Port of Tauranga chief executive Mark Cairns. Photo / File
Port of Tauranga chief executive Mark Cairns. Photo / File
Mark Cairns' brain is geared to the left side - logic, physics and maths, all the stuff that makes an engineer.
But judging from the claim on his CV that he's a "Bloody Good Fisherman", the Port of Tauranga chief executive's right brain - home of emotional expression - is also in good working order.
Recruiters say engineers make particularly effective chief executives, and Cairns, who has a bachelor of engineering (civil) with first class honours, says he's always been more interested in building people than building bridges.
That's why he also has master of management and bachelor of business studies degrees, qualifications which have helped develop his people skills – right brain territory.
Cairns, 56, isn't the one making a meal of his qualifications. No-one could call the water sports fan and petrolhead a big noter. But they're a mix worth exploring, when working out what makes him tick.
Cairns has just delivered listed Port of Tauranga's record result for the 2018 year.
Back in his office overlooking the waters off Mt Maunganui after briefing analysts in Auckland and Wellington, he can take a breath and happily contemplate donning his scuba gear for the start of the scallop season, and summer fishing at his favourite spot off Motiti Island, 12 nautical miles away.
So what makes a bloody good fisherman? "Practice. Lots of practice," says Cairns, who has spent 13 years helming the port company, 54 per cent owned by the Bay of Plenty Regional Council.
Getting out on the water is his stress release. "Seems to be when you cast your lines off, you leave all your stresses on land."
There have been a few of those stresses in recent years.
It's coming up for seven years since the container ship Rena grounded on the Bay of Plenty's Astrolabe Reef, but it feels like yesterday to Cairns, who says it was "a dark time".
While the event was outside the port's control and jurisdiction, it copped blame from locals as their beaches and waters were sullied with oil, containers and debris, and businesses as well as wildlife suffered. The port also gets wrongly blamed for the traffic congestion that has come with Tauranga's explosive growth, says Cairns.
He says "a lot of sweating" also went into the port's ambitious play to accommodate the world's biggest cargo ships, via a six-year, $350 million capital expansion programme to seal its future as New Zealand's premier freight gateway and hub and feeder port.
The analysis was gruelling and the commercial risk was high.
In late 2016, following completion of dredging to deepen and widen the port's shipping channels, the first of the monster ships tied up at Tauranga, the only New Zealand port able to accommodate them on international services. Long term, the big ships have the potential to deliver more than $300m in annual savings to the country's exporters and importers, the port said at the time.
Providing access was only part of the job. The port also had to ensure its operations on land could handle the expected big increase in cargo, particularly containers, and that long-term contracts were secured with the likes of Oji Fibre Solutions, Kotahi (dairy) and Zespri (kiwifruit) to continue to drive container volumes to the port.
Cairns with a snapper. Photo / Supplied
The strategy is paying off. The latest financial results showed the hub port role gaining momentum, with trans-shipments from other New Zealand ports and Australia up 23.3 per cent on the previous year, container volumes up 8.9 per cent, a 13.7 per cent lift in imports and an 8.2 per cent rise in exports.
Cairns makes no bones about how much was on the line.
"For a company of our size with a $2.5 billion market cap at the time, to embark on a $350m capital expansion programme was a big commercial risk. We had to back ourselves to attract that cargo.
"It was a lot of money and the board put a lot of commercial tension around it."
Craigs Investment Partners head of wealth research, Mark Lister, says the strategy has been executed "very well".
"You'd never catch them making the sorts of decisions that don't have financial discipline behind them and that's been to the benefit of all the retail investors that have done very well out of the port over the years.
"For the local council it's been an exceptional investment."
Lister says Port of Tauranga is a fine example of how the public-private ownership model can work really well.
"Compare it with the 100 per cent [council] ownership of the Ports of Auckland. It's chalk and cheese," he says.
"Ports of Auckland has basically been subsidised by poor old Auckland ratepayers for a long time, continuing to under-perform and under-deliver. It's been a drag on ratepayers. Port of Tauranga is exactly the opposite."
Cairns says he has a "fantastic" chief financial officer in Steve Gray, CFO of the year in Deloitte's Top 200 awards last year. Lister says Gray has been a "very capable right-hand man" for Cairns.
The New Zealand port sector isn't for the fainthearted. It's tough to make a margin and sniping and rivalry is fierce among the 13 ports - far too many, some would say.
Lister doesn't pull his punches: "Some of those council-owned ports across New Zealand are an embarrassment in terms of their returns to ratepayers or being run efficiently."
Cairns: "A lot of people say running a port is an easy job because it has a natural monopoly in geographic catchment of cargo. The container story shows that's not the case. Virtually all our growth has come from catchments outside the Bay of Plenty region. Mostly initially from Auckland through [our] Metroport then through the big ship strategy.
"If you look at this [2018 year] result, most of the growth in containers has come from trans-shipments – containers from other ports around the country.
"People say this container port strategy is a lot of rubbish, that exporters in Napier and Lyttelton will always use a direct service to market. That's proven not to be the case. It's actually a faster service (for Asia-bound cargo) to come up from Napier to here. It's 11 days from here to North Asia."
The critics, of course, are other ports. While it would be easy for Cairns to dismiss sniping from ports that earn dismal returns on equity (Tauranga's is 9-plus per cent) but still promote grand spending plans, he is frustrated that the sector "doesn't have good capital disciplines". This despite the Ports Company Act requiring a port to be operated as a successful business.
"It doesn't allow a rational and logical supply chain to develop. We've made great strides with getting rail to work for us properly.
"I've always said that if ports simply priced an investment to achieve a cost of capital return, a natural hierarchy of ports would emerge quite quickly. If you run it commercially the market will sort itself out," he says, noting official statistics which say 70 per cent of New Zealand's export-import demand comes from the Waikato and north.
"These big ships and their economies are just too well established now. With the falling dollar, fuel prices and bunker fuel will go up, which will make the big ships even more attractive."
Cairns always aimed to head a publicly listed company. And he likes the commercial approach to business that a mixed ownership model requires.
He says his career reward comes from developing people, by giving them the resources, promotion and opportunity to achieve above their personal expectations.
"I've very rarely been disappointed."
Cairns has just delivered listed Port of Tauranga's record result for the 2018 year. Photo / File
He recalls a former boss, the late Sir Robert Owens, saying "if you don't make a mistake from time to time, you're not trying hard enough."
But it doesn't sound as though any associate firm or subsidiary which sprang a surprise which affected continuous disclosure would get to do it twice. "Surprises really infuriate me," says Cairns.
"I like the transparency that every dollar you spend is not your own. It's shareholders' money. "
Cairns says that, at a time when the company is trading on a price-earnings multiple of nearly 40, "the last thing you want to do is under-shoot your guidance".
That multiple makes the stock expensive he says. "But I think our investors must like us if they're happy to buy and hold". He likes the fact that the share register has plenty of mum and dad investors.
More than 90 per cent of staff own shares in the company. An unpublished feature of the strong financial result was an offer to staff of an interest-free loan for three years to buy $5000 worth of shares at a 30 per cent discount.
So what's next for this company, which Lister says has delivered "an exceptionally good" track record of earnings and dividend growth?
Cairns and his team are well down the track with planning its growth for the next decade. There is capacity to nearly triple current cargo volumes by developing another 40 hectares of waterside land it owns. The aim is to handle up to 3 million containers a year.
More immediately, discussions are under way with potential new import car customers, and dairy and bottled water exporters in the eastern Bay of Plenty.
"I don't think it'll be in FY19, but pretty sure there's growth there in cargo in FY20 for us."
And personal plans?
"I've had a pretty good innings. I feel incredibly privileged to have had this opportunity. At 56, I don't feel I've got another CEO gig in me (at a different company). There will come a time I'd love to see we've been able to grow a chief executive within the company.
"The moment I get a feeling from the board or shareholders that it's time for a fresh set of eyes, I'll be off and pursue a professional director career."
Mark Cairns
• Job: Chief executive, Port of Tauranga for 13 years • Age: 56 • Born: Napier • Interests: diving, fishing, sailing, "mad petrolhead" • Previous roles: Chief executive, Toll Owens; chief executive, Owens Cargo Co • Family: Married, two children
• 11th largest company in NZX50 • Market capitalisation $3.5 billion • 22 million tonnes cargo a year • NZ's biggest container port • Subsidiaries and associates include: 50% of PrimePort Timaru; 50% of Timaru container terminal; 50% of Northport
