Under Attack from Cyber Crime

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WannaCry, the recent global cyber-attack highlighted the threat our businesses face from the online world. This attack wasn’t hugely successful when putting into context of the number of devices it infected worldwide, but it did generate a discussion on what the future holds for future threats.

The ease of which this threat was curtailed may not be the same going forward unless we invest time and resource into protecting the world from future attacks. In order to do this the manufacturers and businesses that operate in this space will need additional support, which may or may not be through government regulation.

We have an expectation that computers must be inexpensive and full of software, this though is at the expense of security and reliability. So it’s common for the machines we use to have vulnerabilities that attackers find easy to exploit and as we look at the number of connected devices growing exponentially the problem could be significant for some businesses unless a solution is found to address the issue.

Globally cyber security is a 1 Trillion dollar industry and growing. This year alone JP Morgan Chase will spend $500 million US on cyber security. Here at home the NZ government estimates cyber- crime cost New Zealand $257 million last year.

If we take a step back and define what cybercrime is then we can look at the issue from a holistic perspective. Cyber-crime is any crime that takes place using a connected device via a network of other connected devices. This then is a broad brush of crimes that include all that we generally think of when thinking cybercrime, DoS attacks, Phishing, Trojans, Spyware, brute force attack etc.

So who is doing this and why are they doing it?

It’s a complex question. Often it can be easy to do and some of the criminals do it purely for the thrill and kudos they receive. When it comes to the more organised criminals it isn’t so clear cut. Some is done for profit, but other attacks are done to cripple organisations and governments.

It can be profitable, while WannaCry netted only $100k it’s all profit. When looking at the opportunity for these hackers the internet has given them access to billions of people so that even a scatter gun approach can net return. Cryptocurrencies have also made it a little easier to hide the identity of the hacker, although not completely.

The future looks quite bleak in relation to being able to stop this so the current investment is likely to continue to rise until we address some of the questions the future will pose. The internet is no longer a web that we connect to. Instead it’s a computerised, networked and interconnected world that we live in. A world where we will have billions of devices connected and networked to make life easier.

And here lays the greatest risk.

I can’t help thinking back to the Y2K problem at the turn of the century. We didn’t know what could happen because we didn’t know what was connected to what and whether this had the capacity to error and crash some system.

What we do know for sure is the attacks will not stop while we continue to produce software that has vulnerabilities and still use weak passwords (the most common password is still 123456).

The biggest concern is identifying where these risks are, what the impact might be and how far reaching. If we take the growth of connected devices, it seems clear the ability for a massive global attack is going to occur unless there is some action by governments and manufacturers to address vulnerabilities quicker than we do today. In 99% of known attacks, security and IT professionals would have been aware of the vulnerability for at least a year.

What we can do in our own businesses is to address what we have control over. Making sure you are updating your system is obvious and has been talked about a lot. Another thing we can do is tighten up on passwords, we are just to blasé.

Iris scanners are already imbedded in the higher end smartphones and this will continue to become better with each new release. Many companies are now employing a dual authentication process, like Gmail and Yahoo has started to push notifications out so you don’t need a password to access email.

But I don’t think manufacturers are the ones who can fix the problem. In the end the solution is a multilevel approach from manufacturers, governments and consumers. If we continue with low cost devices and low cost deployment we will continue to experience attacks that easy to do but become increasingly harder to isolate for the billions of connected device.

The question I would leave you with is if you can address the one thing in your business what would that be?

How Efficient is Too Efficient

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Obviously resource management involves the consideration and management of competing interests, or if not ’competing’ certainly ‘different’ interests. That’s the democratic society we live in, and one person’s frustration can be another person’s preferred outcome.

It’s the fact we’re different and come from different perspectives that it seems so hard to agree on an approach, and people often question whether others actually understand the perspective they’re coming from. Of course they don’t – but do you understand theirs?

This isn’t a new point to raise, and there are all sorts of methods and best practice approaches that can be adopted to raise awareness and balance competing views to arrive upon an outcome, but I’ve been quite taken by the irony that can be seen within our sector and it’s through this lens that a few more other observations can be made.

I’m loving the recent ‘feel good’ craze with electric cars. Don’t get me wrong, gradually moving away from fossil fuels isn’t a bad idea, but one could say that we’re only in the position to make electric cars relatively easy because of our supply of electricity, and I recall a lot of opposition to wind turbines and hydro-schemes.

I also find it ironic how New Zealand is so keen to tackle climate change even though our efforts may only be a drop in the ocean compared the impact of other countries. With our global citizen hat on – are we focusing our resources in the areas in which we can make the biggest difference? Are we being a good global citizen if we’re not?

Even locally I wonder what we’re doing. Hawkes Bay has great potential as a food growing hub. Talking about being a global citizen – we could help feed the world as well as enjoy some great growth, and what I mean by this is more jobs and more people enjoying a greater meaning in life – great for society yes? All we need to do is manage our water to resolve availability issues. Ironically, we may have done the complete opposite. Do we really appreciate the social implications on the communities most affected?

I think one of the biggest ironies is this obsession for efficiency. Take efficiency to its logical conclusion and this is unemployment. Perhaps the smartest thing we can do is resist ‘too much’ efficiency. I recall a time when I was in Bali and found it interesting how the resort had a man stopping traffic for you to cross the road. I learnt to cross the road some time ago and thought this was a bit over the top, but then I realized that this person had a job and they had meaning. I would be prepared to have a little more inefficiency in my life if it meant preserving someone’s meaning.

You could take this further and suggest the best public policy we could have is to resist ‘too much’ technology. Obviously we don’t want to resist it all, and this is probably the challenge, but if we’re developing technologies that are replacing jobs or slowly leading us away from healthy lifestyles, is that a future we want? Is it actually good for us? What would the world look like with less jobs but more people – and potentially unhealthy people – a world full of massive social challenges that’s what.

How does all this relate to resource management, well the RMA speaks of our environmental, economic, cultural and social wellbeing, but it seems that while people have pretty strong views on other people’s practices or ideas, and whether there’s any elements of irony or not, the social part of the equation seems to have dropped out, and it seems that we’re at risk of beginning to mess with the very basics of our social structures.

Take the primary sector, this is a delicate market, and while society could load up the responsibility on this sector to enhance our environment, could one of the implications be robots to pick our fruit rather than paying salaries due to increased operational costs? Forget thinking the implication maybe asking society to pay a few more cents per apple, technology like this probably isn’t that far away and the more likely implication is massive jobs cuts in the sector. What impact would this have on society?

The point here is that we need to be very careful, and very aware of the trajectories on which we’re setting our society when developing approaches around resource management or deciding on ideas, particularly when our technological advances have the potential to manifest as a foe rather than a friend.

When your conservative portfolio is not so ‘conservative’

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The word ‘conservative’, particularly when it comes to conservative investment portfolios, usually suggests stable, slow-to-change and steady-as- she-goes, but in these changing times, there are early warning signs that a ‘conservative investment portfolio’ may no longer be the haven that it once was.

Most people who don’t have a huge appetite for risk, often because their earnings potential is declining due to age or because they need the income from their investments, will traditionally opt for a conservative investment portfolio. A conservative portfolio may be 75% bonds and cash, and just 25% of so-called riskier growth assets or shares – but the world is a different place from what it was five or ten years ago.

We are living in times of unprecedented and historic low-interest rates, not just here in New Zealand – where the Reserve Bank of New Zealand just recently left its official cash rate unchanged at 1.75% – but also in many of the world’s major economies. For example, the Bank of England last year cut interest rates to .25% for the first time in its 322-year history (it has since gone up to .50%).

Interest rates likely to rise

Essentially this means that cash investments are currently returning next to nothing, which puts pressure on people who rely on their investments for income. Meanwhile, inflationary pressures are increasing here in New Zealand and abroad – recent moderations in inflationary growth, due to a fall in energy prices, are unlikely to be long-term as low unemployment continues to exert upward pressure on wages and, as a consequence, prices.

The New Zealand Reserve Bank also needs to keep money flowing through our economy which, as it strengthens, may lead to rising interest rates to balance inflation.
On top of this, economists are also warning that we can expect to see higher interest rates due to positive growth outlooks, possibly early or mid-2018 here in New Zealand, while the Federal Reserve in the United States has already increased interest rates twice this year. At the moment, New Zealand’s banks are struggling to find cash to lend because the low-interest rate environment is deterring local investors from cash investments. As a result, local banks are having to source funds overseas, where rising interest rates are in turn making those funds more expensive. Ultimately, this will likely cause our banks to increase interest rates locally to attract ‘cheaper’ money. The upshot is that interest rates are likely to rise and, while this is good for cash investment returns, it’s not so good for the other half of your income portfolio, bonds.

Secondary market risks loom for bonds

Traditionally part of a portfolio to offer liquidity and flexibility, bonds can be defined as a ‘debt investment’, because when you buy bonds, you are essentially loaning money to an entity like a corporate or government e.g. government bonds.

Bonds can comprise around 40% to 75% of some conservative portfolios. When cash starts to outperform bonds, however, the latter ends up getting stuck on third base, resulting in a secondary market risk for investors with a large bond presence in their portfolios.

A good analogy for this is to think of your investment portfolio like a rental property. Think of your cash investment returns as the rental returns you would earn from a property. Bonds, on the other hand, are like the capital value of the property, which may decline as interest rates go up.

If your bonds are returning 4.5% interest and interest rates rise beyond 4.5%, you can no longer sell those bonds at their full value, (although you can sell at a marked down discount) because cash is worth more.

What’s more, you may be stuck with those low performing bonds until they mature years later, for example in 2020. We call this secondary market risk, and it is just such an eventuality that is making your traditionally conservative investment portfolio a riskier proposition than in the past – even for moderately conservative portfolios which consist of 60% income assets and 40% growth assets.

In summary, conservative investment portfolios may not be that conservative in a rising interest rate environment.

Time to challenge thinking about what’s conservative

Naturally, everybody’s needs are different, and each investment portfolio should be structured according to your individual goals and needs – based on professional investment advice – but perhaps it is time to challenge yourself with some ‘outside the square’ thinking when it comes to structuring your conservative investment portfolio. It is possible to achieve income and liquidity (traditionally viewed as the domain of bonds) from growth assets without being locked into low-yield returning deposits. Managed funds, for example, offer ways to achieve liquidity as well as solid returns, so long as you are prepared to take a portfolio-wide view of your investments.

Farmers Breed Success For Vet Services

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For longer than most people in the Bay can remember, animal industry stalwart Vet Services Hawke’s Bay (VSHB) has been ensuring all beasts – from sheep to bearded dragons – get the care they need.

Over the past seven decades, the business has grown from a one-vet practice in CHB to an incorporated business of five practices located in Napier, Hastings, Waipukurau, Dannevirke and Masterton.

“Sixty, seventy years ago you couldn’t get a vet down here,” says business manager Brendan James.

Vet Services Waipukurau

“That was pretty typical for rural areas in New Zealand in the late 40s and 50s, even throughout the 60s and into the 70s. At the time, agriculture science was evolving and vets were only just starting to play a more prominent role in the productivity of farms.”

However, Brendan says CHB farmers saw the value of a good vet early on, with a group of farmers getting crafty in 1949 and forming the CHB Farmers Veterinary Club, where they pooled their resources together to establish the district’s first professional veterinary practice.

“The club members collaborated and contracted a vet to come and live here to service the farms in the area,” he says.

“This was pretty typical of what was happening across New Zealand; farmers had to get creative to get vets into the regional areas.”

Thanks to the initiative of a few farmers almost 70 years ago, VSHB is a thriving business today. Incorporated in 1974, it now employs in excess of 50 staff and has plans to expand their Hastings and Waipukurau buildings to better service their clients.

Brendan admits that while the business may not have the same problems attracting staff to the district, vets are still in pretty high demand countrywide, with only around 130 graduates coming out of Massey University each year.

“These grads are highly sought after,” he says. “So, like the farmers’ club before us, we still have to get creative about how we recruit.

“One effective way has been to offer scholarships to students; another drawcard for us is that we can offer them time in a mixed animal practice.

“These types of clinics are becoming less and less so but it gives graduates an opportunity to develop their general veterinary knowledge before they decide what line of clinical expertise to follow.”

While it is these points of difference that have served VSHB well, Brendan says the team is well aware that the business can live and die with the seasons.

“Thanks to some good rain, the dams are full and farmers are in a position that they do not normally find themselves in in that they are trying to find animals to eat the grass,” he says.

“As a consequence, the market is lifting and the sheep and beef guys, the dairy guys and the deer farmers are generally feeling pretty positive at the moment.”

Brendan explains that if it is a dry season then the number of animals disappear out of the area to be fed elsewhere where there is grass.

“We ride the lows and the highs from that point of view, and I am probably oversimplifying it. It is quite a simple business for us on the large animal side, we live and die by their good or bad fortunes.”

In terms of the small animal side of the business, Brendan admits it is driven by how well the Bay is travelling economically and is well measured at the Hastings clinic.

“You may have noticed Hawke’s Bay is bursting at the seams in terms of people wanting to move in here,” he says.

“Most people have pets and when people have got money, they are prepared to spend money on looking after their pets better and prolonging their life.

“It’s interesting seeing the different dynamics of our client base and just how they ride on what is happening economically.”

Because of this, VSHB has to expand two of its clinics to cater for this demand.

“It’s a good problem to have, even if it is a little bit uncomfortable for the guys at the moment because we are really busy and they are working on top of each other. But if we have to create more space for the right things for the right reasons, then it is a good thing to be able to do.”

Beyond this, Brendan believes that what makes his business successful is that the company is owned by the people who work for it every day.

“It makes a difference for the clients due to the quality of our staff. We want to make sure that we deliver the best experience for our clients every time because if we don’t, they don’t return.

“At the end of the day, we are in a service industry so it doesn’t matter how good the seasons are, if you don’t deliver good service you won’t have clients coming back.”

Heads in the Cloud, Boots on the Ground

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Forward thinking has allowed one CHB start-up to move farmers into the 21st century – by keeping their heads in the cloud and their boots on the ground.

You wouldn’t know that Cloud Farmer took flight from a farm half an hour out of Waipukurau with scant access to the Internet four years ago. Designed by AgRecord, the program has essentially transferred the trusted notebook onto the computer.

“Cloud Farmer is a really simple way for farmers to capture, store and share operational data from their farms,” says AgRecord managing director Gretchen King.

“Before, the way the majority of farmers captured this information was to write it down in a notebook and then come home and transfer it to the diary. Our program eliminates this last step.”

While Gretchen may not have invented the program (she and her husband bought it from a friend in 2013), she certainly saw its potential on any farm, anywhere.

“A friend of mine Ginny Neal came up with the original program. At the time, Ginny and her husband managed Castlepoint Station in Wairarapa and she designed the program because she was sick of having to chase up staff for time sheets and tallies.”

So, necessity being the mother of invention, Ginny built the first version of what is now Cloud Farmer.

“She built a small version for their farm; it was basically an intranet and they used Wikispaces, and while it was as clunky as clunky, it worked,” says Gretchen.

“One of the downsides was, however, they had to build it from scratch for every single client.”

Despite this, Castlepoint Station won a local farming competition, which gave the program some media attention. It was then that business for the program boomed.

“Ginny asked if we, myself and my husband Leyton, wanted to buy the program as she didn’t have time for it anymore. So we did and we set about making it more designer and user-friendly,” says Gretchen.

“What Ginny had done for us though through her program was show us that there

was a need for something like Cloud Farmer, what was being used in the application, what wasn’t, what was needed and what was wanted.

“That was huge, because often people have a long list of wants, which makes it hard to pick out what their needs are.’

With a good base program to start from, Gretchen and her team set about addressing other issues with the program.

“The biggest challenge was keeping Cloud Farmer simple,” she says.

“There are other programs out there but they involve really sophisticated software, often beyond what most farmers – who are used to jotting down notes on the back of a cigarette packet – are willing to learn.

“Our points of difference are the simplicity of the program and our ability to be able to customise it for each individual business. Those are great strengths to have.”

After addressing the challenges something new to an old sector can bring, Gretchen knew the next step would be to design a smartphone application.

This came to fruition last year with the launch of the Cloud Farmer phone app, which syncs with the original computer program.

“Farmers can use it just like they would their notebook, collecting information on the go, with or without Wi-Fi coverage.

“With the app, farmers can jot down tallies, staff hours, drench records, log hazards, you name it. It’s just as quick as writing it in your trusty old notebook,” says Gretchen.

“The data from your app syncs back to your main Cloud Farmer desktop system.”

Thanks to the app, all staff members can have access to the same information, be it diaries, maps or job lists.

“Before, the boss would tell you the day’s plan as you were heading out with your dogs, all the information would be stored in his head. With Cloud Farmer, all staff members have access to this information and they can input their own information or file their time sheets and tallies for the day. “So it now becomes about transparency of information and getting everyone involved in the work; in terms of creating a team culture, this is great.”

Moreover, with Cloud Farmer now available as a smartphone app, Gretchen says the program appeals to a far bigger clientele than the original sheep and beef farmers; now other types of farming business, right through to the one-man bands, are using her product.

While the Kings are looking at taking their start-up global (they already have clients as far afield as Scotland), they are taking their time.

“We don’t want to become victims of our own success,” Gretchen says. “We are happy for the moment saturating our own little corner of the market.

“For now, we will take stock of what we have and continually improve and update it so we can provide the best product to our customers.” www.agrecord.co.nz

Mavis Mullins – from the shearing shed to the boardroom

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The Bay’s own Mavis Mullins has been inducted to New Zealand’s Business Hall of Fame, adding to the already long list of her accomplishments in the nation’s corporate sector. Hawke’s Bay born and bred, the self-described country girl has left a lasting impression on a world she never intended to inhabit.

“I have to say ending up where I have wasn’t by design,” she said. “It has been a bit of a collision of a number of things. They say that timing is the key to everything.”

“When I first turned my hand to a higher education, I enrolled in an arts degree at Victoria University, but I didn’t last – primarily because I met this good-looking shearer.”

So how did Mavis go from the shearing sheds in Dannevirke to the boardrooms of Auckland?

Her first job was working for the family business as a wool handler, this was where Mavis got here business grounding, saying “it was honest, real work”.

“It was long days hot grubby, grimy work working with a group of people tasked to

do a job, but I learnt so many skills there particularly around communication and understanding people and how you bring people together.”

From wool handling to marrying the ‘good- looking shearer’ and starting a family, Mavis [eventually] made her way back to university – this time enrolling in a business degree at Massey.

Not only did she complete this degree, she attained her masters and has subsequently spent valuable time at California’s Stanford University.

But none of this wouldn’t have happened if she hadn’t inherited the family business.

“Time spent at Massey University completing my MBA did more than open doors for me in the business world. It opened a lot of windows for in terms of my own self- awareness about what was out there.

While she may not have ended up in the business world by design, her want to succeed was very much fashioned by life experiences.

“As it so often does it comes back to your parents. I had a father who was innovative

and saw things that no one else could see. He was a shearer and a farmer so he had those big gnarly, rough hands that really exemplified that hard work can push you well ahead.

“And then I had my mother, who was the quintessential mum who made sure everybody had food and she was the real mother of old. So there was a whole lot of lessons about the power of a team.”

And then there were her beloved shearing sheds.

“If my parents gave me my grounding, my drive to succeed and initiate change came from my time in the shearing sheds. At the time there was a very low opinion of the work that was done in certain sectors of New Zealand and of the people who worked in them.”

She said this was a real wake-up call for her. Being a relatively new mum she said she never wanted any of her children, but especially her girls, to feel embarrassed or ashamed of the work they ended up doing in a sector that “butters our bread”.

“These workers were handling product that is worth hundreds of millions of dollars to the economy and at the time they were looked down on without any opportunity to have qualifications or endorsements, to have their work recognised. For me that just wasn’t right.

“Everything I have done since has grown from that and today I am still advocating for rural people, so they are not excluded from the conversation that shapes our country.”

Mavis says she is tested on a daily basis around the boardroom table – challenges that stem from often being the only Maori or the only woman, that she is somehow representative of a whole group of people.

“That is just not the way it is. People ask me if I feel under pressure for being the only woman on the board, I say no because at the end of the day we are all people and with each one of us comes a diversity of thought.

After decades in the business sector, Mavis now finds herself in the realm of professional directorships.

“Right now I chair the Taratahi Agricultural Training Centre in Wairarapa and the Post Government Settlement Entity for the Rangitane o Tamaki nui a Rua Incorporated, which is due for its final reading in Parliament.”

Mavis has also joined the Hawke’s Bay Rugby Union Board, saying yes to this because growing up with the Ranfurly Shield she knows firsthand how a sport such as rugby can benefit the whole community.

“I remember when the Magpies united the whole of Hawke’s Bay – it didn’t matter whether you were from Wairoa, Hastings or Dannevirke – everyone felt a part of it. I think we have lost a little bit of that over the years, and people don’t feel a part of it anymore” she said.

While boards across New Zealand are clamouring for her experience, she wouldn’t have such choice if it was not for her time at telecommunications provider 2degrees.

“I was one of the founding members that took the idea of a third mobile network to fruition. I then sat on the board that took it through that whole greenfield to strategy to implementation that was an amazing opportunity. It blew me away how much of an impact we had by just adding to the competitive environment.”

With her long list of accomplishments including winning the Golden Shears, being recognised with the New Zealand Order of Merit, celebrating 43 years of marriage and being inducted into the NZB Hall of Fame,

Mavis said her success came down to her approach.

“I think everybody brings something quite different whether it’s to a conversation or a view,” she said.

“The fact that I am a Maori-Irish-Chinese woman offers a somewhat different point of view, one that I brought to the table in a non-threatening way.

“I think I would like to be remembered as someone who was a part of the movement that bought this diversity to the table.”

With her wealth of knowledge, Mavis offered this advice to anyone starting out in business.

“Do something you are really passionate about, do something that you totally love because but it won’t bother you taking three steps forward and five steps back,” she says.

“Put yourself out there into challenging situations and learn to like being uncomfortable. I was often the only Maori or woman in a meeting and would question my being there – but I challenged this paradigm and everyone has been better off for it.”

To this day Mavis still calls the shearing sheds of her Dannevirke property home. “With all the service stuff I do there is something really grounding about coming back to small town New Zealand,” she says.

“Where scones and a cuppa are a reality and the people are genuine and friendly. Generations of my family were and still are being raised here. I don’t want to be anywhere else to be honest.”

 

Central Hawke’s Bay – all set to thrive

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With a brand new council comes a bold new vision that will see Central Hawke’s Bay thrive well into the future.

Less than a year into the new triennial and with a drive to understand what their constituents want for the future of the district, the newly elected councillors of CHB ventured out into the community.

As part of the annual plan or ‘Thrive’ process, the council held 10 separate meetings in a format where people could discuss their ideas as opposed to the more traditional method of lodging written submissions.

Mayor Alex Walker says this method was chosen because there was confusion between public engagement and public consultation.

“As a new group of councillors we knew coming in that we had a community that felt a bit disconnected from what council is doing,” Alex says.

“The traditionally described methods of consultation end up being quite combative and confrontational, which is actually not conducive to solving problems.”

According to Alex, councillors knew that CHB needed to have plans in place that not only allowed current generations to prosper today but well into the future.

“It is a move away from councils doing things for you to councils doing things with you, where good engagement is feeding good decision-making,” she says.

“It is a subtle shift in the way local democracy could and should be working and that is a really important driver for me.”

It seemed to have worked for council, which Alex reports received great feedback from its constituents.

“A really positive thing that came out of it was the sense of pride that people have for CHB,” she says.

“They are really committed and really love everything that we have here, what we stand for and our sense of community.”

So effective was the engagement approach, Alex says it produced a two-part report that will be used by council as
a cornerstone document to guide not only their annual plan but the long-term plan’s budgets and policy frameworks.

“It’s going to feed into all the key documents that we have and also into the business plan that council operates under,” she says.

“The next step is council working through the priorities and what the big transformational moves are and what we need to do to make some of these come to life.”

The first-time mayor admits that one of the things that surprised her was how strong the common themes were that came out of the 10 meetings held in different parts of the district, such as connectivity, prosperity and respect for the environment.

“I think the amount of consensus there was on what was viewed as important for CHB, it probably shouldn’t have surprised us but it did,” she said.

On the other side of the coin, Alex says that while a strong sense of identity as a district came through in the common themes, each of the smaller communities such as Porangahau and Tikokino have their own clear identity.

“So, one of the initiatives that will come out of this is the idea of doing community plans for each of our settlement spaces so that they own and drive the way that council works with them,” says Alex.

So how does ‘Thrive’ support local businesses?

“Thrive benefits the whole community – schools, families and businesses. It is for everybody,” says Alex.

“When it comes to business, it is about creating a positive space; what benefits the community will benefit business.”

What started out as a values-based discussion amongst elected representatives has become a concept embraced by the CHB community.

“Thrive turned into a term that clearly encompassed our vision for the district, being able to thrive and grow and be successful,” Alex says.

“This is not just my vision, it is not just the council’s vision, it is the vision of the whole community.”

 

CHB – Central to the Hawke’s Bay economy

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Central Hawke’s Bay is defined by its boundaries, from the base of the 200-million-year-old Ruahine Range out to the Pacific Ocean on the East Coast. State Highway 2 runs through the centre of the region, with Napier’s port and airport around 70 kilometres away. Central Hawke’s Bay (or CHB as it’s usually referred to) is also well served by rail, with a station in Waipukurau en-route for trains running from Wellington to Napier, via Palmerston North.

Waipukurau and Waipawa are the largest townships, with many other settlements dotted around the region including Elsthorpe, Tikokino, Takapau, Otane and Porangahau.

CHB’s economy is largely based around the primary production sector, with the largest contributor being agriculture, along with its related food processing facilities and supporting agribusiness. Although accounting for only five percent of Hawke’s Bay’s regional population, CHB produces 20 percent of its exports. The Takapau freezing works Ovation’s processing facility provides vital employment for CHB residents as well as the greater Hawke’s Bay population, with many employees from Hastings and Napier making the daily trek to CHB for work.

Tourism is also a big earner for CHB. Mayor Alex Walker reports more than $26 million is brought in each year through events, cycling and walking trails and beach-related activities.**

While agriculture and tourism may be prosperous, economic indicators for the 2016 calendar year show CHB was the only district in Hawke’s Bay to record a decline in the value of both consented new dwellings and new non-residential buildings.

The good news is that in general, CHB is experiencing increased capital value growth for properties. The median residential property value in Waipukurau lifted from $215,500 in April 2017 to $281,000 in June 2017.

Andrew Chambers is a registered valuer and owner of the Property InDepth franchise for Hawke’s Bay, covering CHB. He says the residential property markets in Waipukurau, Waipawa and Otane are active and steady.

“Purchasers include those trading up in property (second and third homebuyers), investors and first-time homebuyers, including those who commute to Hastings or Napier for work. The lower capital entry levels have allowed a number of first homebuyers to get their foot on the property ladder and the lower fuel costs and current interest rate environment have contributed to making the first home purchases possible. I think CHB will continue to be a steady and stable market due to affordability issues in Hastings and Napier and any slowdown will likely come from interest rate rises and upward pressure on fuel pump prices, the latter being in the spotlight at the moment,” he says.

Andrew notes there appears to be less vacant retail space in Waipukurau than there has been for some time, with commercial rents stable and the uptake of space a reflection on the improved farm-gate returns experienced for the past few years. Likewise, domestic housing rents have been stable for a number of years, with modest growth over the past 12 months.

Primary production accounts for around 95 percent of CHB’s land use. While the residential sector in New Zealand is in the spotlight at present, Andrew says the rural property market has a dynamic of its own with different drivers.

“The CHB lifestyle property market tends to mirror the residential market and has seen a lift in sales volumes and general appreciation in capital values. The sector including large farms has seen a steady number of transactions. New Zealand is at a crossroads of sorts though; with the average age of the New Zealand farmer around 65, succession plans for these properties can be somewhat difficult if ongoing family ownership is desired versus selling on the open market.

“There has been a trend to increase the size of farming operations over the past 10 to 15 years, but the capital required along with the element of ‘fairness’ in some family situations has meant that the next generation has opted out as they do not wish to carry large debt burdens. As a result, there has been an increase of company farming operations and syndicated farm ownership.”

Business Hawke’s Bay reports that there is a large area of rural land in CHB that has “untapped potential” and that the district could benefit from “increased employment opportunities”.

Andrew agrees that CHB is not thriving but holding its own.

“Waipukurau provides a vital service centre to a large farming community. There has been huge uncertainty around the Ruataniwha Water Storage Scheme (the dam). It is my personal opinion that the dam would have provided a much needed injection for CHB, but I am not sure that particular soap opera is over yet.

“If house prices in Hastings and Napier continue the current upward trend, I think you will see more first homebuyers looking more closely at the CHB towns and commuting. If the dam is ever given a green light, I envisage this would create a quick, above-average level of growth in the short term, levelling out to a moderate level of growth.”

With the dam issue now out of its hands, it’s a case of wait and see for CHB.

Barker Contractors – Signed, sealed and delivered for roading contractor

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Waipawa based Barker Contractors has gone from being a jack of all trades to a specialist roading contractor, leading the way with new innovations.

Business owner Michael Barker returned from a five year working stint in Australia back in 1980 and has taken the business of a journey of expansion, both in services and staff numbers, to evolving into a niche contractor that works across Hawke’s Bay.

At one stage, the business was doing everything from forestry roading, agricultural contracting, general earthmoving, fibre, drainage, council and roading work to quarry ownership.

“It actually started to feel as if it was getting out of hand. It doesn’t take much to trip you up when you’re running several operations under the one business,” Michael says.

A new direction was needed and Michael brought on John Masters, who had retired from the corporate world, as general manager.

“It was the best thing I could have done, as I had someone that I could bounce ideas off,” he says.

“We got rid of forestry, the bulldozers, transporters, some truck and trailers, the “big diesel items”, reduced the quarries to one, rebranded the company, and looked toward delivering a specialised chip sealing operation, complementing the work we wanted to retain and servicing a market that the larger roading companies weren’t really interested in. We also purchased new graders, rollers, a road mill – all the toys really needed for this change.”

“We started using Emulsion Chip Surfacing technology which came recommended to us and also had the Clean Green tick.”

The product called CRS-2 sourced from roading contractor Higgins to seal over the high-grade aggregates, which is produced at Barker’squarry. The CRS-2 is contained

in a stainless steel 6,000 litre spray tanker unit Barker built and designed with the engineering design firm, Randal & Associates and Deakin Engineering, which constructed the unit.

Unlike the butane methods used on traditional Bitumen tankers to keep the product hot, a 30Kva generator was fitted to heat the CRS-2 and also power the tankers operations, something Michael thinks is a New Zealand first.

“The process is known as emulsion spraying and it’s proving to be a game-changer for us, offering clients a positive and more environmentally friendly option than the traditional process.

“The quality of finish, ease of application and providing a service that was thought of as being unaffordable to the home owner has been very rewarding. Previously concrete, pavers or gravel finishes were the only option, not now,” he says.

One key advantage in using emulsion is derived from the fact that it is flexible, but with strength. “It will stretch if necessary but also returns to its original shape.”

As well as the Green tick, it also ticks the Health and Safety boxes for both the public and those working on the sealing operation. CRS-2 only needs to be heated to 75 degrees Celsius, which helps eliminate the risks of burns. “There is a You Tube video example of Downers applying RS1 Emulsion to the runway on Great Barrier, which shows the uptake in these products in both strength and acceptance in the commercial world.

Michael says the unit is exceeding all expectations.

“We knew there was a niche market because the bigger roading companies just weren’t really interested in taking on smaller jobs like sealing driveways and since starting this operation last year, we’ve been very busy, and certainly getting more and more enquiry.”

This year Barkers sprayed a residential subdivision as well as a huge commercial carpark in Hastings, on top of all the domestic work that has been undertaken.

Barkers Contractors is committed to helping young sports people in CHB achieve their sporting goals, by sponsoring the Central Hawke’s Bay Rugby Club Senior grades for a number of years as well as supprting young Waipukurau golfer Lucy Owen achieve her goal to earning a scholarship to play golf at an American University.

“I happen to think that if someone is into their sport it’s a good thing and should be encouraged as much as possible, keeps kids off the streets, gives focus and direction.”

For full details of all the services the company offers, go to their website www.barkercontractors.co.nz

Enable Business – Championing the Success of Businesses in the Bay

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Two of Hawke’s Bays’ most innovative accountancy firms — enablebusiness and Knowledge Accountants — have joined forces to deliver even more value to their clients.

Well-known Hastings accountant Cedric Knowles and his team at Knowledge Accountants Ltd have merged with enable- business Hawke’s Bay – and the new two-partner firm is looking forward to an exciting future.

“We’re rapt to have Cedric and his team on board,” says Sam Ogle of enablebusiness.

“Our two firms are very similar – we’re both passionate about the Bay, and we share the same philosophy. We believe accountancy is more than just ticking-the-boxes and filing tax returns on time…it’s about bringing those wider business skills and proactive advice that will really add value.”

Cedric has been running Knowledge Accountants for 10 years; while enable- business started in the Bay nearly four years ago, and is headed by Sam Ogle.

The two Directors also have a similar approach when it comes to their client relationships, adds Cedric.

“Most of our clients have been with us for many years. It’s important to build that strong relationship, so you actually enjoy working together. It doesn’t hurt to bring a sense of humour either.”

Growing client base

The two firms have a similar client base – mostly family-owned businesses in trades, manufacturing, export businesses, professional services, and horticulture/ viticulture. Although proudly Hawke’s Bay-based, they also have clients based throughout regional New Zealand, Australia and even the Chatham Islands.

Cedric says the feedback from his clients about the merger has been “overwhelmingly positive”. The merger will deliver several benefits for the newly-expanded client base.

“From our clients’ perspective, we now have an even broader set of skills and expertise in-house,” says Sam.

“When it comes to solving client issues, two heads are better than one. We also bring different skills to the table. For instance, Cedric is experienced in forensic accounting and providing expert witness services.”

Moving forward, the firm will host business education events that encourage clients to network with each other, and potentially forge new business alliances.

Value-added packages

As a national group of accountancy professionals – located in Auckland, Wellington and the Hawke’s Bay – enablebusiness offers a full range of accountancy and business advisory services.

They specialise in providing clients with affordable fixed-fee packages, specifically designed for the SME-sized business.

There are three types of packages – each with affordable ‘no surprises’ fees – to suit the business at every stage of growth. To help with cash flow, payments can be made by monthly instalment.

“Our philosophy is that we like to quote everything up-front before we do any work… just like our clients have to do in their own business,” says Sam.

“The Basics” is a cost-effective package covering annual returns, GST, tax compliance,

as well as phone and email support. The “Enabler” and “Enabler Ultra” packages are aimed at business owners who are ready for the next stage of growth. They include a business plan, followed up with business coaching quarterly or monthly management reporting, and annual integrated forecasting. Advice on HR and people management can also be provided.

Outcome focused business plans

Their business coaching and advisory services are a key point of difference from the traditional accountant’s offering. enablebusiness offers business planning to set goals and objectives; supported by regular business coaching.

“This is not the kind of business plan you file away in a draw to collect dust,” says Sam.

“It’s a punchy two-pager that’s entirely outcome focused. We tell clients they can laminate it and put it on the dash of their ute – to remind themselves daily what they need to be doing, and why.”

The plan has 12-month objectives, broken down into 90-day tasks. The coaching sessions keep the client on track to their goals, and accountable to themselves.

“The coaching is about making sure the business plan gets executed. It’s a bit like having a mini-Board of directors – a trusted team who are helping you solve problems and overcome roadblocks, while keeping you on course to achieve your goals.”