Jobs going at Rotorua export companies investing millions into equipment and expansion

A Rotorua export company’s “incredible” surge in demand has pushed its backlog for one product out from 22 to 100 weeks as it desperately seeks more staff, as a big local employer puts $85 million into expansion and improvements.

The growth news comes as local businesses face a shortage of skilled labour and list staffing as their top concern, while Kiwi exporters count the “high cost of doing business in New Zealand”.

Hayes International general manager Nick Looijen said business has been “just incredible” but it needed staff.

Orders had increased by 70 per cent and the company’s annual turnover jumped to $24m, up 15 per cent on last year, with the same growth projected for the next financial year.

The export company, which has operated in Rotorua for more than 60 years, manufactures metalworking equipment, including roll-forming accessories and mill machines.

Looijen said its backlog for a simple corrugate roll-former had ballooned out to 100 weeks from 18-22 weeks, due to demand from markets such as Australia and America.

Hayes International managing director Nick Looijen. Photo / Andrew Warner

“Our backlog is around four to five times what we would normally see… It has been difficult to pull this back and dramatically increase our revenue due to difficulties around staff recruitment and our facility footprint.”

“If we could easily increase our business space we still need the staff to fill positions.”

Looijen said recruiting was hard. It had 94 employees but needed another six, including machinists, assembly fitters, service technicians and designers.

“That is a big problem because there is a lack of skilled staff available. We get lots of applicants from overseas but not many of them are suitable.”

He said while it was good to have the pipeline of work, the situation was “frustrating”.

“Eventually we may lose sales because of our lead-in times.”

He hoped a $1.7m machine being installed in November would help.

“Market conditions have been very good. In Australia our customers have seen a large increase in demand for roll-formed building products, leading to the need for investment in capital equipment.”

Rotorua Business Chamber chief executive Bryce Heard said it was great to see some of its longstanding companies in expansion mode but some members had been struggling to find good staff.

Hospitality and tourism sectors were steadily recovering from the exodus of staff due to Covid lockdowns, but the second problem area —finding skilled staff and tradespeople — was ongoing.

“This is more difficult to solve.”

To help with a solution the chamber ran an Employers Advocacy Service aimed at building pathways for employers to access quality employees on a sector-by-sector basis.

The Rotorua Business Pulse April 2023 report showed confidence levels had jumped 90.1 points, from -80.2 per cent in April last year to 9.9 per cent in April 2023.

However, it found inflationary forces and labour market challenges continued to impact Rotorua businesses and 68 per cent of survey participants were concerned about finding skilled staff. That and retaining skilled staff were their top concerns.

Nearly a quarter of businesses were also exploring opportunities to incorporate Artificial Intelligence technology into their operations.

Red Stag Timber general manager Tim Rigter. Photo / Ben Fraser

Red Stag Timber general manager Tim Rigter, who featured in the pulse report, said the company was expanding its sawmill capacity by 10 per cent by installing a new stacker, Trimline and another 90 bins.

It employed 400 full-time staff plus 35 staff at Red Stag TimberLab. Its products were sold in New Zealand and exported to Australia, Pacific Islands, Asia, Europe and North America with an annual turnover of more than $300m.

Rigter said while the past 12 months had challenges such as a slower residential market and less demand for products, the company was staying true to its long-term commitment to developing its product range and market base.

“We are also halfway through doubling our boron treatment capacity by building a second plant. These projects are valued at $60m.”

He said it was spending another $25m on a range of other site improvement projects, including a new turbine to improve the conversion of renewable fuels into energy.

“We are approximately a third of the way through these projects and it will take another 12-18 months to complete.”

Rigter said he was “very optimistic” about Red Stag’s future in Rotorua.

He told the Rotorua Daily Post this week it had managed to fill almost all its roles over the past two years with quite a high turnover of about 15 per cent. It had four vacant roles.

“It is difficult to find staff willing to work night and weekend shifts. We have roles in despatch, plant operation and maintenance supervision vacant.

“All export markets are slow at present with pressure on price.”

The Business Pulse was a collaboration between RotoruaNZ and the chamber, with 93 businesses participating in the April survey.

Rotorua NZ head of business growth, insights and innovation Justin Kimberley said when businesses in Rotorua succeed and grow, there are a range of direct and indirect benefits to the Rotorua economy.

“On top of the new jobs that growth can create, there are other direct benefits to related businesses such as freight and transport, material providers, specialist skills and services. Additional profits that are invested back into the business also have a flow-on effect to the wider Rotorua business community such as construction, cleaners…”

It also meant additional debt could be taken on and larger capital projects undertaken, which had a positive impact on employee productivity.

“This all has wider economic and social benefits in attracting workers to move to Rotorua, creating demand for housing and additional businesses such as the retail and service sector. This is the core focus of regional economic development.”

ExportNZ Executive Director Josh Tan said despite disruptions originating abroad, exporters continue doing what they do best.

“We’re seeing lower commodity prices on the global market, as well as slower than expected growth in China, which will be causing some concern and will impact this quarter’s results. In a nutshell, exporters are feeling cautious, but optimistic about the international trade scene.”

One of the biggest challenges for Kiwi exporters was the “high cost of doing business in New Zealand”.

“The industry needs to balance increased costs due to inflation, with the need to remain competitive on global markets price-wise. It’s not an easy task.”

Tan said recent wins included the NZ-UK Free Trade Agreement and another agreement with the European Union that would come into force next year.

Carmen Hall is a news director for the Bay of Plenty Times and Rotorua Daily Post, covering business and general news. She has been a Voyager Media Awards winner and a journalist for 25 years.