Better times for Bay firms in 2012

By Graham Skellern

The year 2011 will be one that many Western Bay businesses will want to forget pretty quickly. It was challenging, to say the least. The continuing battle to control the rampaging Psa disease cut deep into the kiwifruit industry. The Rena container vessel came to Tauranga - or tried to - and the grounding offshore impacted on the tourism industry, particularly those operators whose livelihoods depend on the water.

The residential property market - for so long the lifeline, like kiwifruit, in the local economy - remained lethargic and many builders twiddled their thumbs. Consumer spending continued to be subdued and many retailers struggled along. Businesses cut staff and some closed, reducing employment opportunities. The economic downturn continued to bite.

By year's end, two industry organisations - Tourism Bay of Plenty and Priority One - launched new campaigns to attract more visitors and new businesses to the region. So, will 2012 produce greater rewards and a brighter future?

Business Editor Graham Skellern checked out the new year resolutions of local business leaders and asked them how they thought 2012 would pan out. An underlying theme was: They wanted more certainty, economically speaking.

Lain Jager- Chief executive of Zespri International

"We are hoping bond rates in Italy, France and Greece will stabilise, Europe's economy will continue to recover, and a lower NZ dollar will bring some relief to exporters. These sorts of things hold our attention.

"We are pretty optimistic about the potential of the G3 early-season gold kiwifruit variety being tolerant of the Psa disease. We will continue to talk with the industry about offering the new cultivar - in trials we see spotting on the G3 leaves but no secondary symptoms and dieback that has occurred with Hort 16A gold kiwifruit.

"We expect growers will received improved returns this year but the next season's crop is expected to be lower, something like 20 per cent. But less supply will improve returns because of the market demand."

David Shaw - Shaw Builders, winner of Bay of Plenty House of the Year supreme award last year

"I'm not sure what this year will bring us. People were holding off building from the middle of last year and we'll wait and see how the quotes have gone. We have eight months work ahead of us but, like all of us, we would like more.

"I don't like putting off any staff and we are running five apprentices. I know there are a few (building) plans around the place but, at present, the new homes just aren't there. The main work is now alterations - even building decks and bathrooms and completing insurance work. That's the bread and butter.

"We have just completed a $1.3 million alteration to a beachfront home in Papamoa, and that's a nice job to get. I guess it's virtually a new house."

Ian Smith - Tourism Bay of Plenty trustee and co-owner of Waihi Beach Top Ten Holiday Park, winner of the Tauranga Business of the Year supreme award last year

"We'd like some fine weather and good bookings. We've had nearly two weeks of rain, people only get a certain amount of time off, and their holidays have been ruined. We need to make sure they come back.

"From a tourism point of view, there's lots of potential coming out of the port with the cruise ship visits and the Bay is on the world map because of the Rena. All publicity is good, whether it's bad news, and the Rena crisis may be over quicker than we thought. Maybe people will want to come and have a look.

"Indications are that this year people will decide to holiday domestically rather than fly overseas. This will be a good thing for domestic tourism and hopefully we will get our share of visitors. We can achieve this by giving them a good experience of the Bay."

Max Mason - Tauranga Chamber of Commerce chief executive

"I hope the European situation gets resolved, to the extent it can, so that export markets will be less affected - that's an important part of the Bay's economic output. I'd like to see small and medium-sized exporters doing more business overseas, and those with high value, niche products will continue to be more resilient.

"I would like the re-build to start in Christchurch and this can only be good for our region in terms of supply; I hope the damn Rena gets sorted out - perhaps that's happening quicker than we thought; and I want the residential property and development market to pick up.

"If building increases, then this activity filters through to other sectors across the board. I'd also like to see businesses becoming more aware of productivity - that's where the competitive advantage lies and is a key growth strategy for the future."

Andrew Coker - Chief executive of Priority One economic development organisation

"I'm really optimistic. What's happening in Auckland with the maritime union strikes can only benefit Port of Tauranga. We can't underestimate the value of the port to the local economy, and the increasing movements of exports and imports will provide opportunities for all the businesses that hang off the port.

"At the end of the day we are a food-producing country and export based, and our region is well placed. Zespri is doing good things to combat the Psa outbreak. It sound like there's real light at the end of a tunnel with a new gold kiwifruit variety that seems to be resistant to Psa. I gather this variety if highly productive and this gives the industry some options.

"We have also had a few inquiries through The Tauranga Business Case campaign. Some businesses are interested in locating here and that's encouraging."

Lionel Crawley - Bay of Plenty regional manager for New Zealand Trade and Enterprise

"I think the world economy has a degree of unpredictability. There is a question mark over what will happen in Europe and United States, and business need to overcome the elements of uncertainty.

"But it's not all gloom and doom. We are working with plenty of local companies which have world-class strategies and are focussing on the right places. Companies need to be diligent, have a strong business proposition and market information, and make sure they are as efficient as they can be.

"The impact of Psa on the kiwifruit industry may have taught us that we can't just rely on one plant or product. In this uncertain world, maybe the local economy needs to spread its risk a little more."

Brett Hewlett - Chief executive of Comvita New Zealand

"We all know 2011 was a particularly challenging year, but from Comvita's point of view we've put our fundamentals in place and we had a good year. We have to believe that this trend will continue, and 2012 should be an even better year for us as long as we do the right things.

"Despite the doom and gloom globally, I don't think the future will introduce anything different for us."

Max Martin - Franchise owner of Harcourts Advantage Realty

"I'm sure there will be more sales and a more positive outlook in the market this year. The month of December was one of the best for a number of years and people were wanting to do deals. I believe money from the dairy farmers will come through and help things along.

"It's been a fantastic (summer) season for dairy production, and sheep and cattle. The grass is growing like mad and the livestock are up to their knees in grass. We just need to have some positive things happening in the country."

Ross Stanway - Chief executive of Realty Services including Bayleys and Eves Realty

"We don't have much control on what is delivered to us, such as the Rena and Psa, but the region has shown it can deal with the issues. The region has a strong spirit and is in good heart.

"We are optimistic about the property market. We had a strong finish to last year and a number of significant properties are lined up over the next two months. We can roll our sleeves up and expect a good year. We are a bit like the Auckland market at present. There's a low level of stock, and well presented and well priced properties will sell in a short period of time.

"If we can get some good sales away, then this will give potential vendors more heart. We are still living in a growth region and people still want to come and live here. The demand will continue."

Michael Farmer - Managing director of Farmer Motor Group

"All businesses are looking for stability and having the confidence to budget accurately. We had a challenging 2011 - the Rena and Psa - and the Bay is due for some good news. I guess you can't have good times without the bad, and businesses just have to get on with it.

"We are focussing on making sure we have market share rather than the volume of cars we are selling. Even if the market in Tauranga drops from 200 to 150 vehicles a month, then we want to get a bigger percentage by doing a better job with customer service."

Glenn Keaney - Office managing partner for KPMG in Tauranga

"My wish for 2012 is for stability to return to Europe and for United States to have a strong recovery, which will assist our exporters and overall economic growth. I also hope New Zealand doesn't have any more disasters - we have had our fair share, including those close to home with the Rena and Psa.

"While I am naturally an optimist, I think that the effects of Psa will hit the Bay economy hard in 2012/13, but the industry and the region will be stronger for it in five years time due to the lessons learned and positive outcomes coming out of it."

- Bay of Plenty Times

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