HAPPY NEW YEAR EVERYONE.
I hope we are all being safe and looking forward to the year ahead. While we are on holiday lets take some time to reflect on a few of the things of 2010. The last year has been a good year. I bought a new lifestyle block, got into the advertising industry, worked with plenty of new real estate agents and am now looking at buying some investments. However for many it was not a very good year. Here in Christchurch it has been a year that I dont think we will forget for a very long time.
The deal between Christchurch International Airport and Malaysian budget airline AirAsia X is one of the coups of 2010 after the two-year effort that was invested in it. The AirAsia service is expected to start in April with four return flights a week between Kuala Lumpur and Christchurch, increasing slowly, it is hoped, to daily flights. An independent study cited by Mayor Bob Parker estimates it could lead to an additional 70,000 Asian visitors a year through Christchurch International Airport and $70 million more spent in the region. The airport expects new jobs to be created as well.
This is my pick for the deal of the year for the city.
Christchurch infrastructure’s resilience after a shattering 7.1 magnitude earthquake on September 4 is a triumph over what might have been. That 90 per cent of us had power restored before the night set in on September 4 is a testament to how well maintained the city’s electricity network has been under the leadership of Orion chief executive Roger Sutton and the conservative ownership of the city council and its investment company Christchurch City Holdings. It’s times like this that having public owners who are not flogging it for its dividends every year brings its rewards.
While Lyttelton Port of Christchurch, largely city council-owned too, may have sustained significant damage, it is mostly covered by insurance and the port’s owners are looking to turn that to their advantage in the longer term. So watch the business space on that one.
Canterbury manufacturers here have just secured 25 per cent – $22.7m – of the $92m funding for three years from the Government’s “picking winners” Technology Grants Programme. Another feather in the cap for the region whose manufacturing sector is proportionately a larger part of economic activity – about 15 per cent – than in the Auckland and Wellington regions, where the services industry is bigger than here.
Fourteen businesses judged to be Canterbury’s most innovative, resilient and successful in the Champion Canterbury Awards in 2010.
The two supreme winners in the large and small categories were eco-tourism firm Whale Watch Kaikoura and hi-tech cycle components maker Dynamic Composites.
The others include manufacturer Cookie Time, global operators Redesign Group which designs retail interiors for airports, global aircraft engine maintenance firm Christchurch Engine Centre, small theatre business Showbiz Christchurch, recruitment firm Sheffield South Island, waste business Canterbury Waste Services, small specialty retailer Mercato, large vehicle retailer Avon City Ford, Search and Rescue Institute New Zealand, charities Cancer Society of NZ Canterbury West Coast and Presbyterian Support Upper South Island, and small innovative high-tech firm ShapeShifter Technology.
Canterbury punched above its weight in the Deloitte Fast 50 Awards recognising the fastest-growing businesses in New Zealand, with three in the top 10 in 2010.
In third position nationally was Canterbury’s Energy Light, growing by a remarkable 1081 per cent in the past three years. It makes high-performance, environmentally friendly lighting for large-scale commercial and industrial buildings.
A manufacturer of frozen and freeze-dried raw pet food, K9, was No8 in the Fast 50 and city council-owned fibre optics infrastructure company Enable Networks number 9.
Others in the Fast 50 included services firm OpEx, adventure clothing and equipment retailer Mouton Noir, industrial safety software firm Platinum Safety, caterer and events manager White Tie catering, financial planner Lifetime Financial Security NZ, service and upgrader of industrial production machines Scott Services International, online support of retail and marketing Doubledot Media and fashion manufacturer J Tilley Agencies.
Christchurch’s Mark Waller of medical supplies company Ebos Group was named Deloitte’s executive of the year for 2010. As one commentator noted, Waller and Ebos fly under the radar. Ebos has doubled in size in the past five years and continues to return good dividends to its loyal shareholders.
Businessman John Brackenridge, chief executive of New Zealand Merino Company, was recognised as an outstanding leader at Trade & Enterprise New Zealand’s annual awards. He was praised for changing attitudes and behaviours in the wool industry, and for earning the respect of farmers and fine wool retailers worldwide.
Businesswoman Peri Drysdale is one of three finalists in the Kiwibank New Zealander of the Year awards. Founder and chief executive of organic clothing company Untouched World and its parent knitwear clothing company Snowy Peak, Drysdale continues to innovate with her new merino cycle range, picking up an international award for design from iF (International Forum Design) in 2010.
The 7.1 magnitude Canterbury earthquake on September 4 must be the lowest point for thousands of local businesses this year. Few would have escaped an interruption in trade, even for a few days. And for those, such as retailers and those in the hospitality industry, dependent on locals spending, the impact has been amplified.
The uncertainty and nervousness after the quake has produced a caution that is making us all think twice about spending and hurting parts of the retail and hospitality sector.
Anecdotally much retail trade has drifted to the malls and away from the central city. Revitalisation of the city centre has now taken on a new urgency.
For many small and/or weak businesses who have struggled through the recession and the so-called recovery the earthquake will be the last straw. The toll on small business in Canterbury is not clear. Many small businesses are struggling on but the question is how long they can last.
The Pike River Coal mine explosions and deaths of 29 miners is a human tragedy that has touched the nation. The loss of millions of dollars of above-average wages from the redundancy of more than 100 miners will hurt the West Coast economy for some time. Although new coal-mining projects are being proposed, such as Bathurst’s open-cast mine on the Denniston plateau, these have to run the gauntlet of resource consents and that will take time.
The statutory management in June of legendary and reclusive Timaru financier Allan Hubbard and his wife Jean and the Serious Fraud Office probe into the assets and private investment businesses Aorangi Securities and Hubbard Managed Funds is a blow for the 400 odd investors who thought their money was safe as houses with Hubbard. Statutory managers have said they will not get all their money back.
The SFO investigation has largely been completed but Hubbard’s counsel has asked for time over Christmas and the New Year to submit more information.
The receivership of South Canterbury Finance on August 31 is a blow for the many businesses, large and small, who rely on finance companies for borrowing for plant, equipment, working and seasonal capital.
SCF was a giant among finance companies for a long time but, like the many others who have fallen, it too was seduced by high-risk, high-return loans for property development. The SFO has recently expanded its investigation into several related party loans involving SCF. That investigation is only just developing and the SFO says it will be much larger than the one into the Hubbard investment company Aorangi Securities and associated company Hubbard Managed Funds.
Investors in SCF debentures, deposits, and bonds must be the luckiest bunch this year. While hundreds of investors are still waiting for less than half a repayment of what they invested in finance companies, SCF’s 35,000 investors in its debt securities got all their money back under the Crown’s retail deposit guarantee. A fine end for them for 2010.
HAPPY NEW YEAR EVERYONE.