Sir Selwyn Cushing
Hawke's Bay businessman and former Air Zealand chairman Sir Selwyn Cushing talks to Hawke's Bay Today's Andrew Ashton in this week's business feature. Sir Selwyn, is a director of Hastings based company Rural Equities and is also a former director of NZX-listed company Skellerup.
1. What do you believe are the key things to have in place to ensure a smooth-running and profitable business?
It is very important to have a capable leadership team and motivated employees.
You need to know where the business is heading so a clearly understood long-term goal is critical. Various strategies can be incorporated to achieve the desired long-term objective.
The business needs to be appropriately funded, not running on the smell of an oily rag. Things sometimes don't go to plan so operate with a margin of safety.
Quality financial systems must be in place and cash flow should be closely monitored.
2. In your experience, what are the difficulties in balancing the needs/wants of shareholders with the ability to future-proof businesses?
Many shareholders want financial returns quickly and are impatient. We have occasionally co-invested with other partners who demanded high returns virtually overnight and were not prepared to wait for a suitable length of time to maximise profit.
When funding a business it is important to attract shareholders who are long-term investors and committed to the long-term goal. Try to avoid sacrificing long-term potential for short-term profits or one-off gains.
3. Do you believe the New Zealand rural and agribusiness sector is too narrowly focused?
New Zealand's agricultural export receipts are driven by dairy, meat, wool, seafood, forestry, wine, kiwifruit, apples and other horticultural produce such as avocados. The rural sector is diverse and continuously adapting so I don't believe it is too narrow.
However, as markets evolve , consumer tastes change and environmental standards strengthen, the mix of agricultural produce New Zealand takes to the world markets will change driven by the highest economic land use.
It is very important to keep being innovative and develop new products, processes and markets. Hawke's Bay has been blessed with many innovative people in the rural sector such as Jim Wattie, John Paynter and John Buck.
4. What do you think will be the biggest challenge to rural-based businesses over the next five to 10 years?
New Zealand is fortunate to have a temperate climate and plentiful water resources. These water resources must be used sensibly and with appropriate environmental standards applied. Water that is otherwise wasted should be harnessed for economic and environmental benefits where it is sensible to do so.
The battles over water will continue and will be a challenge for many in the rural sector. Hopefully common sense will prevail. We do need to support our primary sector as a huge employer in New Zealand but also have sound, common sense environmental policies applied for the benefit of all.
New Zealand will continue to strengthen environmental regulations and standards which also will be very challenging for some producers as the additional costs imposed could be substantial.
5. What sort of government help would you like to see more readily available to New Zealand businesses?
International trade is vital as we are an exporting nation so sensible trade deals are important for the prosperity of all New Zealanders. The government can help by pursuing and closing deals to facilitate the free flow of New Zealand's quality agricultural products.
The government can also help by re-examining the issue of accelerated depreciation for capital expenditure to encourage investment. A streamlining of development and regulatory consent processes would be beneficial as well to speed up initiatives.
It is very important the government does not impose unreasonable costs or taxes on the rural sector such as water taxes, emission trading scheme taxes etc. Our producers must remain globally competitive to thrive.
Lastly, the government should ensure our young people are equipped with accessible and relevant trade and professional training. The future workplace with rapidly evolving technological advancement will require very differently skilled employees.