EIT front foots once in a generation sector change

Posted on 28 May 2019 by Damon Harvey

Eastern Institute of Technology is pumping. 2019 sees an increase of 680 students up on last year’s record 10,325 people engaged in tertiary education through its three campuses in Hawke’s Bay, Tairāwhiti (Gisborne) and Auckland, across certificate, diploma, degree and post-graduate.

“Relationships with our communities are strong,” says Mark Oldershaw, EIT deputy chief executive.

Courses and programmes are constantly reviewed to meet learner and industry needs – the horticulture sector story featured on page 43 aptly demonstrates this. Students across all schools are successfully gaining employment or go on to further studies (2017: 75 percent in employment, 25 percent in study).

Then in mid-February this year, Minister of Education Chris Hipkins announced a Review of Vocational Education (ROVE) that put the institute into overdrive.

With only a six-week window to provide feedback on what Mark describes as “the most significant review of vocational education provision across New Zealand that we have ever seen. A once in a generation change”, intense activity ensued.

“While some of what the Minister has proposed is warranted, there is great risk that Hawke’s Bay will lose our regional autonomy to meet social and economic needs. EIT may no longer have the agility to respond with training to fill workforce skills gaps,” Mark says. “There was absolutely no question that we needed to respond with as much strategic and deep thinking as our collective intellect could provide.”

Within the first week, Mark and Chris Collins EIT Chief Executive had digested the ROVE proposal and marketplace intelligence around it. Overarching values were established – that any response, and the process to develop that response, would put people first and foremost. The focus being on the impact on the community and employers. Regional connectedness would be clearly demonstrated as crucial to EIT’s sustained success. “From the outset we utilised a principles- based approach. We were driven by the need to propose constructive feedback and solutions,” says Glen Harkness, EIT ROVE project manager.

Mark and Glen lead the project group. EIT’s executive team had ROVE steering group responsibilities added to their workloads. Extensive consultation with staff across all three campuses resulted in both academic and administrative staff volunteering to work on a number of workstreams, holding focus sessions to explore the proposal’s impact on EIT, what was supported, and where alternative ideas were needed.

The Wellington-based ROVE team spent a day in Hawke’s Bay meeting with staff, students, EIT Council and executive. An extremely well-supported stakeholders’ meeting was also held. Mayors or their representatives from Central Hawke’s Bay to Wairoa attended, expressing concerns about the region’s potential loss of direct input in determining how the tertiary institution could continue to respond to local education and training needs.

Initially one regional submission was planned. The region’s mayors, iwi and business leaders were all keen to vocalise their support for EIT. The resulting submission had 18 signatories from throughout East Cape and Hawke’s Bay.

“As time progressed it became apparent that one regional submission could not contain the level of detail that was coming out of the ideas from EIT,” said Glen. “The questions being asked in the consultation process required more comprehensive answers.

“It is such a critical issue that we needed to model with a finer level of detail how we could operate and connect with the community while still providing the Minister with the solutions he was seeking.”

In its second submission following further staff consultation and a solid level of agreement, the proposed EIT model sets out how strong regional governance and leadership can be preserved.

It promotes regional Boards to lead and govern tertiary education in their respective regions. Regional education and training delivery plans would be developed in consultation with local iwi, industry, community, students, region and the overarching central entity. Regional providers would deliver to the plans, giving a “real life, real learning fit for the real world”.

In addition, the EIT model has an overlay that demonstrates how industry and the Minister’s proposed industry skills boards would connect to the plan.

“We accept that some of what the Minister has stated as his reasons for the review are warranted but it’s critical that we present an alternative view. The tertiary vocational sector is not as broken as central Government makes out, certainly EIT is not struggling.

“We believe that despite the incredibly short timeframe, we’ve provided a much- improved model for stronger and better provider-based training,” sums up Mark.

“I am extremely proud that once again EIT has shown an amazing ability to pool together to contribute to a significant piece of work. I believe our submission reflects both our history and what defines us now, but also makes a very strong case for the values and principles we hold to be incorporated into a possible new model.”

Minister Hipkins indicated he wants the new entity that arises from the ROVE process to be in place on 1 January 2020. Work over the subsequent year or two will be needed to transition all 16 polytechnics and institutes of technology into the one new entity.

More information about ROVE and EIT’s submissions can be found at https://www. eit.ac.nz/about/reform-of-vocational- education/ – a page dedicated to sharing information on the review proposal and the EIT response.

Attracting high tech talent to the Bay

Posted on 28 May 2019 by Simon Hendery

You’d be hard pressed to describe Hawke’s Bay as New Zealand’s Silicon Valley but Tom Wallace, the founder and CEO of fast-growing local software company Re-Leased, can’t see why it couldn’t be.

Re-Leased is on a mission to double the size of its current team of 60 staff, and that involves doing all it can to attract software developers to the region – even offering them a $5,000 relocation bonus to move here.

“I don’t see any reason why Hawke’s Bay can’t be a really great tech hub,” says Tom, who founded Re-Leased in 2012.

“We’ve got great people, we’ve got a great environment, we’ve got all the technology you need to be able to communicate and work with anyone around the world. Location is no barrier to developing world- beating software.”

Re-Leased sells a cloud-based commercial property management platform – think Xero for landlords, property managers and tenants.

The company is already processing rent transactions worth $500 million a month for clients in 40 countries and it has ambitious growth plans over the next three years, which include opening a US office.

“We want to do it all from the Bay and we need really skilled people who can help us with that,” says Tom.

“We’ve got a great team here at the moment and we want to keep building around that team. We figured there were two options: to bring people in from the outside or train them up internally. We decided to go for a combination of both.”

The company is looking to hire .NET developers, quality assurance and user- experience specialists, as well as filling a range of sales, marketing and operations roles.

To meet its staff growth goals, Re-Leased has allocated $10 million over the next three years for what it’s calling a ‘Homegrown Talent Activation’ campaign – a dual strategy that involves a combination of training aspiring developers from within Hawke’s Bay as well as attracting more experienced people to the region by offering the $5,000 relocation bonus.

At the same time, Re-Leased plans to offer students studying computing at EIT practical experience by supporting the institute’s internship programme. It’s hoping those students will turn out to be a good fit for the company and will move on to becoming permanent staff members.

“In launching a recruitment drive we are sharing what our Napier team already knows – that Hawke’s Bay offers a lifestyle, a working environment and a growing professional ecosystem that can attract and retain the best people to build a global property-technology business,” Tom says.

He believes building that ‘ecosystem’ will produce an upward spiral of IT industry growth for the Bay, which will ultimately deliver a positive payback for Re-Leased.

“The more success we have, the more success other companies will be able to have here, and it will really build up Hawke’s Bay as a [tech industry] destination. It’s about building out the whole ecosystem, because if there’s an ecosystem then we’ll have resources we can tap into as well, and if more strong companies grow alongside us, it’s really going to snowball.”

There’s already plenty of momentum in the local technology sector.

Re-Leased is part of the tech hub cluster of businesses on Ahuriri’s Bridge Street, which includes Xero, NOW, DataNow and several others. That co-location has provided a valuable boost for – and helped build a sense of energy and vibrancy amongst – the players in the tech scene.

Tom believes that if businesses like his can grow staff numbers strongly, it will take that vibrancy to the next level and make it easier to recruit highly skilled staff for Hawke’s Bay roles.

He’s also excited about Re-Leased’s plans to work more closely with EIT, saying there’s a need to fill a gap in the local jobs market, which was evident to him when he left school about a decade ago.

“Previously the options have been to either leave Hawke’s Bay and go to university or stick around and do a trade. There’s another option now: to stay in the Bay, get a great tertiary education and then work on a world- class high-tech project.”

EIT assistant head of schools David Skelton says the institute’s Bachelor of Computing Systems Internship Programme allows industry and education to work together to build our regional capability in IT skills.

“We welcome Re-Leased’s participation, which will offer our students new, valuable experiences,” he says.

Business Hawke’s Bay CEO Carolyn Neville says the company’s Homegrown Talent Activation plans “represent a multimillion- dollar investment in new, well-paid, high-tech jobs that will, in turn, help build the Bay’s reputation for innovation and further diversify our regional economy”.

It’s early days for the Homegrown Talent Activation campaign, which was only launched in late March, but shortly before The Profit went to press, Tom said Re-Leased had been “flooded with inquiries” after announcing the $5,000 relocation bonus. The company was in the process of reviewing a stack of CVs from potential job candidates interested in making the move to the Bay.

An early success for the initiative had been raising the profile of the region among tech industry jobseekers.

“We’ve needed to start making sure there is awareness that there is that option out there. A lot of the time people don’t look for jobs in the Bay because they assume there’s nothing here,” he says.

A company can’t embark on an ambitious expansion strategy without a balance sheet to support it, and Re-Leased is in the fortunate position of having sourced funding to at least get it started on the growth journey it wants to take.

In the middle of last year, the business raised $2.3 million from New Zealand and UK investors in its first external capital round.

It’s a member of the NZTE Focus 700 group of exporters and in 2017 received a Callaghan Innovation Growth Grant to support its research and development efforts.

Tom says given the company’s rapid growth, it will have to raise further capital at some point “but we’re happy with how far we’ve got since last year’s capital-raise. Everything is tracking really well to that plan.”Re-Leased earns more than 70 percent of its revenue from overseas customers, with its highest- growth markets being Australia and the UK.

The more it invests in its skilled development team, the more it will be able to add value to its clients by offering them more high-tech solutions, Tom says.

“We’re making businesses far more efficient, allowing them to grow and we’re solving their problems, so if we can help them do that, we’re obviously adding a lot more value and creating value for ourselves,” he says.

“As we build up new and more sophisticated technology, we can work with much bigger clients too – that’s a natural journey for a software company. We’re working with some really good clients now, which is really exciting.”

It’s an encouraging outlook from a business that’s decided that, while its customer base is global, it’s home will remain in Hawke’s Bay.

Earning and learning helps build career

Posted on 28 May 2019 by Damon Harvey

Apprentices Jade De Har and Harry Algie both agree that learning a trade has been a great decision that will set up their careers in the construction sector.

Jade is one of three female apprentices at Gemco, and the only one training to be a carpenter. A go-getter, Jade left school at 16 years of age and managed a restaurant for 10 years before deciding to take up a trade.

“I love working with my hands and at Gemco, every day I get the opportunity to do something different.”

Jade did a pre-employment course with G & H Training and as part of this she was placed at Gemco for some work experience.

“I could see that there were lots of opportunities here and I like being creative, so I worked hard to impress my foreman so that I could get an apprenticeship.”

Twelve months on, Jade sees a long-term future at Gemco. She is also about to start another exciting new chapter in her life as she is due to have a baby later in the year.

During her time at Gemco, Jade has worked on a wide range of projects, all of which are helping her develop a broad range of skills and experience. In the past year she’s worked on the Hastings Crematorium, Hastings Health Centre, Delegat winery and the new commercial complex on Joll Road, Havelock North.

“I’m a person who does not ask for a hand, instead I’ll tell my workmates that I can do it.”

While on maternity leave Jade plans to continue her apprenticeship education via BCITO in preparation for the next stage of her career.

Harry is in his third year of a plumbing and gas fitting apprenticeship. Although some of his mates headed off to university, Harry enrolled in a pre-trades course at EIT at the beginning of 2016 before joining Gemco later in the year.

Harry was keen to stay in Hawke’s Bay and ‘learn and earn’ while completing his four-year apprenticeship and making the most of working within a large multi-trade construction company.

“There’s a great group of people here at Gemco and everyone is keen to help me. We always have a wide range of projects on the go.

“Better still, I am earning and learning, I have no student loan to pay off and I’m saving money.”

As for the future, Harry hasn’t ruled out a stint out of Hawke’s Bay, whether that’s within New Zealand or overseas, but he is keen to run his own business at some stage.

“It’s a fair while off yet though. I enjoy it here, it’s a supportive environment but at some stage it would be great to have my own business.”

Leading construction firm builds future workforce

Posted on 28 May 2019 by Damon Harvey

The construction industry is booming in Hawke’s Bay. It’s at unprecedented levels both in large-scale commercial projects as well as in the residential housing sector.

In the November 2018 issue of The Profit we estimated there is about $600 million worth of commercial construction projects either currently underway or set to commence. Over and above this is the housing boom, up 38 percent on last year.

Construction companies and other trades-related businesses have full books. It’s an enviable position but while businesses like Gemco have had a hot run with major builds such as the Hawke’s Bay Opera House, Hastings Health Centre and Delegat winery, a pinch point is having enough skilled labour.

However, Gemco is doing something about it. With a 140-strong workforce, Gemco managing director Darren Diack says they generally have over 20 percent of their staff made up of apprentice builders, plumbers, electricians, painters, plasterers and joiners, to ensure they are future-proofed.

“Some will stay on once they are qualified and some will leave; and more importantly, some will become leaders within Gemco. Regardless, we are proud to be contributing to the growth of tradespeople in Hawke’s Bay,” Darren says.

As Gemco’s general manager Chris Olsen says, “when you’ve got a large engine to turn, it’s important to focus on the future”, and the Havelock North-based business maintains a steady stream of apprentices progressing through the ranks.

Gemco currently has 35 apprentices at varying stages of their three- and four-year apprenticeships. The current crop includes

nine mature adult apprentices and three females, with the remainder school leavers.

Chris says they finish their time with a wide range of skills and experience, due to the wider exposure to all the trades within the business as well as the variety of commercial and residential work.

“They pick up a range of skills from their more experienced workmates, as well as getting a varied perspective from other trades,” Chris says. “They are the future of the business and we offer a really good learning space with a wide variety of projects that we have on the go at any one time.”

Chris adds that the mature adult apprentices have decided to take the step up from labourers or tool hands due to the current demand for qualified staff and the opportunities that arise.

Brent McAsey, who oversees the development of the budding tradespeople, says back when he was doing his time, getting into a trade was usually the career path for academic underachievers who didn’t go to university.

“However, that’s no longer the case. Apprentices may start on an hourly rate just above the minimum wage but they are not racking up debt as a student and there are strong career pathways within our sector,” he says.

Gemco, which was formed 18 years ago, has former apprentices who have worked their way up through the business as well as some who have gone on to start their own business or use their experience as a platform to other career options.

Apprentices like Jade and Harry (featured in our supporting story) spend 44 hours on the tools each week working towards achieving the practical components of their qualification, as well as completing theory education via the EIT School or Trades and Technology or BCITO.

“They can go as fast or as slow as they like in earning their unit standards but they work a full week on the tools,” Brent says.

Apprentices at Gemco are also given the opportunity to take on more responsibility as ‘Site Safety Reps’ on larger construction sites; undertaking site inductions, safety inspections and providing support to the Site Foreman.

Chris adds that the benefit of working at a larger construction firm is the exposure to a mix of large-scale construction and smaller domestic projects, as well as learning from many experienced tradespeople.

He says a big issue going forward is the pending demise of the 90- day trial period, which has enabled the business to give someone a go who may not have had the strongest CV.

“It will hurt our industry [the loss of the trial period] as firms like ours probably won’t take the punt on someone who we have a slight doubt over. We just won’t take that risk as we have in the past and that’s sad, as many of them go on to become very good tradespeople.”

Chris, who served in the army, says there’s many similarities between the armed forces and the trades industry.

“It’s [trades] similar to the army in that there’s a lot of comradeship, especially within a large firm like ours where you create long-lasting friendships. Also, your skills are transferable to other jobs.

“There’s also a lot of interaction with the other trades and you inadvertently learn skills from your peers,” Chris says.

Recruiting and maintaining apprentices is an ongoing challenge and learning curve for Chris and Brent, who admit that the old way of leadership no longer cuts it with the Generation Z.

“We have to be smarter and understand where they have come from and where they are going. Youth do have a different attitude than our generation, especially with the influence of technology.

“It’s important that they have an attitude of wanting to be here and wanting to succeed.” One of Chris’s life learnings is: ‘You just have to want it bad enough and the rest you can be taught’.

“We want everyone to have the attitude of giving everything a go and giving it everything they have got, and then if it doesn’t work out, just learn from it. One of the best ways to learn and some of the most important pieces of advice we give them is don’t be afraid to fail, and if you’re going to do something, don’t be afraid to ‘fail big’.

“It’s about learning, growing, taking risks and producing the very best we can for us and them and the future of our industry.”

Legacy to give back creates career pathway

Posted on 28 May 2019 by Damon Harvey

Skilled labour and the lack of it is a big issue that has received plenty of media headlines over the last 12 months.

Across Hawke’s Bay, many businesses are calling out for skilled labour and one Hastings-based business has come up with an innovative partnership with Hastings Boys’ High School (HBHS).

Patton Engineering’s trial last year with HBHS was so successful that not only have other engineering businesses such as McLaren Stainless and DSK also jumped on board, but the technology department at the school is becoming the envy of other schools around the country with modern equipment and a healthy stock pile of materials.

Patton Engineering has a long history with HBHS, with current director Mike Patton and former director Gavin Patton (recently retired) being old boys.

When new shareholders and directors Johnno Williams and Andrew Burn took over the business in 2018, Patton Engineering was performing strongly but struggling to recruit skilled labour locally.

The idea to partner with the school came at Gavin’s farewell. After 19 years working for Mike and Gavin, the new owners decided that they wanted to give more back to the local community.

The question was how?

With plenty of work coming in the door, the pressing issue was skilled labour.

“We would get CVs with the belief that the person was highly skilled, but in many instances that wasn’t the case. They weren’t as capable as what they were telling us, so we started doing tests instead and when we got them into a welding situation, many couldn’t perform,” says Johnno.

As a short-term solution they decided to recruit nine staff from the Philippines, but they were determined to find a long-term local solution.

“We have an aging workforce and we need young kids coming through and learning off these older guys.”

That’s when Johnno turned up at the headmaster’s office.

“I went and saw Rob with some pretty big aspirations but he wanted to make sure that it wasn’t a one-off opportunity.

“I told him we were committed 120 percent for the long haul. To us it’s a journey, not a short-term view, and we wanted to take on apprentices every year going forward.”

After nearly a year (the programme started in May 2018), Patton Engineering has formed a committee; it has more than 23 supporting business involved and head of technology Salla Delport has “600 students learning some form of technology” in a well kitted- out workshop at school, regular placements at three engineering workshops and career pathways.

Rob Sturch says Salla deserves as much credit as Johnno and Andrew, as he’s a teacher whom students love to learn from.

“As a headmaster I’ve learned that students choose teachers, not subjects. If there is a class with 30 and a class with 4 I can tell you straight away who the best teacher is.”

He says the added attraction is that students can also see the potential career opportunities by learning both at school and at the engineering firms.

Patton Engineering managing director Johnno Williams (left) with student and head of technology Salla Delport

“They can see the opportunity to get a job, to earn money, and there’s structure around the learning experience.”

For Salla, he says new equipment with funding support from trusts like One Foundation – purchasing materials at cheaper rates by taking advantage of the buying power of Patton’s and other firms – and getting work experience at engineering workshops is making technology the most popular subject at school. The cost of resources has gone down 75 percent.

“Previously the boys would make something like a steel pencil case as our budget was very limited, but we now spend less on materials like steel but we also get more of it. Students now make things like personal sound systems and BBQs.

“What’s great is that Year 12s go to Patton’s, DSK and McLaren’s to learn welding and they are using the same equipment.”

Ektaj Singh is one of three boys chosen for an apprenticeship with Patton Engineering. In 2018 he had hands-on experience in the company’s workshop for one day every fortnight, doing welding and steel fabrication. He says it was a great opportunity and has provided a career direction.

“I love it, but if it wasn’t for the help and direction from my teachers, I wouldn’t be here. The school’s also given me a toolbox and some starting tools.” The idea has paid off and both the school and Patton Engineering are being looked at by both the education sector and the engineering fraternity as the model school/career programme.

Leaving FAWCland for Auckland

Posted on 27 May 2019 by Simon Hendery

Since it began in 2012, F.A.W .C! has become such a drawcard for locals and visitors alike that it’s hard to imagine Hawke’s Bay’s event calendar without it.

But now the woman who established the Food and Wine Challenge – and has nurtured the growth of the twice-a-year celebration of great eating and drinking – has left town.

After more than eight years in charge of Hawke’s Bay Tourism (HBT), general manager Annie Dundas has taken up a new role in Auckland.

But it looks more like a case of ‘see you later’ rather than a final farewell from the industry veteran.

“I’m keeping my house [in the Bay]. I will be back at some point,” she says.

“It was just an amazing opportunity that came up and I feel we’ve done a lot at Hawke’s Bay Tourism and it’s time to hand the mantle on to somebody else to continue the work.”

Aside from fostering F.A.W.C!, that work has included growing a number of other Bay events such as The Big Easy and the Air New Zealand Hawke’s Bay Marathon.

As the media release announcing her departure noted, when Annie started at HBT in 2011, her role involved “rebuilding the credibility of the region’s tourism organisation”. The entity formerly responsible for delivering tourism initiatives, Venture Hawke’s Bay, had imploded following industry and political infighting.

Before arriving here, Annie had spent 17 years with Tourism New Zealand, the last three as regional manager for North America.

Her boss of 10 years, former Tourism New Zealand chief executive George Hickton, was then the newly-appointed chair of Hawke’s Bay Tourism and brought her to the region.

“He asked me to look at what was going on and initially I think I was supposed to be here a month, but I’ve been here eight and a half years, so it all worked out,” she says.

“I wasn’t from Hawke’s Bay and in a funny way I think that might have made it easier. I didn’t know all the politics but I understood what needed to be done.”

Annie’s team devised a plan that local operators supported through a ‘substantial’ contribution of $160,000 a year for three years on top of funding from Hawke’s Bay Regional Council.

“It was a great starting point to have such a strong and unified industry,” she says.

The following year, F.A.W.C! got off the ground.

Annie says while regional tourism organisations such as Hawke’s Bay Tourism generally aren’t in the business of running events, there was a realisation that if the Bay was going to boost visitor numbers it needed ways to draw people here.

“We thought, let’s step in and create something that’s actually going to drive visitors to Hawke’s Bay, rather than just putting an ad in the paper.”

At the time the region was lacking a premium-focused event celebrating the quality of the food and wine Hawke’s Bay has to offer, and that seemed like a missed opportunity, she says.

“I’d worked in the US at the Food & Wine Classic in Aspen, which is held in June each year, and I thought Hawke’s Bay was ripe for the picking for an event with a structure like that.”

After the first Summer F.A.W.C! in late 2012 proved successful, Hawke’s Bay Tourism took the plunge and decided to also run a winter event. It turned out to be a good move – Winter F.A.W.C! now attracts almost as many attendees as its summer counterpart.

“F.A.W.C! is a really special platform for the region and I hope it can continue in its entirety because while it’s two events a year, it’s positioned Hawke’s Bay as a year-round premium food and wine destination,” Annie says.

“Visitors now genuinely come to Hawke’s Bay for a food and wine experience. Sometimes that’s during F.A.W.C! but a lot of the time it’s throughout the rest of the year. We’ve got incredible venues and F.A.W.C! has had a part to play in raising the profile of food and wine generally.”

Similar thinking led to the creation of The Big Easy. Hawke’s Bay has great cycle trails so why not create an event that encourages locals and visitors alike to make use of them?

Asked about other highlights during her time in the role, Annie says she’s proud of the work Hawke’s Bay Tourism has put into its website (HawkesBayNZ.com), which was rewarded with a win at last year’s New Zealand Tourism Awards where it picked up the Industry Alignment Award.

The award was recognition for HBT bringing together the local councils, business associations and over 300 tourism operators to create a single website to promote the region – something Regional Tourism New Zealand executive officer Charlie Ives described at the time as “no easy feat”.

“We’ve worked long and hard on that and we’ve changed a lot of how we operate and run the business based on our digital footprint,” says Annie.

“HawkesBayNZ.com is not just your usual website, it’s a bit more editorially-driven and a bit more newsy. The fact we’ve hit half a million visitors on the site per annum is testament to

the fact people enjoy the content. It’s worked brilliantly for us and the numbers speak for themselves.”

She was able to leave HBT on a high in April with the latest visitor spend figures showing tourists parted with a record $224 million while in the Bay between December and February,

an $8 million increase on what they spent over the same period a year earlier.

On top of that, February’s nine percent growth in spending compared to the same month last year ranked Hawke’s Bay as the best performing region in the country.

Visitor spend in Hawke’s Bay is now estimated at $652 million a year.

But despite the rosy growth and buoyancy in the sector at present, Annie has some words of warning for the region as she begins a new role in Auckland.

“Hawke’s Bay Tourism has got issues around long-term sustainable funding and ultimately we want a sustainable funding model so that we’re not worried about how we market

the region,” she says.

Hawke’s Bay Regional Council cut back its funding of the organisation last year and is now only committed to contributing $1.25 million a year until mid-2021.

HBT is currently working on a regional visitor strategy, including looking at the visitor infrastructure needs for the next 15–20 years, which it hopes all the local councils will buy into.

“There are a whole bunch of bigger issues that need to be planned in Hawke’s Bay around making sure that we’re ready for more visitors and more growth,” Annie says.

“The region needs a much more longer-term view of how it looks at the tourism potential for Hawke’s Bay.”

HBT also needs a bare minimum of the $1.25 million a year it currently gets to carry out its marketing efforts, she says.

“We don’t need it to go back any further. What we have now is borderline to keep promoting the region as we are. That’s why, as a region, we need to think carefully about how we fund stuff,

and if it’s not the ratepayer that faces that burden, then visitors are going to have to face that burden, so we all need to have grown-up conversations around how we do that.”

She cites the example of Queenstown Lakes District Council, which is proposing a visitor levy aimed at raising $25 million to $40 million a year to help fund infrastructure and services.

“I’m sure these conversations will be publicly had in Hawke’s Bay over time. We have to sit back and say, how are we going to pay for all the things we want? We have to have a good open

discussion around how we should do that.”

But while that debate goes on, Annie will be in Auckland where her new role is heading up the tourism arm of iwi entity Ngāti Whātua Ōrākei Whai Rawa Limited, which until now has been

primarily focused on property investments.

“They’ve been very successful in doing what they’ve been doing and now they’re heading into the tourism arena,” she says.

“For me, it’s got some really exciting components to it. Auckland’s at a point where, within a year or two, we’re hosting the America’s Cup and APEC, so it’s a nice time to think about

the message and story we’ll be telling visitors.”

Hawke’s Bay Tourism has appointed a former CEO of Tourism Dunedin, Hamish Saxton, to manage the organisation

temporarily while it recruits a new general manager.

Tribute – Ray Turner

Posted on 10 May 2019 by Damon Harvey

He may be closing in on 90 years of age, yet Hawke’s Bay’s greatest living inventor continues to submit product patents.

A.R. (Ray) Turner just can’t stop inventing. He’s so prolific that in the past three years, he’s listed 36 patents with the Australian Patent Office. During his lifetime he’s patented more than 100 inventions.

His first invention was in 1954, which was an automatic photographic radar speed detector.

All his life he’s been coming up with ideas and problems solving.

“If someone puts a problem before me, I will solve it because my mind works that way. I’m always thinking of ways of doing things.

Ray rose to prominence for inventing products for the building industry, such as the spring door stop, the angle brace and nail plates.

Pryda, the company which had its beginnings from his home in Taradale in 1964 and which he sold in 1986, is now part of a large international conglomerate, which still proudly has a manufacturing plant in Napier.

Ray will be guest of honour as the company celebrates 50 years this year.

Ray has been out of the spotlight for many years but his daughter Debra Malone read the feature on local inventors in the last issue of The Profit, which motivated her to contacted us to say we had left out “the greatest inventor of all time, who lives in Napier.”

The email went on … “he invented products that revolutionised the building industry around the world, ending up with over 100 patents to his name.

“He employed many people here in the Bay and would specifically employ the deaf to run the huge steel plate presses in Onekawa.

“He is a fascinating man, who is very humble about his achievements.”

Following this email Debra arranged for me to meet with Ray.

When I arrived, I was warmly welcomed at the door by Ray and his partner Elva. He guided me out to the back of his home where he quickly produced folders of his achievements, product patents, media clippings and a bound book he was presented by his seven siblings on his 60th birthday.

At 89, Ray remains pretty mobile and agile of mind. He professed to not having the memory of yesteryear but still fondly retold many stories, along with sharing his ideas on solving some environmental issues, such as converting sea water into drinkable water and

constructing houses on water, to overcome the risk of earthquakes and relieving pressure on land use.

So why is Ray still inventing? He’s still hoping to strike it big with another invention but he says that in his late 80s he was getting bored and needed to keep his mind active.

“I look up websites for manufacturing companies all over the world and look at what they are making and if I can do it better.

“That’s why I started Decklock [his latest project] three years ago because I was bored and I had nothing to think about. I started inventing again but there’s not the demand here [for decklock], I’ve started it in the wrong country.”

He still has high hopes for Decklock, for which he’s developed marketing collateral such as brochures, videos and a website, www.decklock.co.nz, but he’s struggled to convince hardware stores and builders to use the product.

“I did get it right the first time [Pryda], it went off like a rocket.”

Ray says his greatest achievement is the growth and success of Pryda, which he sold in 1986 for a “few million”, which enabled him to help buy homes for his children.

He exclaims that the business was recently bought out again for $87 million!

FROM HUMBLE BEGINNINGS

Pryda’s first factory (under the name A.R. Turner) was set up in the games room of his house in Church Road making spring door stops.

As the demand for door stops increased and new products were invented, the business needed a larger factory and Ray moved to a block of shops he’d built in Gloucester Street, Taradale.

Around the same time Ray, changed the company name to Pryde to avoid confusion with another hardware company, Stanley Turner Hardware.

He took advice from Oliver McKnight from a Hastings advertising agency to name the company Pryde, but a few years later the name was slightly changed to Pryda, which in Norwegian means adorn.

“I kept getting introduced as Mr Pryde and we then also found out that we couldn’t register the name as it was a surname, so we changed it to Pryda.”

At the same time he went into partnership with toolmaker Bob Witham, who had the ability to turn many of the inventions into commercial reality.

The company also established a testing laboratory, where Ray invented the angle brace, which has been an international success for more than 40 years.

As the business continued to grow, Pryda needed more space and the business moved to 75 Niven Street, where the New Zealand operations are still located today.

Ray bought six new truss presses and the company’s famous Claw Nail nailplate product was one of the first products to be manufactured from the factory.

The product was so successful that Ray couldn’t source enough galvanised steel in New Zealand, and had to start importing it from Australia.

GLOBAL EXPANSION

In the late 1960s, Ray undertook some joint overseas ventures in South Africa and Fiji. The South Africa venture stopped because of the political situation but Ray formed close relationships with hardware outlets in Fiji and also helped develop a school on Waya Island, which was named afterhim.

“We sold many of our products to the Pacific Islands and in particular Fiji, where we became benefactors to an island group called the Yasawa Island and Waya Island.

“We provided money for the classrooms as well as furniture and we also supplied power generators and other materials.”

Ray also got Napier residents involved by donating clothing and sewing machines.

Products such as the claw nail plate, truss presses, jogs and the angle brace were patented and were in demand in New Zealand and other countries including Australia and the US.

In 1970 Ray sent his eldest son Daryl to Australia to set up Pryda in Dandenong. By 1972, Prdya had its first truss plant in Adelaide and by 1975 Daryl, had developed truss design technology using a four kilobyte memory Wang 2200 computer.

Ray admits that in the mid to late 1970s he was a workaholic. The business had grown substantially and was a seven-day operation, and he was working up to 16 hours a day.

THE FUTURE IS 3-D PRINTING

Over the years Ray says he’s spent thousands of dollars on patenting and product development, including regularly visiting Napier firm Axia Design Group to develop 3D modelling of his inventions.

Ray’s fascinated by 3-D printing. He says it’s the most exciting technology development and he quickly produces some information pulled off the Internet about a house being built by a 3-D printer.

“I would be a little kid with a toy if I got one, but I think I am past it at 90 years. It would be just too difficult for me to master.

“They’re wonderful. In the last week or two I’ve been looking up everything with 3D. It has a tremendous future for the building industry and for the world.

The opportunities are endless as you can even make human body parts and grow flesh around them.”

MORE INVENTIONS TO COME!

Ray has no plans to stop inventing, although money is now more of an issue than back in the 1970s and 80s.

His wife Elva admits it’s not uncommon for Ray to get up at 3am and go to his computer and start researching or mappingoutanotherinvention.

Ray looks sheepishly as he shows off his latest inventions and talks about what else he’d like to invent.

“It’s [inventing] made me poorer. I used to have a lot of money and owned houses, a motel and 12 companies, but I have no regrets … apart from wishing I still had 10 percent of Pryda!”

Revitalising the value of Hastings CBD

Posted on 8 May 2019 by Paul Harvey

Williams’ Harvey undertakes a retail shop occupancy survey of the Central Business District (CBD) of Hastings City.

The survey is based on retail shop numbers and considers main street retail, side street retail and overall retail vacancies. Our last survey was completed in October 2018 and recorded 10.20% of the retail space within Hastings to be vacant which equates to 25 retail shops, this is down from 11.87% in April 2018, 13.47% in October 2017 and 16.73% in November 2016. This latest survey is showing some continued improvement and is the lowest level recorded since October 2013. While some tenants have closed their doors others have relocated within the Hastings retail area. Relocating tenants have been able to use the market conditions to their advantage and gain a better quality premise within a better retail position and generally at a lower rent level. This has placed downward pressure on retail rent levels at the present time.

The Hastings District Council have been working hard on plans to revitalise and create a strong CBD with their Hastings City Centre Vibrancy Plan whose key target outcomes were to encourage more people and more business by creating an environment and activities whereby “customers, workers, residents, students and visitors” could experience and enjoy the Hastings city centre. This strategy was kick started by the redevelopment of the 100 – 300 Heretaunga East block as the removal of the Albert Hotel gave way to green space and regeneration of retail and hospitality outlets. As a continued part of this vision Council have taken the bold decision to purchase two main street retail premises with plans to convert them

into alley way ‘pocket parks’ and thus soak up excess retail space. The first pocket park now complete is in the 300 West Heretaunga Street block which links a previously little known public car park to the main street and creates different types of retail opportunities for adjoining owners. The second and more substantial development pocket park will link the 200 West Heretaunga Street block to Queen Street West. More significantly this involves a major redevelopment of the historic Hawke’s Bay Farmer’s Co-operative Building which will provide the opportunity

for retailers to develop different types of retail as well as much needed city car parking.

Another substantial development which will have an impact on the CBD and surrounding environs is the Hansen Group development of the old Hawke’s Bay Today buildings on the corner of Queen Street East and Karamu Road. This will provide a mix of retail and office accommodation. These developments together with the Council’s desire to encourage inner city living in the often vacant upper levels of our current commercial stock will help to create a busier and more vibrant CBD. Quality developments will not only encourage other quality developments it will also encourage more business to grow and invest in the city centre and encourage inner city living which is important if we want to limit the urban sprawl on the Heretaunga Plains. This activity along with the redevelopment and refurbishment of the Hastings Opera House goes a long way towards the vision of creating a vibrant and safe city centre where people want to live and work and play.

The Council’s vision to revitalise the CBD also encourages the hospitality industry to create different types and styles of bars, cafes and eateries which supports not only the daytime commercial trade but also the evening residential trade. Ten years ago the notion of inner city living was not even a viable idea – now it is very much on its own pathway and the Council must be commended on investing in this revitalisation.

Drive performance by better understanding the numbers

Posted on 8 May 2019 by Lisa Townsend

Hawke’s Bay’s economy is booming.

The region is experiencing growth across a range of sectors and industries, unemployment numbers are dropping, house prices continue to rise and there is an air of business confidence within the region which is encouraging business owners to look to their future and what opportunities these positive developments could bring. One of these opportunities is an increase in business investment which is exciting for both established and developing businesses. With that said, it is important that you have a clear understanding of your business fundamentals so that if opportunity comes knocking, you are in a solid position to best understand the offer on the table. Below we focus on four financial ratios that should be monitored on a monthly basis.

Gross margin

Measured overall and at product level, this formula measures the amount of margin each dollar of sales is contributing toward overhead costs and profit. The result is found by dividing gross profit (subtract cost of goods sold from sales) by sales. A 40% gross margin means that for every $100 of sales, $40 of gross margin is generated to cover all other costs and profit.

Unless you are offering customers a discount, or incurring additional direct costs, your gross margin shouldn’t change whether your sales increase or decrease. We often hear business owners say “I am chasing an increase in sales”, to which we would add “provided you maintain your gross margin”. If sales increase but your gross margin decreases (perhaps as a result of increased commission or discounting), you may be working harder for each dollar of sales but making less in dollar terms.

Measuring how quickly your inventory turns over is a critical measure for many business owners where inventory (or stock) is a significant asset. Slow moving inventory can lead to lower gross margin through discounted selling price, obsolescence, and carrying costs. Understanding your optimum stock levels, particularly how these may trend differently from season to season can help to ensure your costs are measured and justified.

Inventory turnover can be measured in number of days, found by dividing average inventory value by cost of goods sold multiplied by number of days in the reporting period (e.g. 365 if reporting period is one year). A low number of days indicates inventory is selling quickly, however understanding your product mix is important as average inventory days vary widely across product lines.

Cashflow

Money in the bank or positive cashflow is a good indicator that business is going well. Many retail businesses are largely cash based operations, with customers paying for the goods at point of sale, and suppliers requesting payment shortly after delivery. This means that managing and reviewing cashflow is an essential skill for business owners.

Periods of high sale activity and strong cashflow can be followed by lulls which often coincide with GST and tax payment due dates along with fixed costs such as rent and employment expenses.

This is particularly evident over the Christmas trading period for many retailers where high sale volumes during December are followed by significant cash outflows in January.

Forecasting cashflow can help highlight these pinch points and enable you to plan accordingly. There are many tools available to assist business owners with cash forecasting, such as Spotlight and Futrli.

If your business is set to retain its competitive nature during this growth period and stay ahead of the pack it is vital that you plan ahead, and have a good level of financial literacy.

Understanding the numbers is not just for accountants – as a business owner your success depends on your ability to measure the impact of external changes on your business and implement timely changes.

Profitability

There are many measures of profitability, including operating profit, earnings before interest, tax, depreciation, and amortisation, and net profit to name a few. Choosing a consistent measurement to monitor is important as well as an understanding of what is and isn’t included in that measure.

Net profit before tax is a measure of what is left for the owner after overhead costs have been deducted from gross margin. To find the net profit margin divide net profit before tax by sales. A1 2% net profit margin means that for every $100 of sales, $12 of net profit is generated for the owners of the business.

If the owners of a business are not working owners, but are paid a salary, it can be more comparable to deduct their salary cost (or a proxy amount for which they would pay someone to manage the business) from overhead costs before calculating net profit margin. This is called “normalising” so that comparison of profitability can be made with other similar businesses or against industry benchmarks.

Profitability is negatively impacted by increasing overhead costs. Carefully reviewing each overhead item to ensure it is necessary and efficient can be a useful exercise.

Outstanding performance for region’s economy

Posted on 8 May 2019 by Simon Fletcher

I’m no expert in economics, but I can see the numbers and it looks good, but what about the future? As much as an economist can look at all economic indicators, I look at it from my frame of reference, how will technology contribute to the Regions growth from 2020 and beyond?

The World Economic Forum has identified five areas technology can help economic growth, they are

Direct job creation
Contribution to GDP Growth
Emergence of new services and Industry
Workforce Transformation
Business Innovation

Let’s explore those further

Technology can play a direct part in job creation by employing and attracting good talent from outside the region. With the initiative like Tech-Collective in Ahuriri, which houses Xero, Re-Leased, Now and others, Hawkes Bay can leverage this success because of strong infrastructure and lifestyle to attract further investment.

Technology can and does contribute to GDP growth through innovation and efficiency gain.

Ultra-Fast Broadband for example will continue to drive growth. And as the governments UFB program comes to an end in 2022 (87% of NZ homes with fibre to the door) the region is well place to increase productivity through further up take of high-speed internet.

Chorus (the Governments major partner for UFB) have claimed a 10 percent increase

in productivity for small and medium businesses through internet usage further, small and medium companies that use web technologies grow and export twice as much as their peers.

Research from Sapere Research Group also “estimate that an additional 10% of employees gaining access to UFB in the workplace would result in a gain of 1.62% of gross domestic product (GDP)”.

That number is not insignificant and if we add in the possibility of a 5G network we can assume a positive outcome for growth to the region.

With good infrastructure comes the emergence of new services and industries. Cloud computing will continue to drive efficiency for small business and as mentioned before Hawkes Bay is well placed to accommodate new businesses.

For my mind, Internet of Things (IoT) is likely to create new services in our region. For example the management and ongoing analytics of data captured will create new services, particularly in our horticultural base, although not in any way limited to that.

Using data analytics for Ag and Hort companies by collaboration are likely to be at the forefront of these new entities. The ability to measure data all the way along the chain, from plant selection and orchard management through to harvesting, sorting, transporting and point-of-sale will be the key driver for any new business.

Workforce Transformation is one of the most exciting for our region. Shortages of pickers continues to be a serious issue for the growth of the pip fruit industry, and this inevitably will drive technology into the field. Although still in infancy prototypes of picking machines are hitting the orchards but aren’t likely to have too much impact in the short term as they require orchards that are designed for robotic pickers.

Although we are seeing automation in packhouses and this will continue as industry replaces existing plant. The advantages will be in efficiency, reduced wastage and technology that will compliment existing workforces. For example, stacking or loading pallets is a physical and tiresome job but a robot can easily do this thereby redirecting labour to more value add positions.

Business Innovation is something I think we do quite well in this region, sometimes out of necessity. Sometime it doesn’t have to be a huge innovations. As the roll out of fibre extends to the more regional parts of the region, simply moving to an online presence can mean growth for the region.

Towns like Wairoa, Takapau to name just two will benefit from faster broadband and unrestricted plans.

Having a tight labour market encourages innovation and uptake of technology. The challenge is being able to fund the transition to some of this technology, like robotic pickers. They are extremely expensive to build and deploy and also require orchards to be redesigned to enable access for the robot.

Clearly embracing technology in our business has real tangible benefit and the challenge is to make sure you have the right technology partner that understands your business. As I mention the completion of the Governments UFB roll out will continue to have a positive impact of our economic growth.

Also, I can’t overstate the power of collaboration of data sets, particularly in the Ag and Hort sectors. This will have a significant impact on the sectors performance, yield and workforce cost. The challenge like always is what do I need to do to prepare my business for this.