September/October 2021 - Bay of Plenty Business News

More documents

Recommendations

Info

18 BAY OF PLENTY BUSINESS NEWS September/October 2021 Foresters say afforestation report raises more questions than it answers The Forest Owners Association said in a statement that the recent Beef+Lamb-commissioned survey on forest planting rates is nowhere near robust nor detailed enough to draw a conclusion that the government should impose controls over the rate of forest planting. Forest Owners Association President Phil Taylor said the Beef+Lamb report was a worthy contribution to the land use debate, but that it raised more questions than it answered. “Government data is contradicting the report,” said Taylor. “Official figures clearly point to a decline in the area of the exotic plantation forest estate, and so new planting is not keeping pace with the land area going out of forestry.” The plantation forest estate had shrunk by 162,000 ha in the past 18 years, mostly to dairy farms, said Taylor, who noted that there had always been changing land use. “Our concern on current figures, would be that the Climate Change Commission’s reliance on an expansion of the exotic forest area by another 380,000 hectares by 2035, to meet the 2050 greenhouse gas target, is going to fall well short. “On top of that, the Climate Change Commission anticipates there will need to be more use made of wood in construction, and its extensive utilisation in biofuels to replace fossil fuel.” Risk of not meeting carbon targets Taylor said that meant any government restrictions on afforestation would risk New Zealand not meeting its carbon targets. “By the time that shortfall becomes clear it will be too late to fix it,” said Taylor. The National Exotic Forest Description, which is published by the Ministry for Primary Industries, recorded a reduction in the net stocked area in the year to April 2020 of 31,347 ha, after allowing for 19,000 ha of new afforestation. The President of the Farm Forestry Association, Graham West, said farmers should be free to continue to make economic decisions on whether they want to use their own land to plant trees and on what land classes. A recent Ministry for the Environment study has shown that there is currently 313,000 ha of plantation forests on farmland. Forestry stacks up well as a land use “And that makes sense for farmers,” said West. “The recent PwC report was clear that forestry stacked up very well as a land use and so forestry benefits the economies of local communities. “There is between 7.5 and 10.4 million hectares of hill country farm land, and if a There is between 7.5 and 10.4 million hectares of hill country farm land, and if a conversion of a mere 380,000 ha is a threat, then the meat and wool industries has more serious issues to deal with than just a few profitable trees to worry about.” – Graham West conversion of a mere 380,000 ha is a threat, then the meat and wool industries has more serious issues to deal with than just a few profitable trees to worry about.” West said the report was actually positive about the integrated use of trees on farms and that land sales to forestry are giving better capital gain, which allows movement up the farming ladder or retirement. Phil Taylor BakerAg, the report’s author, stated: ‘If farmers already have experience with trees and forestry, or are confident of the support available in what may not be core business to date, then indicators are this will provide further confidence to consider investing in forestry as part of the land-use mix.” Taylor said Beef+Lamb automatically assumed that farming would always be a better and more productive land use than forestry. “On the tougher hill country, Beef+Lamb are now demanding that even if livestock can barely survive on that land, then tree planting should still be restricted,” said Taylor.” Very little known According to Taylor, the report showed that very little was known about the extent of carbon-only forest planting in recent times. “The Beef+Lamb report estimates this non-harvest forest planting is about 30 percent of the total planting. But nobody has any real idea at the moment. If this carbon planting is on land which could be productive for timber or livestock then we would have concerns that the land should be used better.” “After all, there’s at least a million ha of land in New Zealand, which is too remote or erosion prone for farming or for production forestry and so is ideal to use for locking up carbon, but not useful for anything else.” Taylor said it was important to realise that while forestry is hugely important in sequestering carbon produced by industrial emitters over the next three decades, trees do not offer a continuing long-term answer to greenhouse gas emissions through offsetting. “We have no issues with either Beef+Lamb or the Climate Change Commission in their same view that the only effective long-term response to the threat of climate change is to reduce those source emissions, wherever they come from. Farmers who are expected to produce this extra value strongly demonstrated against regulations recently. They don’t need more restrictions.” NEW APPOINTMENTS BBN’S GUIDE TO NEW PEOPLE AND NEW ROLES ACROSS BUSINESS IN THE BAY To feature in New Appointments email us at new.appointments@bopbusinessnews.co.nz Appointments indicator of Bay’s importance Despite the uncertainties resulting from Covid-19 lockdowns in late August, New Zealand businesses have continued to signal their commitment to the Bay of Plenty business sector through a raft of new appointments. Alex Russell Apricity Finance recently welcomed Alex Russell to the team as Business Development Associate. With a background in the insurance industry, Alex prides himself on developing and maintaining strong relationships and consistently delivering a high level of customer service. Passionate about exercise and learning new things – Alex is approachable and happy to discuss business cash flow challenges. He can be contacted via alex@apricityfinance.com or 021 719 037. Kate Romey Kate Romey is heading up New Zealand operations of the trans-Tasman construction and engineering staffing recruiter, Marble. Kate is based out of Tauranga and recruiting across Bay of Plenty, Waikato and Auckland regions. Her key focus is white collar appointments within residential, commercial and civil construction. Expansion across New Zealand is on the horizon, including other regions and staffing offerings. Kate holds two years of specialist construction recruitment experience in Sydney and New Zealand. She is excited about opportunities that exist within the ever-changing construction and design industries and bringing her knack and passion for matching talent with great organisations. Kaydi O’Connor Kaydi O’Conner has joined Page Macrae Engineering as Marketing Specialist. Kaydi comes to Page Macrae from her previous role at Priority One which enabled a good insight into local Bay of Plenty industry. Given Kaydi’s sporting background in representative canoe slalom and her passion for storytelling, she is well placed to drive Page Macrae’s new market and products marketing strategies. Sustainability is becoming a more integrated consideration for all industries – Kaydi is very passionate in this area, with a totally holistic approach to not only our environment, but also our people and communities. Her involvement in growing tomorrow’s minds with the likes of the Young Innovators program, which Page Macrae continues to sponsor, reflects a synergy which will have benefits for both Kaydi and Page Macrae. We are very excited to merge Kaydi’s talent with our own growth.
September/October 2021 BAY OF PLENTY BUSINESS NEWS 19 NEWSBRIEF Seeka announces six month interim results $30.8m net profit before tax – up 77% on six months to 30 June 2020. Listed New Zealand produce company Seeka Limited, with operations in New Zealand and Australia, is pleased to report its unaudited interim results for the six months ended 30 June 2021. “Seeka delivered outstanding customer service and excellent financial results to shareholders in the first six months of 2021,” says Seeka chief executive Michael Franks. “Strong demand for our services contributed to record Group revenues of $224m in the sixmonth period; up 26% on June 2020. Importantly, we’ve delivered on our strategy to improve earnings, posting $30.8m net profit before tax for the period, up 77% on the pcp. “Seeka continues to invest in our kiwifruit business, acquiring Ōpōtiki Packing and Cool Storage Limited (OPAC) in May. OPAC is an eight-million-tray kiwifruit operation that expands our service delivery to the Ōpōtiki, East Cape and Gisborne regions. OPAC is now integrated, synergy savings on target, and the business is set to make a full-year financial contribution in 2022. “We have also made a significant investment into agritech, taking a cornerstone stake in the digital startup Fruitometry. Seeka’s investment will accelerate the development of smart orchard scanning technology that will help lift orchard production and realise supply chain efficiencies. “Our New Zealand kiwifruit business is in a strong growth phase, and Seeka is investing $20m in capacity builds for harvest 2022, including a new automated packline and high- efficiency coolstores near Te Puke. These new facilities will improve labour use while providing us with post-harvest capacity through to 2024. “Sustainability is a major focus and we are implementing strategies to minimise our environmental footprint. Our 2019 carbon footprint has been independently verified, and we’re defining performance baselines so we can set reduction targets and measure efficiency gains. Seeka is working to be an industry leader on reporting the impact of climate change and we are making real progress to reduce our emissions,” says Franks. PMG closes investment offer in Bethlehem Town Centre Hundreds of Bay locals now own a slice of their own backyard. Over 2000 new investors, including many Bay of Plenty residents, have jumped at the chance to own a share of Bethlehem Town Centre. Unlisted commercial property funds manager PMG Property Funds Management Limited (PMG) has now closed its latest offer in its PMG Generation Fund. Funds raised will help buy the high-profile Bethlehem Town Centre for $107.6m* alongside an industrial property at 11-13 Gough Street in Seaview, Wellington. Conservative bank borrowings will fund the remaining purchase price. PMG Chief Executive Officer Scott McKenzie says it’s a privilege to be the new owner and custodian of Bethlehem Town Centre as it’s a vital community hub. “We are looking forward to enhancing the value of Bethlehem Town Centre and further building its reputation as the shopping destination of choice in this region.” McKenzie says the ongoing low interest rate environment, coupled with headwinds in residential property investment, is generating a high level of interest in commercial property from a wide range of individuals. In a first, PMG partnered with online investment platform Sharesies and InvestNow to bring this offer to market, which has resulted in over 1,850 new investors joining through these investment platforms. “At PMG, we’re passionate about creating value and security for people in property, helping New Zealanders achieve financial freedom. We have great respect for the innovative work Sharesies have done to simplify the investment landscape and build financial literacy and we’re delighted to expand our reach and partner with them as part of this latest offer to market. “Investment in unlisted commercial real estate is sometimes seen as out of reach for many New Zealanders. Through Sharesies and InvestNow we are able to help people overcome some of those barriers to invest in commercial property and make it easier for everyday Kiwis to participate.” The new acquisitions bring the total portfolio value of PMG’s Generation Fund to an estimated $166m*. The Fund comprises five quality commercial properties located within main metropolitan centres across New Zealand and is underpinned by notable tenants, some of which are classed as essential services and provide further confidence around the Fund’s income resilience for investors. McKenzie believes the strong uptake from both new and existing investors – in one of New Zealand’s largest directly-held and unlisted commercial property funds – is a reflection of the track record PMG and its funds have demonstrated over time. “We are extremely pleased with the number of investors who have come on board and the feedback we have had about the quality of our offer and the acquisition properties, including the spread of income risk via multiple tenants, in various industries and the offer of a regular cashflow at an attractive rate.” PMG’s Chairman of the Board Denis McMahon is impressed by the strong response to the offer, which had an accessible minimum investment threshold of 1,000 units ($1,090). “When we launched PMG Generation Fund in 2020, the aim was to help more New Zealanders gain access to the benefits of investing in commercial property, providing regular income and the opportunity for good capital growth on their investment. This latest offer has certainly achieved this.” Since its inception, PMG Generation Fund has delivered a gross cash distribution return of 5.80 cents per unit* to its original investors and has seen a significant increase in the value of its underlying property assets. With a forecast gross cash return of 5.5% p.a.**, paid monthly, this offer delivers an attractive passive income so investors can enjoy the lifestyle they love, well into the future. Loosen the reins or risk losing the horse Us kiwis have always prided ourselves on being a DIY-capable, ‘get it done’ “leave it to me” kind of people. And while this is without doubt an admirable quality to possess it can sometimes be taken too far when it comes to running businesses. I have seen this lead to the downfall of many businesses, especially during phases of growth where the business owner refuses to let go of some of the control. CREDIT CONTROL > BY NICK KERR Nick Kerr is a Business Advisor at NJK Advisory Ltd. He is also director of International Private Investigations Ltd. Nick can be reached at nick@nzipi.com Let’s put this into the context of the current building boom in the Bay of Plenty with a fictional, but familiar example: Bob is a plumber who has gone out on his own after leaving a large firm. He picks up a few builders that he works for and because of his good quality of work he starts to get busy. Two months after striking out on his own, Bob is spending 30 hours a week doing plumbing and travelling to jobs and 15 hours a week doing quotes, invoicing and general administration. A few more clients come on board and at month three, Bob is doing 40 hours of plumbing and 17 hours a week of admin. At month four, Bobs’ business is still growing and he takes on another plumber to “lessen” the stress. But Bob insists on still doing all of the administration, including invoicing, ordering materials and quoting, which at this point is over 25 hours a week as he now must schedule all of his work and that of his staff member as well as doing his 30 hours a week on the tools. Reaching maximum capacity At month five, Bob is pretty much at maximum capacity and should an incident happen, such as a day-long disputes tribunal hearing with a disgruntled client, a Worksafe investigation, or his staff member being sick for a day, then the whole house of cards comes tumbling down. A symptom of this is often shown in the debtors’ ledger of businesses. Where the owner operator is the one doing the work and doing all of the admin, often the last thing on the long list of tasks is the overdue accounts. I have seen owner operator-run trades businesses write off thousands of dollars of accumulated overdue accounts a year because they simply do not have the time to chase them up, but they still refuse to contract an administrator as they do not want to relinquish control or don’t feel that the administrator will do as good a job as they would. My answer to this assertion to them is, would you hire a painter to fix your car? Would you hire a Vet to paint your house? As silly as this seems, it is true that if you specialise in a task (like administration) and do it for long enough you should be better at it than an overworked and stressed out “other subject matter expert” person who is trying to juggle that activity with 10 others. I have interviewed multiple owners of small liquidated trades businesses and the most common admission of fault they make is “I tried to do everything myself”. The first thing that they do when starting a new business is hire someone to do the tasks that they are not expert in. Like some NZ city councils, small businesses often wait for growth to become untenable before infrastructure is addressed. There are business growth experts and outsourced admin businesses out there that specialise in taking the stress in this area away from business owners, you just have to ask. My own investigations company brought on an admin expert six years ago and it transformed our business into an industry-leading profitable entity that is fun to work in rather than a struggling stressful mess. Just a thought.
Page 1 and 2: SEPTEMBER/OCTOBER 2021 VOLUME 5: IS
Page 3 and 4: September/October 2021 BAY OF PLENT
Page 17: September/October 2021 BAY OF PLENT

September/October 2021 - Bay of Plenty Business News

Create successful ePaper yourself

Delete template?

Save as template?