Non-food export manufacturers call for urgent risk-based restart
New Zealand non-food export manufacturers shut down during the COVID19 Alert level 4 face irreversible market loss if they're unable to restart production as soon as possible, say manufacturing industry bodies.
Metals New Zealand, the Wood Processors and Manufacturers Association and Plastics New Zealand, which collectively represent more than 700 non-food manufacturing firms, are calling on government to provide a level playing field with their food manufacturing counterparts.
"The Government is doing an extraordinary job to support New Zealand food manufacturers to continue production during Alert level 4 to support domestic needs and continue export to service essential global markets," says Jon Tanner, CEO of the Wood Processors and Manufacturers Association.
"We need to see the same support for non-food export manufacturers, who also have essential overseas supply chains.
"Rather than blanket closure, we want government to give these businesses the opportunity to demonstrate their ability to manage infection risk. These are well-managed, significant exporting manufacturers, accustomed to managing health and safety risk.
"The viability of these exporters is rapidly diminishing with every day, every hour that their operations are shut down and they can't deliver to essential supply chains. Their customers will very soon be forced to find alternative suppliers with major implications for their operations and ultimately New Zealand's economic recovery."
For AW Frasers in Christchurch, Australasia's only continuous casting bronze foundry and specialist bearing manufacturer exporting 90% of its product to the US, China, Japan, Germany, Australia and the UK - many in essential service industries - the situation is frustrating and dire.
CEO Gordon Sutherland says within 12 hours of shutting down operations, the company received urgent requests for from Water Care in Auckland and Genesis Energy for materials for essential service maintenance requirements.
"It takes 10 hours to shut down the plant and 10 hours to start it up again. So we can't just start up every time an essential service customer in New Zealand needs parts. But we also have essential overseas suppliers that government has told us we can't supply to.
He has letters from essential suppliers, in many cases backed by central and local government and Homeland Security, asking for the company to continue operating.
"If we can't supply them, they'll go elsewhere and won't come back to us even once restrictions are lifted."
Mr Sutherland says they can operate the plant safely at 25% of normal capacity to enable them to fulfil any urgent requirements, limiting staff to only 17 on site at any time, ensuring social distancing and hygiene standards comply with all Alert level 4 requirements.
Tony Clifford, Managing Director of Pan Pac Forest Products, one of New Zealand's largest integrated wood processing and export manufacturing businesses, employing 420 people, says market loss is the critical issue.
"Pan Pac fully supports the lockdown; it was the right thing to do. And we are very pleased with the government's support initiatives. But as each day passes the risk to health goes down and risk to business and the economy goes up.
"Let's do a risk assessment of the ability of manufacturers to manage the infection risk versus the risk to their business of not being able to service their essential supply chains. Businesses like ours are always managing occupational health and safety risk at a high level. Managing the risk of infectious disease is just a new dimension of that work."
Pan Pac exports lumber to 17 countries, including the United States, Australia and Europe and exports 100% of its mechanical pulp to China and India.
"Even with the world under duress there's demand for raw materials where processing is up and running and in countries where construction is deemed essential such as US.
"We need to be looking at a progressive restart as soon as possible based on demonstrated risk management. The longer we remain closed the more and more difficult it will be to get the economy up and running."
For more information contact
Dr Jon Tanner - CEO WPMA
021 0283 1098