The Manufacturing sector involves the transformation of materials, substances or components into new products; however it does not include agricultural and construction activities that fit this description. Activities undertaken by manufacturing businesses that are incidental to their manufacturing activity, such as selling directly to the consumer products manufactured on the same premises from which they are sold, or assembling a prefabricated building at the consumer’s premises, are also included.
Christchurch is the second-largest manufacturing centre in New Zealand. It is headquarters to iconic New Zealand companies such as Hamilton Jet; Tait Communications; Skope; Dynamic Controls; and Skellerup. Christchurch also hosts operations for a number of multi-national manufacturing companies such as Pratt & Whitney, General Cable, Schneider Electrical, TE Connectivity, Moffat, Trimble, Eaton and Hewlett Packard. These companies are in turn supported by a sophisticated supply chain of local component manufacturers that include light and heavy engineering, plastics, rubber and composite materials, electronics and electrical equipment companies supplying sub-assemblies, components and parts to a diverse range of industrial markets.
Food Product Manufacturing:
Christchurch plays a key role in adding value to primary food products harvested in the region. Food and beverage is the largest Manufacturing sub-sector in Christchurch. There are more than 240 companies, ranging from small artisan producers supplying the local market to large processing factories operating on the global stage.
Machinery and Equipment Manufacturing:
Christchurch has a strong history as a centre for machinery and equipment manufacturers. These are engineering companies that specialise in developing products for global niche markets. Many evolved from servicing the rural hinterland and collectively they produce a diverse array of equipment and machinery for the primary sector. The sub-sector has diversified into other specialised areas, with global leading companies in areas such as electronics, water jet propulsion and the production of food processing equipment. Christchurch’s electronics and electrical equipment manufacturers, for example, collectively contribute about 30 percent of New Zealand’s total electronics output.
Fabricated Metal Product Manufacturing:
Supporting the wider manufacturing sector is a sophisticated supply chain of component manufacturers that includes a high number of metal fabrication companies. This is the third-largest manufacturing sub-sector in the city, supplying sub-assemblies, components and parts to local, national and international customers in a diverse range of industrial markets.
Polymer Product and Rubber Product Manufacturing:
There are about 100 plastics manufacturers in Christchurch. Unlike most countries, no polymer resins are manufactured in New Zealand; they are all imported. The industry produces a large range of specialised products, including a high proportion of packaging products supporting the primary and food manufacturing industries.
Christchurch Quick Facts
- Contributes approximately $2.2 billion to Christchurch GDP (Infometrics’ Estimate year ended June 2014, $2010)
- Accounts for around 12 percent of GDP in Christchurch
- Around 2,025 business units are based in Christchurch (2014, Statistics New Zealand)
- Has around 22,765 employees (2014, Statistics New Zealand)
|Manufacturing Sector Employment Breakdown, 2014|
|Source: Statistics New Zealand|
|Sub-sector||Employee Count||% of Total|
|Food Product Manufacturing||4550||20%|
|Beverage and Tobacco Product Manufacturing||240||1%|
|Textile, Leather, Clothing and Footwear Manufacturing||1530||7%|
|Wood Product Manufacturing||1220||5%|
|Pulp, Paper and Converted Paper Product Manufacturing||270||1%|
|Petroleum and Coal Product Manufacturing||55||0.2%|
|Basic Chemical and Chemical Manufacturing||740||3%|
|Polymer Product and Rubber Product Manufacturing||1440||6%|
|Non-Metallic Mineral Manufacturing||1180||5%|
|Primary Metal and Metal Product Manufacturing||300||1%|
|Fabricated Metal Product Manufacturing||2830||12%|
|Transport Equipment Manufacturing||2140||9%|
|Machinery and Equipment Manufacturing||4310||19%|
|Furniture and Other Manufacturing||890||4%|
Across the Manufacturing sector capacity utilisation rates are tightening in response to the long-term impacts of the GFC (global financial crisis), the continuing high New Zealand dollar
and the resource requirements of the Christchurch earthquake rebuild. Manufacturers are increasing their focus on productivity improvements and staff retention in response to this unique set
of challenges. Initiatives like Lean and its related methodologies are being employed to drive continuous improvements in production operations, as well as the implementation of Enterprise Resource Planning (ERP) systems to support management decision-making.
Investment in Equipment and Machinery
Manufacturers continue to introduce new and increasingly sophisticated technologies, such as robotics; the latest high-capacity, multi-axis computer-controlled tools; and Ultra-Fast Broadband
in order to compete globally by improving quality and productivity and reducing labour costs.
Greater Flexibility and Scalability
There has also been a trend towards the adoption of flexible manufacturing systems. This provides scalability from prototyping and small batch runs to modest production runs. It enables quick responses to customer needs and market changes while still controlling costs and quality.
Access to a skilled workforce is one of the key requirements for growth for manufacturers. However, the sector is facing challenges to retain staff because of the increased mobility of the workforce globally; the social impacts of the earthquakes; and an ageing workforce. Locally, resource requirements of the earthquake rebuild are also driving a shift from manufacturing to the Construction sector among certain job categories, as higher wages are being offered to fill the shortage of construction workers.
Competition from Low-Cost Asian Economies
Like many manufacturers globally, Christchurch manufacturers face increasing pricing competition from lowcost, long-run manufacturers operating in Asia. A strong New Zealand dollar
exchange rate is also accelerating import penetration of manufactured goods into the domestic market.
Civil Construction Consumables
Within the sector some businesses are seeing high demand from rebuild activity. Manufacturers specialising in civil construction consumables, such as speed formwork systems or concrete additives, are seeing increased demand. This is likely to continue throughout the rebuild period.
Pre-mix concrete production has doubled since the earthquakes. Quarries are ramping up to accommodate the requirements of the concrete industry. However, they do not need to meet all the
demand as large volumes of recovered demolition concrete will be re-used in the new concrete production as well as being used as base coarse for roads.
There is a global trend in developing clothing and accessories incorporating computer and advanced electronic technologies. They are being used for health monitoring, sports performance,
communicating through the internet, information access and entertainment, as well as for industrial and military applications.
New Zealand Food Innovation South Island
Canterbury Development Corporation (CDC) has established a subsidiary company, New Zealand Food Innovation South Island Ltd (NZFISI), to provide specialised business growth advice, market entry and pilot production facilities for innovative food companies. NZFISI is part of a nationwide initiative that aims to establish facilities for companies to carry out product development, testing and evaluation at a local level.
Productivity and Performance Improvement
CDC is co-ordinating a range of initiatives to drive productivity improvement in the sector. This includes funding and access to systemic business improvement processes and staff training through the NZQA (New Zealand Qualifications Authority) Competitive Manufacturing framework.
Sector Workforce Plan
To address manufacturers’ increasing workforce needs and issues, CDC and the New Zealand Manufacturers’ and Exporters’ Association have developed a Manufacturing Workforce Plan. This plan responds to challenges identified in the way the manufacturing workforce is functioning and the pressures it will face for the next five to 10 years. The plan falls under the Ministry of Business, Innovation and Employment’s (MBIE) Labour Market Recovery Programme. To accurately reflect the issues and priorities of the Manufacturing sector, a steering group has been formed. It is made up of senior management from Christchurch’s leading manufacturers. The plan provides better linkages with government agencies and training organisations to deliver programmes to both attract staff (from school programmes and career clustering to offshore recruitment) and retain staff (for example: through staff training, secondment and loyalty programmes).
New Product Development
For a number of years CDC has provided linkages with universities and public research organisations (PROs) to support manufacturers’ new product development, along with facilitating access to government R&D funding initiatives.
Industry Capability Network
The Industry Capability Network (ICN) is a service delivered by New Zealand Trade and Enterprise (NZTE). ICN’s role is to help New Zealand companies increase their strike-rate in large contracts and complex supply chains, including government procurement. Specialists work directly with suppliers and purchasers, connecting them to relevant projects in New Zealand and Australia. These are typically in the areas of health, energy, oil and gas, education, defence and government, and currently have a focus on the rebuild of Christchurch.
In a related initiative, ICN is collaborating with CDC, NZTE and the Canterbury Employers’ Chamber of Commerce (CECC) to develop a local industry participation programme. It aims to maximise local content supplying the Christchurch rebuild by ensuring that local and domestic companies are fully represented and integrated into the procurement processes of the major project management offices (see Construction Sector Initiatives). A longer-term objective is to grow the long-term capacity and capability of local companies supplying the Construction sector and to develop legacy opportunities as companies develop long-term competitive advantage from resilient products and technologies.
Amplifier is a CDC programme that provides a bespoke service to advance selected high growth-potential businesses. A group of professional service and capital providers provides pro-bono support to the programme. Its purpose is to provide independent advice to businesses to assist them to traverse the business growth issues and challenges they encounter. This may include readiness for obtaining investment capital (both debt and equity). The Manufacturing sector is a target group for the Amplifier programme.