Despite operating in one of the most difficult economic climates in living memory, many New Zealand companies are performing exceptionally well in international markets. The 2012 New Zealand International Business Awards pays tribute to the work of these outstanding firms and the ambitious individuals who drive them.
By Glenn Baker.
Cause for optimism
From all accounts 2011 was a good year for New Zealand’s export sector and we have every reason to be optimistic about the years ahead – despite the bumpy global economic climate.
Looking back, the figures tell us that last year was a satisfying one – 2011 exports totalled $47.7 billion, up 9.7 percent from 2010, and pushed along by healthy commodity prices.
New Zealand Trade and Enterprise CEO Peter Chrisp highlights some further pluses – one being the 22 percent increase in our exports to China to reach $5.9 billion.
“Over the past two years New Zealand’s export trade to China has grown faster than with any other nation in our trading history.”
There was some interesting value-added growth in 2011 too. The TIN100 Report, for example, showed that the technology sector broadly grew revenue by five percent and exports by four percent. TIN ICT revenue jumped 13 percent and healthcare revenue from TIN (Technology Investment Network) companies passed the $1 billion mark for the first time.
“The PM’s mission to India was also a great success,” adds Chrisp, “and the launch of the ‘NZ Inc’ China and India Strategies were important steps in joining up effort across the public and private sectors.”
And let’s not forget the Rugby World Cup and its impact on telling the New Zealand brand story to a worldwide audience.
But wait – the positive news doesn’t stop there. At the end of February the quarterly HSBC Global Connections Report made the bold prediction that New Zealand will easily outperform world trade growth in both the short term and long term. The report picks an annualised growth rate of 5.88 percent over the next five years (compared to world trade growth of 3.78 percent). Then, between the years 2017 and 2021, our figure is expected to rise to 7.28 percent. By 2026 our trade will have grown by 134 percent when indexed against 2011.
And what’s the reason for all this optimism? Gary Cross, head of global trade and receivables finance at HSBC New Zealand puts it down to being in the right geography and in the right industries to take advantage of accelerating trade trends.
“As millions more people within emerging Southern Hemisphere markets move up to the middle classes, demand for our agricultural, meat, wood and wine products can only increase,” he says.
Chrisp agrees that there is plenty of cause for optimism. “The world’s megatrends are on our side – bringing a need for safe, sustainably-produced food.
“Ingenuity is in our DNA,” he adds. “New Zealanders excel in bespoke, niche plays. And, of course, we are stable and corruption-free. The world is there for our taking.”
Of course there are the traditional challenges of scale, distance and isolation that exporters must face, but Chrisp believes New Zealand also has some specific challenges – such as the fact that we need a great number of larger export companies.
“There’s a shortage of entrepreneurial capital too, and we need Kiwi businesses to push further into international supply chains. We must capture more of the value in our international markets.
“A key to overcoming these challenges is getting greater strategic intent and alignment across New Zealand agencies and with the private sector. A great example of this is the ‘NZ Inc’ China strategy,” he says.
Chrisp believes the New Zealand International Business Awards are a great opportunity for Kiwi businesses to share their stories, and help build an understanding of what is required to succeed in overseas markets.
“For the entrants they are an opportunity to benchmark performance, build capability, promote success, network with other business leaders, and boost the ‘feel-good’ factor.
“Previous entrants have said the entry and feedback process has given them new perspectives to help revise and refine their export strategies. If they happen to win, they say the recognition in New Zealand adds another dimension to their international marketing efforts.
“It is important that we acknowledge and recognise the success of our international businesses,” adds Chrisp. “A pat on the back goes a long way.
“This year’s finalists are an ambitious bunch, and New Zealanders need to know who they are.”
The standard of Awards entry was very high across the board this year, according to the judges NZBusiness spoke to.
Jane Hunter, MD of Hunter’s Wines, says the high standard of entries resulted in lengthy discussion to finally isolate the winner in each category. She says the awards spotlighted many exporters that operate well below the radar but are earning substantial international funds.
“I was extremely encouraged by the way a number of companies had obviously faced difficulties during the past few years coming to terms with the effects of the GFC but had dug deep, isolated their strengths and refocused around these, making changes to structure, branding and exploiting niche markets to their benefit.”
Hunter was surprised by the willingness of entrants to delve into their business and sort out a way forward in difficult times – “sometimes taking short-term downward profits for long-term secure markets and earnings.”
Fellow judge John Loughlin, who has a long and distinguished career in business and exporting, agrees that standards are up this year and results were close. He says the awards entrants obviously put a lot of effort into their entries, and the upside of entering is that it makes them think long and hard about their export strategies.
He has advice for new exporters too – starting with the need to have real clarity on your competitive advantage. “Keep focused too – better to do less things well than too many things badly.”
Loughlin says it’s imperative to build a solid, reliable export base, and be prepared for that to take a little longer than anticipated. “And remember there is no substitute for thorough market research. Be sensible, and make the most of all the resources and skills you have available.”
Meanwhile, Jane Hunter, who speaks both as a previous winner and a judge, highly recommends the awards to exporters. “Winning is the ultimate aim but it is the methodology of getting there that is the real plus for businesses that enter. It is quite a rigorous process and requires a good hard look at all aspects of the business.”
So how does Hunter rate New Zealand’s export performance right now?
“It’s probably in the OK basket but we can and should all be looking to do better,” she says. “Sure, it’s hard work out there – the ramifications of the GFC are still hitting us hard – but exchange rates aside there are markets out there wanting our products.
“Our ability and access to funds to move into these markets may still be causing a few to stumble, so we have to work better with the likes of NZTE and industry groups to assist and encourage businesses to move beyond their comfort zone.”
SUPREME WINNER and
BEST BUSINESS OPERATING INTERNATIONALLY – OVER $50M
Orion Health Great story, solid financials
BEST BUSINESS OPERATING INTERNATIONALLY – $10M-$50M
Vista Entertainment Solutions Niche market just the ticket
BEST BUSINESS OPERATING INTERNATIONALLY – UNDER $10M
Fastmount Size no barrier to ingenuity
BEST USE OF R&D IN INTERNATIONAL BUSINESS
Westland Milk Products Realising the potential of Research and Development
BEST COMMERCIALISATION OF IP IN INTERNATIONAL BUSINESS
EverEdgeIP Creating value from intellectual property
BEST USE OF DESIGN IN INTERNATIONAL BUSINESS: JOINT WINNER
Sistema Plastics Defying the odds and the sceptics
BEST USE OF DESIGN IN INTERNATIONAL BUSINESS: JOINT WINNER
Triodent Export success a testament to persistence
MOST INNOVATIVE BUSINESS MODEL IN INTERNATIONAL BUSINESS
Energy Mad Replicating a clever business model
EMERGING LEADER IN INTERNATIONAL BUSINESS
Sarah Gibbs Single minded determination
OUTSTANDING LEADER IN INTERNATIONAL BUSINESS
Neville Jordan, CNZM Leaving a lasting legacy