4 December 2015
Old tired men keeping us poor

Old tired men hold up the progress of Taranaki. It is incredible how the members of our key institutions are so “old world”. I discovered this when I was trying to find out why Taranaki is so under-developed. We do not take advantage of the vigour that diversity and conflict bring.

Port of Taranaki
Compare the annual reports of the Port of Taranaki for the last few years. What you see is that the Port’s fortunes depend on the oil and gas trade. They lost the Fonterra trade in the late 1990s. The Port lets the future happen. It is not trying to make the future.  The Port does not see itself as mission critical infrastructure for the prosperity of the Taranaki province. It does not front-up and take responsibility for regional development.

How to make it work
Our Port is owned by our Regional Council. We, the ratepayers, own it. That is possibly the main reason the Port is a flop. The Council could actually fix the problems of the Port quite easily. Sell half the shares in Port Taranaki to strategic partners from outside New Zealand and change the composition of the Board. We need international partners who will invest in our Port, develop strategic relationships, and market Taranaki. A global Chinese logistics business would be good, but there are others contenders.

If the Regional Councillors cannot share ownership, they might at least appoint more people from outside of Taranaki to the Port’s board.  Try to build strategic partnerships and bring in new thinking – we need board members from overseas. There is probably nobody in Taranaki with the skills, insights and drive we need to govern an internationally focused Port business.

Leadership
I compare the business leaders I meet in Taranaki with those I meet in China. Guangdong Province, where I work, is China’s commercial powerhouse. Here they trade and innovate. They all hate Beijing the way Aucklanders hate Wellington.

I meet mid-career managers who come to the university to do an MBA degree. They bring their directors and managers into the university and there is much integration of business and university personnel. Taranaki can learn from this observation. Chinese business leaders are aggressive, innovative, risk takers. They seek diverse opinions (that is why they question me) and they are ambitious in their goals. If the choice is small-size, middle-size or big-size, they always decide big-size. The problems match the ambition. We need similar people in Taranaki.

China Southern Airlines
The people I meet, own or run significant businesses. For example, we have about 20 students each year from China Southern Airlines. Did you know that China Southern Airlines is the third largest airline in the world, by passengers carried? All the other airlines in the top five are American. The Chinese want their firm to be the biggest and the best, not because they want to make money but because the prestige of China is at stake. China Southern Airlines is owned by the government, but it also has shares listed on stock exchanges in Hong Kong, New York and Shanghai. It is a model of ownership the Regional Council might consider for our Port.

These are the guys we depend on to compete globally and deliver prosperity to Taranaki through the development of our key infrastructure asset.
Are they dynamic, progressive, innovative, strategic, creative, global, diverse, and daring? I think not!

Port’s goals
Most New Zealand ports want to equip themselves for larger cargo vessels and more tourist boats. We can be sure that investment is a good bet long-term. Port Taranaki in its planning, seeks to be modest, prudent and short-term. That is okay if your responsibility is limited, but what if you feel obliged to contribute to the whole of Taranaki? What if you worry about the situation of our children and our grandchildren?

The Port has as its focus the service it can provide to existing customers and any new ones who walk through the door. It does not think beyond its customers. Yet this Port is owned by us. It should serve us not the Regional Council’s budget. I want the Port to lead in the fight to diversify the Taranaki economy, lift the pressure off the farmers, educate the young, and produce commercial opportunities.

Statement of Corporate Intent
Not too many people use statements of corporate intent as bedside reading. The name makes them sound horrid. But, in fact, the Statement for our Port is vital to our wellbeing. The law requires that the Port and its owner agree this Statement. It is the Regional Council’s agreement with the Port directors. It is the mechanism by which we turn the Port into a Taranaki winner.

Income minimal
Do I read correctly, the Port’s plan is to return each to the Council a bit over 5.5% on its investment, after tax. This is so little you wonder why the Council does not sell the Port and invest on the stock exchange. There have been years when the Port has actually lost money, according to a New Zealand Institute of Economic Research report.
           
No ambition
The success criteria in the current Statement indicate the lack of ambition. “Success is measure by: * Improving the satisfaction rating form customers via formal feedback, * Growing freight volumes, * Exceeding targeted return on capital employed, * Achieving a safety based culture.”
            The criteria say nothing about the responsibility of the Port to drive the economic diversity of Taranaki! They do not include any useful development goals for the region or indeed even for the Port. The plan is to sit tight and be nice to customers.  

Dandong
The Port of Dan Dong is an artificial deep-water seaport in China. It is right up north next to North Korea. The strategic move is to link North East Asia to the rest of the world. The investment was made and now they want to find customers. In Guangzhou, a city thousands of miles away with its own port and close to the Hong Kong, Dan Dong advertises on television every night. Taranaki can learn from Dangdong: invest in infrastructure facilities and market your services. Do not wait for the customers to demand facilities. Generate opportunities for people.

Tourism strategy
Taranaki’s tourism strategy could be built around just one observation. China’s middle class population exceeded 200 million people in the year 2000 and it will soon double because of the development of the inner rural parts of China. We want their money in Taranaki. The Chinese middle class spend first on property and children. Then, they spend on travel. It does not take them long to run out of tourist destinations. They go everywhere once. They will come to Taranaki if we provide them with direct sea access.

In an earlier Coastal Outlook I set out ideas on our potential agri-tourism business. It is easy enough to develop attractions. But, Taranaki’s economy depends on the Port’s ability to develop a decent business plan – wake up regional councillors!

Robert Shaw
robert@porirua.net