Report shows untapped revenue potential for NZ firms

There is significant potential to improve the share of work that New Zealand firms win from major supply chains and the economic rewards for both the companies involved and the local economy are significant, according to a recently released report commissioned by the New Zealand Trade and Enterprise’s Industry Capability Network.

According to the report, Australian experience indicates that there is the potential to boost the revenue share for New Zealand by up to $170 million for every $1 billion spent on major projects.

Catherine Beard, Executive Director of Manufacturing for BusinessNZ says it is very important that New Zealand companies start winning a bigger share of large government, local government and SOE tenders, based on their merits.

“In order to grow bigger companies in New Zealand that are more capable of entering into export markets, they need to get a fair crack at the larger local projects, which are typically a government spend. Too often we see an over-emphasis on price versus quality resulting in poor procurement results, requiring expensive remedial work being carried out.

“We would like to see a renewed emphasis on “whole of life” procurement from government, which takes into account price, quality, durability, servicing and local industry capability building.”

The report for the Industry Capability Network surveyed the local and international supply chain scene, and found that while some leading New Zealand companies can compete effectively in the major supply chain market, there is scope for more companies to win this sort of work and develop these relationships.

Paul Linton, Director ICN says that the report indicates that procurement into the local market across a range of sectors is still vitally important for New Zealand companies. “The ICN continues to work hard to help buyers find competitive local suppliers for large projects and to help local companies improve their capability in this space so they can become more successful in Australia and New Zealand, and into global supply chains.”

The ICN and BusinessNZ are holding a series of seminars in Auckland, Wellington and Christchurch this week on what successful New Zealand companies do to win local and global supply chain work, and hear from our own large procurement agencies about what qualities they are looking for in supply chain partners.

The report is available online at www.icn.govt.nz