Locals had been led to believe Baywa AG was expanding

Hawkes Bay apple juice company T&G Foods faces an uncertain future as the owner the gigantic Munich trading house Baywa AG tries to sell it into an unreceptive market

Local fabricators had tooled up anticipating the expansion of the old Turners & Growers business and now they find themselves contemplating the possibility that the business, big by New Zealand standards, but tiny by Baywa’s might simply shut its doors.

Several years ago that The Munich-based company BayWa AG acquired over 100 per cent of the third largest apple producer in New Zealand, Apollo Apples Ltd., through its New Zealand subsidiary Turners & Growers Ltd.:

The on-season/off-season growing cycle made sense at the time.

But now the German firm cites a decline in fruit volumes and a slide in apple juice concentrate prices.

T&G Foods has the capacity to process up to 200,000 metric tonnes of apples and other fruit at its two manufacturing sites, one in Hastings and the other in Nelson.

The company processes apples into apple juice and has also diversified into the production of higher margin fruit ingredient products including diced apple for the food services industry, apple sauce in bulk and small format pouches for retail consumers.

The company was founded in Germany nearly 100 years ago, operates in 34 countries and has nearly 20,000 staff

The uncertainty about the company’s New Zealand apple business is a surprise just because the main problems were well-known at the outset of the acquisition.

These included supply problems due to the widespread pulling up of orchards, and the labour problems involved in the picking of the fruit in the remaining orchards.

Baywa is a conglomerate in that it is involved in energy, notably solar, as well as in building materials, and farm equipment.

The uncertainty over the company’s processing future here comes at a time of intense political sensitivity over the acquisition of New Zealand’s primary resources by foreign firms.

This has been compounded by the worry of local constructors who had been led to believe that the company was on an expansionary path.

| From the This email address is being protected from spambots. You need JavaScript enabled to view it.  ||  Wednesday 18 October 2017   |||

Further reading:

14 June 2014 - The BayWa Group takes over New Zealand's third largest apple producer

16 october 2017 - T&G Global looks to sell food processing T&G Foods unit

IBM and Stellar Are Launching Blockchain Banking Across Multiple Countries.  The news also comes as an important validation of blockchain technology.  In a breakthrough for payments technology, IBM and a network of banks have begun using digital currency and blockchain software to move money across borders throughout the South Pacific.

The significance of the news, which IBM announced on Monday, is that merchants and consumers will be able to send money to another country in near real-time, accelerating a payments process that typically takes days.

The banking network includes “12 currency corridors” that encompass Australia and New Zealand, as well as smaller countries like Fiji and Tonga. It will reportedly process up to 60 percent of all cross-border payments in the South Pacific’s retail foreign exchange corridors by early next year.

The news also comes as an important validation of blockchain technology, which has long promised enormous efficiencies for the financial sector, but has been slow to move from the concept stage to the real world.

Blockchain, which relies on a disparate network of computers to create an indelible, tamper-proof record of transactions, is most famously associated with the digital currency bitcoin. But it can be used in many other applications such as tracking shipments or, as in this case, to record a series of cross-border transactions.

As an example, IBM said a farmer in Samoa will soon be able to contract with a buyer in Indonesia, and use the blockchain to record everything from the farmer’s collateral to letters of credit to payment.

“This is the next step in the evolution of blockchain technology. It’s live money moving around a network,” Jesse Lund, IBM’s VP of Blockchain, told Fortune.

Digital Currency is KeyThe new blockchain banking process is also notable because the banks will initially rely on a bitcoin-like digital currency, known as Lumens, to facilitate the cross border payments.

Currently, banks arrange such payments by maintaining foreign accounts in a local currency (so-called nostro accounts), and then debiting the accounts as required—a process that is both slow and ties up capital.

Under the new blockchain arrangement, banks will conduct the transactions using Lumens, and then rely on local market makers to convert the Lumens into local fiat currency. The Lumens are created by a non-profit company called Stellar, founded a Jed McCaleb, a well known figure in the payments and crypto-currency world.

Both Stellar and IBM are part of a project called Hyperledger Fabric, which is building open source blockchain tools to support payment infrastructures.

According to Lund, though, the banks use of Stellar’s digital currency is likely to be temporary. He predicts that, in the next year, central banks will begin issuing digital currencies of their own, and that these will become an integral part of blockchain-based money transfers.

The IBM-backed blockchain project comes at a time when other companies are creating efficient new ways to conduct global money transfers. These include BitPesa, which relies on the bitcoin network to replace traditional wire transfers between merchants in Africa, and TransferWise, which provides an inexpensive way for consumers to obtain foreign currencies.

| A Fortune release   ||  October 16,  2017   |||

Multinational tech giants like Google, Apple, Facebook and Amazon are taking a bigger slice of the New Zealand economy every day writes Rohan MacMahon in his article published on Newsroom:-

'Lack of IT skills adds to dismal productivity' As productivity flatlines, we need to help Kiwi businesses stay competitive in a global world, writes management consultant Rohan MacMahon

Whatever the make-up of the next Government, we can expect some major topics debated in the election campaign to get a lot of attention. Things like housing supply, mental health and water quality.

One fundamental challenge for New Zealand which received little attention in the campaign, but will need to be addressed, is productivity. The latest statistics paint a dismal picture (read a great summary by Michael Reddell here).

Basically, once you net out population growth, New Zealand's productivity is static or, if you choose the most optimistic measure, growing at less than one percent per annum.

This means workers need to work longer hours to have more money in their pockets. It means farmers must hope for better prices on commodity exports or an uptick in global demand to generate growth in profits.

Why is it so hard to, as they say, "work smarter, not harder"?

One area where New Zealanders are not "working smarter" at scale yet is in the use of ICT.

New Zealanders are enthusiastic consumers of technology. Kiwis love global technology brands like Apple, Facebook, Netflix, Amazon and Google, and are generally quick to take up attractive new technologies.

However, it's businesses that drive productivity, not consumers - and here the story is less rosy.

| Continue to the full article on Newsroom here  ||  October 17, 2017,   |||

Purple patch for SMEs set to continue, but political machinations could put spanner in the works…

New Zealand’s small to medium enterprises (SMEs) have enjoyed a period of sustained growth and there is an expectation the good times will continue to roll in the coming year. That’s the findings of recent research from accounting software outfit MYOB. Its Business Monitor Economic Snapshot, which polled 400 SMEs nationwide, found that 37 percent reported a revenue increase in the last year, tracking slightly up from 36 percent in March, with almost half (46 percent) expecting their revenue to increase over the next 12 months.

Fewer businesses are struggling in the current environment, with just 15 percent of SME operators reporting their revenue decreased over the last year, down from 19 percent in February, and 20 percent in September last year.

In a statement, MYOB’s NZ GM Carolyn Luey said SMEs have worked hard to put themselves in this position, and many are now enjoying a period of steady growth. “Since they recovered from the GFC, we’ve seen the performance of local SMEs steadily improving. And looking ahead, local businesses see no reason for their stellar run to end.”

Of course, one reason for the stellar run to end could be New Zealand’s changing political environment. As D-Day approaches, a switch to protectionism and a potential clampdown on immigration, thanks to Winston Peters holding the balance of power, could have interesting consequences.

Luey said the survey reinforces that growth is not just confined to the main centres, with the regions also showing significant improvement. “A trend we’ve seen over the last few years of our research is that SMEs across many of New Zealand’s regions are experiencing a period of sustained growth,” she noted.

“For example, 44 percent of operators in Waikato and the Bay of Plenty saw their revenue improve in the last 12 months, with similar levels of growth seen in Otago/Southland.”

On the back of their own performance, the MYOB Business Monitor Economic Snapshot highlights that SMEs are confident in the New Zealand economy.

Close to half (42 percent) believe New Zealand’s economy will improve over the next 12 months, while almost a quarter (23 percent) think it will decline.

“Confidence in the economy from the small and medium-sized business sector is good for the whole country. It means more businesses are willing to invest and therefore increase employment opportunities,” Luey added.

However, she said some sectors are less positive – particularly those which are exposed to the slowing property market.

“Only 32 percent of businesses in the construction and trades sector expect the economy to improve next year, while 29 percent say it will decline. By contrast, the tourism sector is clearly preparing for another good year, with half of all businesses in the retail and hospitality industry expecting the economy to grow.”

While there is growing confidence in the economy, the new Government will have to look carefully at what it can do to help maintain it, especially in terms of policies focused on education, training and immigration.

“This is really noticeable in terms of finding the right people to fill skills gaps,” said Luey. “Forty-one percent of respondents said their industry is experiencing a skills shortage – and in areas like Canterbury where the rebuild is ongoing, 47 percent of SMEs said finding staff with the right skills is one of their greatest challenges.”

And it is larger SMEs – those who employ 10 or more people – which are finding it the hardest to recruit the staff they need, she added. For those employing 10-19 people, 68 percent said they find it difficult to find suitable staff, while 32 percent of businesses with 2-4 employees said the same.

“The ongoing skills shortage is continuing to bite across a range of industries, with 67 percent of the transport industry, 50 percent of the retail and hospitality sector and 47 percent of the construction and trades reporting a skills shortage in their industry,” Luey said.

“The skills gap is a huge issue facing the new government. It will need to look at what policies are needed to support SMEs growth and attract the right people to work across a broad range of sectors.”

Which may just throw an interesting spanner in the works, particularly should Peters choose Labour over National in the week ahead.

| An MYOB release  ||  October 4,  2017   |||

German's largest airlines, Lufthansa, is investing into an ICO pre-sale and teaming up with a Swiss startup on bookings on Ethereum.

One of Europe's leading airlines, Lufthansa, will be buying into an ICOs and teaming up with a startup on bookings on the blockchain. Winding Tree, a Swiss-based startup, is building a marketplace on the ethereum blockchain to connect businesses and suppliers. The deal between was announced today. Together with Lufthansa Group, the pair is exploring a decentralized booking platform.

The two companies met through Lufthansa's Innovation Hub. Both firms view this collaboration as an overall win-win. Lufthansa hopes to bring on board its expertise in customer experience from the airline industry while benefiting from Winding Trees blockchain development.

CEO of Winding Tree, Maksim Izmaylov shared their intentions to help the German airline build and deploy blockchain- powered travel apps on that align with the industry's standards. Lufthansa will provide Maksim's development team with access to APIs.

Markus Binkert, Senior Vice President Distribution & Revenue Management Lufthansa Group Airlines explained the goal of API integrations via press release:

"By integrating these APIs with Winding Tree's public blockchain, Lufthansa Group enables all innovative partners who develop cutting-edge travel applications to access these offers via a decentralized and intermediate-free travel marketplace."

The largest German airline is exploring customer service applications on the blockchain including bookings, and itinerary travel information. Lufthansa is on the forefront of exploring use cases for the technology underpinning cryptocurrencies for its aviation business. The scalability and efficiency of blockchains are features it can explore both customer service and aircraft maintenance. Last year, the firm launched a Blockchain for Aviation (BC4A) initiative aimed at evaluating innovative technology for flight maintenance.Lufthansa Buys into Pre-Sale ICO

Winding Tree is in the process of launching an initial coin offering (ICO) to fund development. As part of their commitment to this partnership, Lufthansa will finance part of the token sale at the ICO pre-sale stage. Investors will receive native ‘Lif' cryptocurrency in exchange for their contributions.

More startups are turning to ICOs for capital, the latest cryptocurrency crowdfunding craze. Typically, investors make contributions via cryptocurrency and receive issued tokens representing some form of right or utility. But in more recent times, the model has opened up avenues for Hedge funds and private investors to participate at a pre-ICO stage.

Lufthansa's buy-in to Winding Tree's pre-sale is likely to contribute regular currency. Regulatory warnings on ICO funding have picked up over the course of the last few months. It is becoming harder for startups to skirt rules on securities laws.

The LIF crypto token will have utility on the marketplace. Businesses and suppliers will settle payments and transfer of data relating to accommodation, flights, and cruises on the blockchain using Lif.

Dr. Christian Langer, Chief Digital Officer of Lufthansa Group, said: "To us, Winding Tree is a strong candidate to turn today's understanding of distribution upside down."

|  A Cryptovest release  ||   October 12,   2017   |||

An ownership dispute over proposed milk processing facilities in Southland has hit the courts, with a jilted group of investors claiming to have missed out on a major opportunity to tap the Chinese market worth at least $227 million.

The tussle harks back to September 2014 when Brian Wagstaff and Richard Young set up a company called Danpac (NZ) to build and run an infant formula factory and hold a minority interest in a site for a proposed milk powder processing factory that was to be owned by Mataura Valley Milk. They entered into a heads of agreement with Randolph van der Burgh and Geoffrey Pollard, Pure Elite Holdings, PEF New Zealand and Ever Health New Zealand that both parties would pour capital into the entity to build a dairy exporter targeting China.

Neither group ended up injecting their capital and Wagstaff and Young took back control of the entity, later amalgamating Danpac with another entity Bodco Ltd, which counts Chinese state-owned enterprise China Animal Husbandry Group as its biggest shareholder, bankrolling the processing plant.

A September 25 judgment in the High Court in Hamilton shows van der Burgh, Pollard and the PEH group of companies claim the agreement didn't have a fixed timeframe meaning delays to capitalise Danpac didn't breach the deal, and that the moves to push them out were themselves breach of the heads of agreement. They estimate their loss to be at least $55m from being deprived of the equity stake in Danpac, and at least $227m in lost value, the judgment said.

| Continue to red full article on TheCountry here   ||  October 12,  2017   |||

Vector is looking to drive new innovation in the rapidly expanding electric vehicle sector by not only providing charging solutions but also turning them into power sources.

"We see potential for EVs to become mobile energy sources and a key part in making our network smarter and more resilient," chief networks officer Andre Botha said in an emailed response to questions.

The latest data from the Ministry of Transport shows there are now about 4,900 light EVs on the road up from almost 2,000 a year ago. While the numbers are pushing higher, Botha said the cars aren’t putting pressure on the grid as their contribution to demand is small but "we are developing smart solutions" to ensure that doesn't happen. The government is aiming to double the number of electric vehicles in New Zealand every year to reach approximately 64,000 by 2021.

Among other things, Vector is closely monitoring existing public charging stations to get data on usage patterns and wants to "build flexible customer-focused networks that are accommodative to this disruptive technology," he said.

Vector has been on expanding its reach outside its dominant regulated electricity and gas distribution which faces smaller returns, branching out into telecommunications, smart meters, battery storage, solar and home ventilation.

Botha said Vector now has 18 rapid charging stations, plus another nine standard chargers. EV users do not currently have to pay to use them. A car takes an average 15-to-25 minutes at a rapid charger and six-to-eight hours at a standard charger.

"Between July 2016 and June 2017, these chargers have seen over 22,700 rapid electric vehicle charging sessions, delivering 180.6MWh (megawatt hours) of electricity to EV users. That’s more than 195,641 kilograms of CO2e (carbon dioxide equivalent) emissions saved compared with using a petrol-powered vehicle," he said.

While different electricity retailers are offering night rate specials to avoid congestion in peak hours, Vector is going one step further and implementing so-called Vehicle-to-Grid technology, or V2G "which realises the potential of an EV to be a mobile power source," Botha said. It is currently pioneering the technology, using its EV fleet - which will soon by 100 percent of its corporate pool. Similar trials are underway in Denmark, Italy, the UK and the Netherlands, he said.

The vehicle charges overnight and then its stored power can be used as a cheaper power source during peak hour consumption and as a way to power homes during outages. A second-generation Nissan Leaf with a 20 kWh (kilowatt hour) battery could power the average household for 10 hours on a full charge, he said.

Given most cars are parked for the majority of the time "people could charge up their car batteries overnight with cheaper energy and then use them as power boosts when needed, or in the morning and evenings when energy costs more," he said.

According to Botha, Vector will be offering V2G to customers in the near future.

Also on the innovation front, Vector is looking at how EVs could improve the resilience of the network as the impact of climate change makes extreme weather like storms or droughts more common.

"As EVs become a key component of the transport network, the need for resilient energy supply is going to become more and more important," he said.

Vector is also investigating end-of-life uses for EVs when batteries are no longer effective at powering the vehicle. Botha said one idea is to group ex-EV batteries into mobile power supply units which could replace generators as temporary power sources - for example when network maintenance is going on.

| A Sharechat release ||  October 11,  2017   |||

ASX-listed IPH Ltd said it has acquired New Zealand intellectual property law firm AJ Park for $66 million.

IPH, which describes itself as Asia-Pacific's leading intellectual property group, expects the deal to be completed by Oct. 31. AJ Park employs 205 people with offices in Auckland, Wellington and Sydney, including 30 percent of New Zealand’s registered patent attorneys, and was established in 1891. The Kiwi law firm's client list spans a third of Fortune 500 companies and more than half of New Zealand's top 200 companies.

AJ Park will be the first New Zealand IP firm to join a publicly listed IP group, as a result of legislation which took effect from February 2017, which removed restrictions on ownership structures for patent attorney firms.

The deal comes as foreign ownership was discussed in the current negotiations between NZ First and the National and Labour parties to form the next government. NZ First has been a strong proponent in seeking to limit the level of foreign ownership in New Zealand.

The $66 million price tag, adjusted for net debt and working capital, represents 7.5 times AJ Park's normalised earnings before interest, tax, depreciation and amortisation (ebitda) in the 2017 financial year, IPH said. It will be settled 60 percent in cash and the remainder in new IPH shares, with those shares to be escrowed for two years and the cash to be funded by USD denominated debt.

"We are confident that significant benefits will flow from being part of the IPH Group," AJ Park managing partner Damian Broadley said. "Importantly, we will continue to operate under the same name, with the same high-quality people, but will gain access to investment, technologies and networks that will enhance the way we deliver services to our clients."PH managing director David Griffith said the deal "represents a further step in IPH's strategy to expand its presence in secondary IP markets and, most importantly, supports IPH's growth in Asia through extension of our Asian service offering to AJ Park's local and international clients."

The acquisition still hinges on completion of restructuring and contractual arrangements, consent from third parties and no material adverse changes, IPH said. Its shares last traded at A$4.96 on the ASX, and are down 3.1 percent this year.

| A Sharechat release  ||  October 2017,  11   |||

Leading New Zealand economic research company BERL next week celebrates its 60 years in business with a special event in Wellington. BERL was founded by Bryan Philpott, then an economist with the New Zealand Meat and Wool Board’s economic service; Hew Walls, a staffer in the Reserve Bank; and Norman Macbeth, editor of the Christchurch Press; opened for business in November 1957 with the distribution of the prototype issue of Trends, later to become BERL forecasts. Current BERL chief economist Ganesh Nana says that first issue, in the shadow of the 1957 general election, predicted grim times ahead. “With the confirmation of the forecast crisis and the subsequent infamous Nordmeyer Black Budget, BERL’s reputation was immediately established,” Dr Nana says. “While the BERL founders have long since passed, their ethos of making sense of the numbers remains alive and at the core of BERL today. “We overhauled the measurement of the asset base Māori economy asset base for Te Puni Kōkiri. Newly devised methodology supported by international peer review saw the 2010 measure of $36.9billion being widely adopted as a benchmark. This measure was subsequently updated for the 2013 year to $42.6billion. “We continue to regularly provide the local government sector forecasts of costs facing the sector for use in council annual plans. We measured – for WWF New Zealand – the transition costs involved in moving to alternative dolphin-friendly fishing methods. “The Māui dolphin is one of New Zealand’s most endangered animals with an estimated 63 dolphins over one year of age and are only found on the west coast. “Work for the New Zealand Housing Foundation highlighted the potential gains to the government’s finances – in terms of reduced health care costs, welfare payments, and crime costs, and increased tax revenues – arising from the improved outcomes of those in owner-occupier housing. “We have provided regular impact assessments for the Taranaki Arts Festival Trust across the range of their events including WOMAD and the Garden Festival. “We are proud to renew our corporate patrons” sponsorship of the New Zealand Festival and are excited about the 2018 event and to providing economic research and advisory services to assist in its success. “Over the past years BERL has tackled many challenges and opportunities. We are proud to remain a fiercely independent New Zealand owned, Wellington-based research consultancy business. “There are probably not many New Zealand owned commercial small to medium enterprises that have completed 60 years in business, so we believe it is a milestone worthy of celebration. “We know BERL was first in New Zealand in the economic forecasting and research consultancy game. We have seen in office 14 prime ministers, 13 governors-general, 13 finance ministers, 11 Treasury secretaries and nine Reserve Bank governors. “While some of these office holders may or may not change in the near future, BERL fully intends to outlast many more. “BERL remains true to our vision to make a difference. Economics is not about finance, nor about dollars and cents. It is about people, their communities, and their potential. We strive to make a difference by helping people and their communities realise their potential,” Dr Nana says.

| A Make Lemonade release  ||  October 11,  2017   |||

The new government should make it a policy priority to help rebalance the economy, says BNZ boss Anthony Healy.

"I do think the shape of our tax system needs to be looked at, particularly when you consider some of the widening gaps between rich and poor.

"I think addressing that through redistribution, particularly with a capital gains tax, would certainly be something I'd like both (potential) governments to be considering."

Hear Healy's comments in the video player above

Healy said there were four main reasons why the housing market stopped going up.

The first was a lack of affordable houses – a lot of buyers were simply priced out of the market now.

Secondly, the LVR restrictions were having a significant impact particularly on investors.

Thirdly, all the major banks had stopped lending on foreign income which had removed a lot of foreign investors from the market.

Finally, Healy said capital controls in China had cut the number of Chinese buyers in the market.

Healy said the banks “weren’t” panicking about the slow-down but agreed that property developers were now having difficulties in financing some projects.

| A Newsroom release  ||  October 09,  2017   |||