Bay of Plenty Business News September/October 2019

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4 BAY OF PLENTY BUSINESS NEWS September/October 2019 CONTACT INFORMATION PUBLISHER Alan Neben Ph: (07) 838 1333 Mob: 021 733 536 Email: alan@nmmedia.co.nz Bay of plenty EDITOR David Porter Mob: 021 884 858 Email: david@nmmedia.co.nz STUDIO MANAGER Tania Hogg Ph: (07) 838 1333 Email: production@nmmedia.co.nz GRAPHIC DESIGNER Kelly Milne Ph: (07) 838 1333 Email: kelly@nmmedia.co.nz ADVERTISING INQUIRIES BUSINESS DIRECTOR Pete Wales Mob: 022 495 9248 Email: pete@nmmedia.co.nz www.bopbusinessnews.co.nz ELECTRONIC FORWARDING EDITORIAL: News releases/Photos/Letters: david@nmmedia.co.nz PRODUCTION: Copy/Proofs: production@nmmedia.co.nz SUBSCRIPTIONS: info@nmmedia.co.nz Bay of Plenty Business News has a circulation of 8000, distributed throughout Bay of Plenty between Waihi and Opotiki including Rotorua and Taupo, and to a subscription base. www.bopbusinessnews.co.nz Bay of Plenty Business Publications 19A Briarley Street, Tauranga, 3110 Bay of Plenty Business Publications specialises in business publishing, advertising, design and print media services. From the editor This month’s cover story looks at the Port of Tauranga and Tainui Group Holdings subsidiary Port Ruakura LP’s 30-year rail freight partnership to support the development of the planned Ruakura Inland Port at Hamilton. The deal, says Port of Tauranga chief executive Mark Cairns, is a significant development. The parties have been discussing the partnership for some time, but have recently made progress and inked a deal. The agreement allows Port of Tauranga’s cargo trains running between MetroPort Auckland and Tauranga to service the Ruakura Inland Port. That will allow Waikato-based importers and exporters direct access to fast international shipping services calling at Tauranga, which is the only port call for the biggest 9640 TEU (20-foot equivalent units) container ships visiting New Zealand. Cairns said the planned Ruakura Inland Port offered significant cargo handling capacity and scope to meet future needs. TGH describes Ruakura as a “visionary logistics hub” designed to help importers and exporters unlock the golden triangle. The journey begun by the founders of Rotorua downhill ball rolling venture Zorb has come full circle, with the founders recently buying back the company they launched 25 years ago. Andrew Akers and his brother David reached an agreement earlier this year with the owners of Zorb. They have now amalgamated Zorb with OGO (Outdoor Gravity Orb), the downhill ball rolling company the Akers set up in 2010, four years after they left Zorb. Bringing on board investors, Zorb Limited was created, and the team commercialised downhill ball rolling, later setting up their own franchise network around the globe. But unhappy with Zorb’s direction once professional investors became involved, Andrew and his brother left the company. After exploring other ventures, he and his brother decided they wanted to get back together and redevelop the downhill ball concept under their own terms. They did well with new venture OGO and were in a position to approach Zorb’s owners and buy the company back. Leading cloud company The Instillery and managed IT and security services provider Origin have agreed to merge. The Instillery established a presence in the Bay of Plenty and the Waikato last year. The merger with Origin was aimed at creating a unique, future-focused provider of cloud, automation, connectivity and security professional and managed services for Kiwi midmarket, enterprise, local and central government organisations, the companies said. The combined organisation will retain The Instillery brand, with 200 staff across the country, and was expected to deliver more than $40 million in revenue. Leading fresh fruit labelling and packing innovator Jenkins David Porter Group - which has a significant presence in the Bay’s horticulture sector - has taken a 50 percent stake in Hawke’s Baybased CR Automation (CRA), an award-winning automation and control systems manufacturer. The two companies say they are coming together to deliver a range of automation services to post-harvest operators across Australasia who want to enhance efficiency, meet compliance needs and overcome labour shortages. Jenkins Group is a key industry player throughout Australasia’s horticulture post-harvest industry with subsidiaries in New Zealand and Australia (Tauranga-based Jenkins Freshpac Systems Ltd and NSW-based J-Tech Systems PTY). The group provides an extensive range of labelling, packaging and handling systems to the fruit and vegetable industry across both countries. “The Internet of Things (IoT) and automation are clear requirements for our horticulture sector to excel and thrive in a global economy and soar through its ambitious target of being a $10 billion industry by 2020,” said managing director of Jenkins Group, Tony Sayle. Strength in numbers. We’d like to introduce our brilliant new Associates Pip, Rachel, Dan, Jess, Tim and Joel, and congratulate them on their recent promotion. They are highly dedicated and skilled in their areas of expertise and a key part of our service delivery to the Bay. Pip Allan / Civil Litigation & Dispute Resolution DDI 07 571 3858 M 027 650 1480 pip.allan@hobec.co.nz Rachel Rosser / Family, Civil Litigation & Dispute Resolution DDI 07 927 2753 M 021 474 818 rachel.rosser@hobec.co.nz Dan Broadhurst / Property, Commercial, Business, Asset Protection & Estate Law DDI 07 926 2280 M 021 853 799 dan.broadhurst@hobec.co.nz Jess Warn / Commercial & Business DDI 07 927 2756 M 027 231 9124 jess.warn@hobec.co.nz Tim Conder / Health & Safety, Civil Litigation & Dispute Resolution DDI 07 928 7093 M 021 361 8208 tim.conder@hobec.co.nz Joel Murphy / Property, Commercial & Business DDI 07 570 0682 M 027 268 6480 joel.murphy@hobec.co.nz hobec.co.nz HOB25233 BBN
- BAY OF PLENTY BUSINESS NEWS September/October 2019 5 The 9640 TEU Aotea Maersk on its maiden visit to Tauranga: Bigger container ships have a lower carbon footprint than previous average size vessels. Photo/David Porter Port of Tauranga results Port of Tauranga (POT), New Zealand’s largest port, has reported record cargo volumes and increased profits for the year to 30 June 2019. Group Net Profit After Tax passed the $100 million milestone for the first time, increasing 6.7 percent on last year’s profit of $94.3 million to reach $100.6 million. The port has consolidated its position as New Zealand’s international hub port, with transhipment increasing 11.2 percent. Port chair David Pilkington said Transhipment (where containers are transferred from one service to another), had been growing significantly since 2016, when it completed its $350 million capacity expansion programme to accommodate bigger container ships. Transhipment now makes up 32.1 percent of the containers handled at Tauranga. New Zealand shippers can access fast, big ship services that only call in Tauranga by utilising the sea links between Tauranga and Timaru, Napier, Nelson or Wellington. Long-term agreements Pilkington said the port’s longterm agreements with key customers gave it the assurance to plan ahead for increases in cargo growth. The port recently renewed its 10-year operating agreement with major customer Oji Fibre Solutions. “Having the necessary infrastructure is one thing, but it is also vital to have the relationships to ensure we have the freight volume to attract the big ship services,” said Pilkington. “We have long-term agreements in place with key cargo owners such as Oji Fibre Solutions, Fonterra’s shipping supplier Kotahi Logistics and Zespri International.” Chief executive Mark Cairns said the increased number of containers transferred by rail to and from Tauranga’s inland freight hub, MetroPort Auckland, meant that Metro- Port Auckland currently stands alone as the country’s fourth largest container terminal by volume. The recently announced partnership with Tainui Group Holdings (see our cover story) would help Waikato-based importers and exporters unlock the significant efficiencies to be gained by being directly linked by rail to the big ship services calling at Tauranga, said Cairns. Port of Tauranga has also expanded its MetroPort Christchurch inland freight hub by constructing a large warehouse that is being leased by associate company Coda Group to handle Westland Milk’s dairy exports. Cairns said the development of the group’s network of ports, inland freight hubs and logistics services, ensured importers and exporters in key cargo-producing areas throughout the country could access the efficiencies offered by bigger ships. “The availability of rail and coastal shipping to consolidate cargo at Port of Tauranga, and the efficiency of the big ship services, means we can also offer a HIGHLIGHTS – 12 MONTHS TO JUNE 2019 • Group Net Profit After Tax increases 6.7% to $100.6 million. • Annual container throughput increases 4.3% to more than 1.2 million TEUs. • Transhipment increases 11.2%, making up 32% of all container traffic. • Log export volumes increase 12.5% to 7.1 million tonnes. • Exports increase 11.2% to 17.1 million tonnes. • Imports increase 8.4% to 9.8 million tonnes. • Annual revenue increases 10.4% to $313.3 million. • Final dividend of 7.3 cents per share bringing the full year dividend to 13.3 cents per share, a 4.7% increase on the previous year. • A special dividend of 5.0 cents per share will also be paid, and the capital repayment programme will be extended for another four years. lower carbon supply chain to our customers,” he said. Sustainability Reiterating the port’s commitment to sustainability, Cairns said it favoured rail transport over road because of the lower emissions. “We are working with our rail partners KiwiRail to reduce train-related emissions through efficiency and technology. We are also working with our partners Pacifica Shipping to promote greater use of coastal shipping where feasible,” he said. The availability of rail and coastal shipping to consolidate cargo at the port, and the efficiency of the big ship services, means Port of Tauranga was the obvious choice for customers seeking the lowest carbon supply chain, he said. Big ships of 7500 to 9500 TEUs have a carbon footprint more than 31 percent lower than the previous average size vessels calling in New Zealand. Cargo trends Exports increased 11.2 percent to 17.1 million tonnes and imports increased 8.4 percent to 9.8 million tonnes for the 12 month period. Log exports increased 12.5 percent to 7.1 million tonnes. However, as Cairns noted to Bay of Plenty Business News, the drop in demand from China and in log prices is expected to impact future earnings. “We expect some impact on volumes in the coming months.” Looking to the 2020 financial year, Cairns said log volumes were expected to fluctuate in the coming months following the recent drop in international prices. Dairy product exports remained steady at just over 2.3 million tonnes, while imports of dairy herd food supplements and fertiliser decreased by 11.8 percent and 9.2 percent respectively. Kiwifruit exports increased 15.2 percent during the period. Other primary produce sectors also performed strongly, with frozen meat exports increasing 18.8 percent in volume and apple exports increasing 54.3 percent. Cement imports decreased 17.1 percent in volume and steel exports decreased 7.7 percent. Ship visits decreased 3.9 percent to 1678 for the year, but the average size of vessels continues to increase. Port of Tauranga is now planning for the next stage of growth and in response to customer demand, intends to add another container vessel berth by extending up to 385 metres to the south of the existing Sulphur Point wharves. A ninth container crane will be delivered in January 2020. Port of Tauranga will provide an update on the first quarter’s trade, and earnings guidance for the full year, at the Annual Shareholders’ Meeting on 25 October 2019. – By DAVID PORTER Bay of Plenty. -
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