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Manufacturing Matters- Tuesday Top-Up 74

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What’s Been Happening in our MAKE│NZ Community

Last night, those who braved the possible hit to their petrol tank joined us for our fireside chat led by Glenn Morgan and Richard Frew from Sutton Tools. They talked us through the fire that burnt Sutton Tools to the ground – as the building still smoldered they went immediately to the drawing board, using sheets of a3 to devise how to get back into operation as soon as possible. This plan resulted in a new dream factory, with brand new machinery and room to grow, being built on the site of an old pig farm.
It was great to hear about how something so devastating can lead to a brighter future. Their production is nearly back to the same level pre-fire, and now with less staff and more efficient systems. Certainly a reassuring story for those who are haunted by the what-ifs of surprise disasters.

If you’re disappointed in missing out, or want to learn more, Sutton Tools have offered to host our next Production Managers Meeting at their fresh and fire-free factory. Invitations will be going out shortly, but if you’re worried you or someone in your team isn’t on the invite list – just reach out to dieter@makenz.org or sabine@makenz.org!

We’ll be taking a short break from the Tuesaday Top-Up over the next two weeks. Our editor and author in chief is off to gather international news personally, and it’s only fair we give him time to catch up on his jet lag. But don’t fret – when we’re back we’ll have news straight from the manufactured-horses-mouth in Germany.

Our priority is to always bring you the latest in manufacturing news, New Zealand and the world over, so if there’s ever a topic you’d like us to focus on or research, make sure to let us know!

Future Events

•Business Canterbury are organising a Manufacturing Futures Forum: Funding and Growth Pathways on Wednesday 25th March 4.30pm – 6.30pm. For details and registration, please see here

• We’ve partnered with ExportNZ to help share the word about the upcoming State of the Export Sector, presented by New Zealand’s Minister for Trade and Investment, Todd McClay.

The Minister will reflect on the challenging global environment our exporters currently face, outline his priorities for the trade and export sector, and look ahead to future opportunities through trade agreements, improved market access, and emerging growth sectors.

Following the Minister’s remarks, there will be an opportunity for discussion and questions from the audience.

If you’re interested in attending you can find tickets and more information HERE

The good people at ExportNZ have also offered a discount code available for MAKE│NZ members for $20 off ticket price, so make sure to reach out for the code!


News From The World of Manufacturing

•The New Zealand government has a plan to cope with regional or national fuel shortages that could arise as a consequence of a range of different events – the National Fuel Plan. n.b., in spite of any superficial similarities that Plan, last amended in October 2024, has nothing to do with emergency measures government introduced in response to the COVID-19 pandemic.

As part of the Plan, there is an escalation ladder of restrictions to ensure that those with the most important functions in our society (and economy) will run out last:

When we look at Level 2 in more detail, the Plan envisages:

  • Moderate fuel distribution impacts, most customers still serviced but causing risk of shortages to critical fuel customers.
  • Fuel SCE (Sector Coordinating Entity) is activated (Section 4.2.2) to monitor demand levels and re-supply options and coordinate Government support as required for the fuel sector (Section 5.4).
  • Critical Fuel Customer prioritisation is invoked (Section 5.7). Fuel companies to take steps to ensure critical customers are supplied. Government powers may be used to enforce this.

Critical customers are those agencies responsible for the health, safety and welfare of the community and, in an emergency, CDEM (Civil Defence Emergency Management) response and recovery activities. Noting planning to support isolated users is also required as they are reliant on fuel generators.

The Plan then lists those included in the list of Critical Fuel Customers: The following sectors (not in a priority order, as this alters with each response) are defined as critical customers, with the right to access priority supply at nominated sites for the purpose of continuing essential functions:

  • Agriculture (including food supply chain, milk collections, preventing animal welfare issues, crops, fisheries, and activities of significant economic export value),
  • Airlines,
  • Civil defence emergency management (national/regional/local CDEM Group),
  • Corrections (facilities and the monitoring of offenders in the community),
  • Fire and Emergency New Zealand (FENZ) (response to public and property health and safety),
  • Health and disability sector (hospitals, public health services, health emergency coordination centres, primary care, ambulance services, and aged care facilities),
  • Lifeline utilities (major supplies of energy, transportation (see also below*), telecommunications, water, and wastewater services),
  • Local authorities, for lifeline utility services, solid waste and other essential functions,
  • New Zealand Police (response to public and property health and safety),
  • New Zealand Search and Rescue,
  • NZDF (noting that they hold limited stocks for normal NZDF operations),
  • Public transport – rail, bus and ferry,
  • Transport and storage of food, and
  • Welfare services (household goods and services, Civil Defence Centres, Oranga Tamariki facilities, large-scale animal husbandry and veterinary officials)

*Entities and types of activity that fall under the definition of Lifeline Utilities involved in transport are defined in Schedule 1 (Part A and B) of the Civil Defence Emergency Management Act 2002. Nothing in Schedule 1 would cover transportation of goods required for non-food manufacturing, or the transportation of finished products other than food, with the exception of:

  • Production, supply or distribution of manufactured gas or natural gas (whether it is supplied or distributed through a network or in bottles of more than 20 kg of gas)
  • Supply or distribution of water to the inhabitants of a city, district, or other place
  • Production, processing or distribution to retail outlets and bulk customers any petroleum products used as an energy source or an essential lubricant or additive for motors for machinery.

In terms of information about the likelihood of restrictions being introduced under the National Fuel Plan, MBIE is running a website that is updated frequently.

Other news of interest to manufacturers

•Not our biggest worry right now, but with a connection to our biggest worry right now:

The level of public debt in relation to GDP for the 10 most-indebted OECD countries

Let’s look at what still is the world’s largest economy, and the economy the economies of many countries, including our own, is closely linked to – the USA.

At 124% in 2024, the IMF expects that ratio to rise to 140% by 2030. That estimate does not yet include increasing expenditure on unscheduled military activities.

In fiscal year (FY) 2025, the US federal government spent $970 billion (between 3.1% and 3.2% of GDP) on interest payments on the national debt – the equivalent of 19 percent of all federal revenue collections and roughly $7,300 per household. Net interest was the third-largest government expenditure in FY 2025, behind Social Security and Medicare.

Truflation, a US economics consultancy, just published figures suggesting that this month American year-on-year goods inflation has jumped from less than 1% to nearly 3.5%. This was almost entirely the result of rising petrol prices.

The standard response from central banks to a rise in inflation is to raise interest rates. Notwithstanding the very strong pressure against such a move the Fed would be facing, such a rise in interest rates would add to the debt burden; interest payments already are the primary contributor to the US deficit:

Calculating the exact amount of additional interest payments required when interest rates rise is not a straightforward exercise, as it depends on the roll-over and maturity structure of the debt; Treasury securities have different maturities (short‑term bills vs. long‑term bonds). Fair to say, though, in summary, is that current levels of oil and gas prices, and the flow-on effect on derived products, should they persist for any length of times, won’t be good news for the US economy, and nor for ours.

Fun Facts (some of them not so funny)

•The life cycle of stars is an interesting story, and quite well understood by astronomers:

As far as our own star is concerned, the sun is expected to expand into a Red Giant, incinerating earth and the other inner planets, in about 5 billion years’ time. Terrestrial equivalents sometimes proceed a lot faster.

•There are several measures of efficiency. The one we come across most often is productivity, and there it is usually labour productivity – the amount of GDP created in an hour of work. Another way of measuring efficiency is Energy Intensity, the amount of GDP created from the use of a unit of energy – probably of more interest right now than at other times.

Environment Southland has just granted Datagrid NZ Partnership Ltd. a resource consent for setting up a 78 ha data centre, including a permit to extract ground water at a rate of up to 220,752 m3 p.a. Negotiations are underway with Transpower to secure access to up to 280 MW of electricity directly off the 220 kVA grid. At an estimated annual consumption of 2.45 TWh when fully operational, that would make it New Zealand’s second-largest commercial use of electricity behind the Tiwai smelter.

According to the CE of the Southland Business Chamber, the data centre will create about $60m in GDP annually once it is fully operational. In terms of Energy Intensity, and converting MWh to Megajoule (MJ), that would be ca. 147 MJ per dollar of GDP. Compare that to the latest industry data available from MBIE:

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