26 Oct: South Port New Zealand Ltd, operator of the Port of Buff, has benefited from a long running positive economic cycle in the New Zealand economy which has supported growth in cargo volume and profitability, the Company’s shareholders were told at today’s Annual Meeting held at Bluff. The Company’s Chairman, Mr Rex Chapman, indicated that the economic momentum has continued into the current 2017-18 year. This 2017 result again emphasised the importance of bulk cargos to South Port’s business.
"South Port is primarily a bulk port with a container operation. Bulk or break bulk cargos comprised over 2.6 million tonnes with containers representing just over 400,000 tonnes. This equates to a volume split of 86% bulk vs. 14% for containers."
"Within the main bulk cargoes of forestry, NZAS cargo, fertiliser, petroleum and stock food, the log category continued to show strong growth. Log exports reached a new record of 560,000 tonnes while forestry in total now represents almost 30% of South Port’s overall cargo."
Other bulk cargo volumes were generally steady.
Continued growth in container throughput propelled South Port to a new record of 39,300 TEU, up from 35,100 in the previous year. This increase in container volumes was primarily due to an increase in dairy related exports and inbound cement, fertiliser and farm nutrition products.
FY17 net profit was $8.45 million, a very satisfactory result, although below the FY16 record of $8.71 million. One of the significant differences in financial performance in FY2018 was an 18% increase in the cost of repairs and maintenance which was forecast last year.
Guidance was for FY17 profit to be back by about 15% which would have delivered a profit in the order of $7.4 million and so the Company bettered forecast by over $1 million.
"Another positive was that we were able to once again, for the second year in a row, break 3 million tonnes of cargo and we matched last year’s record volume of 3.05 million tonnes."
This year’s sound financial result has enabled the Board to pay a final dividend of 18.5c which translates to a full year dividend of 26c, the same as last year.
Mr Chapman said, "At this early stage of the financial year, we are expecting South Port’s main cargoes of logs, NZAS, dairy exports, petroleum and fertiliser to show modest growth in the next 12 months.
"The dairy sector appears to be on a more stable platform and this should support both the bulk and containerised cargoes which are associated with it."
"Given reasonably stable volumes for the year, we are predicting that our earnings will be broadly consistent with the past year and on that basis the Board will be aiming to maintain the current level of dividend pay-out."
An update of earnings will be provided when the interim result is released.
Mr Chapman commented on the consolidation amongst the container shipping lines.
Three global alliances have emerged which now control over 77% of global container shipping capacity.
Over recent years, the size of new container vessels being built has grown from 10,000 to 14,000 TEU vessels to 18,000 and now 22,000 TEU size. "However, it has recently been reported in shipping media that there is starting to be a difference in opinion between the biggest two shipping lines, MSC and Maersk as to whether or not this trend will continue. Maersk now believe that the race for bigger and bigger ships is gone for the foreseeable future."
"There are several reasons for this; the range of ports that are capable of handling these larger vessels is limited and larger ships mean less frequency of sailings which does not suit importers and exporters."
"The rationale for using larger vessels was to get economies of scale and reduce costs, but these financial benefits are only obtained if the ships are full. With the present excess capacity in the global market, that is difficult to achieve."
"In New Zealand there continues to be strong competition amongst all ports for containerised cargo within their catchment", he said. In many cases, the natural catchment of the port is being extended by inland ports, "a trend that is likely to continue."
Mr Chapman noted that all ports have a different mix of cargos, revenue streams and in some cases non-port businesses.
He provided a comparison of South Port’s percentage of net profit after tax derived from port revenues with that of four other ports.
The analysis shows that South Port converts 23% of its revenue to net profit after tax which Mr Chapman says compares very favourably with the peer group percentages of between 11.9% and 18.5%. "South Port’s performance demonstrates the importance of our favourable bulk cargo mix."
South Port’s business has a greater weighting towards bulk cargos than containers and also has a diverse range of bulk cargos, both on the import and export side.
Bulk cargos by their nature require less people to handle and operational plant interaction, he noted. These cargoes move in larger volume parcels and thus provide a better gross margin than containerised cargo.
Whist there is better margin at a gross level, the Port must provide extensive infrastructure which, in South Port’s case, is requiring increased spending on maintenance to sustain.
The Company distinguishes between growth-related capital expenditure and ‘stay-in-business’ capex required every year within the existing business. A Board objective is to ensure that annual total "stay in business" capex does not exceed depreciation expense.
During the coming year two significant capital projects will be undertaken:
- Construction of a replacement pipe and access corridor for the Town Wharf fuel import berth at an estimated cost of $5 million; and
- Paving of one hectare of the log storage area, coupled with installation of an improved drainage system for a total of $2.2 million.
These two projects make up $7.2 million of the 2018 capex budget of $9.4 million.
Mr Chapman expressed the Company’s thanks to outgoing Chief Executive, Mark O’Connor.
Mr O’Connor joined South Port nearly 25 years ago in 1993, initially as Finance Manager. In the lead up to the Company’s stock exchange listing in July 1994, he was appointed Company Secretary and was involved in much of the background work prior to that listing. Five years later he was appointed to the CEO role.
During his 25 years, Mr O’Connor has served under three Chairmen, Rex Powley, John Harrington and Rex Chapman.
"He has overseen the early transformation in the Company’s business with a successful refocus on the core port activities and achieving solid growth in the operation," said Mr Chapman.
He established the MSC International Container Service at Bluff and has grown container and other cargo handling capabilities together with warehousing facilities both on-port and now in Invercargill.
Since 2000, South Port’s revenue has increased by approximately 300%, tax paid profit has increased by over 400% and cargo volumes have increased by 60%.
"This is impressive growth for a small regional port. He has, in my view, set the standard for the others that will follow him and he has left a lasting legacy in his record of achievement at South Port."
The share price when Mr O’Connor was appointed was $0.86; the current share price is $6.20, a 720% increase. The total return to shareholders since listing has been $222 million.
There were over 40 applicants for the South Port CEO’s position from both New Zealand and offshore. From a shortlist of very strong candidates, Mr Gear was successful and took over as from 1 October. Mr Gear has been with South Port for 23 years in a variety of roles.
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| A Southport release || October 26, 2017 |||
Beckie wilson writes in the Wairarapa Times Age about a family meat processing company that has created a niche for meat products away from the larger red meat exporters and has hit the nail on the head. The Everton family don’t want to be “lumbered in the same box” as other red meat providers.
They pride themselves on the integrated process of owning the meat all the way from the paddock to the plate.
Cabernet Foods Ltd and the processing plant Kintyre Meats has been working out of rural Carterton for the past 17 years.
Lyndon Everton, the managing director and in charge of processing, works in the Wairarapa office on Gladstone Rd.
The family company recently won the chilled/short shelf life award for their Everton Dry Aged Beef at the NZ Food Awards.
Mr Everton said it was great to be recognised for the smaller meat exporter that they are.
“The red meat sector is very challenging when it comes to the larger exporters which overshadows smaller exporters like us,” Mr Everton said.
“We don’t want to be regarded as just meat, we have got responsibilities behind our name and brand, whether it be an animal welfare aspect, or environment sustainability aspect.”
They were approached by a food technologist three years ago to develop the speciality product, which they carried on into the commercial and retail stages.
Continue here to read the full article || October 26, 2017 |||
26 Oct: As China's Inner Mongolia Yili Industrial Group eyes up a possible expansion into Australia, its New Zealand operation is picking up steam with plans to build a state-of-the-art laboratory and to invest at least another $200 million.
Oceania Dairy - the South Canterbury-based dairy company owned by Yili - is in the process of commissioning the second stage of its development, which includes a canning and blending operation for infant formula and two UHT manufacturing lines, general manager Roger Usmar told BusinessDesk. The first stage involved 10-tonne an hour infant formula capable dryer. Total investment so far is around $400 million.
The third stage of development will likely include a second, larger dryer and a lactoferrin plant, although the dryer's size hasn't been determined, said Usmar. Meanwhile "we arguably have a stage two-B and we are working through the approval process," he said. Oceania has a small onsite laboratory for testing but expects to commence construction of a far larger laboratory to support the operation by mid-2018, he said.
Continue here to read the full release from BusinessDesk || October 26, 2017 |||
26 Oct: New dairy nutrition innovator, manufacturer and exporter Winston Nutritional formally enters the New Zealand market today with its sponsorship of the Infant Nutrition Council’s Feeding the Future Conference in Auckland.
Winston Nutritional will present to potential suppliers, partners, local and national government agencies and market participants about its product suite, its state-of-the-art technology, its vision for the New Zealand nutrition market and the company’s role in advancing the industry’s innovative capability.
Winston Nutritional General Manager Leon Fung, who was previously Deputy General Manager at Yashili NZ Dairy Company and directed the development of their Pokeno plant, said the company sponsorship of the conference signals that the new operation is open for business.
"Our investment in the modernisation of the manufacturing facilities at our Mt Wellington site has been substantial, as is our investment in our people," says Mr Fung. "We have state-of-the-art technology capable of processing and packaging 20,000 metric tonnes a year but without the best people in place you can’t hope to be the best and we want to be better than our peers," he says.
"We have experienced technical experts in research and development, who have a strong innovation track record and previously worked at Fonterra and Danone ," Mr Fung says. "Product development and innovation is a core function at Winston Nutritional and will help drive our expansion plans here and overseas."
The company’s research and development will also help drive innovation across the nutritional sector, he says, increasing New Zealand’s capability by raising the bar.
"I am a proud New Zealander producing innovative New Zealand nutritional products for a global audience and I want Winston Nutritional to be at the forefront of our sector as it reaches out to the rest of the world with new products and new ways of doing business," he comments.
To ensure Winston Nutritional can achieve its ambition, the company has a clear strategic vision.
"Our focus is first on quality, then teamwork and workplace culture," Mr Fung explains. "Culture and teamwork are incredibly important if you truly want to produce the highest quality nutritional products in the world and we do."
Winston Nutritional will also be looking at partnership opportunities at the Feeding the Future Conference and Mr Fung says his company has a lot to offer suppliers, producers and exporters.
"We can certainly help those companies who have a strong China focus and need guidance and assistance to better understand the commercial landscape" he says. "But it’s important to note that we have a wider market focus than just China - Winston Nutritional will be an exporter to the world."
Mr Fung says the company will be making further significant investments in the nutritional sector and there will be an announcement about additional development soon.
| Winston Nutritional release || October 26, 2017 |||
Passengers worldwide are demanding more personal control over their travel writes Peter Needham for eGlobal. In particular, they want a single biometric security token that covers all aspects of travel procedures, according to a large-scale survey commissioned by IATA to find exactly what travellers want.
The International Air Transport Association (IATA) based its 2017 Global Passenger Survey (GPS) on 10,675 responses from around the world.
The responses provide insight into what passengers want from their air travel experience. Topping the list were:
Ready to go digital
Digital travel processes are the expectation and passengers want more. The GPS found that 82% of travellers would like to be able to use a digital passport on their smartphones for as many travel activities as possible, from booking flights to passing through the airport. Biometric identification systems were the technology of choice with 64% favouring biometric identifiers as their preferred travel token.
“Passengers want to use one single biometric identity token for all their travel transactions from booking flights to passing security and border control and picking up their bags,” commented Nick Careen, IATA’s senior vice president for airport, passenger, cargo and security.
“IATA’s One ID project is rapidly moving travel towards a day when a face, iris, or fingerprint will provide the key to a seamless travel experience. The technology exists. Its use in aviation needs to be accelerated. Governments need to take the lead by working with industry to establish a trusted framework and agreeing the global standards and security protocols needed to use the technology.
“One ID will not only make process more efficient for passengers but allow governments to utilize valuable resources more effectively”
Passenger in control
Passengers want to be able to do more of the airport processes themselves by taking advantage of the latest digital self-service options. Baggage was the top activity that passengers wanted more control over. The GPS found that 68% of those surveyed want to self-tag their bags with electronic bag-tags being the preferred option. In addition 48% of passengers wanted to self-drop their bag.
The survey found that the number of passengers using automated immigration gates and kiosks increased by 6% in 2017, reaching 58% with a satisfaction rate of 90%. Boarding the aircraft was another area in which passengers wanted to have more control with 72% of passengers preferring to self-board, an increase of 2% over 2016.
“Passengers have never been as empowered as they are today. Self-service solutions range from mobile check-in and bag drop, to self-boarding and automated border control. Smartphone- and tablet-toting, passengers want to use these mobile devices to control their travel experience. They expect easy access to the information they want, exactly when they need it in the travel process. Airlines and airports that make the most use of technological innovations will be giving a better travel experience to their customers,” said Pierre Charbonneau, IATA’s director passenger and facilitation.
Continue here to read the full article and download the 2017 GPS report || October 26, 2017 |||
26 Oct: The German industrial giant Siemens plans to merge its rail business with the French train equipment maker Alstom, the companies said Tuesday, creating a behemoth that can compete with the Chinese-state backed China Railway Rolling Stock Corporation. The combined company, Siemens Alstom, would make systems and equipment for two of Europe’s high-speed rail lines, Germany’s ICE and France’s TGV, which can zip between cities at about 185 m.p.h.
“We are creating a new European champion in the rail industry for the long term,” said Joe Kaeser, the chief executive of Siemens. “This will give our customers around the world a more innovative and more competitive portfolio.”
The European rail industry faces pressure from China Railway Rolling Stock Corporation, which has been making an aggressive push to expand around the globe, including in the United States. It is part of China’s larger economic and geopolitical agenda that encourages its technology and infrastructure companies to seek foreign markets, refashioning the global economic order to draw countries and companies more tightly into the country’s orbit.
Continue here to read the full article published in the NYT September 27, 2017 |||
Palace of the Alhambra, Spain
By: Charles Nathaniel Worsley (1862-1923)
From the collection of Sir Heaton Rhodes
Oil on canvas - 118cm x 162cm
Valued $12,000 - $18,000
Offers invited over $9,000
Contact: Henry Newrick – (+64 ) 27 471 2242
Mount Egmont with Lake
By: John Philemon Backhouse (1845-1908)
Oil on Sea Shell - 13cm x 14cm
Valued $2,000-$3,000
Offers invited over $1,500
Contact: Henry Newrick – (+64 ) 27 471 2242