By John Fraser-Mackenzie, Chief Executive, EMA
New Zealand exporters are accustomed to operating far from major markets, navigating complex supply chains and competing against larger, better-resourced international businesses.
What is changing is the scale and speed of the disruption they face.
The rules-based international trading order is increasingly being challenged by economic and political power. Commercial relationships are being shaped not only by economics, but also by national security. At the same time, businesses and governments have recognised that efficiency alone is no longer enough. Resilience matters too.
These changes are affecting investment decisions, supply chains and access to export markets. EMA members are experiencing the effects through tariffs, freight diversions, supply chain delays, distributor negotiations and uncertainty about how emerging technologies such as artificial intelligence will reshape their businesses.
In this environment, successful exporters will need three things: a strong strategy, greater diversification and the agility to make good decisions quickly.
Start with a clear strategy
Businesses cannot control tariffs, geopolitics or volatility in international markets. They can, however, control how clearly they understand their customers, the value they create and the qualities that distinguish them from competitors.
Dodson Motorsport is a compelling example. The Auckland-based company designs and manufactures high-performance components for specialist automotive markets around the world, with the United States its largest market.
Its approach is not based on being the cheapest producer. It competes through product performance, engineering expertise, technical support and customer service. Its customers value reliability and performance much more than a small difference in price, making the quality of its engineering and production central to its position in the market.
The company has even turned New Zealand’s location into an advantage. When automotive workshops close for the day in California, it is midday here. They have organised operations so that US orders can be picked, packed and placed on an overnight DHL flight, with the aim of delivering products within 48 hours.
That combination of specialist engineering, service and delivery gives the business a clear point of difference. A strong strategy should answer four questions:
- Who is our customer?
- Why does that customer buy from us?
- What value do we create?
- How will we remain different from our competitors?
Clarity on these questions creates pricing power, strengthens customer loyalty and gives a business more flexibility when conditions change.
Build resilience through diversification
A clear strategy is only the starting point. Exporters also need enough options to avoid dependence on a single supplier, market or manufacturing location.
For some businesses, diversification begins in the supply chain. EMA members have been finding new or back-up suppliers for essential materials, including aluminium, specialised steel and resins used in pharmaceutical products. Decisions that were previously viewed as transactional purchasing choices have become strategic questions about business continuity and resilience.
Trimax Mowing Systems, a winner at the Bay of Plenty Export Awards, has applied this thinking to its manufacturing capability. Based in Tauranga, the company produces commercial mowing equipment used at prominent sporting venues and estates, including Windsor Castle and venues hosting US PGA events.
After establishing a distribution base in Georgia, United States, the company added warehouse and manufacturing capacity to an existing assembly operation. This has given it greater flexibility over where equipment is manufactured and how production is optimised for different markets.
Reaching that point required detailed preparation. Trimax Mowing Systems needed systems capable of tracing the origins of components, identifying tariff exposure and modelling the costs and implications of different manufacturing arrangements.
Diversification does not mean abandoning New Zealand. It means creating options and reducing exposure to disruption. Trimax Mowing Systems can now respond more directly and cost-effectively to demand in the United States and Europe, while continuing to draw on the expertise and capability it has developed here.
The same principle applies to customers and markets. The lesson is to build a capability that is difficult to replicate, then use it as a platform for growth. Resilience comes from choice across suppliers, manufacturing locations and customers.
Develop the agility to act
Having options only creates value if a business can use them effectively.
Agility is not simply speed. It is the ability to recognise what has changed, assess its implications and respond intelligently. Sometimes this means managing an immediate disruption. At other times, a change in trading conditions creates an unexpected opportunity.
Autex Acoustics demonstrates the second scenario. When the United States announced new tariffs, one of the company’s major competitors, a Chinese producer, found itself in a less favourable cost position.
Autex Acoustics also had flexibility around where it manufactured and finished its products, allowing it to move production between markets and reduce the effect of the tariffs.
The company recognised the opportunity and acted. It secured an exclusive US alliance with Momentum, a major commercial textiles and wall-coverings supplier, marking the first time Momentum had partnered with a New Zealand company. It also recruited a team in the United States to support its growth.
This response was not based on good fortune alone. It relied on capability developed before the opportunity emerged, timely market information and the confidence to make a decision.
Agility will look different for every exporter. It may involve rerouting freight, shifting production, obtaining regulatory approval in advance, redesigning a product or using digital channels to enter a new market. The consistent principle is to recognise change and act on it.
New Zealand exporters have the capability
The only constant in international trade is change.
To succeed, exporters need a clear understanding of where they create value. That is strategy. They need alternatives that reduce their exposure to a single point of failure. That is diversification.
They also need the capability and confidence to respond when circumstances change. That is agility.
Many of New Zealand’s most successful exporters, including Fisher & Paykel Healthcare, Skellerup, EBOS and Xero, have applied these principles over many years.
The next generation of New Zealand growth companies can do the same. Our exporters have repeatedly shown that they can compete internationally through focus, innovation and strong execution. They have the capability. They understand the challenge. They’ve got this.
This article is based on a speech delivered to the Auckland Trade and Economic Policy School (ATEPS), an annual event hosted by the University of Auckland’s Public Policy Institute in partnership with the Ministry of Foreign Affairs and Trade (MFAT).