Diversity powers Auckland growth

Both the Chinese and Indian communities have a reputation for entrepreneurship based on family businesses, so it’s only natural that when they migrate here they follow the tradition. Peter Boyes highlights how ethnic diversity is powering the growth of Auckland and traces the business fortunes of one successful family. 

Auckland is becoming very different from the rest of New Zealand and quite unique globally, not just in its relative size but in its cultural and business diversity.

The ‘City of Sails’ is already one of the world’s most diverse cities with 40 percent of its residents born overseas. In the past three decades Auckland has become much more cosmopolitan and internationally connected through technological change and the networks fostered by the various diaspora who now live here.

It is forecast that 60 percent of New Zealand’s growth will occur in Auckland over the next decade and it will become home to 40 percent of all New Zealanders.

The city features two large Asian populations, Indian and Chinese, as well as a medium-sized Korean and Filipino community and migrant populations from the UK, South Africa, and Pasifika. These new New Zealanders have brought a diversity of food, sports, media, religious beliefs, languages, and attitudes – and that’s changing how businesses develop and grow across the city too.

According to New Zealand’s first Indian Sikh MP, Kanwaljit Singh Bakshi, a National List MP based in Manukau East, this increasing diversity will help power the growth of the city as well as the wider New Zealand economy.

Kanwaljit, who sits on Parliament’s Commerce Select Committee says “There are so many business success stories in this part of Auckland and it’s down to people seizing the opportunities offered by New Zealand.

“Like many of them I came here for a better life and a better future for my kids. I had a business background, having owned a logistics company and a recording studio in India. Business is in our family DNA as it is in many migrant communities.

“When I first arrived I went into partnership in a motel business, and then I had a business servicing vending machines for two years. After that, I went into property development. When I had the vending machine business I would restock the machines on the way to dropping the kids off at school. The kids helped carry the stuff from the car so I could load the machines. In the evening they helped me sort out the orders. My wife counted all the coins and banked them. Everyone was involved.”

Kanwaljit points out that many of the people living in south Auckland have come from enterprising cultures. Both the Chinese and Indian communities have a reputation for entrepreneurship based on family businesses. With 95 percent of New Zealand businesses being SMEs, it’s no wonder that many dairies, corner shops, restaurants and food outfits across the city are run by newcomers.

“When they come into a new country most migrants go into business to get established, because to be honest, very often it’s easier to do that than get a job,” he says. “There is sometimes reluctance among New Zealand businesses to employ someone without New Zealand experience. You don’t need to have perfect English to work in many of these businesses and if you adapt and learn as you go along you can succeed.

“This really is a land of opportunity. We’ve all heard many stories of success about people who arrive in New Zealand with less than $200 in their pockets who are now millionaires. Without family support most of these businesses can’t succeed.

“Doing business in New Zealand is much easier than many other countries because there’s less regulation. Of course, we still have issues in terms of red tape which could be reduced and I’ve been keen to champion the cause of less paperwork for small businesses since I entered Parliament in 2008. The new legislation combining ACC, GST and IRD Numbers into one New Zealand Business number is a huge step in the right direction. I’m determined to see the restrictions on business eased even more.

“Most New Zealand companies are SMEs. They are the engines of the economy. If we can help them succeed the country as a whole succeeds and there is no doubt Auckland’s business diversity is a great strength that is now coming into its own.

“You only have to look at the results of the Auckland region’s business awards to see the diversity of Auckland’s successful business community on display,” he adds. “I was at the Westpac South Auckland Business Awards in October and many of the awards went to ethnic family businesses.”

Supreme example
Kanwaljit points to one outstanding example. Nauhria Precast, a manufacturer and supplier of precast concrete components, took out the Supreme Business Excellence Award and the Excellence in Innovation category. CEO, Rakesh Nauhria, also won the Excellence in Business Leadership category.

Nauhria Precast was cited by the judges as an outstanding example of businesses leading South Auckland’s dynamic manufacturing base and demonstrating innovation and entrepreneurship in a highly competitive space.

Nauhria supplies the commercial, civil and residential construction sectors. But it is very much a family business. Rakesh Nauhria’s father, Roshan, seized the microphone at the awards ceremony to leave the audience in no doubt that this was a team celebration.

Rakesh, who runs the business with his father, says “I was born in New Zealand in 1977 so I would describe myself as Kiwi Indian. That’s the reality of who I am. More Kiwi than Indian. I reckon I’ve got the best of both worlds.”

Driven to succeed
Sitting in a room where the walls are lined with inspirational statements and ideas from a recent team brainstorming session, Rakesh admits he doesn’t have a lot of Indian friends, although he’s from an Indian family.

“My family came to New Zealand in 1972. My father was very driven. He had a job already arranged in electrical engineering but he was soon self-employed doing contracting work.

“My father has been involved in setting up at least half a dozen businesses from which he has learnt a lot of lessons. Unlike me, he didn’t have a management background, mentors or support along the way. Thirty years ago things were very different in New Zealand, but he’s given me so much advice based on that experience.”

However, it hasn’t always been straightforward. The precast concrete company’s sister operation, Nauhria Reinforcing, supplying reinforcing steel and mesh via its fabrication service, was set up in 1991. Like many New Zealand companies it ran into difficulties in 1997 and Roshan had to start again from scratch.

“Dad said he could never work for anyone else so he went to Christchurch and started all over again,” explains Rakesh, “while the rest of the family stayed in Auckland, where I was studying at Grammar School. It took three years before he was able to come back but that company is now regarded as one of Auckland’s major suppliers of reinforcing steel.”

He says the importance of education as a bedrock is part of the cultural difference between some ethnic communities and some New Zealanders. “For some of my Kiwi friends, studying hard was a choice. We were not given the choice about studying. We knew we had to do it, but again it was not something we fought against either. I qualified with a Bachelor in Business Studies at AUT. I only did it because I was good at numbers. I never intended to work with Dad either. It was August 1999 and the economy was slow. I had a job to go to at BNZ and was supposed to work with him for three months before I started. It’s turned into 15 years.”

Rakesh says the two of them came up with the idea of starting the precast concrete company. “It involves a very similar clientele to the reinforcing business so was a complimentary service to that existing business. We already had the cranes and the expertise in the sector,” he recalls.

“We want to become the leading sub-contracting firm in the Auckland region. This will be the biggest growing market in New Zealand for the next 30 years. But we’re competing not just in terms of size, but also on service quality, safety, cost and getting the right people.

“We have ambitious revenue growth plans as the economy expands but we’re also planning for when it slows or contracts.

Succession plans
Rakesh points out that maintaining efficient processes gets harder as the business gets bigger. There are now 165 staff and it means having to monitor and revise how the business operates. Five years ago Rakesh and his father established a management team and they now delegate a lot of responsibility and set agreed targets with their managers.

Rakesh has taken over the day to day running of the business from his father and says that the strong succession ethic in Indian culture is another of those core values.
“Having a family business is a huge advantage for succession planning but if my son wants to be a musician then it’s up to him. That’s a long way off yet. Ironically, given all the advantages of a family business, the biggest hurdle in running a family business is also the family. My father and I agree and disagree every single day, but somehow together we make it work.”

Rakesh points out that he doesn’t really think of the company as an Indian business.

“That’s because I think of myself as a Kiwi first. I’ve never experienced any difficulties in business because of my ethnicity. I don’t know if my father ever did. He’s never mentioned it. Construction is a typically Kiwi industry and it’s very blokey, but I’ve never felt that our involvement was made any more difficult because of our Indian heritage.”