Commercial doctor is ma king N.Z. fit to go into the world

Press, 3 February 1979, Page 17

Commercial doctor is ma king N.Z. fit to go into the world

| By ALEX C. FOX Cultural and Economic De- ' velopment, Ltd, a Christ- : church firm of commercial I advisers, is providing valuable assistance to New Zea- , (and companies seeking expansion in foreign markets and in New Zealand. In doing so C.E.D., and its clients are making the New Zealand economy fitter to compete in a competitive world. C. E. D. might be described as a commercial docItor —- not a general practitioner, but a specialist in in- : ternational trade, and its [problems. It diagnoses ills, (prescribes cures, helps in re[habilitation, but recovery depends on the stamina of the[ patient.

C.E.D. has, for the last three years, been helping small, and some large New Zealand companies find their way into profitable exporting, and better trading on the domestic market through its advice in a number of specialised areas of commercial practice. C.E.D. specialises in assist-, mg and advising firms on matters relating to tariffs and licensing, exporting, freighting. and financing trade — activities which are covered by many regulations and statutes, and administered by a vast bureaucracy.

A new commercial activity, such as that established by C.E.D.. is rare in New Zealand. and it is timely since the country is trying to increase its share of the world export trade. It is a particularly important addition to the range of specialised advisory services being offered to small firms with mainly production skills.

i In speaking of New Zealand’s balance-of-payments problems, the need for our economy to be “restructured” has often been stressed, meaning that the old patterns of employment, production, and international trade are no longer appropriate in today’s world economy. Forced by the decline in the terms-of-trade of mainly agricultural exporting developing countries, New Zealand is endeavouring to increase its export earnings by expanding the volume of both agricultural and manufactured exports, and trying to reduce its dependence on foreign markets for the nation’s major inputs to production, raw materials, fuel, and machinery. The three members of C.E.D. (Peter O. Johnston. Bernard A. W. Hack, and Mrs Pauline Image) do not stand alone in seeking to establish new and broader prospects for N.Z. producers; they are part of an effort by the Government, State Departments, and private enterprise. The New Zealand Government’s role is a general one; its makes trade agreements with other governments, covering what will be imported and exported by their econo-

mies, and on what terms, ji tariffs, and quotas. The Gov-h ernment also largely deter- il mines what is produced by [I New Zealand firms, and fori! whom, by its fiscal, and!:

monetary policies, and regulatory powers. The state departments advise on. and ensure that trade agreements between nations are kept, endeavour to see that the environment [is protected; administer the currency, tax, and commerce laws; and promote national economic development with, more recently, an emphasis on manufactured exports. But if all that I have put in a nutshell in the last two paragraphs did not result in making production and trade

Mr Peter Johnston. B. A.N.Z.1.M., (left), the principal of C.E.D. He worked with several commercial accounting firms whilst doing a degree at Canterbury University. After two years with a paper products importing and distributing company in Melbourne as sales director, he returned to New Zealand in 1969 and joined the staff of the C. Hamilton group of companies, as assistant to the secretary. After managing Hamilton Jets Australia Pty, Ltd, he became commercial manager of the group here in Christchurch and was later responsible for the formation and management of C.W.F. Hamilton Sales, and remained in that position until leaving their employ in August, 1976, to form Cultural and Economic Development. He was in Europe to attend the Frankfurt Industrial Trade Fair, and visited 100 paper products manufacturers and allied industries in Sweden. Finland, Denmark, the Netherlands, Belgium. Germany, Italy, the United Kingdom and Canada. In 1975 he

[more difficult for business : there would be no need for [the services of C.E.D., but [ bureaucratic controls have (made business more comjplex, and it is surprising

that C.E.D.'s services were not established earlier. : Probably the most dauntling prospect facing a wouldibe New Zealand exporter, or (producer of a product originating overseas is the number of regulations covering economic activity, and the number of authorities which have to be satisfied, before almost anything can be ■. done. ' Most firms in New Zealland do not have commercial [managers to cope with these (economic regulators so they

visited Japan for theHamilton Group, Export Division, and in 1976, visited Australia again on export business . Mr Johnston returned to Europe in 1978 to attend the Hanover Industrial Trade Fair and companies in Europe, Asia, and North America. Mr Bernard A. W. HACK (right) was with the Customs Department in Christchurch, from 1960 to 1970, covering most aspects of Customs work. In 1970 he commenced employment with the P.D.L. group of companies where he was primarily involved with customs and shipping, import and export, until 1977 when he joined Peter Johnston at Cultural and Economic Development. Mr Hack served on the committee of the Bureau of Importers and Exporters, and now is in his second year on the executive of the Canterbury division of the New Zealand Export Institute. He has been a member of Jaycees since 1970. during which time he has been president of the North Christchurch Chapter, and has held regional offices.

lack the dynamic necessary to grasp opportunities overseas, or to bring new products from abroad onto the New Zealand market.

The extra costs, especially in time, of this aspect of commercial management can seldom be afforded by executives of even a large firm, so New Zealand industrial development lags behind more innovative economies, a situation not conducive to the expansion of exports of many types of manufactures from a doniesItic base. In any case, few New Zealand executives are experts in international trade law. and foreign finance, and are therefore probably happier and more productive in coping with the problems of trading in the New Zealand market.

Even with expert staff New Zealand firms find that the task of establishing their products on overseas markets an arduous one. and the successes that have been achieved are the result of intensive effort over a long time.

Even when protectionist trade policies do not stand in the way of New Zealand exports a great deal of ground-work must be put in before a new market is opened, and then often only in return for a market of at least equal value in New Zealand.

Negotiating under existing international agreements C.E.D. has been able to satisfy, on the one hand, the export plans of one client, and on the other, the desire; of a New Zealand manufacturer to reduce his cost of imported inputs by importing direct. the importance of this for the national economy cannot be over emphasised, because two great needs are being met; export growth, and cost reduction. Other contributions to cost reduction being made by firms, on the advice of C.E.D., is in financing charges faced by firms for working-capital, and import/export finance; insurance; and freight all of which add up to make the total cost of goods to an overseas client acceptable or not.

In a bureaucracy, expertise in production is not sufficient for success in business, it is also important to know the rules, because as well as imposing restraints on activity New Zealand regulations provide for valuable incentives grants and tax concessions

to business enterprise. It is C.E.D.'s experience that some firms paid the wrong rate of sales lax, tariff, duties, and have missed-out on freight : concessions, and neglected to obtain rebates of import ■duty. It is not surprising therefore that by putting these matters righ. C.E.D. has won the confidence of I its clients, and helped make New Zealand industry more competitive.

I have skipped lightly ■over the ills of the New Zealand economy in generalising about firms' lack of in overseas trade; ‘regulation of the economy iby bureaucrats; and the high .costs of ignorance being Icontent only to remind that I they present a considerable obstacle to structural .change. ' Depending on ones outlook or philosophy' any one of these ills may b e elevated to a disease, and credited with bringing about the destruction of our economy, or at least a continued fall in the standard of living of New Zealanders, and well they might be. But it is heartening to know that at least a small | section of the economy. ■ C.E.D. and its clients in par ticular, are taking steps toigether to surmount the I internal and external difficulties and that their efforts might even be contagious.