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Recent key developments in MAKE│NZ
Last night Andrew Barclay (Wyma Solutions) and Gordon Sutherland (AW Fraser) spoke at our Fireside chat about their experiences selling their respective businesses.
Opening with Gordon Sutherland, he had one very clear takeaway for those in attendance- “Get an advisor”. As someone who works hard to solve any problem thrown at him himself, when looking to sell AW Fraser, Gordon was keen to not involve the hassle – and eye-watering costs- of an advisor, but after interviewing a few different candidates found that the right one can be worth their cost. He also found something that really helped entice the future owners was a factory tour. Being able to show off not only their capabilities, but also the culture inside the factory itself was a real bonus.
Andrew Barclay found some differences between his story and Gordon’s, but mostly a lot of similarities when it came to selling Wyma. A key motivator for him was to be able to step back from the business, having more time for family, but making sure he was stepping back when Wyma was in a place to be able to keep growing. He wanted to make sure Wyma continues to have a future, and that includes their staff – and it sounds like he achieved that goal. Despite now being in foreign hands, Wyma is continuing to grow, with new opportunities for staff now that the business has joined a multinational group of companies, and Andrew is still involved but has more time for himself.
The entire chat really solidified that selling your company is very much a long term process. Both men started thinking about selling ten years before it happened. It’s also as much a personal act as it is a business act. Taking something that’s a source of pride that you’ve grown and then letting it change hands is never easy. Taking a step back can be an uncomfortable shift, but ultimately one that is for the best.
It was great to hear from Andrew and Gordon, and thank you to those attending- the new and the regulars. If you’d like to attend our next Fireside Chat, make sure to get in contact with the MAKE│NZ team!
That’s it. We’re now twenty two (22) days away from, you guessed it, TUNING YOUR PRODUCTION ENGINE!
If you haven’t got your tickets yet you’d best hurry! The countdown is on, and this is a day you won’t want to miss. Experience fantastic speakers from New Zealand manufacturers, interactive case studies, and the chance to learn from your community!
Make sure to get your tickets here!
Tuning your Production Engine – Manufacturing Industry Conference
Recent key developments in New Zealand
• Last week we commented on the lack of systematic research into the views on and understanding (young) people in New Zealand have of manufacturing. It is generally accepted that careers in manufacturing are seen as unattractive by (too) many, but what exactly is it that people don’t like?
This week we received the copy of a project report, written by Simeon Lodge, an MBA student at the University of Canterbury. Part of the project consisted of interviews with apprentices and Polytech students in subjects relevant to manufacturing. While the sample size was low (8), some of the insights into what had attracted these people into manufacturing are worth noting:
– None of the interviewees felt that advice from their parents, teachers and career advisors had any significant impact on their career choice – nor did information available on social media, although these were used widely; mostly Tik Tok and Instagram
– However, inspiration from teachers, parents or relatives (role models) was mentioned by some
– Being able to ‘Do this with one’s hands’ was mentioned regularly; several interviewees mentioned working on their cars (with their dad). In some cases, people felt that was the only thing they could excel at, while others also enjoyed academic work, but still preferred working with their hands
– There was a mix of those that ‘strayed’ into manufacturing, and others for whom it had been a deliberate choice, based on expectations on career progression and starting their own business
– Regular hours, stable pay and a predictable commute and workplace were mentioned as attractions by some – the latter presumably when compared to employment in the construction industry
– Interesting and varied work, and the ability to acquire new skills, are seen as important. Excessively repetitive work is seen as a turn-off
Given the low number of interviewees the above is based on, we have to acknowledge that this study has barely scratched the surface. It should serve as further evidence, however, for the need to undertake a systematic analysis of the perceptions of manufacturing held by those we want to target for choosing a career in manufacturing, and those who they listen to. And of the reasons why (young) people chose a career in manufacturing, or chose not to – which may or may not be directly linked to those perceptions.
• As we are going to talk about (un)reliable electricity supplies below, and with winter approaching, it’s worth looking at (wholesale) electricity prices again:
When we look at the prices for electricity futures for Q2/25 and Q3/25, and monthly up to August, they all sit above the $350/MWh level. No too bad, compared to the excesses of last winter?
Well, maybe not – except that futures for the corresponding periods in Australia are sitting at less than half of that level, at around AUD120 to AUD150. And the fact that, given where lake levels are at, worse may well be yet to come …
National hydro storage has seen a slight increase this week, now sitting just above the 10th percentile at 83% of the historic mean for this time of year. And that only because the contribution of thermal generation remains above average and increased from 17% to 18% of the mix this week – as we understand it, mostly from coal (the data for Q1/25 aren’t available yet).
There is another twist to this. Wholesale electricity prices only make up about half of the total cost for industrial users, with a higher proportion for heavy users because they tend to face lower distribution costs. But Transpower’s transmission charges still account for 10-15% of the total and are certain to go up further than the increases that came into effect on April 1. Transpower is predicted to spend $4.7b over the next five years on grid upgrades, and those costs will be passed on to the users of electricity – industrial and domestic. When it comes to distribution costs, we’ve seen examples of surprisingly high quotes for installing new connections for industrial users, for example.
The Northern Infrastructure Forum – an industry energy advocacy group – and the Auckland Business Chamber are currently running a survey on electricity costs for businesses. It would be good to get a response from many! https://www.surveymonkey.com/r/energycostsurvey2025 .
Recent key developments in the World
• Before we get back to electricity, some exciting news. The use of robots even in smaller manufacturing operations is expanding, and the ease of programming these robots has played a big part in that. Recently, there has been another major step in that direction – the development of Vision Language Action Models (VLAM). In essence, these models use machine-learning methods and training to acquire information and turn it into a set of operating instructions for robots. They are all-in-one AI systems that combine three AI capabilities:
– Vision: What the robot sees (using cameras/sensors)
– Language (Reasoning): What the robot is told (via voice or text commands)
– Action: What the robot does (movement or digital tasks)
The seminal paper describing the approach can be found here, and a more hands-on explanation with examples is available here. The technology effectively enables robots to operate in and adjust to dynamic environments. It also enables them to process verbal and visual instructions offered by human operators (workers).
We are now starting to see real-life applications of VLAM in industrial automation. In January, the German tech start-up Sereact managed to secure €25 million in Series A funding to further develop the technology, which is already being trialled by a number of manufacturers, including BMW and Daimler Truck. Sereact – the name stands for Sense, Reason and Act – are specialist software developers for pick-and-place robots, and their PickGPT software allows workers to verbally and/or visually instruct robots to pick products and combine them into a single batch or consignment.
• We talked about it before, and we’ll talk about again, as it is a topic that will be critical to ensure stable and reliable future supplies of electricity. The recent blackout in Spain and Portugal provided a stark reminder of that. There still is no credible analysis of the root causes behind that event in the public domain, but as this article by a Spanish academic points out, whether it was a contributing factor here or not, increasing supplies of electricity from renewal resources – which are inherently inconsistent – lead to a less stable system of supplies.
Another – and related – consequence of increasing electricity supplies from renewables, especially solar and wind, is the fact that the require massive investments in reconfiguring and expanding grid systems. That is mainly due to the fact that instead of large singular power plants built close to the centres of consumption, electricity generation from renewable sources is (widely) dispersed and may be far away from centres of consumption (offshore windfarms).
One key building block in that grid expansion will be (large) electrical transformers. Demand for these is predicted to grow by a compound annual rate [CAGR] of 6.5% to 2034.
The problem with these projections is that they are a demand forecast. Current industry capacity is falling well short of that. Actual global production capacities are predicted to grow at a CAGR of 5.5% between 2024 and 2027, resulting in a supply-demand gap exceeding 100,000 Mega Volt-Amperes [MVA] by 2027, with North America and the Middle East & Africa facing the most severe shortages. Current investment in additional manufacturing capacity (around $500m in the US alone) will not be enough to close the regional supply gap, resulting in extended lead times. Where 12 to 14 months were industry standard a few years ago, 30 months is considered rapid at the moment. In Europe, which experienced overcapacity issues in the resent past, resulting in factory closures, lead times of four to five years are common today.
There is a lesson in this – the same one we mentioned last week when discussing US plans to revitalise their shipbuilding industry. When it comes to expanding manufacturing capacity, especially for large and more complicated products, long-term planning is of the essence. Governments in ‘Western democracies’, often mainly focused on winning the next election, appear to be struggling with that times.
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