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.
All articles and comments on Voxy.co.nz have been submitted by our community of users. Please notify us through our contact form if you believe an item on this site breaches our community guidelines.
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.
26 Oct: Avocado grower and Avocado Growers Association Representative Tony Ponder has been elected as the new NZAGA & AIC Chair. "It’s an exciting time to be in the New Zealand avocado industry, with an incredible increase in industry value and the positive collaboration throughout the industry”, says Ponder.
Tony has replaced Ashby Whitehead who stepped down as Chair at the Annual General Meeting in August. Ashby served as Chair since 2013 and as a Representative on the NZAGA Executive and AIC Ltd Board since 2006.
“I acknowledge the leadership provided by the previous Chair, Ashby Whitehead, which has resulted in tremendous progress and positioned the industry well for future growth.”
Tony has been one of the eight grower-elected directors on the NZAGA & AIC Board since 2005.
Tony and his wife Nicky have an 11 hectare avocado orchard investment in the Coromandel district, and more recently have purchased a 26-hectare property in Tauranga with existing avocado, berry and kiwifruit. Tony also has commercial kiwifruit interests acting as an independent director for a large family based avocado & kiwifruit orchard and packing company in the Bay of Plenty.
Tony’s day to day responsibilities include Director & Chief Executive Officer of avocado, berry and kiwifruit exporter Southern Produce Limited. In this role, Tony is involved in the strategic oversight of the groups export and domestic business including the Avoco/Avanza joint venture with Primor Produce and Team Avocado. Tony is a director of several related collaborations and joint venture entities associated with avocado trading and investment.
“The New Zealand avocado industry is experiencing a period of impressive growth – a huge part of that being due to the work being undertaken to achieve Primary Growth Partnership Go Global goal of quadrupling sales and trebling productivity by 2023”, says Ponder.
NZAGA Grower Representative Linda Flegg has been elected as the Vice Chair of the NZAGA. Linda was elected to the Board in 2016 and is the At Large region grower representative. Linda is an avocado grower on the Kauri Point Peninsular in Bay of Plenty and has been in and around avocados her whole life. Linda, along with her family, run their avocado and kiwifruit orchard businesses in Katikati.
25 Oct: Tech advances in artificial intelligence (AI) and the Internet of Things (IoT) might help New Zealand move toward a solution for helping feed the world which will require food production to double to meet a growing population demands, says a Kiwi tech expert. New Zealand IoT Alliance executive director Kriv Naicker says the new government needs to support the tech industry, in particular the NZ IoT Alliance and its sister organisation the New Zealand AI Forum to help address a growing food shortage. “Farmers’ uptake of technology is becoming the norm in the rural sector. Smart farming and precision agriculture is helping farmers get better results on the land with enhanced tech forecasting and IoT sensor data collection and analytics, optimising resources and supplies,” Naicker says. “We know the world is heading toward a major food supply crisis. By 2050, the planet’s human population will reach beyond nine billion, requiring food production to double to meet demands. “Agriculture has long been considered the backbone of New Zealand and with timely help from the tech sector, the country faces an exciting challenge and opportunity to create sustainable economic growth and establish ourselves on the world stage. “The future of food and the alternative ways to feed a growing global population will be discussed at a plant-based conference in Christchurch in early December. Key key tech leaders will attend the Feed the World 2030: Power of Plants Hackathon event on December 2 and 3. This will provide an opportunity for agritech food innovators, scientists, industry experts and tech entrepreneurs to begin shaping New Zealand’s agricultural platforms for the future. “We have seen movie produces James Cameron and Sir Peter Jackson enter the food supply arena by creating a Future Foods project, looking at plant-based protein.” “How much will these guys leverage IoT and AI to drive cutting-edge innovation in this sector? Both Sir Peter and Cameron have identified the huge potential in this area and will need to leverage significant IoT and AI to achieve farmer to plate innovation.“Digital agriculture, in the form of precision farming, big data, sensor technology and drones, delivers a new potential for productivity gains across rural New Zealand.
“Tech promises to cut costs and enable faster repayment of both irrigation scheme and farm infrastructure capital, while allowing farmers to demonstrate their compliance with environmental and other regulatory requirements,” Naicker says. NZTech’s Digital Nation report last year showed that the tech sector was worth more than $16 billion to the economy.
25 Oct: New opportunities aimed at improving access to employment in the primary sector will be considered for incorporation into Matariki – Hawke's Bay's Regional Economic Development Strategy and Action Plan. The Ministry for Primary Industries (MPI) has been leading work in Hawke's Bay aimed at increasing the uptake of employment in primary industries, one of the region's largest sectors. The work is part of the Regional Growth Programme.
"Hawke's Bay has over 25% of its workforce employed in primary industries. There's a growing need to attract more locals into primary sector to meet current and future growth," says Ben Dalton, Head of the Regional Growth Programme at MPI. "Increased economic growth will come from the primary sector and it's estimated there will be between 3,000 and 4,400 new primary industries jobs by 2025 in the region."
MPI, as an action point under Matariki, canvassed a group of Hawke's Bay stakeholders about the feasibility of setting up a local joint venture primary industries training hub, however, locals interviewed felt there was no need to progress this. Instead, stakeholders provided MPI with potential opportunities aimed at improving the consistency and quality of local training in the region.
The opportunities include an increased focus on horticulture, viticulture and forestry, meeting specific workforce needs such as trained seasonal workers and supplying management, supervisors and logistics roles in the pipfruit industry. Stakeholders also asked for more collaboration between industry and tertiary training and an increased focus on skills gaps such as driver's licenses, literacy and numeracy, and improvements to the quality of training.
Immediate actions for MPI are to continue growing awareness of primary sector employment opportunities amongst young people, bringing together the local forestry sector to discuss recruiting and retaining trainees, and continuing work with local iwi and stakeholders to extend primary sector employment to at-risk young people through Youth Employment Pathways. The Youth Employment Pathways programme supports young people, at risk of long-term unemployment, into sustainable work.
The opportunities will be considered for inclusion in the refreshed action plan.
The Regional Growth Programme is an across government initiative co-led by the Ministry for Primary Industries and the Ministry of Business, Innovation and Employment (MBIE) which aims to increase jobs, income and investment in regional New Zealand.
25 Oct: Food manufacturers looking for pallet wrappers that deliver speed, reliability, economy and safety need look no further than the Octopus Ring Pallet Wrapper from Signode. The last step of many food manufacturing processes, pallet wrapping helps ensure products are not only secure and ready for shipping but also that they arrive at their final destination in good condition.
Businesses which use pallet wrappers want the process to be completed with a minimum of fuss and without putting staff in physical danger. In summary, they are looking for machines that are reliable, accurate, fast and safe.
Haloila, a member of the Signode Industrial Group, has been manufacturing the Octopus automatic rotary ring stretch wrapper for over 30 years. With over 6,000 units installed world-wide, these high speed systems are capable of wrapping up to 135 pallets an hour.
“Businesses which use the Octopus want to achieve a higher level of reliability, whether to cope with their current demand, or due to increased production necessitating a faster solution,” Andre de Wet from Signode (the exclusive suppliers of the Octopus range in Australia and New Zealand) told Food & Beverage Industry News.
Fully automatic, the machines employ the “Octopus ring method”, whereby the wrapping film reel is suspended from a ring and it revolves around the pallet. The ring is raised and lowered according to the wrapping program.
25 Oct: The New Zealand meat industry could be hit by fallout from the tense and divisive Brexit negotiations. It seems that the UK and the EU, in a desperate attempt to reach agreement, are poised to breach World Trade Organisation (WTO) rules over a long-standing agreement NZ has for sheepmeat access to the EU which includes – at this stage – the UK.
The NZ meat industry had become aware that the UK and EU have reached a deal to arbitrarily split the 228,000 quota to the EU, with 45% going to the UK and the rest to Europe. However, the original agreement has been ratified by the WTO and needs the approval of all parties to the agreement and the WTO to make changes.
What has annoyed the the Meat Industry Association and Beef + Lamb NZ is that the UK and EU have seemingly done this deal without consulting NZ, which is illegal under WTO rules.
“Taken at face value this is not a positive sign,” says BLNZ chairman James Parsons. “We want to put our views on the table.”
Cryptocurrency hardware company Ledger has partnered with Intel. The partnership involves the implementation of Ledger’s BOLOS operating system into Intel’s Software Guard Extensions secure storage products.
Through the integration, Intel aims to offer more secure cryptocurrency storage to consumers.
This partnership will allow users’ private keys to be stored in an Intel secure enclave, lowering the risk of software attacks.
Ledger said the solution will first be implemented within cryptocurrency software wallets like MyEtherWallet and Electrum.
“Working with a leading player like Intel is a unique opportunity to keep providing our growing client base with innovative solutions for cryptocurrency and blockchain applications,” said Ledger.
Many New Zealanders are buying into the benefits of artificial intelligence (AI) as it is creeping into many walks of everyday life.
New Zealand needs to actively embrace artificial intelligence at a faster rate as an extraordinary opportunity and challenge for New Zealand’s future, Artificial Intelligence Forum of New Zealand (AIFNZ) executive director Ben Reid says.
AI has a growing impact on the daily lives of all New Zealanders.
In the near future, it is likely to accelerate at an unprecedented pace, resulting in major changes to NZ's economy, society, and institutions.
Precision Driven Health (PDH) is one organisation spearheading AI changes across NZ in the health sector.
PDH is a seven-year $38 million academic research group aimed at improving health outcomes through data science and is a finalist at the NZ Innovation Awards.
Reid states, “Globally, hospitals have been slow to adopt robotics and artificial intelligence into patient care, although both have been widely used and tested in other industries.
“However, surgeons are already using intelligent robots in the operating theatre to assist with surgery.”
In the business world, examples include the Xtracta App, which uses machine learning to read documents such as invoices, receipts and sales orders to insert data directly into accounting software.
Reid continues, “Soul Machines latest project with Air New Zealand is another great example of the potential of AI or digital humans in customer service.
“Soul Machine’s robot, Sophie, the digital human, has advanced emotional intelligence and responsiveness and can answer questions about New Zealand as a tourist destination and the airline’s products and services.”
“Soul Machines is creating some of the world’s first emotionally responsive and interactive digital humans.”
However, despite the advancements, corporate New Zealand and government have yet to engage significantly and start building an in-house capability to develop AI tech.
Boards and senior management teams are still coming to get to grips with the major impacts that AI presents as part of their organisation's strategy.
The use of AI technologies could lead to greater productivity, enhanced social good and the creation of new fields of work.
But AI also presents risks, these could include greater inequality and unemployment from disrupted industries and professions.
Reid concludes, “We have a duty to seek a deeper understanding of New Zealand’s potential as an AI-assisted economy and society, to ensure AI is a positive part of New Zealand’s future.
“The AI Forum brings together business, academia and the government connecting, promoting and advancing the AI ecosystem to help ensure a thriving New Zealand underpinned by technology.”
Housing Minister Phil Twyford has revealed to the Herald the first in-depth details of the incoming Government's new $2 billion KiwiBuild scheme, explaining how 100,000 new residences will be built in the next decade.
So-far-unknown details about precisely how, when and where the much-vaunted Labour initiative is planned to become a reality have been announced, giving details of a plan to fulfil tens of thousands of New Zealanders' long-ditched home ownership dreams.
The just-announced Housing Minister told the Herald how labour, skills and land shortages in the over-stretched, under-delivering, under-resourced high-priced housing market were planned to be resolved by his regime which will change immigration laws and form public private partnerships with business like Fletcher Residential and Mike Greer Homes.