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March 2020 - BAY OF PLENTY BUSINESS NEWS

From mid-2016 Bay of Plenty businesses have a new voice, Bay of Plenty Business News. This new publication reflects the region’s growth and importance as part of the wider central North Island economy.

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MARCH <strong>2020</strong> VOLUME 4: ISSUE 3 WWW.BOP<strong>BUSINESS</strong><strong>NEWS</strong>.CO.NZ FACEBOOK.COM/BOP<strong>BUSINESS</strong><strong>NEWS</strong><br />

BALLANCE RESPONDS<br />

TO ON-FARM CHALLENGES<br />

Ballance Agri-Nutrients is a major Bay employer at<br />

its Mount Maunganui headquarters. (Main picture).<br />

Phosphate from Boucra; a key ingredient for New<br />

Zealand superphosphate. (Inset) Photos/Supplied.<br />

BY DAVID PORTER<br />

Bay of Plenty-based fertiliser<br />

giant Ballance<br />

Agri-Nutrients is sometimes<br />

in the news for what it<br />

sees as the wrong reasons.<br />

Mainly, that is because of<br />

Ballance’s preference for the<br />

specific qualities of the phosphate<br />

rock supplied from the<br />

Western Sahara area in the<br />

south of Morocco categorised<br />

by the UN as a non self-governing<br />

territory.<br />

Morocco contains some 75<br />

percent of the world’s finite<br />

reserves of phosphate. Details<br />

of the differing views on the<br />

phosphate story can be read<br />

in our accompanying story on<br />

page 5.<br />

But chief executive Mark<br />

Wynne told the Bay of Plenty<br />

Business News that the big<br />

challenge for the farmer owned<br />

co-operative was to help its<br />

19,000 farmer members-owners<br />

become future ready.<br />

“That’s primarily it in a<br />

nutshell,” he said, adding that<br />

farmers felt almost under attack<br />

at the moment.<br />

Changing attitudes<br />

towards farming<br />

It had been a reasonably rapid<br />

change from the days when<br />

shepherds and their dogs were<br />

revered, and Footrot Flats and<br />

Fred Dagg were cultural icons,<br />

he said. Farmers had woken up<br />

to the fact that they were in a<br />

Continued on page 3<br />

economy<br />

Central Banks likely to<br />

keep rates down.<br />

P6<br />

special focus<br />

Zespri officially opens<br />

new headquarters.<br />

P11<br />

horticulture<br />

Hort funding tightens despite<br />

demand for produce.<br />

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2 <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> <strong>March</strong> <strong>2020</strong><br />

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COVER STORY<br />

<strong>March</strong> <strong>2020</strong> <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> 3<br />

Ballance<br />

responds to onfarm<br />

challenges<br />

From page 1<br />

new era when people were letting<br />

them know they didn’t like<br />

everything they were doing.<br />

“People talk about the<br />

urban rural divide. I don’t<br />

think there is that big a divide.<br />

But there is frustration around<br />

certain areas where we know<br />

we’ve got to fix the rivers, and<br />

get it together.”<br />

Ballance’s role was not just<br />

to manufacture effective fertilisers,<br />

he said.<br />

“Essentially we need to get<br />

right the four ‘rs’ – the right<br />

product, in the right place, in<br />

the right amount, at the right<br />

time,” he said.<br />

Ballance has about 45<br />

percent of the fertiliser market,<br />

with main competitor<br />

and similarly farmer-owned<br />

cooperative Ravensdown accounting<br />

for about 35 percent,<br />

said Wynne. The market was<br />

highly competitive, with a<br />

total of around 40 importers<br />

making up the remainder of<br />

supply, he said.<br />

The company – which has<br />

around 260 of its 800 New Zealand<br />

staff based in the Mount,<br />

a fertiliser manufacturing plant<br />

at Awarua in the South Island,<br />

and three pelletised feed<br />

operations in Morrinsville,<br />

Wanganui and Ashburton, and<br />

contributes “10s of millions of<br />

dollars” to Bay GDP.<br />

Ballance also runs the urea/<br />

ammonia plant in Taranaki –<br />

site of a fascinating new partnership<br />

with Hiringa Energy<br />

to use alternative energy-produced<br />

hydrogen for fuel.<br />

Creating efficiencies<br />

Wynne emphasised that its<br />

key concern was to do the best<br />

it could to make its farmer<br />

members more efficient and<br />

effective.<br />

“Our innovation programme<br />

essentially wraps<br />

around that mind set,” he said.<br />

“For example, late last year<br />

we launched a new, world<br />

first product, called Sure-<br />

Phos – a low water-soluble<br />

superphosphate,”<br />

SurePhos can reduce the<br />

phosphate solubility (or runoff<br />

into rivers) by up to 75 percent,<br />

said Wynne.<br />

“Everyone talks about Nitrogen<br />

in rivers, but phosphate<br />

is just as bad,” he said<br />

With the new product, the<br />

water soluble element can<br />

be washed off the land in the<br />

event of a major rain event and<br />

Essentially we need<br />

to get right the<br />

four ‘rs’ – the right<br />

product, in the right<br />

place, in the right<br />

amount, at the right<br />

time.” – Mark Wynne<br />

reduce leaching into waterways,<br />

he said.<br />

The new product, which is<br />

currently only being manufactured<br />

in the Mount, had been<br />

getting an excellent market response,<br />

he said.<br />

Wynne said he believed<br />

Ballance’s major tool was its<br />

nutrient specialists.<br />

“We have about 100 people<br />

on the road who are advising<br />

farmers,” he said.<br />

“Now everyone thinks<br />

they are there to flog fertiliser,<br />

but they are actually there<br />

to talk about their farms and<br />

make sure they can help them<br />

achieve their objectives.<br />

“How do nutrients fit into<br />

that farm system? We spend<br />

a lot of time training them<br />

so they understand nutrients,<br />

they understand farm systems<br />

and they know how to tease<br />

out from the farmer their real<br />

issues.”<br />

Building digital capability<br />

Wynne said the company’s<br />

biggest changes in the Bay had<br />

been around digital capability<br />

and innovation, including<br />

tools such as Mitigator. This<br />

allows the creation of an aerial<br />

3D map of a farm taking in all<br />

available information on nutrients<br />

use, stock, farm systems,<br />

contours and soil types.<br />

It operates on the basis of<br />

finding where the majority of<br />

phosphate leaching, nitrate<br />

leaching, your sediment runoff,<br />

and e coli buildup and<br />

ranks the farm in terms of how<br />

best to mitigate the unwanted<br />

side effects.<br />

“I think we’re making<br />

progress.”<br />

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4 <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> <strong>March</strong> <strong>2020</strong><br />

From the editor<br />

CONTACT<br />

INFORMATION<br />

PUBLISHER<br />

Alan Neben<br />

Ph: (07) 838 1333<br />

Mob: 021 733 536<br />

Email: alan@bopbusinessnews.co.nz<br />

EDITOR<br />

David Porter<br />

Mob: 021 884 858<br />

Email: david@bopbusinessnews.co.nz<br />

PRODUCTION<br />

Copy/Proofs/Graphic Design<br />

Times Media – Clare McGillivray<br />

Ph: (09) 271 8067<br />

Email: clare@times.co.nz<br />

ADVERTISING<br />

INQUIRIES<br />

www.bopbusinessnews.co.nz<br />

ELECTRONIC<br />

FORWARDING<br />

EDITORIAL:<br />

News releases/Photos/Letters:<br />

david@bopbusinessnews.co.nz<br />

GENERAL INQUIRIES:<br />

info@bopbusinessnews.co.nz<br />

Bay of Plenty Business News has<br />

a circulation of 8000, distributed<br />

throughout Bay of Plenty between<br />

Waihi and Opotiki including<br />

Rotorua and Taupo, and to a<br />

subscription base.<br />

www.bopbusinessnews.co.nz<br />

Bay of Plenty Business Publications<br />

210/424 Maunganui Road,<br />

Mount Maunganui, 3116<br />

This month’s cover story<br />

takes an in-depth look<br />

at major Bay of Plenty<br />

company Ballance Agri-Nutrients,<br />

which contributes millions<br />

to the Bay’s GDP and has<br />

260 of its 800 New Zealand<br />

staff based in the Mount. Although<br />

in the media because it<br />

sources phosphate from a disputed<br />

area in the Western Sahara<br />

– an issue we also cover<br />

– chief executive Mark Wynne<br />

says the big challenge for the<br />

farmer owned co-operative is<br />

to help its 19,000 farmer members-owners<br />

become future<br />

ready.<br />

“That’s primarily it in a<br />

nutshell,” he said, adding that<br />

farmers felt almost under attack<br />

at the moment.<br />

“People talk about the<br />

urban rural divide. I don’t<br />

think there is that big a divide.<br />

But there is frustration around<br />

certain areas where we know<br />

we’ve got to fix the rivers, and<br />

get it together.”<br />

Ballance’s role was not just<br />

to manufacture effective fertilisers,<br />

he said.<br />

“Essentially we need to get<br />

right the four ‘rs’ – the right<br />

product, in the right place, in<br />

the right amount, at the right<br />

time,” he said.<br />

Meanwhile, the dairy sector<br />

is not alone in struggling for<br />

bank finance, with the horticultural<br />

sector also finding funding<br />

tougher to come by since<br />

the New Year.<br />

Mike Chapman, chief executive<br />

of Horticulture New<br />

Zealand, said he is hearing<br />

anecdotally from growers in<br />

every sector of horticulture -<br />

including kiwifruit - that banks<br />

are proving tight fisted over<br />

funding options for the sector.<br />

“Banks demand security<br />

and they have increased the<br />

security that they demand to<br />

reduce their risk,” he says. “As<br />

a result, the opportunity for the<br />

rural sector to expand has been<br />

reduced. This situation is for<br />

new loans, as well as for the<br />

renewal of existing loans.”<br />

Chapman said the funding<br />

limitations also come off the<br />

back of the new Reserve Bank<br />

capital requirements coming<br />

into play. “It also seems that<br />

if you are going to plant a forest,<br />

there is plenty of support<br />

there, but that is very much a<br />

one trick pony policy,” he said.<br />

And finally, some good<br />

news for the Bay from China.<br />

In our Special Focus on<br />

Zespri’s formal opening of its<br />

new headquarters, we report<br />

that it has also just received<br />

welcome key trademark protection<br />

status against copyright<br />

infringements in mainland<br />

David Porter<br />

China.<br />

The trademark protection<br />

will deliver a boost to Zespri’s<br />

in-market protection through<br />

significantly stronger legal and<br />

administrative powers open to<br />

it for pursuing breaches of its<br />

intellectual property.<br />

Zespri now shares this reinforced<br />

protection with such<br />

high profile companies as Disney<br />

and Ferrero Rocher, and<br />

is the first New Zealand company<br />

to be offered it.<br />

The protection has been issued<br />

by the Shanghai government,<br />

but it is being circulated<br />

throughout China to other<br />

provinces, ensuring it receives<br />

national priority for brand<br />

protection.<br />

Meanwhile, here in New<br />

Zealand, Zespri has been<br />

awarded $15 million in damages<br />

in a civil court case<br />

against an individual who<br />

allegedly sent SunGold G3<br />

plants to China.<br />

<strong>BUSINESS</strong> DIRECTOR<br />

Pete Wales<br />

Mob: 022 495 9248<br />

Email: pete@bopbusinessnews.co.nz<br />

Bay of Plenty Business<br />

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COVER STORY<br />

<strong>March</strong> <strong>2020</strong> <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> 5<br />

Phosphate<br />

dispute’s<br />

colonial roots<br />

Ballance Agri-Nutrients recently hosted a delegation of officials from<br />

Morocco’s OCP. The visit was one of several regular visits to New<br />

Zealand aimed at countering the campaign by representatives of<br />

Polisario, the organisation that claims to reflect the views of those<br />

Saharawi people largely living in refugee camps in Algeria.<br />

Hajbouha Zoubeir and M’barka Bouaida, president of the Regional Council of<br />

Guelmim Oued Noun, with Tauranga mayor Tenby Powell during OCP’s recent<br />

visit to New Zealand. Photos/Supplied. (Main picture, Boucra phosphate)<br />

BY DAVID PORTER<br />

Representatives of OCP<br />

– the world’s biggest<br />

phosphate mining company<br />

– spoke to Bay of Plenty<br />

Business News. The Boucra<br />

mine OCP controls is in the<br />

disputed Western Sahara region,<br />

which is regarded by the<br />

UN as a non self-governing<br />

territory under the legal administrative<br />

authority of Spain, but<br />

under de-facto Moroccan civil<br />

and military occupation.<br />

The OCP representatives<br />

emphasized that the Boucra<br />

mine was a key source of social<br />

development for approximately<br />

500,000 Sahawaris living<br />

in the disputed region, and<br />

the 2100 directly employed by<br />

the mine.<br />

The mine supplies approximately<br />

70 percent of the<br />

phosphate imported by New<br />

Zealand. But according to the<br />

OCP officials, the Western<br />

Saharan phosphate represents<br />

only two percent of Morocco’s<br />

total phosphate reserves, most<br />

of which are in the north in undisputed<br />

territory.<br />

Small portion of exports<br />

to NZ<br />

Last year Boucra sent approximately<br />

22 percent of its output<br />

to New Zealand, the balance<br />

going to other countries<br />

worldwide.<br />

Between them Ballance<br />

Agri-Nutrients and its main<br />

competitor, fellow farmers<br />

cooperative Ravensdown, import<br />

about $30 million worth<br />

of phosphate a year from the<br />

disputed territory.<br />

Hajbouha Zoubeir, president,<br />

Phosboucra Foundation,<br />

OCP, said the total Boucra<br />

exports were approximately<br />

“We’ve been visiting<br />

the region for 20<br />

years now and seen<br />

huge development of<br />

infrastructure over<br />

that time.”<br />

– Mark Wynne<br />

400,000 tonnes, compared to<br />

the 11 million tonnes OCP<br />

produced.<br />

“That is nothing to what<br />

we sell around the world,” she<br />

said.<br />

Zoubeir, whose father originally<br />

worked in the mine, is<br />

a Sahawari. She said families<br />

in the region benefit from<br />

OCP’s massive investment<br />

in the community, including<br />

schools, hospitals and social<br />

programmes.<br />

Major phosphate source<br />

Morocco holds around 75<br />

percent of known worldwide<br />

deposits, only around two percent<br />

of which are in the Western<br />

Sahara.<br />

Boucra was originally<br />

owned by a Spanish company<br />

and the regional dispute has its<br />

origins four decades ago when<br />

Spain left its former colony.<br />

Polisaro regards Morocco as<br />

having invaded the region in<br />

1976 when Spain withdrew as<br />

an occupying power, driving<br />

out many Sahawaris into refugee<br />

camps on the Algerian side<br />

of the border.<br />

OCP took over the mine<br />

in 2002, when, according to<br />

Zoubeir, it was not producing<br />

any income.<br />

According to Zoubeir, Boucra<br />

did not make a profit until<br />

2008 and the parent company<br />

still did not receive any income<br />

from it, instead reinvesting it<br />

in the development projects in<br />

the region.<br />

“People say the mine<br />

doesn’t benefit local people,”<br />

she said.<br />

“What I can say is it does.<br />

They say it is the biggest mine<br />

in Morocco – but it is actually<br />

the smallest. They say<br />

the money goes to the north,<br />

whereas none goes to the<br />

north.”<br />

The trade was completely<br />

in conformity of international<br />

rules, she said.<br />

Ballance chief executive<br />

Mark Wynne told Bay of<br />

Plenty Business News that its<br />

superphosphate was made up<br />

of approximately 70 percent<br />

from Boucra, with the remainder<br />

from South Africa, Vietnam<br />

and some from Christmas<br />

Island. The Boucra phosphate<br />

is low in cadmium, and high in<br />

carbonate, making it particularly<br />

suitable for application to<br />

New Zealand’s soils, he said.<br />

According to Ballance,<br />

without phosphate fertilisers,<br />

New Zealand rural production<br />

would fall at least 50 percent,<br />

which equates to a $10 billion<br />

per year hit to the economy.<br />

“We’ve been visiting the<br />

region for 20 years now and<br />

seen huge development of infrastructure<br />

over that time,” he<br />

said.<br />

“We have met many of the<br />

employees who have directly<br />

benefited from the social,<br />

health and educational programmes<br />

that OCP continues<br />

to deliver.”<br />

But ultimately, it was<br />

something the UN needed to<br />

resolve, said Wynne.


6 <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> <strong>March</strong> <strong>2020</strong><br />

Optimistic start for investment markets<br />

Investment Market Update, quarter ended 31 January, <strong>2020</strong><br />

Inflation remains subdued, central banks remain committed<br />

to low interest rates, and trade tensions between the US and<br />

China have de-escalated (for now) with the signing of a Phase 1<br />

trade agreement in mid-January.<br />

WHAT TO DO WITH YOUR MONEY<br />

> BY BRETT BELL-BOOTH<br />

Investment Adviser with Forsyth Barr Limited in Tauranga, and<br />

an Authorised Financial Adviser. Phone (07) 577 5725 or<br />

email brett.bell-booth@forsythbarr.co.nz.<br />

The progress in trade negotiations<br />

between the<br />

world’s two largest economies<br />

appeared to have helped<br />

stimulate improved economic<br />

activity highlighted by improved<br />

commodity prices and<br />

better manufacturing data.<br />

Consumers remain an economic<br />

strength in most developed<br />

markets. Jobs are plentiful,<br />

and real wages and salaries<br />

are rising. Low interest rates<br />

have reduced debt servicing<br />

costs, and strong asset prices,<br />

including for housing, have<br />

made consumers feel wealthier.<br />

Consumers will continue<br />

to spend (outside of coronavirus<br />

fears), and housing construction<br />

is buoyant.<br />

But then came along<br />

coronavirus<br />

Markets don’t like uncertainty,<br />

and coronavirus was an unanticipated<br />

risk.<br />

Health-scares impact economic<br />

activity through factors<br />

such as people spending and<br />

travelling less. If it becomes<br />

significant enough – such as<br />

the coronavirus – quarantine<br />

measures are put into effect<br />

and places of work are closed.<br />

China has quarantined an<br />

estimated 60 million people<br />

and extended the annual Lunar<br />

New Year holiday beyond the<br />

traditional one-to-two week<br />

celebration period. Because<br />

coronavirus is centred in China<br />

where so much of the world’s<br />

manufacturing is based, work<br />

closures can disrupt global<br />

supply chains meaning companies<br />

around the world are<br />

not able to obtain products<br />

and services essential to their<br />

businesses.<br />

No one knows how far<br />

and wide the coronavirus may<br />

spread, and therefore what the<br />

impact on global markets may<br />

be. Other recent series viral epidemics<br />

include SARS (2003),<br />

MERS (2012), Zika (2015-<br />

2016), and Ebola (2018).<br />

The most comparable to the<br />

Wuhan coronavirus is SARS,<br />

which infected thousands<br />

across the Asia Pacific region.<br />

At the start of that epidemic,<br />

the regional global equity<br />

index (MSCI Pacific ex Japan)<br />

dropped -13 percent. In the<br />

US, equities dropped as much<br />

as minus five percent. Markets<br />

did not fully recover until the<br />

virus was contained. China is<br />

now a far larger contributor to<br />

the global economy than it was<br />

in 2003, so the threat the virus<br />

represents is more significant<br />

today. However, if the coronavirus<br />

follows the pattern of<br />

previous epidemics, then the<br />

economic impact will be relatively<br />

short-lived.<br />

Investors still need<br />

returns<br />

The dominant influence on<br />

markets since the beginning<br />

of 2019 has been the world’s<br />

central banks’ commitment to<br />

low interest rates. Last year<br />

the markets climbed a wall of<br />

worry to deliver exceptional<br />

returns despite headline-grabbing<br />

risks such as trade wars,<br />

Brexit, Hong Kong protests,<br />

and US-Iran tensions.<br />

In a world of ultra-low interest<br />

rates, we suspect equities<br />

will likely continue to be<br />

supported by the “TINA” effect.<br />

For many investors “there<br />

is no alternative” (TINA) to<br />

equities to generate an acceptable<br />

investment return. Meaning,<br />

as we have seen in early<br />

February, any pullback in equity<br />

prices will likely be met<br />

with good buyer demand.<br />

Mergers and<br />

acquisitions remain a<br />

feature of the market<br />

An additional consequence of<br />

low interest rates has been a<br />

sharp resurgence in corporate<br />

merger and acquisition (M&A)<br />

activity. 2019 saw a number of<br />

companies acquired and delisted<br />

from the NZX, including<br />

TradeMe, Methven, Orion<br />

Healthcare, and SLI Systems.<br />

Late last year the boards of<br />

both Abano Healthcare and<br />

Metlifecare recommended<br />

takeover offers, which are<br />

pending shareholder approval.<br />

And this year Augusta Capital<br />

has followed suit.<br />

Conditions remain ripe for<br />

M&A activity to continue.<br />

High stock prices provide<br />

companies with a strong takeover<br />

“currency”, interest rates<br />

and funding costs are low, and<br />

private equity funds around<br />

the world have record levels<br />

of cash they are looking to<br />

deploy.<br />

Diversification is the<br />

best risk management<br />

tool<br />

Equity markets finished 2019<br />

very strongly and that momentum<br />

carried on into <strong>2020</strong>. The<br />

recent volatility due to coronavirus<br />

concerns should be<br />

taken in that context. Interest<br />

rates remain historically low<br />

and central banks are expected<br />

to provide further support to<br />

markets if needed this year.<br />

The outlook for global corporate<br />

earnings remains positive<br />

although we expect companies<br />

will now be more conservative<br />

around their outlooks.<br />

The future is inherently<br />

uncertain, and markets can always<br />

face unexpected shocks.<br />

Diversification remains the<br />

key risk management tool. We<br />

recommend clients maintain a<br />

balanced approach with diversified<br />

exposure to both equities<br />

(across a range of geographies<br />

and industries) and high-quality<br />

fixed income. This helps<br />

cushion short-term volatility<br />

while also offering the potential<br />

to capture long-term capital<br />

growth.<br />

This column is general in nature<br />

and is not personalised investment<br />

advice. This column has been prepared<br />

in good faith based on information<br />

obtained from sources believed<br />

to be reliable and accurate.<br />

Disclosure Statements for Forsyth<br />

Barr Authorised Financial Advisers<br />

are available on request and<br />

free of charge.<br />

BEWARE <strong>OF</strong> FOREIGN IMITATIONS.<br />

There’s no shortage of great ideas in New Zealand.<br />

But for an innovative bunch, we’re not the best at<br />

realising the full potential of our innovations, particularly<br />

when exporting them.<br />

At James & Wells, we can identify your competitive<br />

edge, offer business strategies for specific markets and<br />

help you own and leverage your intellectual property to<br />

ensure no one steals the fruit of your labour.<br />

www.jaws.co.nz | +64 7 928 4470


<strong>March</strong> <strong>2020</strong> <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> 7<br />

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8 <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> <strong>March</strong> <strong>2020</strong><br />

If you don’t know where you are<br />

going, then any road will do<br />

Although it sounds complex,<br />

an IP Strategy is<br />

simply a plan detailing<br />

how a business will use IP<br />

rights and knowledge to help<br />

achieve its objectives, by developing<br />

its intangible assets<br />

and reducing risk.<br />

Managed well, IP can be a<br />

powerful tool.<br />

For instance, it can help<br />

with attracting and retaining<br />

customers, improving margins,<br />

increasing productivity,<br />

competing more effectively in<br />

the market, or securing a deal<br />

with a partner or distributor.<br />

Is IP Strategy relevant<br />

to me?<br />

IP Strategy is relevant for all<br />

businesses because it secures<br />

and leverages your intangible<br />

INTELLECTUAL PROPERTY ISSUES<br />

> BY DAVID MACASKILL<br />

David Macaskill is a Senior Associate at James & Wells with expertise<br />

in all areas of intellectual property and a particular focus on Intellectual<br />

Property Strategy. He can be contacted at 07 957 5660 (Hamilton) or<br />

07 928 4470 (Tauranga), and davidmacaskill@jamesandwells.com.<br />

The competitive and fast-changing business environment is posing<br />

new challenges for all businesses. An effective tool in combating these<br />

challenges is the development of an intellectual property (IP) strategy.<br />

assets, ensuring that you can<br />

continue to enjoy the benefits<br />

of your competitive advantage.<br />

Many businesses have<br />

never considered how IP<br />

rights are relevant to them and<br />

whether better outcomes could<br />

be achieved by controlling and<br />

leveraging those rights.<br />

The process of developing<br />

an IP Strategy is also an opportunity<br />

to reassess your existing<br />

assumptions and critically<br />

evaluate your business.<br />

Businesses that will find an<br />

IP strategy particularly beneficial<br />

include:<br />

• Existing businesses investing<br />

in R&D and new product<br />

development. These<br />

businesses need to be able<br />

to identify their outputs and<br />

make informed decisions.<br />

• Established or emerging<br />

exporters. These businesses<br />

are exposed to new and<br />

variable threats as they encounter<br />

new markets, unfamiliar<br />

legal considerations<br />

and different competitors.<br />

• Businesses commercialising<br />

a new product or innovation.<br />

These businesses<br />

are often creating a new<br />

market segment, disrupting<br />

an existing market, or competing<br />

with an established<br />

market leader. This can<br />

bring them onto the radar<br />

of the incumbents, who are<br />

only too willing to leverage<br />

their market dominance to<br />

squeeze out the new player.<br />

• Businesses that are raising<br />

money to help start or<br />

grow a business. Investors<br />

want assurance that a business<br />

can operate without<br />

infringement risk, and that<br />

they own the assets critical<br />

to the business’s growth.<br />

• Businesses looking to generate<br />

passive income by<br />

licensing their innovations<br />

to third parties for commercialisation.<br />

These businesses<br />

must have control<br />

and ownership of their IP<br />

rights in order to leverage<br />

them in licensing deals.<br />

• Businesses looking to pivot<br />

or redefine themselves to<br />

compete in a changing<br />

environment.<br />

Basically, any business<br />

looking to maximise return<br />

on investment and improve its<br />

chance of success.<br />

What does an IP<br />

Strategy involve?<br />

The scope and scale of an IP<br />

Strategy is limited only by a<br />

business’s goals and its willingness<br />

to commit.<br />

There’s no one-size-fits all<br />

approach, but that means that<br />

you can easily and cost effectively<br />

develop an IP Strategy<br />

to meet your business’s needs.<br />

An IP strategy may include:<br />

• Integrating and embedding<br />

IP thinking into your overarching<br />

business strategy.<br />

• Identifying early what IP<br />

is owned or generated in<br />

your organisation and how<br />

it will sustain or grow your<br />

business.<br />

• Identifying and capturing<br />

your IP in a timely and systematic<br />

way. This will help<br />

with identifying and controlling<br />

your IP.<br />

• Considering timing of disclosure<br />

of innovations and<br />

when to make decisions.<br />

Confidentiality can mean<br />

the difference between securing<br />

certain IP rights or<br />

not.<br />

How do I develop an IP<br />

Strategy?<br />

Knowing how to start is<br />

often the hardest part of the<br />

process.<br />

Initially it pays to talk to<br />

someone with experience developing<br />

and implementing an<br />

IP Strategy, who can answer<br />

your questions and reassure<br />

you that the investment of time<br />

and effort is justified.<br />

This may be other business<br />

owners and leaders, or an IP<br />

advisor with proven strategic<br />

experience.<br />

The Innovation IP ® program<br />

is a useful tool for getting<br />

started with IP Strategy.<br />

An IP professional will<br />

start by gaining an understanding<br />

of your business perhaps<br />

by talking with key team<br />

members, learning about the<br />

business’s history and growth,<br />

understanding future business<br />

plans and goals, and touring<br />

premises.<br />

What is Innovation IP ® ?<br />

Innovation IP ® , is a two-stage<br />

programme that Callaghan Innovation<br />

part-funds in which<br />

businesses work with an IP<br />

professional to create and implement<br />

a bespoke IP Strategy.<br />

During Stage one, businesses<br />

build on their knowledge<br />

of IP rights and learn<br />

how they can be managed to<br />

achieve the defined business<br />

goals. They identify their key<br />

IP assets and develop an IP<br />

strategy that aligns with their<br />

business strategy. During<br />

Stage two, businesses implement<br />

the strategy.<br />

Where can I find out<br />

more?<br />

James & Wells is an approved<br />

provider for both Stage 1 and<br />

Stage 2 provider of the Innovation<br />

IP ® programme – see our<br />

website www.jamesandwells.<br />

com for more details.<br />

The importance of walking the talk<br />

I am continually<br />

amazed at what<br />

appears to me to<br />

be a growing gap<br />

between what<br />

people say and what<br />

they actually do.<br />

In the business world one<br />

would expect it to be relativity<br />

simple, be clear on what<br />

you are offering, and deliver<br />

on that. Walk the talk – or just<br />

do what you say you are going<br />

to do. In other words, deliver.<br />

These gaping holes appear<br />

everywhere. From how long<br />

it takes to get a cup of coffee<br />

and the quality or lack of said<br />

coffee, through to having supposedly<br />

customer-centric large<br />

companies address customers’<br />

issues.<br />

What’s this got to do with<br />

franchising? I believe the<br />

franchise business model can<br />

address the delivery of walk<br />

the talk in a number of unique<br />

ways.<br />

Franchise systems<br />

provide frameworks<br />

Franchising involves the systemisation<br />

and documentation<br />

of a business process, service<br />

or product.<br />

To be successful as a brand,<br />

a franchise system needs to be<br />

not only be good at, but able<br />

to reproduce the process, and<br />

train others to do it. Reproduce,<br />

refine, develop.<br />

A franchise is also more<br />

likely to monitor feedback<br />

and use it as a proxy measure<br />

of customer delivery versus<br />

solely revenue. Whatever it is,<br />

chances are that it will evolve<br />

over time and benefit from<br />

group learnings.<br />

The franchise mind set<br />

As a business model, franchising<br />

is not for everyone, but a<br />

successful franchisee will be<br />

one that is able to follow a<br />

model or process.<br />

This starts at the beginning<br />

when they apply for or<br />

examine a franchise business.<br />

The franchisor is able to see<br />

quickly whether or not the<br />

franchisee can follow an application<br />

process. If they can<br />

follow the systems here they<br />

are more likely to follow the<br />

systems that are designed to<br />

walk the talk in the business<br />

itself. The franchisee picks up<br />

the system, and one supports<br />

the other.<br />

Human nature helps. As<br />

competitive individuals, franchisees<br />

often share and compare<br />

information on performance,<br />

which leads, no great<br />

surprise, to improved performance.<br />

Corporates may have<br />

similar benchmarking, but for<br />

franchisees it’s far more personal,<br />

which leads us to the last<br />

area where they have a great<br />

incentive to walk the talk.<br />

Everyone has skin in the<br />

game<br />

Here’s the big kicker and it’s a<br />

factor that is very difficult for a<br />

corporate model to emulate. A<br />

franchisee has a personal and<br />

vested interest to deliver.<br />

FRANCHISING<br />

> BY NATHAN BONNEY<br />

Nathan Bonney is a director of Iridium Partners. He can be<br />

reached at nathan@iridium.net.nz or 0275-393-022<br />

Incentive programs, KPI’s<br />

and the like cannot reproduce<br />

for an employee what the personal<br />

skin in the game provides<br />

for a franchisee. It’s personal<br />

– their livelihoods depend on it.<br />

They are closer to the customer<br />

interaction and as such more<br />

motivated to walk the talk.<br />

Add the next layer to this.<br />

A good franchisor will ensure<br />

that the franchisee is walking<br />

the talk. They will receive<br />

coaching, training and if ultimately,<br />

they are unable to walk<br />

the talk, the franchisor will assist<br />

them in walking along.<br />

I am not saying that a franchise<br />

business is going to deliver<br />

the goods each and every<br />

time, because obviously there<br />

are multiple factors involved.<br />

However, starting with<br />

a systemised approach for<br />

a business that has already<br />

proven that it works, delivered<br />

by an individual that has a<br />

personal interest in delivering<br />

well on the business offering,<br />

sounds promising to me.


<strong>March</strong> <strong>2020</strong> <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> 9<br />

Tell ’im he’s<br />

dreaming<br />

A few of you may remember the 1997<br />

Australian movie, The Castle. It was a<br />

comedy classic about a family in Melbourne<br />

whose home was being compulsorily<br />

acquired by the airport – and the family’s<br />

efforts to fight this. A few times in the movie<br />

one of the sons, Steve, reads the local<br />

trading newspaper (two years pre TradeMe)<br />

– and after telling the dad Darryl about an<br />

advert, he responds with the now timeless<br />

line “tell ’im he’s dreaming.”<br />

Now here is where I tell<br />

you what this has to do<br />

with buying a business.<br />

I suggest it is not uncommon<br />

for a prospective business<br />

buyer to go to an accountant all<br />

excited to tell them about the<br />

potential business they have<br />

found to buy. And sometimes<br />

the response is effectively “tell<br />

’im he’s dreaming.”<br />

Now of course at times this<br />

is absolutely the right thing<br />

to say. There are vendors out<br />

there who want moonbeams<br />

for their business – and it is<br />

our job to advise our clients<br />

that that price is too high in<br />

that case.<br />

However, I believe there<br />

are other occasions where we<br />

risk pouring cold water on<br />

an idea – without necessarily<br />

holding all the facts.<br />

It’s not just about the<br />

money<br />

Generally, accountants see a<br />

lot of businesses across many<br />

industries – which means we<br />

see success, but also failure.<br />

We want to protect our clients<br />

from poor decisions. But<br />

what we do not see as often as<br />

business brokers, is what businesses<br />

sell for.<br />

Most of the time when a<br />

client brings us a business to<br />

consider, they do not want to<br />

pay for us to do our own valuation.<br />

They just ask us for our<br />

views on whether it is worth<br />

the price. We must watch out<br />

that we give advice based on<br />

facts – and not any inherent<br />

bias that a value should not be<br />

over say a 3x multiple etc.<br />

There is a risk that if we do<br />

not take the time to understand<br />

the opportunity, the motivations<br />

and plans of the buyer<br />

and the reasons why the business<br />

is asking for a particular<br />

sum, we may do our clients a<br />

disservice.<br />

People buy businesses for<br />

many reasons – and money is<br />

just one of them. Sometimes<br />

it is for lifestyle and location<br />

reasons. Sometimes it is just<br />

to have the opportunity to be<br />

self-employed. Often it is a bit<br />

of all the above.<br />

Now accountants are not<br />

taught what to do about any<br />

of the touchy-feely reasons,<br />

so we gravitate to the numbers<br />

by nature. Sometimes that can<br />

risk souring a buyer on an idea<br />

they were previously excited<br />

about – and that might not be<br />

in their best interest.<br />

As a rule, I think it is fair<br />

to say that most asking prices<br />

bear some relationship to the<br />

valuation the broker has done<br />

on the business. That appraisal<br />

BETTER <strong>BUSINESS</strong> BUYING<br />

> BY TOM BESWICK<br />

Director at Ingham Mora Chartered Accountants in Tauranga, is a<br />

business advisor who specialises in buying and selling businesses.<br />

He can be contacted on 027-5744- 019 or tom@inghammora.co.nz<br />

should reflect what other people<br />

have paid in recent times<br />

for similar businesses. So, it<br />

should (for the most part) be<br />

a reasonable starting point in a<br />

negotiation.<br />

Overall, I believe the accountant’s<br />

role is to understand<br />

why the vendor is asking<br />

for what they are, and then to<br />

help the prospective buyer<br />

understand the wider opportunities<br />

and risks of the acquisition<br />

– not just the multiple of<br />

profits being asked.<br />

I think this is more valuable<br />

advice then a default setting of<br />

“tell ’im he’s dreaming.”<br />

SELLING<br />

YOUR<br />

<strong>BUSINESS</strong> IS<br />

A ONCE IN A<br />

LIFETIME<br />

VOYAGE<br />

THE MOST IMPORTANT FINANCIAL DECISION<br />

A <strong>BUSINESS</strong> OWNER WILL EVER MAKE.<br />

ENSURE IT’S ALL PLAIN<br />

SAILING FROM HERE<br />

As a busy business owner, you may not have had time<br />

to consider what will happen when you want to exit<br />

your business.<br />

That’s where Tabak can help.<br />

A successful sale and smooth transition out of<br />

business ownership depends on achieving a clear<br />

understanding of market conditions and the potential<br />

sale value of your business.<br />

Our team of business brokers are experts in guiding<br />

business owners through this process.<br />

So if you are looking for expert, tailored advice on how<br />

to prepare your business for sale we want to hear from<br />

you.<br />

Contact us today!<br />

203503AA<br />

tauranga@tabak.co.nz<br />

07 578 6329<br />

www.tabak.co.nz<br />

Tabak Limited. Licensed REA (2008)


10 <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> <strong>March</strong> <strong>2020</strong><br />

International gymnastics likely to be a proving<br />

ground for the Olympics. Photos/Supplied.<br />

Trustpower Baypark – the Hub of<br />

Entertainment in the Bay of Plenty<br />

Recognised as the Bay of Plenty’s Hub of Entertainment, <strong>2020</strong> is<br />

keeping up the tradition and is shaping up to be extremely busy.<br />

The calendar of upcoming events is jam- packed full of a diverse<br />

range of things to do and see.<br />

Speedway<br />

Speedway season is in full<br />

swing, with many more action-packed<br />

nights of racing<br />

for the whole family still to<br />

come including February 8 &<br />

22, and <strong>March</strong> 7 & 21.<br />

If you are interested in<br />

watching the races from the<br />

comfort of one of our Corporate<br />

Boxes contact events@<br />

bayvenues.co.nz us for more<br />

information. Check out www.<br />

bayparkspeedway.co.nz for<br />

further race details.<br />

Tattoo and Art<br />

Extravaganza<br />

The NZ Tattoo and Art Extravaganza<br />

is back again on 14 &<br />

15 <strong>March</strong>.<br />

Prepare yourself for the best<br />

international and local tattoo<br />

artists festival, indoor and outdoor<br />

zones, live entertainment,<br />

Wearable Art Show, Creative<br />

Village, caravan street art<br />

exhibition, bike stunts, live<br />

bands, ‘The Island’ – with a<br />

variety of food and drinks and<br />

more. Come along to celebrate<br />

creativity & celebrate life.<br />

Netball<br />

Waikato Bay of Plenty Magic<br />

Netball Team play against<br />

the Otago Northern Stars in<br />

Round 2 of the ANZ Premiership<br />

competition on 23 <strong>March</strong><br />

at Baypark. The ANZ Premiership<br />

is the premier domestic<br />

netball league in New Zealand.<br />

The new domestic league<br />

was launched by Netball<br />

New Zealand as a successor<br />

to the ANZ Championship, a<br />

Trans-Tasman netball competition<br />

that was contested by<br />

five Australian teams and five<br />

New Zealand teams starting<br />

from 2008.<br />

The ANZ Championship<br />

saw netball reach the status of a<br />

semi-professional sport in both<br />

countries, with players making<br />

significantly higher salaries<br />

than in previous competitions.<br />

Seniors and Travel Expo<br />

The Seniors and Travel Expo<br />

<strong>2020</strong> is on <strong>March</strong> 28 & 29<br />

from 10am to 3pm. The Expo<br />

has expanded to many more<br />

exhibits offering many more<br />

options from Ocean Cruising,<br />

River Cruising, travel within<br />

New Zealand destinations, in<br />

fact, 50 plus destinations to<br />

learn about.<br />

There will be caravans<br />

on show for tripping around,<br />

and lots more options to suit<br />

all tastes and budgets. Colin<br />

explains “The purpose of the<br />

Expo is to provide seniors<br />

with first-hand opportunities to<br />

discuss products and services<br />

usually advertised in magazines<br />

and newspapers alone.”<br />

The Expo is showcasing<br />

a vast range of services and<br />

products for seniors in one<br />

convenient location and it’s all<br />

for free. This year Ray Woolf<br />

entertains us, live at 1pm,<br />

both days, singing 60s and 70s<br />

hits, including songs by Matt<br />

Munro, such as Walk Away,<br />

Born Free, Portrait of my<br />

Love, etc. An event not to be<br />

missed, loads of information<br />

and entertainment, and tastings<br />

for all.<br />

Pacific Rim Gymnastics<br />

Tauranga has secured hosting<br />

rights for the <strong>2020</strong> Pacific Rim<br />

Gymnastics Championships<br />

which will take place 17 to 19<br />

April.<br />

The biennial international<br />

event gathers the best of men’s<br />

and women’s artistic, rhythmic<br />

and trampoline gymnastics<br />

from the 21 eligible Pacific<br />

Rim nations, including traditional<br />

power houses. The US,<br />

Russia, Canada, Australia, Argentina,<br />

Chile and Mexico are<br />

among the countries already<br />

registered.<br />

The Pacific Rim Championships<br />

is one of only three<br />

events on the international<br />

calendar that competes all four<br />

Olympic sports under one roof.<br />

As in other Olympic years,<br />

the event is expected to continue<br />

to play a key lead-in for<br />

Tokyo <strong>2020</strong> Olympians.<br />

The 2016 Pacific Rim<br />

Championships saw several<br />

subsequent Rio Olympians<br />

take the floor including world<br />

gymnastics phenomenon Simone<br />

Biles, alongside New<br />

Zealand’s own Olympians<br />

Dylan Schmidt and Courtney<br />

McGregor.<br />

Schmidt is no stranger<br />

to the Pacific Rim Championships<br />

having won bronze<br />

in 2016 in the lead-up to his<br />

Olympic debut in Rio. In<br />

2012, he gained recognition<br />

on the world stage by winning<br />

gold in the junior division.<br />

<strong>2020</strong> will be Schmidt’s fifth<br />

championships.<br />

Trustpower Baypark offer<br />

a complete package for any<br />

event with state of the art conference<br />

and meeting rooms,<br />

full Professional Conference<br />

Organiser (PCO) event management<br />

services, in-house<br />

catering, audio visual services<br />

and marketing/promotions.<br />

Meet at Baypark for your next<br />

event.<br />

For more information on any events, enquiries for Baypark venues, BayStation activities or service on/off site from BayCatering, BayAudioVisual visit<br />

www.trustpowerbaypark.co.nz, email events@bayvenues.co.nz or call 07 577 8560.


SPECIAL FOCUS<br />

<strong>March</strong> <strong>2020</strong> <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> 11<br />

Cutting the ribbon: Craig Greenlees, Doug Voss, Peter McBride, John Palmer and<br />

Dan Mathieson. Photo/Jamie Troughton, Dscribe Media.<br />

Zespri officially opens<br />

new Mount Maunganui head office<br />

Zespri officially opened its Mount Maunganui head office in February as<br />

part of the kiwifruit industry’s marquee Momentum <strong>2020</strong> conference.<br />

With phase one of the<br />

new building complex<br />

completed in<br />

April 2019, phase two has<br />

seen the completion of a new<br />

meeting wing featuring an additional<br />

486 sqm space, five<br />

meeting rooms and a demonstration<br />

kitchen. The building<br />

project saw Zespri work with<br />

a range of construction partners<br />

including Beca, Hawkins,<br />

Rider Levett Bucknall and<br />

Warren and Mahoney.<br />

The office was officially<br />

opened by Minister of Agriculture<br />

Damien O’Connor, with<br />

four previous Zespri Chairmen<br />

– Craig Greenlees, Peter Mc-<br />

Bride, John Palmer and Doug<br />

Voss – cutting a commemorative<br />

ribbon in front of around<br />

500 growers, Zespri customers,<br />

representatives from NZKGI,<br />

KVH and the post-harvest<br />

sector.<br />

Zespri Chair Bruce Cameron<br />

said the completion of the<br />

complex represented a significant<br />

milestone for the kiwifruit<br />

industry.<br />

“We’re very proud of our<br />

story and the contributions<br />

our industry has been able to<br />

make to growers and our local<br />

communities.<br />

“This building was always<br />

designed to be a hub for the industry<br />

and to celebrate its completion<br />

with so many of our industry<br />

stalwarts and customers<br />

during Momentum <strong>2020</strong> is a<br />

fitting way for us to start what<br />

we hope will be another successful<br />

year for our industry.<br />

“With the building’s completion<br />

and our recent brand refresh,<br />

Zespri now has an excellent<br />

platform for its next phase<br />

of growth which we hope will<br />

enable us to create continued<br />

strong returns for our growers<br />

and help people, communities<br />

and the environment around<br />

the world thrive through the<br />

goodness of kiwifruit.”<br />

Multi-functional centre<br />

The total office complex is<br />

now 5264 sqm, with the meeting<br />

wing’s demonstration<br />

kitchen designed to enable the<br />

industry to host tour groups<br />

and provide a multi-functional<br />

space for significant events.<br />

“Last year alone we hosted<br />

nearly 800 visitors and the new<br />

meeting wing provides not<br />

only a stunning space to host<br />

them, but also educate them<br />

about our industry’s history,”<br />

said Cameron.<br />

“The meeting rooms all<br />

carry names of significance<br />

to our industry, recognising<br />

people like Alexander Allison,<br />

Isabel Fraser or Hayward<br />

Wright, and important locations<br />

around the world.”<br />

Within the complex there is<br />

also a redeveloped greenspace<br />

which Cameron said would<br />

provide a fantastic spot for<br />

both the Zespri team and the<br />

We hope that being able to enjoy a fantastic<br />

open green space in the heart of Mount<br />

Maunganui might encourage some of the<br />

next generation to think about a future career<br />

in our industry.” – Bruce Cameron<br />

wider public to enjoy.<br />

“We hope that being able<br />

to enjoy a fantastic open green<br />

space in the heart of Mount<br />

Maunganui might encourage<br />

some of the next generation to<br />

think about a future career in<br />

our industry.”<br />

Reflecting the commitments<br />

announced during Momentum<br />

<strong>2020</strong>, the building<br />

also features a number of sustainable<br />

design features.<br />

“Embracing sustainable design<br />

principles was certainly a<br />

focus for us in this build,” said<br />

Cameron.<br />

“The complex features<br />

solar roof panels, energy efficient<br />

sensor lighting, grey<br />

water storage, electric vehicle<br />

charging stations, ability to<br />

charge 16 electric bikes and<br />

improved recycling options.<br />

We’ve already seen some efficiencies<br />

and we’re looking<br />

forward to that continuing with<br />

the new wing now in action.”<br />

HAWKINS<br />

is proud to have built<br />

the new head office<br />

for Zespri


12 <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> <strong>March</strong> <strong>2020</strong><br />

SPECIAL FOCUS<br />

Growers urged<br />

to yell louder on<br />

produce benefits<br />

Kiwifruit growers have been urged to sing their own praises louder in<br />

the market to their consumers, as plant-based foods risk stealing the<br />

limelight after several years of phenomenal growth.<br />

Cathy Burns heads up<br />

the Produce Marketing<br />

Association (PMA), a<br />

global trade organisation representing<br />

more than 2000 floral<br />

and produce producers and<br />

accounting for several billion<br />

dollars of global produce trade.<br />

Addressing delegates at the<br />

recent Zespri Momentum conference<br />

in Tauranga, she said<br />

one of the biggest emerging<br />

trends in consumer behaviour<br />

in six regions surveyed globally<br />

was “healthy living”.<br />

“This includes a desire to<br />

shed things from the diet that<br />

are not good for me, and it has<br />

become a proxy term for ‘intelligence’<br />

and ‘social acceptance’,”<br />

she said.<br />

“There are two main pathways<br />

are been seen in behaviour<br />

to achieve that outcome, choosing<br />

organics and plant-based<br />

foods in the diet.”<br />

Organic produce accounted<br />

for 36 percent of total organic<br />

spend in the US, with dairy<br />

products next accounting for<br />

about 18 percent in a sector that<br />

has enjoyed almost 10 percent<br />

per annum growth for the past<br />

10 years.<br />

“For the first time we have<br />

seen the US organics market<br />

break the US$50 billion mark<br />

for sales in 2018 and we do not<br />

see that slowing down at all.”<br />

Obviously, PMA members<br />

got to enjoy the growth organic<br />

produce has experienced<br />

in recent years. But it was the<br />

growth in plant-based foods<br />

and the claims those foods were<br />

making that gave Burns and her<br />

executive most concern.<br />

“We are the original plantbased<br />

food [as produce growers],<br />

and someone else is going<br />

out and talking our story.”<br />

This sector was now at<br />

US$19 billion and expected to<br />

be valued at US$85 billion by<br />

2030.<br />

Stronger messaging<br />

needed<br />

Claims of low environmental<br />

footprint and good health<br />

benefits were already well<br />

substantiated by the fresh produce<br />

sector, but simply telling<br />

people “eating fruit and vegies<br />

is healthy for you” was not<br />

enough, she said.<br />

The kiwifruit sector had already<br />

made major advances by<br />

validating its gut health claim<br />

several years ago.<br />

This had in turn been linked<br />

to a product supported with<br />

strong marketing and connections<br />

to growers, something<br />

consumers were seeking more<br />

of when considering purchases.<br />

The use of videos to tell<br />

product stories on the internet<br />

was a valuable plank for promotion,<br />

given this year videos<br />

are estimated to form 80<br />

percent of all global internet<br />

traffic.<br />

Worldwide, people were<br />

spending 84 minutes a day<br />

watching video on line and 50<br />

percent of video watched on<br />

line is on a mobile device, with<br />

90 percent shared with friends.<br />

Add in the most popular social<br />

media platform of choice,<br />

which is now Instagram, 89<br />

Produce Marketing Association CEO Cathy<br />

Burns: Kiwifruit companies should sing<br />

their own raises louder. Photo/Supplied<br />

percent of users were aged<br />

under 35.<br />

“I cannot think of a better<br />

time to capitalise on what you<br />

are already doing.”<br />

The message about fresh<br />

produce’s health benefits was<br />

one increasingly easy for growers<br />

to back up with evidence.<br />

Burns pointed to health<br />

practitioners in the United<br />

States who “prescribed” fruit<br />

and vegetables to their patients.<br />

A programme in Connecticut,<br />

“Wholesome Wave,” had<br />

55.3 percent of participants reporting<br />

an increase in their fruit<br />

and vegetable consumption.<br />

Over one-third of child participants<br />

showed a decreased<br />

Body Mass Index, the metric<br />

used for measuring obesity,<br />

since enrolling in the program.<br />

Sustainability policy<br />

ramping up<br />

Zespri also used the Momentum<br />

conference to announce its<br />

sustainability policy for heading<br />

towards 2025, by which<br />

time all products used for packaging<br />

would be reusable, recyclable<br />

or compostable.<br />

It has committed to reduce<br />

its packaging footprint by 25<br />

percent per kg of fruit produced<br />

by 2030, building on a<br />

track record of consistent packaging<br />

improvements.<br />

Burns said PMA had identified<br />

consumer concerns over<br />

environmental footprint, and<br />

plastic waste in particular was<br />

a key area influencing consumption<br />

decisions.<br />

In the US, 72 percent of<br />

We are the original<br />

plant-based food [as<br />

produce growers],<br />

and someone else is<br />

going out and talking<br />

our story.”<br />

– Cathy Burns<br />

consumers expected grocery<br />

chains to have a sustainability<br />

policy, and 62 percent expected<br />

the same from their<br />

restaurants.<br />

But recent research out of<br />

Holland had also highlighted<br />

how much of an issue food<br />

waste was. Researchers now<br />

maintain food waste may actually<br />

be almost double the<br />

1.3 billion tonnes a year estimated<br />

by the United Nations at<br />

present.<br />

Zespri chief innovation and<br />

sustainability officer Carol<br />

Ward said the packaging announcements<br />

were based on<br />

the company’s belief in respecting<br />

and enhancing the<br />

natural environment, optimising<br />

natural resources and fostering<br />

health and wellbeing.<br />

Zespri already had 95 percent<br />

of its packaging used<br />

to transport our kiwifruit to<br />

market as cardboard, but realised<br />

there was more to do,<br />

she said. “Today’s consumers<br />

care about what their food is<br />

wrapped in, want to know more<br />

about where it comes from and<br />

are seeking reassurance that<br />

it’s been grown in a way that<br />

enhances the environment and<br />

supports livelihoods.”<br />

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SPECIAL FOCUS<br />

<strong>March</strong> <strong>2020</strong> <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> 13<br />

Zespri boost to<br />

Chinese trademark<br />

protection<br />

As Zespri works to identify plots of illegally grown kiwifruit in China,<br />

it has also just received welcome key trademark protection status<br />

against copyright infringements in mainland China.<br />

By RICHARD RENNIE<br />

The trademark protection<br />

will deliver a boost to<br />

Zespri’s in-market protection<br />

through significantly<br />

stronger legal and administrative<br />

powers open to it for pursuing<br />

breaches of its intellectual<br />

property.<br />

Zespri now shares this reinforced<br />

protection with such<br />

high profile companies as Disney<br />

and Ferrero Rocher, and<br />

is the first New Zealand company<br />

to be offered it.<br />

Zespri’s general manager<br />

for greater China, Michael<br />

Jiang, said there was significant<br />

kudos for the company to<br />

be awarded such protection. It<br />

was a conscious acknowledgement<br />

of the high profile it held<br />

as a foreign brand in China, he<br />

added.<br />

To be circulated<br />

throughout China<br />

The protection has been issued<br />

by the Shanghai government,<br />

but it is being circulated<br />

throughout China to other<br />

provinces, ensuring it receives<br />

national priority for brand<br />

protection.<br />

Jiang said having the<br />

boosted protection meant<br />

Zespri will be able to act on<br />

companies using the brand for<br />

products other than just fresh<br />

fruit, something it was unable<br />

to do before.<br />

Meanwhile, here in New<br />

The recognition<br />

also reflects the<br />

challenges Zespri<br />

is facing with<br />

counterfeiting in<br />

China, including with<br />

the unauthorised<br />

growing of our<br />

Zespri SunGold<br />

kiwifruit variety<br />

there.”<br />

– Michael Jiang<br />

Fake “Zespri” lookalikes could be a less of a problem, following<br />

Chinese support in curbing counterfeits. Photo/Supplied.<br />

Zealand, Zespri has been<br />

awarded $15 million in damages<br />

in a civil court case<br />

against an individual who<br />

allegedly sent SunGold G3<br />

plants to China. (see accompanying<br />

story)<br />

The trademark protection<br />

afforded Zespri, marks moves<br />

by Chinese authorities to<br />

clamp down on the notoriously<br />

high level of counterfeiting<br />

that has blighted most aspects<br />

of Chinese commerce in the<br />

past.<br />

New trademark protection<br />

laws came into effect from 1<br />

November last year, with the<br />

maximum penalty doubled to<br />

just over US$700,000.<br />

Two years ago, the sale of<br />

more than a million pieces of<br />

fake Dole, Zespri and Sunkist<br />

labels resulted in a company’s<br />

directors and staff being sentenced,<br />

including a two-year<br />

jail term.<br />

Over 100 trays of fake<br />

Zespri fruit were also intercepted<br />

by government officials<br />

in the Xiamen province.<br />

Food fraud is becoming an<br />

increasing focus for Chinese<br />

authorities, with a 40 percent<br />

increase in the number<br />

of food-related cases heard<br />

by Shanghai courts between<br />

2015-17.<br />

Zespri staff have fought an<br />

ongoing battle with companies<br />

duplicating company logos<br />

and packaging, often with only<br />

minor detectable variances<br />

from legal versions.<br />

“The recognition also reflects<br />

the challenges Zespri<br />

is facing with counterfeiting<br />

in China, including with the<br />

unauthorised growing of our<br />

Zespri SunGold kiwifruit variety<br />

there,” said Jiang. “And<br />

is another demonstration of the<br />

support we have received from<br />

Chinese authorities.”<br />

Zespri welcomes successful defence of IP rights<br />

By DAVID PORTER<br />

Zespri has welcomed the successful<br />

result of legal action<br />

taken against a forrmer kiwifruit<br />

grower who took Zespri’s<br />

protected plant material to China,<br />

where it has continued to spread.<br />

The court awarded Zespri almost<br />

$15 million in damages. Zespri will<br />

now consider its options in China in<br />

relation to Gao and his associates,<br />

as well as seek to collect the damages<br />

awarded.<br />

The civil action was launched<br />

in 2018 against kiwifruit grower<br />

Haoyu Gao, his wife Xia Xue and<br />

their company Smiling Face Limited,<br />

after Zespri discovered that<br />

two of Zespri’s protected kiwifruit<br />

varieties had been taken from New<br />

Zealand to China and propagated<br />

by Gao and his associates.<br />

Efforts by Zespri to work with<br />

Chinese authorities to identify and<br />

prosecute owners of the illegally<br />

grown fruit make it the first fruit<br />

company to dispute such an instance<br />

on Chinese soil.<br />

The Court found that Gao had<br />

fraudulently offered to sell Zespri’s<br />

varieties as well as the right to licence<br />

them to parties in China – a<br />

right exclusively retained by Zespri.<br />

It had also facilitated the planting<br />

of Zespri’s varieties on Chinese orchards<br />

and breached his contractual<br />

obligation to notify Zespri of any<br />

infringement that they were aware<br />

of.<br />

Important decision for<br />

growers<br />

Zespri’s chief grower and alliances<br />

officer Dave Courtney said it was<br />

an important decision for New Zealand’s<br />

kiwifruit growers, as well as<br />

for other New Zealand horticultural<br />

businesses. It gave them the confidence<br />

that if they continued to invest<br />

in research and development<br />

to create value for New Zealand,<br />

they would have protections against<br />

New refreshed branding for<br />

Zespri. Photo/Supplied.<br />

those who seek to undermine that,<br />

he said.<br />

“Gao’s actions, along with those<br />

of his associates, put at risk the<br />

livelihoods of New Zealand’s 2,800<br />

growers, directly contributing to<br />

the unauthorised spread of Zespri’s<br />

SunGold Kiwifruit in China which<br />

has the potential to cost New Zealand<br />

communities significantly.<br />

“Zespri has been investigating<br />

the spread of unauthorised plantings<br />

of its varieties in China and has<br />

identified parties associated with<br />

Gao, as well as others who were<br />

involved in the establishment of<br />

SunGold in China and who knowingly<br />

misled Chinese investors and<br />

growers to plant Zespri’s varieties<br />

without authorisation.”<br />

Courtney said the Chinese Government<br />

had strong Plant Variety<br />

Right (PVR) legislation, which it<br />

is in the process of strengthening<br />

further, alongside enforcement<br />

provisions.<br />

Encouraging development<br />

“We’re very encouraged by that, as<br />

well as by China’s broader commitment<br />

and efforts to clamp down on<br />

other types of intellectual property<br />

infringement in China and we hope<br />

to work alongside Chinese officials<br />

to strengthen the protections of investors<br />

and IP holders further. “<br />

“New Zealand and China are<br />

both in the process of bringing their<br />

PVR legislation into line with the<br />

latest UPOV [International Union<br />

for the Protection of New Varieties<br />

of Plants] standards. This decision<br />

is a clear recognition of the importance<br />

of governments continuing<br />

to progress multi-lateral protection<br />

mechanisms for innovation and intangible<br />

assets.”<br />

Courtney said investment in new<br />

plant varieties was becoming an increasingly<br />

important way of creating<br />

value around the world and the<br />

sector needed to protect intellectual<br />

property rights to encourage that investment<br />

and to feed the world.<br />

“Zespri is talking to other plant<br />

variety rights owners in New Zealand<br />

and around the world about<br />

how we can work together to protect<br />

those rights for the benefit of growers<br />

and consumers who receive the<br />

benefit of the extensive quality and<br />

food safety innovation and practices<br />

that plant variety owners place<br />

around their protected varieties.”<br />

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14 <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> <strong>March</strong> <strong>2020</strong><br />

SPECIAL FOCUS<br />

New sustainability<br />

commitments<br />

Medal awarded to<br />

Ian Greaves<br />

Zespri has announced a new commitment to make all of its<br />

packaging 100% reusable, recyclable or compostable by 2025.<br />

By DAVID PORTER<br />

The announcement is one<br />

of a suite of sustainability<br />

commitments<br />

shared recently with growers,<br />

consumers and suppliers at<br />

the New Zealand kiwifruit industry’s<br />

marquee conference<br />

– Momentum <strong>2020</strong>: Standing<br />

Up and Standing Out.<br />

Zespri also revealed commitments<br />

that by 2025, any<br />

plastic packaging will be<br />

made from at least 30 percent<br />

recycled plastic, and<br />

that it will reduce its packaging<br />

footprint by 25 percent<br />

per kg of fruit produced by<br />

2030, building on a track record<br />

of consistent packaging<br />

improvements.<br />

Chief Innovation and<br />

Sustainability Officer Carol<br />

Ward says the packaging announcements<br />

are based on the<br />

company’s belief in respecting<br />

and enhancing our natural<br />

environment, optimising natural<br />

resources and fostering<br />

health and wellbeing.<br />

“While we are already one<br />

of the lowest impact foods<br />

produced, we can do even<br />

better,” she said.<br />

“Today’s consumers<br />

care about what their food<br />

is wrapped in, want to know<br />

more about where it comes<br />

from and are seeking reassurance<br />

that it’s been grown<br />

in a way that enhances the<br />

environment and supports<br />

livelihoods.<br />

Zespri already had 95 percent<br />

of its packaging used<br />

to transport our kiwifruit to<br />

market as cardboard, but realise<br />

there was more to do,<br />

she said.<br />

New Plastic Economy<br />

commitment<br />

The announcements follow<br />

Zespri joining some of the<br />

world’s biggest brands in<br />

2019 to sign up to the Ellen<br />

MacArthur Foundation’s<br />

New Plastics Economy<br />

Global Commitment and<br />

working with its industry<br />

partners to create a circular<br />

economy for plastics.<br />

Ward said a dedicated<br />

work programme focusing<br />

on sustainable packaging<br />

had been established to<br />

build on actions already<br />

undertaken by Zespri, including<br />

reducing the weight<br />

of liners used in cardboard<br />

transport packs, trialling fibre-based<br />

solutions for pocket-packs,<br />

implementing improved<br />

recycling options, and<br />

eliminating all unnecessary<br />

packaging.<br />

Ward said this was a<br />

time of great opportunity for<br />

Zespri, and the commitments<br />

were designed to enable the<br />

industry to succeed in the<br />

right way, helping to both lift<br />

people up and take better care<br />

of our environment.<br />

“We’re confident these<br />

commitments reflect what<br />

matters most to our customers<br />

and industry partners, and<br />

will allow us to deliver better<br />

value to our consumers.”<br />

Other Zespri sustainability commitments<br />

• Carbon positive by 2035<br />

• Zespri will disclose its climate risks and opportunities<br />

by August 2021 and develop an industry-wide climate<br />

change adaptation plan by December 2022<br />

• By 2025, the industry will more effectively monitor nutrient<br />

inputs and losses as well as its impact on water.<br />

The kiwifruit industry’s Fresh Carriers Hayward<br />

Medal recognising outstanding contributions<br />

has this year been awarded to Ian Greaves,<br />

for the life-saving pastoral care he provided<br />

the industry during the Psa outbreak.<br />

Kiwifruit Industry Advisory<br />

Committee chair<br />

and Zespri director Tony<br />

Hawken presented the medal<br />

to Greaves at the industry’s<br />

Momentum <strong>2020</strong> conference<br />

dinner, recognising the efforts<br />

he put in to caring for the<br />

health and wellbeing of growers<br />

during the Psa outbreak<br />

through his Grower Support<br />

Network.<br />

“The judging panel unanimously<br />

awarded Ian this<br />

year’s Fresh Carriers Hayward<br />

Medal,” said Hawken.<br />

“The outbreak of Psa was<br />

truly distressing for our kiwifruit<br />

growers and the wider industry,<br />

and an event that would<br />

forever change the trajectory<br />

of our industry, putting those<br />

involved in the industry at the<br />

time under real pressure.<br />

“However, as a grower himself<br />

during the outbreak, Ian<br />

stood up to advocate for mental<br />

health awareness and suicide<br />

prevention within the kiwifruit<br />

industry. He established a<br />

support system that previously<br />

didn’t exist, and which ultimately<br />

saved lives.”<br />

Hawken said Greaves<br />

clearly met the judging panel’s<br />

criteria, which assessed<br />

the nominee’s length of service,<br />

the benefits from their<br />

contributions, their leadership<br />

within the industry, their selflessness<br />

and the legacy they<br />

had created.<br />

During the Psa outbreak,<br />

Greaves brought together a<br />

team of volunteers and created<br />

a pastoral care plan which<br />

provided a variety of services<br />

to support growers. Under<br />

his Grower Support Network<br />

which launched early in the Psa<br />

outbreak, he helped arrange industry-wide<br />

seminars, counselling,<br />

grower discussion groups<br />

and other support avenues in<br />

growing regions across New<br />

Zealand.<br />

These services not only<br />

empowered growers to ask for<br />

help but supported the collaboration<br />

of the wider industry<br />

during a stressful and unprecedented<br />

situation.<br />

His work is now used as an<br />

example for other rural industries,<br />

and Greaves was the recipient<br />

of the Kiwibank Local<br />

Hero Award in 2013 and also<br />

awarded the inaugural HortNZ<br />

Hayward Media winner Ian<br />

Greaves. Photo/ Dscribe<br />

Media Jamie Troughton.<br />

President’s Award in 2015 for<br />

his life-saving pastoral support.<br />

“The Hayward Medal was<br />

established in 2012 to honour<br />

the dedication, knowledge, excellence<br />

and passion of the kiwifruit<br />

industry’s world-class<br />

leaders, and Ian has truly been<br />

a leader in our kiwifruit industry,”<br />

said Hawken<br />

“Ian showed true leadership<br />

and selflessness during the Psa<br />

outbreak,” said Hawken.<br />

“Our wellbeing is so important,<br />

but often in times,<br />

rarely considered or talked<br />

about. Ian understood the anguish<br />

our people were feeling,<br />

and he was motivated to step<br />

up, even though he was an affected<br />

grower too.”<br />

Hawken noted Greaves’<br />

compassion extended outside<br />

of kiwifruit and included funding<br />

and establishing micro-enterprises<br />

in India that employ<br />

people out of poverty, and acting<br />

as chairman and trustee of<br />

The Life Foundation.<br />

Congratulating Zespri for another successful<br />

Momentum conference and the opening of<br />

their new global head office.<br />

www.dms4kiwi.co.nz Ph 07 578 9107<br />

Photo/Sam Hartnett<br />

Rider Levett Bucknall is proud to have<br />

provided Quantity Surveying services on<br />

Zespri’s new<br />

Mount Maunganui<br />

head office<br />

The development, which embraces sustainable design<br />

principles, will provide Zespri an excellent base for growth<br />

and also a place for the wider public to enjoy and learn<br />

about the Kiwifruit industry.<br />

A thousand<br />

little<br />

decisions<br />

create big<br />

wins.<br />

RLB.COM Tauranga 07 579 5873


<strong>March</strong> <strong>2020</strong> <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> 15<br />

Hort sector finds funding tight<br />

The dairy sector is not alone in struggling for bank finance,<br />

with the horticultural sector also finding funding tougher to<br />

come by since the New Year.<br />

Mike Chapman, chief<br />

executive of Horticulture<br />

New Zealand,<br />

said he is hearing anecdotally<br />

from growers in every sector<br />

of horticulture – including kiwifruit<br />

– that banks are proving<br />

tight fisted over funding<br />

options for the sector.<br />

“Banks demand security<br />

and they have increased the<br />

security that they demand to<br />

reduce their risk,” he told Bay<br />

of Plenty Business News.<br />

“As a result, the opportunity<br />

for the rural sector to expand<br />

has been reduced. This<br />

situation is for new loans, as<br />

well as for the renewal of existing<br />

loans.”<br />

Chapman said the funding<br />

limitations also come off the<br />

back of the new Reserve Bank<br />

capital requirements coming<br />

into play.<br />

“It also seems that if you<br />

are going to plant a forest,<br />

there is plenty of support there,<br />

but that is very much a one<br />

trick pony policy,” he said.<br />

All funding aspects<br />

getting tighter<br />

Chapman noted all aspects of<br />

financing for orchardists have<br />

got tighter, whether for seasonal<br />

financing or for orchard<br />

projects.<br />

“It may not be a silly idea<br />

to have a conversation with<br />

banks about the fact the sector<br />

is very positive, and there is<br />

plenty of opportunity there to<br />

do more with it.”<br />

In the Ministry for Primary<br />

Industries Situation and<br />

Outlook for Primary Industries<br />

Report, released prior to<br />

Christmas, apple exports were<br />

expected to be up 7.2 percent<br />

to almost 1 billion dollars this<br />

year, kiwifruit to be up 8.6 percent<br />

and approaching $2.5 billion,<br />

and wine up 1.8 percent<br />

to $1.8 billion.<br />

Chapman said there was a<br />

sense in the horticultural sector<br />

that growers were being<br />

treated like their more indebted<br />

dairy farming colleagues when<br />

it came to securing finance.<br />

The dairy sector accounts<br />

for two thirds of the $61 billion<br />

agricultural debt market, compared<br />

to less than 10 percent<br />

for horticulture.<br />

Debt per dollar of exports<br />

equates to $2.79 for dairying,<br />

compared to only 68c for<br />

horticulture.<br />

Dairy debt averages $2.9<br />

million per dairy farm business,<br />

compared to $523,000<br />

per horticultural business.<br />

Kiwi demand still strong<br />

MyFarm investment syndication<br />

company received an unprecedented<br />

40 enquiries for<br />

its latest kiwifruit orchard syndication<br />

project, located near<br />

Edgecumbe.<br />

Con Williams, MyFarm<br />

head of investment research,<br />

said the level of enquiry was<br />

unprecedented, and indicated<br />

there was a strong appetite<br />

among investors to put funds<br />

into a promising sector.<br />

He said it was an unusual<br />

point in time in the sector,<br />

when predictions were positive<br />

across almost all crop types<br />

for strong market returns, but<br />

money was hard to get.<br />

“It would not be as hard<br />

to raise the funds as it is in<br />

dairying right now, but it is<br />

definitely harder than it should<br />

be.”<br />

Williams said funding for<br />

new green field projects was<br />

particularly hard to come by,<br />

with banks spooked by the delays<br />

in cash flow new projects<br />

inevitably involve.<br />

He agreed restrictions<br />

around foreign land ownership<br />

in New Zealand were only further<br />

constricting the availability<br />

of capital here.<br />

It is only possible for foreigners<br />

to purchase up to 24.9<br />

percent of farm or orchard land<br />

greater than 5ha by gaining<br />

regulatory approval.<br />

Investors getting more<br />

innovative<br />

Banks demand<br />

security and they have<br />

increased the security<br />

that they demand to<br />

reduce their risk.” –<br />

Mike Chapman<br />

Hort NZ CEO Mike Chapman: All funding aspects for<br />

orchardists have got tighter. Photo/Supplied.<br />

Syndication or private purchases<br />

were often becoming<br />

the main vehicle for orchard<br />

purchases, outside of iwi deals,<br />

and investors were having to<br />

get more innovative about how<br />

they structured deals.<br />

MyFarm’s latest syndication<br />

incorporates lease income<br />

and orchard profit.<br />

Williams said leasing was a<br />

common income stream for kiwifruit<br />

and viticultural operations.<br />

His company was trying<br />

to take more of a commercial<br />

property approach to earning<br />

streams from orchard operations,<br />

something that worked<br />

better for some operations than<br />

others.<br />

He said shortages in root<br />

stock plants for establishing<br />

apples and cherries can push<br />

development times and costs<br />

out further in new developments,<br />

making bankers less<br />

likely to lend on those longer<br />

time frames.<br />

The Veros project<br />

management team is<br />

delivering landmark<br />

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Our extensive range of project<br />

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• Consultant Procurement<br />

• Design Management<br />

• Local Authority & Consent Management<br />

• Main Contractor Procurement<br />

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16 <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> <strong>March</strong> <strong>2020</strong><br />

Production for export<br />

While there’s unprecedented demand around the country for<br />

industrial property from logistics, warehousing and distribution<br />

companies, there’s also increasing need for industrial space to<br />

cater to food and beverage processing, and the production of<br />

complementary medicines, cosmeceuticals and nutraceuticals.<br />

According to Plant &<br />

Food Research, a<br />

New Zealand government-owned<br />

Crown Research<br />

Institute, the international food<br />

and beverage industry is growing<br />

at around five percent a<br />

year and global expenditure on<br />

food products by consumers is<br />

expected to reach US$20 trillion<br />

by 2030.<br />

It says key trends for new<br />

product development are in<br />

health, convenience, naturality<br />

and sustainability with the intrinsic<br />

“health halo” of natural<br />

produce meaning products derived<br />

from fruits and vegetables<br />

are highly sought-after in<br />

the global marketplace.<br />

Manuka honey led the way,<br />

but “functional foods” – that<br />

is, foods that offer benefits beyond<br />

basic nutrition – is one of<br />

the fastest growing segments<br />

of the global food industry and<br />

it’s taking off in New Zealand.<br />

There’s a lot of talk about<br />

mussel derivatives to help<br />

combat inflammation, cherry<br />

concentrates deemed to assist<br />

with sleep, probiotics said to<br />

improve gut health, trending<br />

superfoods like blackcurrants<br />

said to aid exercise recovery<br />

and post-exercise immune<br />

function, along with extracts<br />

from seaweed, kelp – even native<br />

tree ferns with health-giving<br />

claims.<br />

New Zealand is also jumping<br />

on the “nootropics” train.<br />

These are plant-based supplements,<br />

and other substances<br />

that may improve cognitive<br />

function, particularly executive<br />

functions, memory, creativity,<br />

or motivation, in healthy<br />

individuals.<br />

And then there’s plant-derived<br />

protein products which<br />

are starting to make waves.<br />

Agri-food exports<br />

expected to grow<br />

Plant & Food Research says<br />

the broad category of agri-food<br />

exports from New Zealand are<br />

predicted to treble by 2025, to<br />

around NZ$58 billion. This is<br />

primarily due to the production<br />

of new high-value food and<br />

beverage products, combined<br />

with value chains that enhance<br />

the delivery of New Zealand<br />

products to its premium<br />

customers.<br />

An example of a business<br />

with a consolidated presence<br />

within an industrial estate, is<br />

Hamilton-based dairy biotech<br />

company Quantec which operates<br />

from the Waikato Innovation<br />

Park.<br />

Quantec has received multiple<br />

awards, including the<br />

Cawthron Institute Innovation<br />

Award, for its specialist approach<br />

to extracting high-value<br />

bioactives from natural ingredients<br />

which are then developed<br />

into proprietary<br />

ingredient formulations<br />

for use in human and animal<br />

products.<br />

One of Quantec’s main<br />

business growth areas is within<br />

the gut health and immune<br />

health sector in China. Quantec<br />

is combining omega-3 oil<br />

with an aqueous milk protein<br />

powder to produce a high-end<br />

innovative nutraceutical product<br />

to be marketed to the mother-baby<br />

supplement market.<br />

Natural Health Products<br />

NZ, a national industry organisation<br />

representing the natural<br />

products, functional foods,<br />

complementary medicines,<br />

cosmeceuticals, and nutraceuticals<br />

industries, says New<br />

Zealand’s natural products industry<br />

is worth NZ$1.4 billion<br />

annually and growing. Major<br />

markets are already established<br />

in Asia and North America,<br />

and there’s a developing presence<br />

in Europe.<br />

A report released by research<br />

and consulting group<br />

Coriolis in conjunction with<br />

the Ministry for Business, Innovation<br />

and Enterprise, The<br />

Investor’s Guide to the New<br />

Zealand Processed Food Industry<br />

2017, says New Zealand<br />

has robust credentials to attract<br />

new investment in food-related<br />

industries and the potential to<br />

drive strong export growth.<br />

It says as a country, we have<br />

significant untapped potential<br />

to generate more product, to<br />

add value to large volume of<br />

raw material ingredients which<br />

at present are exported as unprocessed<br />

commodities, and<br />

to bring a distinct and unique<br />

edge to the sector.<br />

This signals that there will<br />

be increasing demand for industrial<br />

space to accommodate<br />

this growing sector and<br />

it is likely that location will be<br />

pinned to areas with good distribution<br />

links for export.<br />

www.bayleys.co.nz/workplace/industrial/insights/<br />

production-for-export<br />

At Bayleys, we believe relationships are what businesses are built on and how they<br />

succeed. We understand that to maximise the return on your property you need:<br />

Professional property management<br />

A business partner that understands your views and goals<br />

Contact the Bayleys Tauranga Commercial Property Management team today.<br />

Bayleys Tauranga<br />

Commercial Property Management<br />

07 579 0609<br />

jan.cooney@bayleystauranga.co.nz<br />

SUCCESS REALTY LTD, <strong>BAY</strong>LEYS, LICENSED UNDER THE REA ACT 2008<br />

ALTOGETHER BETTER<br />

Residential / Commercial / Rural / Property Services


<strong>March</strong> <strong>2020</strong> <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> 17<br />

Prepare your<br />

business for<br />

the minimum<br />

wage increase<br />

The Government has announced that from 1 April <strong>2020</strong>, the<br />

minimum wage is going to increase from $17.70 to $18.90 per<br />

hour. This is an increase of 7.27 percent or $1.20 per hour. It<br />

will mean an extra $48 per week before tax for employees on<br />

minimum wage working a 40-hour week.<br />

MONEY MATTERS<br />

> BY STEPHEN GRAHAM<br />

Stephen Graham is a Director and Managing Partner at BDO<br />

Rotorua, Chartered Accountants and Advisers. To find out more<br />

visit bdorotorua.co.nz or email rotorua@bdo.co.nz<br />

The training/starting out<br />

wage also sees an increase<br />

from the current<br />

rate of $14.16 to $15.12 per<br />

hour on the same date. The<br />

training/starting out wage rate<br />

is set at 80 percent of the adult<br />

minimum wage rate.<br />

The Government has indicated<br />

a likely further increase<br />

to lift the minimum wage to<br />

$20 per hour in 2021. So, what<br />

can you do to prepare your<br />

business for this change? Here<br />

are some practical tips to help.<br />

Update your payroll<br />

system<br />

Most payroll systems should<br />

either automatically update or<br />

provide you with instructions<br />

on how to adjust settings to<br />

manage the increase from 1<br />

April. We recommend that you<br />

confirm well in advance if any<br />

action is required to ensure<br />

compliance.<br />

Consider moving to a<br />

cloud system<br />

If you are currently using a<br />

manual or desktop payroll system,<br />

it is timely to consider the<br />

benefits of moving to a cloudbased<br />

solution. There are many<br />

options available to suit the<br />

needs of your business.<br />

Cloud-based means you<br />

can access payroll from anywhere<br />

with an internet connection,<br />

ensures that you are always<br />

using the most up to date<br />

version of the software, and<br />

means you are not reliant on<br />

in-house backup procedures.<br />

You may also be able to link<br />

with time sheeting and finance<br />

systems to reduce the opportunity<br />

for data input error.<br />

Prepare an annual<br />

budget<br />

Understanding the financial<br />

impact of the increase is vital<br />

so you can plan and make adjustments<br />

as necessary. Preparing<br />

an annual budget on a<br />

month by month basis with the<br />

help of your accountant will<br />

highlight the effect of the increase<br />

both on wage cost and<br />

holiday pay liability.<br />

Using tools such as Spotlight<br />

or Futrli can help you<br />

visualise the impact in a user-friendly<br />

format.<br />

Review other employees’<br />

wages<br />

The minimum wage increase<br />

is likely to have a bearing on<br />

Preparing an annual budget on a month by<br />

month basis with the help of your accountant<br />

will highlight the effect of the increase both<br />

on wage cost and holiday pay liability.<br />

wage expectations from those<br />

employees who are currently<br />

receiving more than minimum<br />

wage because of their skills/<br />

loyalty.<br />

You may wish to consider<br />

whether to maintain wage<br />

parity across your employees<br />

by offering increases to those<br />

above the current minimum<br />

wage.<br />

As this increase is not required<br />

by law (provided they<br />

are already on or above $18.90<br />

per hour), you could stagger<br />

these.<br />

There may also be other<br />

non-financial benefits, such<br />

as flexitime or training, that<br />

you could offer to those more<br />

skilled employees in order<br />

to keep them motivated and<br />

engaged.<br />

Review your pricing<br />

strategy<br />

All other things being equal,<br />

the cost of operating your business<br />

will increase on 1 April<br />

<strong>2020</strong>. Just as you would look<br />

at your options if any other<br />

supplier passed on increased<br />

costs, the increased wage cost<br />

should prompt a review of<br />

your current customer pricing,<br />

if this has not been carried out<br />

recently.<br />

Is your market such that<br />

you could raise prices across<br />

the board incrementally? Or<br />

should you focus on increasing<br />

selected product/service pricing<br />

only? Other ways to look<br />

at pricing include reviewing<br />

discounts offered and how you<br />

bundle goods/services.<br />

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18 <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> <strong>March</strong> <strong>2020</strong><br />

CONNECTING<br />

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Photos from the Tauranga Chamber of Commerce’s BA5 networking event hosted by<br />

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<strong>March</strong> <strong>2020</strong> <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> 19<br />

All category winners from last year’s Bay of Plenty Export Awards: (from left) Dan Meade and Hemi Coates, Manaaki Adventures;<br />

Brian Smith, Automation & Electronics NZ; Murray Denyer, Cooney Lees Morgan; Ruby Grant, Heilala Vanilla, and Greg Jarvis, Bluelab.<br />

Bay Export awards open<br />

for nominations<br />

Entries are now open for this year’s Bay of Plenty ExportNZ Awards <strong>2020</strong>,<br />

sponsored by Zespri International, in early <strong>March</strong>, says ExportNZ Bay of<br />

Plenty executive officer Joanna Hall.<br />

The organisers of the<br />

Bay of Plenty ExportNZ<br />

Awards are<br />

encouraging local businesses<br />

to nominate companies and<br />

people in their networks<br />

that deserve showcasing for<br />

their contribution to the export<br />

sector for what will be<br />

the 30th anniversary of the<br />

awards, to be held on 19<br />

June.<br />

“We welcome exporting<br />

companies who’d like to get<br />

recognition for their hard<br />

work, objective feedback<br />

from experienced judges,<br />

and boost their staff morale<br />

to enter the <strong>2020</strong> awards,”<br />

said Hall.<br />

The theme for this year’s<br />

awards will be announced in<br />

early <strong>March</strong> and Hall said<br />

the event was sure to be ‘out<br />

of this world”, said Hall.<br />

Entries close Friday, 8<br />

May, 5pm so ExportNZ<br />

BOP is encouraging early<br />

nominations.<br />

For further information,<br />

please contact Joanna Hall at<br />

joanna@exportnz.org.nz<br />

THE CATEGORIES THIS YEAR ARE:<br />

• Best Emerging<br />

Business – sponsored by<br />

You Travel<br />

Recognising success for exporting<br />

businesses with up to<br />

five years’ history of international<br />

operations with growth.<br />

• Excellence in<br />

Innovation – sponsored<br />

by Page Macrae<br />

Engineering<br />

Recognising success in developing<br />

and commercialising innovation<br />

in international markets,<br />

incorporating intellectual<br />

property, strategy, processes,<br />

and monitoring.<br />

• Best Medium-Large<br />

Business – sponsored by<br />

Sharp Tudhope Lawyers<br />

Recognising success for exporting<br />

businesses with total<br />

annual revenue over $5<br />

million.<br />

• Export Achievement –<br />

sponsored by Beca<br />

Recognising a particular individual<br />

within a business who<br />

has made a material contribution<br />

to their export success<br />

through processes, products or<br />

technologies, team dynamics,<br />

ultimately resulting in export<br />

growth and profitability.<br />

New co-working space at The Lakes aims<br />

to support contemporary working styles<br />

A drive to support small businesses<br />

in the local community has resulted in<br />

the opening this month of Bloom Co,<br />

Tauranga’s newest concept in shared<br />

work, meeting and event space.<br />

Founders Jade Maddox<br />

and Sheree Merrick said<br />

that Bloom Co provided<br />

a workplace home. In fact, it is<br />

located in a former show home<br />

in The Lakes.<br />

The Bay had become a real<br />

magnet for entrepreneurs doing<br />

wonderful things, but many<br />

were also feeling the limitations<br />

and isolation of their<br />

working space, they said.<br />

Bloom Co is a space to support<br />

them, a place where they<br />

can thrive individually and in<br />

the company of others, and an<br />

alternative to more traditional<br />

leased offices, they added.<br />

“Bloom Co draws inspiration<br />

from the need for connection<br />

and collaboration amongst<br />

independent businesses,” said<br />

Jade Maddox. “It also fills a<br />

local need for small, beautiful<br />

spaces for events, workshops<br />

and classes.”<br />

Bloom Co provides options<br />

for full time, part time or casual<br />

office and meeting space, with<br />

all the expected professional<br />

resources included.<br />

From glass whiteboards and<br />

ultra-fast internet to ergonomic<br />

chairs and standing desks,<br />

Bloom Co is fitted out to high<br />

standards, but it looks less like<br />

an office and more like a beautifully<br />

crafted day spa, according<br />

to Maddox.<br />

Ideal for different<br />

businesses<br />

The founders said the space is<br />

ideal for different businesses,<br />

community groups, and ventures<br />

to coexist and gain the<br />

benefits of collaboration. The<br />

workspaces range from individual<br />

rooms or offices<br />

through to open plan co-working<br />

spaces.<br />

The larger break-out spaces<br />

are ideal for groups, catering<br />

for more than 30 people for<br />

meetings, seminars or community<br />

events.<br />

“What makes Bloom Co<br />

unique is the unexpected – a<br />

zen garden surrounded by<br />

bamboo and a waterfall, indoor<br />

plants, essential oil diffusers,<br />

Bloom Co co-founder Jade Maddox: offering a new<br />

approach to the co-working environment. Photo/Supplied<br />

contemporary art and comfy<br />

chairs to sink into,” she said.<br />

Bloom Co’s location in The<br />

Lakes, a community-focused<br />

suburb, was a deliberate move,<br />

said Maddox, in order to offer<br />

an environment that reflected<br />

the more serene, laid-back vibe<br />

of the region.<br />

“The feel of this suburb,<br />

designed with the community<br />

in mind, completely fits our<br />

ethos. We are away from the<br />

hustle and bustle of the city,<br />

surrounded by homes, cafes,<br />

small businesses, and a whole<br />

lot of greenery.”<br />

Jade Maddox said that<br />

Bloom Co is committed to<br />

making a positive difference<br />

in the community, supporting,<br />

mentoring and collaborating.<br />

“Supporting local charities<br />

is also an important part of<br />

our culture,” she said. “When<br />

a new member joins, we plant<br />

a tree locally through Trees<br />

That Count, and have already<br />

funded the planting of over 100<br />

trees.”<br />

Bloom Co will be at the<br />

Smarter Business Event on 18<br />

<strong>March</strong>, and can be contacted<br />

directly at: hello@BloomCo.<br />

nz, or Jade Maddox on 021<br />

0616961.


20 <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> <strong>March</strong> <strong>2020</strong><br />

Beware of ‘bad credit’ loans<br />

CREDIT MANAGEMENT<br />

> BY NICK KERR<br />

Nick Kerr is Area Manager BOP for EC Credit Control NZ Ltd.<br />

He is also a director of International Private Investigations Ltd.<br />

Nick can be reached at nick.kerr@eccreditcontrol.co.nz<br />

In the responsible lending code (June 2017) it is suggested that one<br />

role of a responsible lender is to “assess whether a borrower will<br />

make repayments without substantial hardship, the lender should<br />

conduct more detailed inquiries for products or borrowers where the<br />

consequences of default are serious or there is a greater risk of default”.<br />

Unfortunately this seems<br />

to be at odds with a<br />

great deal of the lender<br />

behaviour displayed by information<br />

that is in the market as<br />

of writing this article.<br />

Just this evening while<br />

scrolling through Facebook’s<br />

marketplace looking at cars<br />

that my wife will never let me<br />

buy, I have seen three posts advertising<br />

“quick and easy” auto<br />

loans specifically encouraging<br />

“beneficiaries with bad credit”<br />

to apply for loans – and that<br />

was over a 30 minute period.<br />

In the past I would have<br />

thought that these “Bad<br />

Credit” loans would be for<br />

small amounts. And surely<br />

they would not have been for<br />

people with really bad credit,<br />

ie outstanding debts. But after<br />

being involved in more than<br />

300 repossessions, hundreds of<br />

investigations and consulting<br />

to numerous financial institutions,<br />

the things I have seen<br />

have proven that assumption is<br />

untrue.<br />

I have seen $10,000-plus<br />

loans given to applicants with<br />

no job, numerous outstanding<br />

loans and in several cases court<br />

judgments for fraud involving<br />

accessing credit. When I say<br />

bad credit, I am talking about<br />

credit scores of 180 out of<br />

1000. To put that in perspective,<br />

such a rating gives an<br />

approximate 18 percent likelihood<br />

of the applicant paying<br />

the debt based on their fiveyear<br />

credit history.<br />

Now I know that this looks<br />

bad from the lender’s perspective.<br />

But it can be just as bad or<br />

worse from the borrower’s perspective<br />

and can lead to severe<br />

hardship.<br />

You are considered insolvent<br />

when you are unable to<br />

pay your debts when they fall<br />

due. The very fact that applicants<br />

have unpaid debts when<br />

they are granted additional<br />

credit means, in my opinion,<br />

that a current insolvency is<br />

being made worse and the<br />

chances of the applicant becoming<br />

debt free is once again<br />

reduced.<br />

Although many reputable<br />

lending institutions have software<br />

and strict processes for<br />

determining affordability ratios,<br />

there are quite a few lenders<br />

that rely on the applicants’<br />

own supplied information or<br />

the information passed on to<br />

the lender via a finance broker<br />

who receives a fee for each<br />

successful loan drawn down.<br />

Readers may think it<br />

doesn’t really matter because<br />

if the loan is secured against a<br />

car, then the lender can simply<br />

repossess it and sell it to recoup<br />

their money.<br />

Not so. The following is<br />

a real situation that proves<br />

why this is not always the<br />

case. A debtor financed a car<br />

for $10,000 from a yard with<br />

a $200 loan establishment fee,<br />

plus a $1200 mechanical warranty.<br />

The debtor made none<br />

of the agreed $193 weekly<br />

payments, damaged the car<br />

while drink driving, and after<br />

three months the car was repossessed,<br />

incurring around<br />

$1500 in repossession, storage,<br />

default and admin fees.<br />

The car was auctioned and<br />

sold for $3450 (the word repossessed<br />

in an auction or listing<br />

generally halves the value<br />

to a buyer) minus a $500 +<br />

GST commission to the auction<br />

house giving a net result<br />

of $1375 from an outlay of<br />

$11,400 paid by the lender.<br />

The debtor is technically liable<br />

for the $10,025 but in this<br />

case the debtor applied for a<br />

NAP (no asset procedure) and<br />

the debt was legally wiped,<br />

leaving the lender out of pocket<br />

with absolutely no chance of<br />

ever being paid.<br />

We are also seeing a resurgence<br />

in debt consolidation<br />

loans that promise to get people<br />

“debt free faster”. These<br />

are great when the original<br />

contracts allow for an early repayment<br />

without penalty or a<br />

low early repayment fee.<br />

If not, the applicants can<br />

often find themselves paying<br />

back a good portion of the interest<br />

payable on the original<br />

loan as well as the interest on<br />

the consolidation loan, in addition<br />

to any loan establishment<br />

fees.<br />

As with any agreement, the<br />

Devil is in the detail, but having<br />

one payment rather than<br />

several looks so attractive to<br />

people that may be struggling,<br />

that they compound the problem<br />

rather than alleviating it.<br />

Just a thought.<br />

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<strong>March</strong> <strong>2020</strong> <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> 21<br />

Keys to small business<br />

marketing success<br />

Successfully getting a new business off the ground is a feat of prioritisation. There are<br />

myriad ways to spend your time and energy, not to mention your starting capital.<br />

One of the questions I’m<br />

often asked by people<br />

starting a business is<br />

“what marketing efforts should<br />

I prioritise?” These business<br />

owners all grasp the importance<br />

of marketing, but with so<br />

many options available, many<br />

find it difficult to know where<br />

to start.<br />

The good news is that there<br />

are some obvious areas any<br />

starting business should invest<br />

in if it wants to maximise its<br />

chances of success. Developing<br />

a plan, creating a powerful<br />

brand and establishing a solid<br />

web presence are three critical<br />

foundations for growth.<br />

Have a plan<br />

So you’ve come up with that<br />

business idea and decided it’s<br />

a winner. Maybe you’ve done<br />

your market research or even<br />

gone as far as outlaying some<br />

cash for your first production<br />

run or to lease a store.<br />

Before you book advertising<br />

across all New Zealand<br />

radio stations or lock yourself<br />

in to attending every trade<br />

show in the country, it’s worth<br />

developing a marketing plan.<br />

That way you can ensure your<br />

marketing spend is contributing<br />

to your objectives and<br />

reaching the right people, in<br />

the right place, at the right<br />

time.<br />

A good marketing plan<br />

will identify your objectives,<br />

the audiences you are trying<br />

to reach, your unique selling<br />

point, and the avenues you can<br />

use to best reach those audiences.<br />

It’s worth timelining<br />

each of your planned activities<br />

so you can hold yourself<br />

or your team to account, and<br />

including measures you will<br />

use to determine whether your<br />

plan is working.<br />

Create a strong brand<br />

THE LAST WORD<br />

> BY JAMES HEFFIELD<br />

Director of Bay of Plenty marketing and PR consultancy Last<br />

Word. To find out more visit lastwordmedia.co.nz or email<br />

james@lastwordmedia.co.nz.<br />

A strong brand is critical to<br />

any new business. This is<br />

much more than a logo – it’s<br />

what you say about yourself in<br />

your marketing messages and<br />

how you and your team conduct<br />

yourselves when you do<br />

business. Ultimately, it’s how<br />

others perceive you.<br />

Creating a strong brand is<br />

about knowing what you stand<br />

for and knowing what really<br />

drives your prospective customers.<br />

It needs to be authentic<br />

too. If it’s based purely on<br />

what you think your customers<br />

want to hear, and not reflective<br />

of the way you and your team<br />

behave, it will fall flat. That’s<br />

not to say your brand can’t be<br />

aspirational but make sure the<br />

values and story you are telling<br />

are demonstrated in the<br />

way you do business now, or<br />

at least the way you want to do<br />

business in future.<br />

Develop a web presence<br />

These days, the first tangible<br />

marketing output most new<br />

businesses should make is a<br />

website. This doesn’t need to<br />

be perfect in its first iteration<br />

– websites are forever evolving<br />

– but it should portray your<br />

brand and business in a positive<br />

light.<br />

It’s particularly important<br />

that your site is easy to navigate<br />

and makes it easy for<br />

customers to find what they<br />

are looking for. Ensure the<br />

written content reads well and<br />

that the overall look and feel –<br />

including the photos you use –<br />

reflects your brand as well as<br />

the values your target audience<br />

holds dear.<br />

It’s also worth taking steps<br />

to ensure your website will be<br />

easy to find in a Google search<br />

as – other than word of mouth<br />

– this is the most likely way<br />

people will find your business<br />

in the early days. With this in<br />

mind, it’s worth researching<br />

search engine optimisation or<br />

enlisting the help of an expert<br />

in this area.<br />

Last, but not least, a strong<br />

web presence should typically<br />

include social media. There<br />

will be some rare cases where<br />

this isn’t the way to go, but for<br />

most businesses, getting on<br />

board the social bandwagon<br />

is worth the money. Facebook<br />

is particularly well used<br />

in New Zealand, but others<br />

worth consideration are Instagram,<br />

LinkedIn and possibly<br />

TikTok and Twitter. Keep in<br />

mind that it’s better to build a<br />

community and following well<br />

on one or two of the platforms<br />

that reach your target audience<br />

well, than to run accounts<br />

across all social channels in a<br />

mediocre way.<br />

There’s much you can do<br />

outside of these three areas and<br />

what will work best will vary<br />

wildly by business and industry.<br />

Once you have these foundational<br />

elements in place, you<br />

can explore the many other<br />

channels available. That might<br />

be digital advertising, print<br />

advertising, public relations,<br />

attendance at trade shows and<br />

events, or something else.<br />

Getting the mix right requires<br />

regular investment and experimentation<br />

– the key is measuring<br />

progress and being willing<br />

to adapt your approach based<br />

on what’s working best.<br />

Business continuity and contingency<br />

planning<br />

HUMAN RESOURCES<br />

As the world and New Zealand react to the threat of the<br />

Coronavirus Virus, employers are finding themselves wondering<br />

how this may affect our own businesses and what we can do to<br />

plan for what may eventuate.<br />

> BY KELLIE HAMLETT<br />

Kellie Hamlett is Director and Recruitment & HR Specialist, Talent<br />

ID Recruitment Ltd. She can be contacted on kellie@talentid.co.nz<br />

We are already seeing<br />

the effects of this in<br />

crucial sectors here<br />

– such as tourism – with some<br />

devastating consequences.<br />

Time to dust off the Business<br />

Continuity Plan – a revisit<br />

and refresh to ensure we are<br />

ready for what may lie ahead.<br />

As a business who provides<br />

advice to employers, and also<br />

as an employer of my own<br />

staff, I’m finding it is timely to<br />

revisit the planning around the<br />

possible interruption of business<br />

operations.<br />

Over the past few years we<br />

have seen issues arise from<br />

earthquakes in the South,<br />

businesses who have suffered<br />

losses through fire and flooding,<br />

as we as SARS and the<br />

Bird Flu scare.<br />

Planning for business continuity<br />

will help you to identify<br />

the most important aspects of<br />

your business and the critical<br />

risks in these areas. The aim<br />

is to help you to recover as<br />

quickly as possible.<br />

Think about the following<br />

aspects: what are your specific<br />

risks if something were to go<br />

wrong? And it doesn’t need to<br />

be a pandemic or natural disaster.<br />

How would you get back<br />

to a business as usual state?<br />

What options should you consider<br />

if you couldn’t return to<br />

business as usual.<br />

To start your business<br />

continuity plan you’ll need to<br />

identify your key products or<br />

services, the most profitable,<br />

least profitable and what are<br />

the essentials you need to carry<br />

out these activities.<br />

Who are the key people<br />

within your business? And<br />

this won’t always be limited to<br />

employees. What about your<br />

vital business connections –<br />

for example suppliers, service<br />

providers, regular customers,<br />

etc.<br />

Plant and equipment – what<br />

do you need in order to do<br />

what you do? What is essential<br />

and what would you do if<br />

you didn’t have access to your<br />

usual equipment? In terms<br />

of location, where could you<br />

work from if you didn’t have<br />

access to your usual work<br />

premises?<br />

When planning for the unexpected,<br />

think outside the<br />

square in terms of where your<br />

business could potentially operate<br />

from.<br />

For example, if your premises<br />

were damaged or unavailable,<br />

could your staff work<br />

from home or another location<br />

and how easily could company<br />

information and data be accessed<br />

in order to do so? How<br />

would your customers know<br />

how to find you or contact<br />

you?<br />

Do you have appropriate<br />

insurance cover in place to<br />

protect you against losses?<br />

Business interruption insurance<br />

can help cover businesses<br />

with their normal operating<br />

expenses and this will likely<br />

include covering wages for a<br />

period of time while your business<br />

may not be generating an<br />

income.<br />

If you couldn’t run your<br />

business, who could? Have<br />

you identified key roles within<br />

the business and their roles in<br />

helping your business operate?<br />

It might even be a good idea<br />

to talk to your bank manager<br />

about managing cash-flow<br />

should a disaster occur.<br />

In terms of managing your<br />

staff, employers have obligations<br />

to their employees under<br />

the Employment Relations<br />

Act. Business interruption can<br />

present itself in many forms<br />

– not necessarily through a<br />

national disaster. Businesses<br />

can’t rely upon outside assistance<br />

as a given.<br />

An important factor when<br />

dealing with any interruption<br />

in your business and then subsequent<br />

decisions around running<br />

the business and negotiating<br />

with your staff, is to keep<br />

communication lines open and<br />

active.<br />

It’s a stressful time for all<br />

concerned and a flexible and<br />

common-sense approach is<br />

needed to get businesses up<br />

and running and staff back on<br />

board.<br />

There is a general obligation<br />

for employers to pay salaried<br />

and wage workers who are<br />

fit, willing and able to work,<br />

but can’t because their place<br />

of employment is closed or<br />

damaged.<br />

There are other options,<br />

which include the negotiation<br />

of using annual leave for a period<br />

of time, negotiating a reduction<br />

in wages, unpaid leave<br />

or the offering of alternative<br />

work.<br />

Planning and communication<br />

are key in times of adversity<br />

and we can take practical<br />

steps to minimise the impact<br />

such an event could have on<br />

our own situations.


22 <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> <strong>March</strong> <strong>2020</strong><br />

Learn from great business leaders.<br />

Over 100 businesses attending.<br />

ONE<br />

DAY<br />

ONLY!<br />

Don’t miss out - Bookings close - 5pm, 11th <strong>March</strong>.<br />

LEADERSHIP<br />

DIRECTORSHIP<br />

& GOVERNANCE<br />

SOCIAL MEDIA/<br />

CONTENT MARKETING<br />

KEY NOTE SPEAKER<br />

Craig Hudson<br />

Managing Director<br />

New Zealand &<br />

Pacific Islands, Xero<br />

GUEST SPEAKER<br />

Kirsten Patterson<br />

Chief Executive,<br />

Institute of Directors<br />

GUEST SPEAKER<br />

Brent Ireland<br />

Director, Collab Digital<br />

Smarter Business Event<br />

The National Business Network – Smarter Business Event <strong>2020</strong><br />

will bring together hundreds of businesses from corporates to<br />

SME’s in one location for one day across all business categories<br />

attracting business owners, decision makers, managers and staff.<br />

The purpose of the event is to bring Bay of Plenty wide businesses<br />

together annually at one location for a day to hear from leaders<br />

and well-respected business people to network, make contacts,<br />

build new relationships, find new business partners, contractors,<br />

suppliers and clients to do business.<br />

The event is designed to provide every business that attends with<br />

a return on their investment by offering fantastic value at a very<br />

competitive price. This is a ticketed only event with all businesses<br />

attending being paid attendees.<br />

Format<br />

B2B ticketed only event.<br />

Each business gets a 1m x 1m table with entry<br />

for 2 people from that business.<br />

Please bring a pull up banner, business cards<br />

and other collateral to promote your business.<br />

Location<br />

Queen Elizabeth Youth Centre (QEYC)<br />

Cnr Devonport Rd & 11th Ave, Tauranga<br />

PULL<br />

UP<br />

BANNER<br />

Pricing<br />

PER <strong>BUSINESS</strong>,<br />

INCLUDES<br />

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A 1M X 1M TABLE.<br />

$349 + GST<br />

10% <strong>OF</strong>F<br />

PRIORITY ONE MEMBER DISCOUNT<br />

Extra individual tickets available per business upon request<br />

at $80 + GST each after purchase of main business ticket<br />

DON’T DELAY, BOOK TODAY<br />

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For great deals on the following services leading up to and on the event day please see<br />

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FOR MORE EVENT INFORMATION<br />

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PROUDLY<br />

PRODUCED BY


<strong>March</strong> <strong>2020</strong> <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> 23<br />

Consider this<br />

before signing a<br />

commercial lease<br />

If you are about to lease a<br />

commercial property to run<br />

your business from, it’s not<br />

just the real estate agent you<br />

need to talk to. Commercial<br />

leases come in different shapes<br />

and sizes and before you sign,<br />

there are several things to consider.<br />

Make sure to do your<br />

homework and don’t forget to<br />

consult your lawyer before you<br />

commit to anything.<br />

Whether it’s a showroom,<br />

retail space or hospitality business,<br />

or even just an area to<br />

park your company vehicles,<br />

it’s important to have a lease<br />

which ensures that both you<br />

and your landlord have a clear<br />

understanding of each other’s<br />

rights and obligations.<br />

Paula Lines, director of The<br />

Law Shop, says that the Auckland<br />

District Law Society has<br />

Paula Lines, Commercial<br />

Lawyer at The Law Shop.<br />

a standard form Deed of Lease<br />

that can be used. She says it<br />

is the easiest option because<br />

the terms are well known,<br />

tested in other cases, and fully<br />

unambiguous.<br />

Paula explains that many<br />

people settle for an Agreement<br />

to Lease, often prepared by<br />

the real estate agent who has<br />

marketed the premises, and<br />

while the Agreement to Lease<br />

does say that the terms of the<br />

current Deed of Lease apply,<br />

she points out that it is still important<br />

to also follow up with a<br />

formal Deed of Lease.<br />

“One of the reasons for<br />

this is that an Agreement to<br />

Lease doesn’t contain all the<br />

terms and conditions you need<br />

to be aware of. If you haven’t<br />

seen the Deed of Lease, you<br />

may not be fully informed of<br />

what you are agreeing to,” she<br />

clarifies.<br />

“The Agreement says<br />

you’re bound by the Deed of<br />

Lease that is used at the time,<br />

but as that Deed is updated<br />

Commercial leases come in different shapes<br />

and sizes and before you sign, there are<br />

several things to consider. Make sure to do<br />

your homework and don’t forget to consult<br />

your lawyer before you commit to anything.”<br />

from time to time, you need<br />

to know which version applies<br />

to you. Some significant<br />

changes have been made after<br />

the Christchurch earthquakes<br />

for instance, so it’s important<br />

to know whether it’s an earlier<br />

or latter one that applies.”<br />

Signing a commercial<br />

lease is a big commitment,<br />

and you’ll have to make sure<br />

you’ve addressed every aspect<br />

and issue before you sign. Renegotiating<br />

a lease is much<br />

more difficult once the terms<br />

have been agreed and the lease<br />

is signed.<br />

The team at The Law Shop<br />

is highly experienced in Business<br />

Law and happy to help if<br />

you require guidance on your<br />

commercial lease. They can<br />

explain the ins and outs in a<br />

no-nonsense manner and help<br />

finalise the documents to make<br />

sure they suit your business<br />

needs and goals.<br />

“No matter if you’re starting<br />

out in business or if you’re<br />

expanding your existing venture,<br />

you are welcome to book<br />

in a meeting with me or one of<br />

our other business lawyers to<br />

make sure you’ve thought of<br />

everything on the legal side of<br />

things,” Paula says.<br />

“In most cases, we can<br />

quickly asses what you need<br />

to suitably protect your business<br />

as well as your personal<br />

assets.”<br />

The Law Shop works from<br />

a virtual space in Tauranga<br />

and in Rotorua, the office can<br />

be found at 1268 Arawa Street.<br />

Call 0800 LAW SHOP or<br />

email team@thelawshop.co.nz<br />

to get in touch.<br />

PAULA LINES<br />

LL.B | Director<br />

ROTORUA<br />

1268 Arawa St<br />

Rotorua<br />

TAURANGA<br />

Virtual Office


24 <strong>BAY</strong> <strong>OF</strong> <strong>PLENTY</strong> <strong>BUSINESS</strong> <strong>NEWS</strong> <strong>March</strong> <strong>2020</strong><br />

Trusted to sell the Bay of Plenty’s finest homes<br />

and lifestyle properties.<br />

OLIVER ROAD ESTATE AGENTS LIMITED | LICENSED REAA 2008<br />

Willowdene<br />

174C M<strong>OF</strong>FAT ROAD, BETHLEHEM<br />

$2,875,000 5 bed 5 bath 4 car<br />

Luxury & Lifestyle<br />

420 MINDEN ROAD, TE PUNA<br />

$3,650,000 4+ bed 4 bath 3 car 597 m 2 9,026 m2<br />

Country Class<br />

397 m 2 1,467 m 2<br />

3,369m 2 Private Coastal Retreat<br />

Rewrite History<br />

34 GASSON LANE, PYES PA<br />

9 LEVERS ROAD, MATUA<br />

EO $2,150,000 6 bed 3 bath 2 car 470 m 2 6,439 m 2<br />

$2,475,000<br />

5 bed<br />

5 bath<br />

2 car<br />

411 m 2<br />

One Harvey Street<br />

1 HARVEY STREET, TAURANGA SOUTH<br />

EO $3,000,000 4 bed 3 bath 2 car 410 m 2<br />

1,391 m 2<br />

265 WALKER ROAD EAST, AONGATETE<br />

$1,575,000 5+2 bed 3+1 bath 2+1 car 455 m 2 2,883 m 2<br />

Jason Eves 027 587 5509<br />

Cameron Macneil 021 800 889<br />

oliverroad.co.nz

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