmetics segment is globally 15%, some companies in the sector are struggling due to saturation of brands and nature of their business.

While 30% of respondents rated as their business as buoyant or very buoyant and 45% as neutral, 25% rated their business as difficult.

Companies operating in different market segments reported different levels of activity. Firms exporting rated their business as more buoyant saying “it's very buoyant in the overseas market.”

In the retail and therapy clinic segment, clients were said to be lengthening the time between visits, so cosmetics firms serving this market have demand slowing for products. One respondent said the level of activity was “very dependent of the distribution channel. Some sectors have taken a hiding.”

As for Trilogy, the company is planning to launch into new markets including Canada, Korea and Malaysia.

“Strong export focus is our strategy. We are biting off more than we chew; we're building the business both domestically and internationally,” Mrs Gibbs said.

Top 10 Skincare companies

Rank / Company / Excitement index

1 Trilogy 72.5
2 Antipodes International 72.0
3 BECCA Cosmetics (Perth) 68.0
4 The Elements Medi-Spa & Beauty 64.0
5 Oil Seed Extractions 60.0
6= Estee Lauder 58.0
6= Mai Costetics 58.0
6= Oxygen Skincare 58.0
9 Skinfood 57.2
10 Baccarat Aromatique 54.5

Source: Trilogy [Cosmetic Sector]

Auckland Philharmonia Orchestra [Arts & Culture Sector]

Fri, 25 Jun 2010 00:00:00 +1200

Innovative orchestra changes key to a modern tune

Kristina Koveshnikova [NBR]

More than half of the arts and culture sector is reported to be experiencing difficult business conditions with government funding frozen and falling consumer purchases, but for some the tougher economic environment presented a window of opportunity for growth.

To overcome the issue of its aging and disappearing audience the Auckland Philharmonia Orchestra (APO), which has been named the top business in the arts and culture sector in the latest NBR monthly Exciting Companies series, is implementing an innovative business strategy to attract younger audience by combining new types of music such as hip-hop and R&B.

The orchestra was singled out by respondents in the Exciting Companies poll as one of the best in business for challenging expectations of what an orchestra is and keeping up with the times for audiences. But with an excitement index rating of 72.6, the orchestra is closely followed by Weta Workshops and Wingnut Films.

The excitement index score ranges from 0 to 100. The index is made up of senior executives and business owners’ ratings on a range of psychological based factors measuring excitement for a business and is completed by market research company New River.

Survey respondents dubbed the whole Weta empire as a ‘world class” business for its ability to parlay skills into internationally successful business.

And no doubt thanks to Peter Jackson’s international success and recognition the company received a score of 72.0, ahead of Lemi Ponifasio, who is better known overseas, the Court Theatre and NZTrio, rounding outto the top five.

Although 18% of those surveyed rated business as buoyant, 55% of arts and culture respondents are finding business difficult at present.

Among key issues the sector is currently facing are: lack of funding, less consumer purchase and competition for talent.

Those reliant on government funding were finding things tougher with funding for arts said to be “frozen for a while now.” Likewise getting sponsorship was also said to be more difficult.

Respondents also mentioned a major challenge in the sector is competition for talent. Having the best artists can make an arts and culture business.

But overall, the sector believes the future for arts and culture is promising, saying demand has risen for entertainment closer to home and that despite the tougher environment artists are still producing. They were said to be less driven by economics than the creative urge.

Top Eleven Arts and Culture companies

Rank / Company / Excitement index

1 APO (Auckland Philharmonia Orchestra) 72.6
2 Weta Workshops / Wingnut Films 72.0
3 Lemi Ponifasio 69.0
4 The Court Theatre 67.0
5 NZTrio 66.0
6 Mark Olsen 65.0
7 The Big Idea 62.7
8 Christchurch Art Gallery 61.6
9= Creative Communities 60.0
9= The Arts Foundation 60.0
9= Creative New Zealand 60.0

Source: Auckland Philharmonia Orchestra [Arts & Culture Sector]

Newmont Waihi Gold [Mining/quarrying sector]

Fri, 28 May 2010 00:00:00 +1200

Waihi gold mine digs out environmental concerns

by Robert Smith [NBR]

The government’s plan to look at mining on conservation land has generated the expected complaints about the environmental impact but many in the mining industry claim opponents have ignored the environmental advances made in the business in recent years.

Newmont Waihi Gold, which has been named the top business in the Mining/Quarrying Sector in the latest NBR monthly Exciting Companies series, has a long history of working with the local community and taking a strong stance on its environmental impact.

External affairs manager Kelvyn Eglington said anti-mining groups were often focused on historical issues, rather than current reality.

‘Modern operations like ours at Waihi and Pike River Coal’s own operations have made huge advances in recent years on the environmental front but these are often overlooked by opponents.”

Newmont Waihi Gold’s track record of environmental responsibility was singled out by respondents in the Exciting Companies poll as one of the best in the business. It was a clear winner in the survey with an excitement index rating of 77.0, well ahead of OceanaGold in second place at 64.4, with Downer-Stockton Alliance, Pike River Coal and Borat Longyear rounding out the top five.

There has been mining at Waihi since the 19th century and the current operation includes two separate locations — a traditional big open pit the size of three football fields and a precision underground mine.

Mr Eglington pointed out that under the current regulations, an open pit as large as the Waihi one would not even get past the planning stages but said that taking care of environmental issues meant more than just meeting the legal requirements.

“There are some big requirements under the Resource Management Act but we are also part of the community we operate in and there is a certain amount of sensitivity towards that.

“There is a mature relationship between the local community and the mining company which we would not want to jeopardise. It’s all about looking at the environmental, social and business aspects of everything we do in Waihi and pulling it all together.”

The Waihi mine’s connection to the wider mining world made this task somewhat easier, according to Mr Eglington.

“One of the advantages of being part of a major global player like Newmont is that it ensures we have the resources to put something back into the community.”

It’s a particularly good time to be in the gold mining business as gold prices reach all new heights on a regular basis but Mr Eglington said the spot price only affected what was being sold on the day.

“Projects are costed on the three year rolling average and we operate on guidance from our head office in Denver which has set its rolling average at $US950 an ounce with a New Zealand dollar exchange rate of 72USc.

“A strong gold price is certainly good for our margins but it’s not all a one way street. While the gold price has been heading up, we have also seen things like the cost of labour and fuel rise, so there are still some challenges to face there.”

MINING CONFIDENCE UP, BUT QUARRYING BUSINESS STRUGGLES

High product demand and higher prices have seen the mining sector gain confidence for the future but the quarrying side of the business still has a long road to travel before it recovers from the recession.

More than half of those polled by strategic business consultancy New River as part of the NBR Exciting Companies series rated the mining/quarrying sector as buoyant, but there was a clear split between the two sides of the sector.

A third of respondents rated conditions as difficult, with those concerns mainly confined to the quarrying segment, which produces aggregates for building roads and cement for construction.

With council and private development spending down, respondents said they were seeing less demand for their products, creating a difficult time for those in the quarrying business.

But the opposite was happening for those mining for minerals and coal. With gold prices at all-time highs, demand for the golden mineral was seeing a corresponding lift, while demand for coal was also on the rise, thanks largely to demand from Asian markets such as India and China.

Investment in mining in New Zealand was also said to be looking better with a new 40% tax on the profits of mining companies in Australia.

The mining sector was also feeling positive about government support in this country, with several respondents pointing out that government interest in developing minerals was higher than ever. One respondent said the degree of confidence caused by this new atmosphere had not been seen in 20 years.

Another respondent said the business was also benefiting from improved relations with the Department of Conservation — “The industry is not out to decimate but to maximise the value of resources and protect land and the environment. We can work closely together on environmental protection [with DOC].”

Overall, when picking the most exciting companies in the sector, respondents mostly named firms that were seen as leaders in environmental and health & safety concerns — areas where mining companies had faced criticisms as being careless in the past.

Top Nine Mining/Quarrying companies

Rank / Company

1 Newmont Waihi Gold
2 OceanaGold
3 Downer — Stockton Alliance
4 Pike River Coal
5 Borat Longyear
6 Steartite
7 Winstone Aggregates
8 Stevenson Group
9 Raven Estate Coal

Mining/Quarrying Sector Facts

* 6000 people are employed in the Mining Sector (including oil and gas) in New Zealand
* The Mining Sector in New Zealand is worth about $2 billion
* There were $1.1 billion in exports from the Mining Sector in 2009
* 4000 hectares of land are devoted to mining use in New Zealand

Source: Newmont Waihi Gold [Mining/quarrying sector]

Winning the distribution channel

Mon, 03 May 2010 00:00:00 +1200

Often the choice of market and how to be competitive in it comes down to a question of how can products or services be widely distributed. How can your company win a disproportionate share of distributors to market your product or service to their customers?

In one of our exciting companies, a company called Club Life, a start-up, tackled and won over a distribution channel which was long-established and dominated by a small number of large incumbents in the insurance industry.

When we first researched the Insurance Sector in 2004, one of the rather disconcerting things that we heard was brokers said insurance companies were blocking their independence. A broker is supposed to be an independent agent that can find their clients the best deal from different insurers.

What brokers complained of was insurance companies tying them into contracts telling brokers they couldn’t do business with other insurers. This annoyed brokers as it took away their independence, reduced customer choice, and created a facade where brokers weren’t really brokers anymore, but agents for particular insurance companies.

Club Life, who entered the market as a start up a few years before, took a different tack. Brokers were free to work with whichever insurance companies they liked. So the broker distribution channel, and business model, was respected and invigorated. Club Life also introduced superior new products for customers.

For medical insurance they created a product with a clause saying they cannot change the policy e.g. to exclude certain types of sicknesses. This too was a real problem with other companies changing policies if too many claims and then people find they are not covered when they get sick.

Another example of Club Life's new products were for trauma claims on strokes. If you have a stroke some companies want you to show 25% immobility, Club Life's new policy didn’t – you could claim if diagnosed as having a stroke.

So as well as giving brokers a better business model to work with, where they could add genuine value in the market (through knowledge and choice of different insurers), they were able to offer customers new and better products.

This is the nub of how distribution channels are won off incumbents. Distributors have to be treated in a way superior to existing suppliers. Often, when you look at a distribution channel it may appear all locked up by big incumbents, but if you take a closer look like with the insurers, there can be problems below the surface, that if resolved or a better model is created, it creates a major opening for your business.

For that to work, to win a distribution channel also requires, at least parity, if not better, products or services to offer end customers than the incumbents. Distributors have businesses to run also, and they need to be offering their customers at least parity products or services; and ideally better ones, so they can win and keep more customers.

In the case of Club Life, after the first few years of operation they had 180 brokers attending their annual conference. By 2008, they had 300 brokers attending, a distribution channel that had been won. By that time, the company had also been taken over by one of the largest insurers in the world, ING; and Club Life, started by entrepreneur Naomi Ballantyne, is now called ING Life.

This competition for distribution channels can play a major role in deciding the winner in sales to end customers. The math is simple. Win more distributors or major distributor that reach the most customers - that means your products or services are more widely available - then you'll sell more.

This happens not only in domestic distribution channels but also international ones. In the international arena a different set of dynamics can apply, and we’ll cover that off in upcoming months in this series of articles.

By Roger Parker

Source: Winning the distribution channel

Paragon Investigations NZ [Security Services]

Fri, 30 Apr 2010 00:00:00 +1200

Paragon kept busy chasing down fraud

by Robert Smith [NBR]

Private investigators charged with sniffing out corporate fraud and theft have been kept busy over the past year, as companies take a more pro-active approach to fraud in the wake of the recession.

KPMG’s most recent fraud barometer — released in February — showed that the total value of frauds worth more than $100,00 jumped from about $70 million in 2008 to $100 million last year, with $76 million of that coming in the last six months of the year.

The KPMG barometer found that those in management tend to be more likely to commit fraud than lower level employees and that there were “significant levels” of fraud prompted by, or uncovered during, the economic crisis, although most of last year’s cases involved long term pre-existing frauds, with the full impact of the current economic situation yet to ifiter through.

At Paragon Investigations — which has been uncovering this type of fraud for the past three decades — there has been more theft and fraud work to investigate over the past year as companies show more concern for their bottom line after the economic downturn.

Paragon is now the country’s largest corporate private investigation firm and is the top business operating in the security services business sector in NBR’s monthly Exciting Companies series with a 69.5% rating in surveys conducted by strategic business consultancy New River. It was followed by camera surveillance systems company MiS, Assa Abloy and Gallagher Security Management Systems.

More investigating

Paragon director Daniel Toresen has been a licensed private investigator for 25 years and said that while government work was down, the amount of commercial and insurance investigations was up considerably

“Insurance fraud is alive and well and that’s keeping us very busy. There has been a noticeable increase over the past year or
so as company get far more interested in everything that impacts their bottom line, and they’re willing to spend more money to catch people who are fraudulently taking it out of their business.”

He said smaller companies did sometimes face a struggle justifying the cost of catching the fraud but that the larger corporates with bigger pockets were only too willing to spend the necessary funds.

Paragon deals with between 300 and 400 cases of corporate theft and fraud every year, while also taking on more than 1000 insurance fraud cases each year.

Mr Toresen said many investigators around the country operated as solo practitioners but Paragon had a broad national presence that attracted many of its bigger corporate clients and that its main competition in this area came from the police.

“Usually it’s the police who do these types of investigations for free, but that doesn’t stop clients from looking for answers elsewhere.”

Crime doesn’t change

Insurance investigations remain the biggest slice of Paragon’s business, with director Ron McQuilter named the insurance investigator of the year in 2009.

Paragon has 35 investigators around the country, with 30 involved in the insurance side of the business, with most of the commercial work going to the company’s Auckland-based investigators.

Mr Toresen said there had been no change in that nature of the crimes Paragon investigated over the past few years but that new technology had tilted the balance in favour of the investigators.

“From our side, it is easier to catch people, because of the growing arsenal of tools. We now have things like a wide array of databases, GPS units and covert cameras.

“Despite this leap in technological capability, it’s still not preventing fraud. Everybody knows there are CCTV cameras everywhere, but they still commit crimes. People always think going to get away with it, until we come knocking on their door.”

STAYING SECURE IN A TOUGH BUSINESS

New Zealand’s rising crime rate has fuelled demand for the security services sector but, as in many industries, companies looking to rein in their costs have been cutting back on their security spend.

The global slowdown has also had a knock-on effect for the security business in areas such as the building sector — as building work has dropped, the need for security patrols around new developments and alarm systems installations have also dropped.

Respondents to the NBR exciting companies survey of the security sector remain cautious about the current state of the industry, with 42% rating business as difficult, 32% describing it as neutral and just 26% seeing things as buoyant.

Some businesses are reporting sharp drop-offs in business due to the economy, as many companies cancel their security services and security companies find it difficult to pass on rate rises.

There were some positive signs for the business in the unfortunate crime trends, with more interest in camera surveillance systems.
One respondent said this interest was not just confined to catching out worker theft.

“There are more farmers with long driveway security. They are having burglaries, which they didn’t have 30-40 years ago — people are going right up driveways. So they are using camera systems.”

Other segments of the business that have remained strong due to high demand include debt recovery work, high-end security for government and corporate clients, classified work and online
data security systems.

Top nine security services

Rank / Company/ Excitement rating
1 Paragon Investigations NZ
2 Mi5
3 Assa Abloy
4 Gallagher security Management Systems
5 Code9
6 Independent Monitoring Services
7 Intek
8 Armitage
9 Surveillance Technologies

Security services facts

* 451,495: Reported criminal offences in NZ in 2009
* 20,022: Increase in reported criminal offences from 2008
* $76 million: total amount defrauded in NZ in last six months of 2009
* >$1 million: Average amount of individual fraud committed by senior management staff

Source: Paragon Investigations NZ [Security Services]

Targeting the 1st link in the chain

Wed, 21 Apr 2010 00:00:00 +1200

The natural inclination most of us have in business is to aim solutions at the problem visible in front of us. Working back through to the original or root cause is something mostly ignored.

In rare cases where businesses do work back to the root cause, the first link in the chain of events, and aim a solution at that point, then the results can be astonishing, flowing right through the chain from start to finish.

This can fix the end problem or capture the end opportunity, meaning the other solutions are not required, and cause multiple benefits over time throughout the chain of events that would have otherwise happened had not the first link solution been implemented.

One example from the exciting companies’ research is from a social entrepreneur and one of leading medical researchers in New Zealand (and the world), Dr Peter Gluckman, and his business the Liggins Institute.

The Liggins Institute has been working to improve the health of new born babies and earlier stage treatments, back to where babies are still in the womb, to maximize the health of baby’s brain, a field of science called Perinatal Physiology. One treatment they developed that has been adopted worldwide is a cooling cap put on new born babies to prevent or minimize brain damage at birth.

When babies are born sometimes oxygen is cut off during the birth which then results in permanent brain injury. The Liggins solution is placing a cooling cap on the baby’s head which slows down the flow of blood and eliminates or reduces the brain damage that would otherwise have previously occurred.

It is a simple, low cost and effective solution, for what has been a devastating health problem that has occurred worldwide.

With a brain injury in an infant, or an adult, it can flow through throughout their whole life from the point in time of the injury. It creates a harmful chain of events. It may be possible for occupational therapists later in life, after the injury has occurred, to get the person up and running and have them be able to cope and work in life. It also may not be possible.

Some areas of the brain can recover from an injury and other injuries cannot be recoverable back to normal. Either way, the cost personally is enormous to the person, families and health services, and it is a cost to society with a loss of the person’s full potential.

The earlier in the life the brain injury happens the bigger the cost is in the longer term over the person’s life.

An early prevention of brain injury in infants is an extraordinary benefit to people, to the burden on health services, health budgets in future, and society in general as the potential of people is not impaired.

Again the massive flow-through benefits speak for themselves where the outcomes 50 years into the future for individuals and society can be dramatically altered by successful interventions at this very early stage.

The same principal applies in many businesses and situations of problem solving. If you can tackle a root cause of a problem that results in a long term chain of adverse events, the solution at the first link in the chain can be far more valuable than any intervention later on. It can create multiple benefits replacing subsequent expensive solutions that were otherwise required over time.

As a note to this principal in strategic problem solving and market choice, in the medical field now, it is standard best practice to do a “root cause analysis” on any problems presented with patients.

By Roger Parker

Source: Targeting the 1st link in the chain

Optimising the value of hidden assets

Thu, 08 Apr 2010 00:00:00 +1200

In one of the exciting companies, the Tuaropaki Trust, the business went from being a sheep farm, a low return area; to earning $50 million p.a. in revenues (average sheep farms have $200,000 p.a. revenue). How it made this startling transformation is by optimising the value of hidden assets.

The trust had an existing sheep farm it had developed from the 1950s but profits fell away in the 1980s when export subsidies were abolished. Not content with a then unprofitable business, the Tuaropaki Trust searched for other ways to optimise the value of its assets.

Trust members traveled overseas to look at how assets like theirs were best applied. One of the things they discovered on their trip was geothermal power. The trust had a geothermal field (hot, bubbling mud) on its farm. Internationally these are made into power plants.

Tuaropaki Trust raised $200 million in capital internationally and built geothermal power plants. These plants are now run by Mighty River Power and it is a highly lucrative business, much more so than the original sheep farm, and with a much brighter business future in store.

The strategy principle here, is that sometimes businesses have assets which are highly valuable if applied to another area but like the bubbling mud on the farm, the value is hidden or unknown. If we look at how assets can be best be applied this can allow entry and an advantage in more profitable markets.

In international research, this strategy principle has been found to apply to a wide range of asset classes. If you review your assets, from intellectual property, land based assets as above, distribution systems, staff expertise, market or brand position – look at the most valuable applications elsewhere, particularly internationally. Assets most likely to be of very high value in another context are ones that are unique, rare or not easily imitable. Results from this approach to your strategy can be absolutely brilliant.

By Roger Parker

Zindia [Indian Business Sector]

Fri, 26 Mar 2010 00:00:00 +1300

Wood exports show India trade potential

by Robert Smith [NBR]

New Zealand’s population might be 0.37% the size of India’s, but an exporter of Kiwi wood to the Indian market says there are enough similarities to make the two countries natural trading partners.

Jacob Mani Mannothra - managing director at Marlborough-based Zindia - said the free trade agreement now being negotiated between the two nations could have a massive impact.

“India could be New Zealand’s biggest trading ally in the coming years, because we have so many things in common.

“There is synergy in thought and language, as well as similar legal systems and a love of cricket."

"The owner/operator style of business is also a significant part of both economies, with India and New Zealand both producing people who would rather own the business than just work for it.”

Zindia was named the top business operating in the Indian business sector in NBR’s monthly Exciting Companies series with an 85.8 excitement index rating in surveys conducted by strategic business consultancy New River. It was followed by Relianz Forex, Masala Indian Restaurant in Wellington and fast food retailer Bikanervala.

The business was established in 2004 and ships logs and other timber products out of Marlborough, with one ship making the trip to the subcontinent every month, generating about $US4 million in turnover each voyage.

It’s a competitive industry with other New Zealand timber companies keeping an eye on India, while there is also competition from low-cost businesses from countries such as Malaysia or Korea.

Mr Mannothra — who co-owns Zindia with Rick Osborne — said Zindia had sidestepped its competitors by focusing on that shared trait for small businesses.

“As a rule, in India we only sell to small sawmillers, so there are no middlemen.

By going directly to the small guys who actually use the product, we cut all the middlemen speculators right out of the picture.”

He said having a sales channel to India also helped Zindia make the logging business more viable, as the company found a willing market for wood that wasn’t always wanted in New Zealand.

“India takes the industry-grade logs, for which there is a limited market for in New Zealand. For a forest owner, to be really viable, you need to sell every single grade and you can get a reasonable return by shipping that material to India.”

With India’s economy emerging from the global recession relatively unscathed, Mr Mannothra said he had no doubt the business links between the two countries were only going to strengthen.

“India is a growing market with one billion people and a younger population than any other country. It’s a natural fit for New Zealand in the future.”

INDIAN BUSINESSES LOOK FORWARD TO FTA

With more than 5000 businesses run by Indian New Zealanders, the Indian business sector is not confined to any one industry.

Along with Zindia, the list of the 10 most exciting Indian companies compiled by New River included several restaurants, financial services companies, health care businesses, film and television outlets, vending machine operators and the owner of three Mitre 10 Mega stores.

Indian-owned businesses, like others, struggled through the recession and remain cautious about the future, with 60% business people surveyed rating business as “difficult.” Just 15% described the current situation as “buoyant,” with another 25% remaining neutral, while none rated it as either “very buoyant” or “very difficult.”

Despite this caution, there is widespread optimism on the potential of the proposed FTA, with respondents pointing to opportunities in wine, leather, cotton and aviation training.

With India now the world’s second fastest growing economy, the removal of trade barriers and a growing middle class will make it a prime export target of the future but Indian businesses are also
finding opportunities in the domestic scene.

Other businesses that rely on more discretionary spending have found success by specifically targeting an Indian customer base, with firms such as Mind Blowing Films making inroads into the
Auckland cinema scene in recent years.

Top 10 Indian companies

Rank / Company/ Excitement rating

1 Zindia
2 Relianz Forex
3 Masala Indian Restaurant
4 Bikanervala
5 Mitre 10 Mega (Lincoln, Botany, Westgate)
6 East Tamaki Health Caie
7 Mind Blowing Films
8 Moshims Discount House Group
9 Vision Asia
10 Sri Vishnu Enterprises

Indian business facts

* 90-95% of New Zealand Indian businesses are owner-operators
* 105,000 ethnic Indian population in New Zealand (2006 census)
* 68% growth in Indian population in New Zealand between 2001 and 2006
* 1.1 billion — population of India

Source: Zindia [Indian Business Sector]

SP/High Modulus [Marine Manufacturers]

Fri, 26 Feb 2010 00:00:00 +1300

High tech marine manufacture sails swiftly into global water

by Robert Smith

An innovative method of making high-tech boat building as smooth as possible has seen New Zealand marine manufacturer High Modulus snapped up by a global composite materials giant.

The company — now known as SP/High Modulus — was founded by Bob Rimmer 31 years ago as a supplier of composite materials such as fibreglass and resins to the marine world.

While it has provided materials to everything from commercial vessels to production motorboats, it made its name in the sailing superyacht business through its long association with the America’s Cup competition.

It was part of the landmark 1986 campaign, developing composite structures for the New Zealand Challenge’s 12 Metre yachts — the world’s first fibreglass 12 Metres.

Seen as a major step forward for the use of composites in the marine industry worldwide, High Modulus has continued its involvement in the world’s biggest yachting regatta, providing structural engineering or composite materials to three of the 2007 syndicates.

Over the years, its structural engineering team has built on its superyacht reputation to spearhead a wave of innovative engineering production methods that has seen the company gain a global profile.

European foray

It established a presence in Europe with the launch of a UK
office in t995, with operations in Australia and Asia established in 2008.

Late last year, it was bought by Swiss composite material company Gurit Holding AG and now essentially serves as that multinational’s marine division, out of its North Harbour headquarters.

SP/High Modulus topped the marine manufacturing sector in NBR’s monthly Exciting Companies series with a 62% rating in surveys conducted by strategic business consultancy New River. It was followed by Navico, Elite Marine Design and C-Quip international.

The company has primarily built its reputation on its B3SmartPac (read B-cubed Smart Pac) boat construction system, which offers builders all core and reinforcement pre-cut materials that they need in one package.

The process reduces build time, labour costs and material waste, making the notoriously cost-heavy boat construction process more cost effective, while also ensuring a high level of quality control throughout the construction process.

B3SmartPac sales and marketing manager Sian Raynor said while there were several manufacturers around the globe that offered similar kitset products for the high-tech race market, the local version offered a full package.

“It’s a fairly unique construction solution because it offers both pre-cut reinfotcements and core materials, unlike other operators who just supply the core composite materials.

‘Builders benefit from the expertise of our structural engineering team and straightfotward approach to materials supply, without the usual complexity of the purchasing and building process seen for this type of marine project.”

Miss Raynor said the Gurit acquisition was not just a sign of confidence in the process but also helped put the newly owned company into a stronger position.

“The acquisition means we now have access to a different set of resources, a greater range of materials and new support. The overall company has good technology behind them and a strong research and development focus.

“The key thing is it allows us to he more flexible with our offerings, and that’s what will be needed for future growth.”

Kiwi branding

Despite the loss of several high profile players in the local marine manufacturing industry, more businesses are feeling positive about the future.

The New River survey of 20 companies in the business found 52% of respondents rating business as buoyant, with just 32% finding it difficult and 16% classifying business as neutral.

It’s been a hard two years for the industry, with receivers called in at long-term manufacturer Salthouse Marine earlier this month, while Genesis Marine, VaudreyMiller Yachts, Sovereign Yachts and Calibre Boats have also recently sailed into troubled waters.

But respondents to New River’s survey found demand had picked up in both Australia and New Zealand in the new year, with increases in sales, enquiries and orders reported.

Another silver lining can be found in the sinking of competitors with the marine manufacturers left floating able to pick up the extra work.

Companies that carry out repairs and supply parts have also benefited from the drop in new boat building.

While the future does look a little clearer, there are still words of warning in the report. Although demand has rebounded, it has not picked itself back up to the levels seen before the recession.

Overall, the image of the New Zealand marine industry is still seen as a strong one around the world, with good demand for locally made boats and marine technology, despite competition from low-cost counterparts in Asia.

“New Zealand boats are well regarded overseas,” said one respondent. “Overseas buyers are looking further afield, looking at New Zealand favourably.”

*$1.8 billion: Annual sales of the New Zealand marine manufacturing sector
*10,000: Number of people employed in the sector
*$535 million: Annual exports from the sector
*$34 billion: Global annual sales of yachts and leisure boats

Top 10 Marine Manufacturers companies

Rank / Company/ Excitement rating

1 SP/High Modulus
2 Navico
3 Elite Marine Design
4 C-Quip International
5 Q-West Boat Builders
6 Sea Tech
7 Sealegs
8 Yachting Developments
9 AMF Boats
10 Feadship

Source: SP/High Modulus [Marine Manufacturers]

Lyndale Nurseries [Floriculture Sector]

Fri, 29 Jan 2010 00:00:00 +1300

Intellectual property coming up roses

by Laura Caygill

The good, old “Kiwi-made” slogan has a whole new meaning for one player in New Zealand’s floriculture industry.

Faced with a tough export market made tougher by the recession, the floriculture industry has had to think of new ways to make business bloom over the past few years.

Foodstuffs has begun stocking high quality freshly cut flowers in its supermarkets and Plant & Food Research is working on intergenic plants but it is Lyndale that is leading the charge to take Kiwi- bred plants overseas through the licensing of the intellectual property of plant development.

Over seven years the company has developed a network with the US, Europe, Australia, Japan and South Africa, taking New Zealand plants to the world.

The nursery markets its contracted growers and licenses them internationally — a cost- effective way to cover more ground without the pain of exporting.

Running the show is Lyndale’s Malcolm Woolmore, who spoke to
NBR from Paris, en route to a four- day trade fair in Essen, Germany.

New Zealand’s floriculture industry exports bulbs and seeds to 40 countries but Mr Woolmore said exporting live plants had become too difficult.

“We’re geographically challenged. We face the toughest of conditions in the world for exporting and importing — that’s just a fact we live with. So our approach was not to try to export plants but try to export the intellectual advantage that we’ve got.”

The patents last for 25 years and are in line with a convention set by the international union for the protection of new varieties of plants, to which most countries adhere. (The notable exceptions are China and the US.)

Mr Woolmore said the scheme was beginning to take off but it had been only in the last two years that the company had turned a profit on the project.

“We’re very lucky in that we don’t only represent our own products, we represent other New Zealand breeders and we go out of our way to find people.”

One of those was Dr Keith Hammett.

“Most breeders are hobbyists but he’s one of New Zealand’s few professional plant breeders,” Mr Woolmore said.

Dr Hammett is known for his sweet peas and dahlias, but also
breeds new varieties of clivias, nemesia, and helianthus.

He told NBR he was very supportive of Lyndale Nurseries’ foray into intellectual property.

“I have a high regard for them and I think they are working very hard [to make it work] ,” he said.

Top 8 Floriculture companies

Rank / Company/ Excitement rating

1 Lyndale Nurseries 66.0
2 Plant and Food Research 63.0
3 Zhush 61.6
4 Green Harvest Pacific 59.7
5 Foodstuffs 55.0
6 Elibee 54.0
7 Craig Howard 50.4
8 Pacific Growers Supplies 49.0

Source: Lyndale Nurseries [Floriculture Sector]

Antipodes [Water Sector]

Fri, 18 Dec 2009 00:00:00 +1300

Antipodes dips toes in export markets

by Graeme Kennedy [NBR]

Whakatane premium bottled water company Antipodes is seeding offshore markets with its natural product to gauge interest in export sales.

Chief executive Simon Woolley said that although New Zealand and Australia were its fast-growing customer bases with about 1.5 million units sold last year, Antipodes had put small amounts in Asia, Europe and the US.

“We will see if the brand has international appeal and focus on markets as they show promise,” Mr Woolley said. “Australia is growing brilliantly although we are just scratching the surface with about 600,000 bottles last year and while we have only a small distributor in the US our water is in some really premium establishments there."

“Antipodes is the only New Zealand water with EU certification
— the highest standard in the world — and in 2006 it beat 109 entries to win a US award as the world’s best sparkling water. We are also the first premium water company in the world to be certified carbon-neutral.

“It is New Zealand’s only glass-bottled water and is available only in restaurants although we will soon begin doing some selective retail as consumers are very loyal to the brand but find it difficult to get.”

Antipodes topped the water sector in The National Business Review’s monthly Exciting Companies series with a 70% rating in surveys conducted by strategic business consultancy New River. It was followed by Smart Membrane Solutions, Just Water, Promax and Life Water (see table).

Mr Woolley spent many years in the New Zealand hospitality and restaurant business before he and five partners started Antipodes six years ago.

“There was no water in glass bottles then and good restaurants would not serve water at the table in plastic so they imported products in glass such as Evian, Pelligrino and Perrier,” he said.

“I felt that with tourism growing and fine food and wine now part of New Zealand’s contemporary culture we had a simple idea which had been overlooked. We thought that finding a water source in New Zealand would be easy but getting it out of the ground where it doesn't have to be filtered or processed is like striking oil."

“But we found our product in Whakatane where a kiwifruit farmer was drilling for well water to use as irrigation and hit an aquifer, artesian water which came out at high pressure giving it natural filtration."

“We do nothing to the product except add CO2 to the sparkling variety — it is pure, living water from an amazing and infinite source.”

Mr Woolley said the types of soils and stone water passed through in the filtering process gave it a distinctive taste and a real issue was convincing people to treat it as a serious beverage.

“People won’t drink bad wine but they don’t think about water and its taste. They just wolf it down,” he said. “If they held it in their mouths for a few minutes and concentrated on the flavour they would be staggered by what they were drinking.”

Antipodes’ first Customer was an Auckland restaurant and it is now available in still and sparkling styles at 300 outlets throughout New Zealand. A one litre bottle costs about $10.

Exports to Australia began in 2004 while small shipments went to Spain and Hong Kong the following year and to China and Germany after a new bottling plant was installed last year. Interest has also come from Mexico and the United Arab Emirates.

“We needed the new plant,” Mr Woolley said. “We’d hit the point where we couldn’t grow any further without increasing capacity”

BOTTLED WATER THE ONLY GROWTH AREA

Consumers’ drinking water remains the only growth sector in the water industry as others, including infrastructure, irrigation and water for businesses are still struggling in the economic downturn.

The New River survey found conditions matched respondents’ activities with 45% reporting difficult or very difficult trading and 30% buoyant or very buoyant.

It said consumer bottled water growth was driven by a greater awareness and demand for higher-quality product and a switch from soft drinks and juices by health-conscious and obese consumers.

Alternatives to home tap drinking water such as filtration systems and tanks were also benefiting from the trend.

New River said businesses had cut expenditure on office drinking water but it was beginning to increase again.

Infrastructure and environmental work mainly driven by councils had also suffered, it said, while housing development was also down.

The survey found lower capital expenditure in the rural sector had hit irrigation expenditure although some respondents expected a recovery next year.

Business conditions

Current business conditions in the WATER Sector

Very buoyant =10%
Buoyant =20%
Neutral =25%
Difficult =40%
Very difficult =5%

Top 7 Water companies

Rank / Company/ Excitement rating

1 Antipodes 70.0
2 Smart Membrane Solutions 67.0
3 Just Water 65.5
4 Promax 59.0
5 Life Water 51.0
6 NIWA 48.0
7 Water Supply Products 45.9

Source: Antipodes [Water Sector]

Pitango [Food wholesale Sector]

Fri, 27 Nov 2009 00:00:00 +1300

Pitango prepares for Asian Launch

by Graeme Kennedy

Auckland organic food manufacturer-distributor Pitango plans to expand into Asia, with Hong Kong and Singapore likely targets and Japan a possibility.

General manager Wade Gillooly says the company is working on product development to meet local tastes in offshore markets, though convenience and health qualities are universal attributes for any consumer group.

“As a fresh product, we can’t ship it too far, which might rule out markets such as Europe,” Mr Gillooly says, “but there are many good opportunities in the Asia-Pacific region for us.

“We went into Australia in 2006, gradually building the business and now 65% of our sales are there — you’ve got to look at Australia for growth and it is important to stay close to home markets and follow trends.”

Mr Gillooly says a growing trend in the food business is carbon emission awareness and in the UK products are now labelled with the amount of CO2 and greenhouse gases generated during production.

“Customers overseas are making purchase decisions based on how much emission is produced and although it’s not in New Zealand yet it is on the way,” he says.

“Last year Pitango became the first food manufacturer in the world to be certified as carbon-zero — we measured and reduced emissions, then bought carbon credits.

“This is part of our company’s ethos and looking ahead a couple of years it could become a key buying decision here for consumers wanting to save the world.”

Pitango topped the food wholesaling sector in The National Business Review's monthly Exciting Companies series with a 67.5 rating in surveys conducted by strategic business consultancy New River. It was followed by Moore Wilson, Angel Bay, Kato Pacific Marketing and Bidvest (see table).

Pitango was started in 2001 by Israeli chef Ofer Shenhav and his New Zealand-born ballerina wife Yasmin, initially with pre-packed salads assembled at rooms in the Auckland Badminton Centre and sold through supermarkets and delicatessens.

Mr Shenhav began making soups within 12 months and moved to 400sq m premises in Albany. This has since extended to l600sq m and 35 staff. Meals came on the menu in 2007.

With transtasman sales climbing, Australian private equity group Crescent Capital Partners subsidiary Gourmet Food Holdings acquired Pitango in February last year.

Mr Gillooly says Pitango products include 36 soups and four meal types — risottos, paella, pastas and curries, with two new styles to be introduced in February.

“They are all designed for healthy eating and made from natural organic ingredients containing no genetic modification or additives such as preservatives or gluten,” he says.

“Chilled meals are a new and emerging sector driven by lifestyle trends — people are working harder, longer hours and are looking for healthy alternatives to takeaways.”

He said 90% of organic ingredients were sourced in New Zealand while those unobtainable locally were imported — diced tomatoes from Italy and tomato paste from Israel.

Pitango produced four million heat-and-eat plastic packages of chilled soups and meals last year, rising 30% in the 12 months to June. Mr Gillooly says he will be happy with 15-20% growth in the current economic environment.

HARD GOING

Most food wholesalers have been hit by the recession with increased competition, falling demand and lower consumer spending driving business down.

New River’s survey found worst-affected market sectors included luxury food suppliers and those serving the hospitality industry where restaurant customer numbers had dropped with the downturn.

“Those not experiencing the bite of the recession and doing well are in niche markets such as organics and health foods and lower-end suppliers serving people who have traded down from luxuries and restaurants,” New River says.

“Suppliers to takeaways have been busy and low-cost essentials such as eggs have been steady. In recent months we have seen lower costs for those importing food due to the New Zealand dollar rising against currencies like the euro but as the market has tightened the normally highly competitive sector has become even more so.”

While 10% of respondents say conditions are very buoyant, 55% reported trading as difficult or very difficult and 35% neutral.

New River says while only a few wholesalers say the situation is not improving, most feel it is picking up.

Business conditions

Current business conditions in the WHOLESALE FOOD Sector

Very buoyant =10%
Buoyant =0%
Neutral =35%
Difficult =40%
Very difficult =15%

Top 10 Food Wholesaling

Rank / Company/ Excitement rating

1 Pitango 67.5
2 Moor Wilson 61.0
3 Angel Bay 60.0
4 Kato Pacific Marketing 56.6
5 Bidvest 55.7
6 Gilmours 55.0
7= Blue Rock 54.0
7= The NZ King Salmon Company 54.0
9 Che Ready Meat Company 50.1
10 Sabato 46.0

Source: Pitango [Food wholesale Sector]

Bomac [Animal Health Sector]

Fri, 06 Nov 2009 00:00:00 +1300

Bomac benefits from global shakedown

by Graeme Kennedy

The country’s biggest animal health company, Bomac, is poised for huge international growth in the fallout from a wave of mergers by the sector’s top multinational firms.

Many leading human pharmaceutical businesses, such as Pfizer and Merck, have animal health divisions that are being merged or acquired by other companies and are aggressively seeking new products.

Bomac founder, owner and director Don McLaren said the multinationals were gaining growth by merging rather than developing products of their own and were searching the world for innovative animal applications.

“We have registered 50 new products in the past three years and have another 60 under development,” Mr McLaren said. ‘They are chasing us now but we are waiting to see which way it all goes after the mergers and how to take our products into the big markets
— the veterinary business is worth about $200 million in New Zealand but $9 billion in the US.

“We are sitting on a gold mine ready to blast into space when we find the right way to go with our relatively new products — they are ready to launch on the world market once the mergers have been worked out.

“We will find who can best drive our innovations but a problem is that the orders the multi-nationals have indicated we could get are so big we would have to build 10 new factories to cope.”

Bomac topped the animal health sector of The National Business Review’s monthly Exciting Companies series with a 66.9 rating in surveys conducted by strategic business consultancy New River. It was followed by Annandale Feeds, Merial Ancare, Bell-Booth and FIL New Zealand (see table).

Mr McLaren began the company as a one-man business after working during his 1957 OF for a large UK pharmaceutical firm which sent him home to set up its animal health division in New Zealand.

“I had to do the whole country myself so I left and the next year formed Northern Veterinary Supplies in Auckland, wholesaling and distributing products to vets,” he said. “I was joined by a partner, Jim Bowen and we went into agencies with exclusive distributorships for major overseas companies which were using us as a pathway to becoming established here.

“The driver was differentiation through innovation and the company has grown to 400 staff including 100 vets, scientists and researchers worldwide with manufacturing plants in Australia and the US as well as South Auckland.”

A 2008 Business Hall of Famer, Mr McLaren said Bomac’s total domestic and worldwide sales were around $100 million compared with the New Zealand company average of $2 million to $4 million.

“Our exports this year will be our best-ever with 35% growth although we are being hit by the high dollar. The big companies look for the $200 million blockbusters to justify their efforts while we take a portfolio approach with $5 million to $10 million products — incremental growth is not enough for them.

“They like to deal with the macro-customers but we will sell to w small Asian farmer with 50 chickens and a pig — we can supply the small guys but would like to move into the really big markets.”

GETTING BETTER

Conditions in the animal health industry differ widely depending on the market sector companies are operating in but only 10% are reporting buoyant trading.

The exciting companies survey conducted by New River found 40% of respondents are finding business difficult, 5% very difficult and 45% neutral — a sharp reversal from the 60% who rated conditions buoyant in 2005.

Spending has been kept to the essentials and dropped in the dairy industry following producers’ payout falls over the past year although one respondent said his phone began ringing an hour after Fonterra’s recent increases.

New River said companies operating in areas affected by drought in the past few seasons had been affected as farmers’ returns came under pressure.

Sheep and beef markets had not been as severely hit, it said, as returns had been improving although the high dollar was hurting exporters.

“Animal health companies exporting product, however, are reporting buoyancy and continuing to see growth and high demand,” New River said. “Other more stable sectors are domestic pets and horses.”

Business conditions

Respondents’ rating of current business conditions in the ANIMAL HEALTH Sector

Very buoyant =0%
Buoyant =10%
Neutral =45%
Difficult =40%
Very difficult =5%

Top Nine ANIMAL HEALTH

Rank / Company/ Excitement rating

1 Bomac 66.9
2 Annandale Foods 63.0
3 Meriel Ancare 58.8
4 Bell-Booth 56.0
5 FIL New Zealand 50.0
6 Homeopathic Home Support 49.9
7 Norbrook 47.5
8 Pfizer 44.0
9 Stockguard Laboratories

Source: Bomac [Animal Health Sector]

Ernslaw One [Forestry Sector]

Fri, 02 Oct 2009 00:00:00 +1300

Further growth tops Malaysian's agenda

by Graeme Kennedy

Malaysian-owned forestry company Ernslaw One has spent much of the economic downturn investing in new forests and processing plants in a bid to improve its position as New Zealand’s fourth-biggest operator.

Managing director Thomas Song Chai Leng said the company made the acquisitions, which included another 17,000ha of Crown licences, while most of the industry wanted to divest assets. The latest purchases took Ernslaw’s holdings to 100,000ha of Crown licence forests and 27,000ha in marginal farmland planted mostly with radiata and scheduled for harvesting in about 10 years.

“We will acquire more land and grow even bigger,” Mr Song said. “I don’t know if we will become the biggest but we hope and keep working at it. We are still clearing Crown licence forests and producing 1.8 million cubic metres a year, demand is high and prices are starting to go up.

“When the downturn began, premium pruned logs fell to $US80 a tonne but they have now risen to $US118 and could reach $US14O as the recovery is under way and huge demand remains. Our log and lumber markets are Korea, Japan and China and at this stage we could not supply any other markets as China is taking everything we can produce.

“There is very little in the domestic market as there is not much building going on due to the recession but we tend to re-invest in New Zealand - thats why we are growing so quickly.”

Ernslaw One topped the forestry sector in The National Business Review’s monthly Exciting Companies series with a 78.1 rating in surveys conducted by strategic business consultancy New River.

Tenon, Rayonier, Solid Energy and Forest Distribution were next on the list (see table).

Mr Song said Ernslaw One, a name of no significance or relationships to the Lake Wakatipu steamer Earnslaw, was formed in 1990 by the Tiong family’s multinational Malaysian corporate Rimbunan Hijau.

The company, he said, was one of Malaysia’s biggest timber harvesters, processors and marketers and has other interests in shipping, newspaper publishing and optical fibre cable manufacturing.

“I was international division manager when the business expanded its forestry operations overseas,” Mr Song said. “In Malaysia, the company used indigenous forests and wanted instead to create sustainable resources. We went into PNG [Papua New Guinea] and I came to New Zealand to look at the potential opportunities here.”

Ernslaw has the same family share-holding as Rimbunan Hijau
— which means Forever Green — and became the first foreign bidder to acquire Crown forest licences, starting with five totalling 20,000ha in Coromandel, Manawatu and Otago.

Mr Song said the company in the early 1990s took over the Conical Hill sawmffl near Gore, renaming it Blue Mountain Lumber, and later purchased the Winstone pulp mill at Ohakune. Its investment arm Oregon Forestry acquired land developer Neil Group and in 1995 bought Regal Salmon, which it merged with Salmond Smith Biolab's aquaculture division to form the NZ King Salmon Co.

Mr Song is managing director of Oregon, executive chairman of Winstone Pulp International and a director of NZ King Salmon and Neil.

“But forestry is our major focus,” he said. “We have been accruing carbon credits since January 2008 as we plant new trees and now have the equivalent of 570,000 tonnes of emissions to sell to the Norwegian government. Norway produces a lot of North Sea gas and oil and is short of credits, so has to buy them to offset emissions.

“We are trialling wood pellets made from sawdust at our Otago pilot plant — they are a very hot and efficient wood-burner fuel very popular in Europe.”

IMPROVED OUTLOOK

Conditions in the forestry sector have improved dramatically in the past few years due to unprecedented demand from Asian markets, particularly China.

New River’s survey indicates 35% of respondents are finding business buoyant, a major turnround from the 75% who said it was either difficult or very difficult in the previous examination of the industry in 2005.

New River says the higher demand is being driven by increased construction spending by the Chinese government and higher prices from China’s traditional sottwood market Russia due to exchange rates.

Exporters have also been helped last year by the weak New Zealand dollar and low shipping rates but both have been rising and are unlikely to maintain their advantage.

The survey finds forestry companies are excited by the Emissions Trading Scheme due to be finalised soon with saleable carbon credits generated from tree planting — one respondent says the scheme could double returns to the industry.

Business conditions

Respondents’ rating of current business conditions in the FORESTRY Sector

Very buoyant =5%
Buoyant =35%
Neutral =35%
Difficult =25%
Very difficult =0%

Top 10 FORESTRY

Rank / Company/ Excitement rating

1 Ernslaw One 78.1
2 Tenon 67.0
3 Rayonier 66.0
4 Solid Energy 63.7
5 Forest Distribution 62.5
6 Scion 62.0
7 Forest Owners’ Marketing Services 61.5
8= Future Forest Research 58.0
8= Juken Nissho 58.0
10 Hancock Forest Nianagement 57.0

Source: Ernslaw One [Forestry Sector]

New River

Kemsol [Chemical Manufacturing Sector]

Chemistry gone green

Top 10 Chemical Manufacturing companies

Trilogy [Cosmetic Sector]

Lipstick effect keeps skincare market glowing in recession

Top 10 Skincare companies

Auckland Philharmonia Orchestra [Arts & Culture Sector]

Innovative orchestra changes key to a modern tune

Top Eleven Arts and Culture companies

Newmont Waihi Gold [Mining/quarrying sector]

Waihi gold mine digs out environmental concerns

MINING CONFIDENCE UP, BUT QUARRYING BUSINESS STRUGGLES

Top Nine Mining/Quarrying companies

Mining/Quarrying Sector Facts

Winning the distribution channel

Paragon Investigations NZ [Security Services]

Paragon kept busy chasing down fraud

More investigating

Crime doesn’t change

STAYING SECURE IN A TOUGH BUSINESS

Top nine security services

Security services facts

Targeting the 1st link in the chain

Optimising the value of hidden assets

Further reading

Zindia [Indian Business Sector]

Wood exports show India trade potential

INDIAN BUSINESSES LOOK FORWARD TO FTA

Top 10 Indian companies

Indian business facts

SP/High Modulus [Marine Manufacturers]

High tech marine manufacture sails swiftly into global water

European foray

Kiwi branding

Top 10 Marine Manufacturers companies

Lyndale Nurseries [Floriculture Sector]

Intellectual property coming up roses

Top 8 Floriculture companies

Antipodes [Water Sector]

Antipodes dips toes in export markets

BOTTLED WATER THE ONLY GROWTH AREA

Business conditions

Top 7 Water companies

Pitango [Food wholesale Sector]

Pitango prepares for Asian Launch

HARD GOING

Business conditions

Top 10 Food Wholesaling

Bomac [Animal Health Sector]

Bomac benefits from global shakedown

GETTING BETTER

Business conditions

Top Nine ANIMAL HEALTH

Ernslaw One [Forestry Sector]

Further growth tops Malaysian's agenda

IMPROVED OUTLOOK

Business conditions

Top 10 FORESTRY