Pacific Magazine > Magazine > April 17, 2007

New Zealand

Growing NZ Trade Links To The Pacific

Three Companies Expand

By Peter Rees in Auckland

For some years Pacific Island economic managers have been deliberating as to how to address their gaping trade imbalance with New Zealand. Trade figures released last November showed that New Zealand’s surplus with its 23 Pacific Island neighbors continues to exceed NZ$1 billion (US$744 million) on an annual basis. New Zealand has increased its exports to the Pacific by NZ$70 million (US$52 million) since 2005, while exports from the islands into New Zealand have dropped by about NZ$43 (US$31.9) million in the same period.

According to the New Zealand Pacific Business Council (NZPBC), on a global basis, NZ’s trade surplus with the Pacific Islands region of NZ$1.054 billion is by far "our single largest regional trade surplus.

 An area of focus is the exporting and importing of fresh fruit and vegetables which is surprisingly low into New Zealand. New Zealanders preferred to look beyond the islands for their source of fresh fruit and vegetables, with the exception of Fiji which exported 46.8% of all fresh fruit and 95.1% of all fresh vegetables from the Pacific Islands.

In recent years, high powered business roundtable visits to the islands accompanied by leading New Zealand government officials, and even the commencement of a Pacific trade expo in Auckland to promote Pacific businesses and organizations, have been introduced in an effort to tip the scales the other way. But there is a feeling more has to be done at the ground level, with more work needed to make New Zealand businesses aware of the benefits of trading with their Pacific neighbors. There  is also a feeling that Pacific nations need to encourage more of their peoples to enter into the entrepreneurial spirit and either start their own or expand their existing businesses into exporting to New Zealand markets.

New Zealand Pacific Business Council Chairman Gilbert Ullrich

“We have a big job on our hands, in building trade relationships," says NZPBC Chairman Gilbert Ullrich. “New Zealand must engage more with these countries for better business, social and political relations. We see things that are made in Asia that are copies of New Zealand and Pacific products. Handicrafts even. So we want country of origin labeling to help Pacific businesses. Interest and exchange rates are factors affecting the economies and Government aid could be better targeted to help overcome health and nutrition problems – and consequently the economies - in the Islands."

But there are many New Zealand based businesses making a difference in the Pacific who have realized the importance and the advantages of developing links with their close neighbors.

Beca group

The Beca group specializes in engineering, planning and project management consultancy. Based in New Zealand, it has grown to become one of the Asia-Pacific's leading professional services organizations since its establishment way back in 1918.

Its Pacific operations are vast with the provision of consulting services in Samoa, Fiji, American Samoa, Kiribati, New Caledonia, Papua New Guinea, Solomon Islands, Tonga, Tuvalu, Niue, Cook Islands, Tokelau, Nauru, the Republic of the Marshall Islands, Vanuatu, and the Federated States of Micronesia.

Beca specializes in the planning, design and construction of airports with completed projects in Fiji, New Caledonia, American Samoa and the Republic of the Marshall Islands.

Beca Group operations at the Goro Nickel water supply, New Caledonia.

 

They also offer architectural services, building, civil and transport, planning, project management, water and environment and valuation services.

Beca is involved in several significant Pacific based projects this year. The organization is working on the World Bank-funded Samoa Infrastructure Asset Management Plan and Coastal Infrastructure Management Strategy and Infrastructure Maintenance as well as redevelopment plans for the Marshall Islands Government.

Beca is currently in a joint venture in Fiji with Erasito Consultants Ltd, providing technical support to Erasito's engineers to enable them to work on the relocation of Kings Wharf to Rokobili, development of a new wharf at Bua on Vanua Levu, environmental impact assessments for housing developments,  water supply projects (such as Natadola), sewage projects (including Suva- Nausouri), extension of Nausouri runway, and a number of reservoirs and pipelines.

Beca also has a significant workload in American Samoa. The airport there is currently developing a master plan with assistance from Beca and airport planners Landrum and Brown.

Beca also has affiliate offices in Papua New Guinea (Gure Kule Konsultants) and in New Caledonia (Beca Nouvelle Calédonie).

Beca International Consultants Ltd Managing Director Bob Durrant says their main challenges in working in the Pacific are, "The simple logistical issues and costs associated with calling on business leaders and government throughout the Pacific on a regular basis."

But he's quick to point out that Beca regards the Pacific region highly when stacked against its other international operations. And although its overall revenue earnings are superior outside of the Pacific, this ratio may change if Beca's increasing commitment in the region is anything to go by. According to its annual review, Beca revenue earnings in 2006 was close to NZ$180 (US$133) million with an estimated two percent share drawn from its operations in the Pacific.

Durrant definitely envisions new frontiers for his company in the Pacific.

"Beca sees ongoing opportunities to introduce new technological solutions to the Pacific nations. For example the use of coral aggregates in the construction of regional airports and also the use of marine mud stabilization in wharf and port construction for providing environmentally sustainable and cost effective solutions," Durrant says.

Ullrich Aluminium Co Ltd

Another New Zealand based company with extensive operations in the Pacific is Ullrich Aluminium Co Ltd. Led by its high profile managing director, Gilbert W. Ullrich, who handily enough is also the chairman of the influential New Zealand Pacific Business Council.

Ullrich Aluminium Company’s fastenings division started back in 1966 as an extra service to assist its customers who were buying rolled products or extrusions for products they manufactured for building projects. It now does replacement work in Guam, Micronesia and other Pacific areas. One of its flagship products is Naco AirFlow louver windows, designed specifically for New Zealand and Pacific Islands hurricane zone areas.

Through its export division, Ullrich has been involved in opening up markets throughout the Pacific with contracts to supply fastenings for major building projects such as international airports and port terminals.

Ullrich Aluminium provided walkway bridge and overhead at Manta Ray Bay Hotel in Yap.

The political turmoil in the Pacific over the past year, especially the Fijian military coup has proven a challenge to the company's regional operations. Ullrich says about NZ$2 (US$1.4) million a year of turnover is tied to the Fijian market alone.

Speaking to Pacific Magazine, Ullrich says the company's main challenge is the "high exchange rate for the U.S. and its territories and the freight rates increasing, and infrequent shipping services to some regions."

Overall, the region is worth NZ$8 to NZ$10 million in trade value to the company per annum. It’s most important ventures at present are a multi million dollar schools project with the Marshall Islands Government and similar costing large resort projects in Fiji.

Ullrich Ltd is also committed to upskilling local labor with training courses provided for the staff of its client in aluminium joinery. With bigger projects, on site training to ensure correct installation of joinery is also offered.

Vuksich & Borich Limited

Football's international governing body FIFA has invested millions into development initiatives in the Oceania/Pacific region over the past decade and New Zealand based Civil Engineering Contractors and Sub-Contractors, Vuksich and Borich, have been at the forefront in the construction phase of state-of-the-art facilities. The company has left its imprint in the Solomon Islands, Samoa, Fiji, Tonga, Tuvalu, and Papua New Guinea.

Vuksich and Borich in the Pacific, Toleafoa JS Blatter football fields, Samoa. PHOTO: Peter Rees

"We go to great lengths to understand the local culture and social environment. In nurturing good relations with local communities, patience, sensitivity and persistence are necessary qualities," add the directors.

The varied geography and logistical obstacles the Pacific islands present also means adapting to local conditions. "We select only those personnel who have a proven record in the Pacific Islands. We ship plant to remote islands and have a discrete and speedy mobilization programme."

But the company has expressed concern in recent months with New Zealand imposing sanctions on Fiji after the military coup there late last year. About 30% of the company's income is derived from Fiji where it does roading, pipe-laying and excavation work, so it’s not hard to see why.

"We've worked in 12 Pacific countries, from Papua New Guinea to Tahiti, and one thing we've learnt from our 15 years in the Pacific is not to interfere in politics," Vuksich said. "We should take a hands-off approach. Frank Bainimarama is in power now and the New Zealand Government isn't going to change that. He has major support in Fiji and the people are generally happy with him," Ray Vuksich has told New Zealand media.