<p>10 May 2022</p> <p>During ASB's latest Backing Business International Trade and Global Markets event in Christchurch we heard from industry leaders across small business, corporate finance, logistics and global manufacturing about the impact of the current macro environment and why it's not all doom and gloom for Kiwi businesses.&nbsp;<br> </p> <p>The expert panel consisted of the CEO of Natural Pet Food Group, Neil Hinton, NZ Regional Director of Barrington Treasury Services, Leanne Stapylton-Smith, the Country Manager and Director of DB Schenker, Reon Edwards, a Director of Nevada Sport, Elle Steans and ASB Senior Economist, Mike Jones.</p> <p>The theme for the event was mitigating risk in business, examples of how we address those risks and tips on moving forward. Kiwi businesses face a wide range of risks including the current suite of world events such as the pandemic, supply chain disruption, war, labour scarcity, climate change, inflation and Central Bank movement. It means the global business landscape is riskier than ever before.&nbsp;</p> <p>For Kiwi businesses that are involved in global markets, whether through exporting or importing, one strategy they can implement is to put greater emphasis on relationships. These relationships cover a range of parties including suppliers, buyers, consumers and partners.&nbsp;</p> <p>For example, smaller Kiwi businesses can partner or work as a collective to help with importing goods, rather than trying to find individual space on increasingly constrained shipping vessels.&nbsp;</p> <p>This concept was unpacked by Country Manager and Director of DB Schenker, Reon Edwards, &quot;partnering with a reputable, global freight forwarder will put businesses in a better position with air freight. Most global freight forwarders will have space agreements with the airlines in each key market&quot;</p> <p>&quot;Kiwi businesses can also think creatively about how they move their cargo, such as utilising rail networks for a portion of the journey. Another strategy to reduce the higher costs of direct air freight and the longer waiting times of shipping all the way from Europe to NZ, for example, importers can air lift their goods to Singapore and then ship them from Singapore to NZ.&quot;</p> <p>Elle Steans from importing and distribution business Nevada Sport and Neil Hinton the CEO of Natural Pet Food Group both agreed that maintaining relationships has been fundamental to getting them through the years of the pandemic and will play a major part as they continue to grow. Neil also noted the importance of having their own representatives in global markets to relay customer specific intelligence.&nbsp;</p> <p>A key challenge for NZ business this year is the anticipated slowing in the economy as the government and Reserve Bank started to wean it off support, according to ASB Senior Economist Mike Jones.&nbsp;</p> <p>&quot;No matter which way you look at it, it's clear that the business cycle is back, and businesses are under more pressure as a result. But downturns can still create opportunities so I think there will be opportunities for firms that are lightly geared, have a long-term vision, and cash to invest.</p> <p>&quot;This is particularly so for agricultural and rural communities given record commodity prices and the low NZ dollar. For example, in the dairy sector alone, we're expecting an approximate $3 billion revenue windfall this season relative to last season's already solid revenue numbers,&quot; said Mike.</p> <p>For Kiwi businesses involved in importing from global markets, there's certain pitfalls to avoid and the NZ Regional Director of Barrington Treasury Services, Leanne Stapylton-Smith said, &quot;for businesses that are importing there is a greater need for them to consider how they manage their foreign exchange (forex) exposure, with the NZD depreciating notably against the USD, since March 2022.</p> <p>&quot;Such a fall highlights that NZ importers should be considering a robust forex hedging plan to ensure they are protecting their bottom line. Conversely, Kiwi exporters are presented with an opportunity to maximise this trend with a lower NZD helping them sell their goods in foreign markets.&quot;</p>