Magazine article New Zealand Management

MARSH MOST IMPROVED PERFORMANCE: Port of Tauranga; A Solid Foundation

Magazine article New Zealand Management

MARSH MOST IMPROVED PERFORMANCE: Port of Tauranga; A Solid Foundation

Article excerpt

The statistics were impossible to ignore, said the judges when they reviewed the business performance of infrastructure company Port of Tauranga this year. As a consequence, they gave it the 2012 Marsh Most Improved Performance Award.

Like many of this year's Top 200 Award finalists and winners, Port of Tauranga has a history of top level performance. It won this category in 1999 and has made Top 200 Award appearances in 2001, 2004, 2008 and last year when it was a Top 200 Company of the Year Award finalist. This is an impressive organisation built on a solid foundation of impressive performances over many years.

This year Port of Tauranga has again out-ranked New Zealand's reasonably significant number of port-operating companies. And the company has to compete on merit and service, said the judges. "It does not pick up business by default or because it is a monopoly."

Its net profit grew 26 percent. It met the challenges of the grounding of the container ship MV Rena. Its total trade volume grew 20 percent; and not just because of record log volumes which, by the way, increased to a record 4.9 million tonnes. The port handled 35 percent more containers, less than one third of which were diverted from Ports of Auckland due to that organisation's long-running strike.

And this growth happened despite the fact New Zealand's economy and exports weren't exactly booming this year. All these market and economic realities should be appreciated, said the judges. The business did a good job of leveraging its investment in people, plant, equipment and infrastructure, all of which came together to produce a great result. Investors appreciated the performance by lifting Port of Tauranga's market capitalisation by 30 percent. Shareholders were well rewarded.

Port of Tauranga is one of New Zealand's mixed ownership success stories. It is still substantially publicly owned through the Bay of Plenty Regional Council. And its reputation for operational efficiency, container crane productivity, and focus on safety and care for its people are what drive its business success. These attributes all attract new services and increased business from existing lines.

Chairman John Parker said in his annual report that New Zealand ports must prepare for bigger ships. And his port's plans to deal with that eventuality are "well advanced". The company spent $39 million on capital works in 2012 and plans to spend $180 million on capital expenditures over the next three years.

And while its container terminal congestion challenges -- created this year when cargo was diverted from Auckland -- were unexpected, the company has since moved to provide "some headroom capacity" for the future. Meanwhile, forestry exports remained buoyant despite New Zealand's strong dollar, and forecasts suggest continued demand from both China and India.

The company's performance was also recognised this year by the Government's Productivity Commission. Its report into international freight handling acknowledged Port of Tauranga's excellence in managing high productivity. It said Tauranga was New Zealand's highest performing port for container productivity and was ranked in the "upper decile" when benchmarked internationally. The port was this year also named a finalist for Port Operator of the Year in the prestigious international Lloyd's List Global Awards.

Port of Tauranga is a successful mixed ownership model that competes successfully in a competitive marketplace, and focuses on the safety and wellbeing of its employees, said the judges. …

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