NEW ZEALAND HEAVY ENGINEERING RESEARCH ASSOCIATION About HERA HERA is the Research Association for the New Zealand metals engineering industry. Established in 1979 un- der the Heavy Engineering Research Levy Act as a member-based, not-for-profit Research Association, HERA today serves 600-plus industry members as their leading resource support centre. HERA PURPOSE - Service heavy engineering sector interest - Facilitate access to markets - Provide Research & Development, technical training, advice and support - Provide a respected voice for the aspirations and concerns of members - Lead the movement towards a sustainable and internationally competitive industry HERA Executive 2013/2014: From left: Dr Troy Coyle (inset), Terry Duff, Mike Lehan, Bernard Hill, Alistair Fussell, Dr Wolfgang Scholz, David Moore, Peter Hutton, Noel Davies, Paul Bryant, John Frear, Sean Gledhill (inset), Prof Thomas Neitzert, Simon Ward (inset) Name Company Affiliation Membership Representation John Frear (Chairman) Best Bars Limited Ordinary & Associate Members Mike Lehan (Deputy Chairman) Page Macrae Engineering Ordinary & Associate Members Peter Hutton (Past Chairman) Fitzroy Engineering Group Ordinary & Associate Members Paul Bryant Steel & Tube Holdings Ordinary & Associate Members David Moore Grayson Engineering Ordinary & Associate Members Prof Thomas Neitzert Auckland University of Technology Ordinary & Associate Members Bernard Hill Hawkins Infrastructure Ordinary & Associate Members Terry Duff Southern Cross Engineering Ordinary & Associate Members Sean Gledhill AURECON Ordinary & Associate Members Noel Davies Hydraulink Fluid Connectors Heavy Engineering Educational & Research Foundation (HEERF) Dr Wolfgang Scholz HERA Director Dr Troy Coyle NZ Steel Representing the President NZ Steel Alistair Fussell Steel Construction New Zealand Co-opted representing SCNZ Simon Ward A-Ward Attachments NZ Manufacturing & Exporters Association (NZMEA) About the Cover - Quality, Value, and Certainty through Innovation This year the New Zealand’s heavy engineering industry has made major progress on its sec- tor wide promise to deliver quality, certainty and value through innovation. In co-operation with Steel Construction New Zealand, HERA put in place the Steel Fabricator Certification scheme aimed at demonstrating that certified companies produce consistent quality in line with New Zealand and international best practice standards, deliver value through ongoing in- novation and certainty by being independently certified as meeting the claimed requirements. 1 Annual Report 2014 CONTENTS HERA STRATEGIC FOCUS Page 2 JOINT MESSAGE FROM HERA CHAIRMAN & DIRECTOR Page 3 GROWTH & INNOVATION Page 5 RESEARCH & DEVELOPMENT Page 8 BUSINESS MODEL Page 10 TRAINING & EDUCATION Page 11 LEADERSHIP Page 13 METALS NZ CEO MESSAGE Page 15 HERA FINANCIAL STATEMENTS Page 16 HEAVY ENGINEERING EDUCATIONAL & RESEARCH FOUNDATION REPORT Page 18 HERA MEMBERS Page 19 HERA DIVISIONS & STAFF 2014 Page 22 HERA STRATEGIC FOCUS: INDUSTRY VISION HERA MISSION To have New Zealand’s Metals Engineer- HERA to be the catalyst for research, ing Industry achieve world-class standards innovation, growth and development in for profi tability, quality and sustainability New Zealand’s Metals Engineering Industry The HERA Strategy has the five focus areas as identified in the diagram. The strategies developed and followed by HERA staff for each of the focus areas remained unchanged with key strategies such as : • Maintain industry input in research road maps in each of the research focused HERA divisions Structural Systems, New Zealand Welding Centre and Industry Development • Develop NZ industry ‘competitive advantage’ • Use HERA Roadmap Process to develop Clean Energy business opportunities • Drive and support “Securing the Future of NZ Metals Engineering Industry” programme • Better use of technology to improve delivery of key messages and communications, e.g. improve online presence of HERA and metals industry • Use Standards as a means of innovation and through harmonisation to access to new markets • Develop and implement progra- mmes to enhance productivity in key areas of metals fabrication such as welding and construction • Grow business opportunities through Certification • Product development work that embraces international best practice to facilitate export opportunities Annual Report 2014 2 JOINT MESSAGE FROM HERA CHAIRMAN AND DIRECTOR Industry Activity – Steel Con- over 4%. Considering this against implementation of the Steel Fab- struction Rock Star Performance the prevailing high exchange rate, ricator Certification scheme. Heavy steel usage in New Zealand this is a pleasing result but we are rose by 10% compared to last year, still well behind previous peaks. In a joint effort between HERA’s NZ bringing the total consumption to Welding Centre, SCNZ and lead- over 145,000 tonnes. The major As an industry sector, we need to ing construction industry members, growth was in sections with over 21% continue to advocate for more to be the industry-governed Authorised growth being indicative of the buoy- done by Government to support our National Body for Company Certi- ant building and construction market. high-value industry transformation fication (ANBCC) to IIW/ISO 3834 towards increased export contribu- has been put in place. All condi- However as the graph shows this tions. Imports were dominated by tions of the international scheme is still 12% short of the pre-2009/10 the high-value ship category and have been met and following an Global Financial Crisis peak, in- more than doubled as we typically international audit the HERA - AN- dicating operations are still below see when driven by big ticket items. BCC received its official accredi- industry capacity especially when tation to commence operations. considering newly-built steel fab- The particularly relevant steel rication capability. The fact that structures category (7308) showed However, most significant to note plate volumes stayed static is of an annual increase of 25% in im- is the extent of the industry buy concern, indicating that the general ports. While this is within the nor- in with one company concurrent- John Frear heavy fabrication area excluding mal fluctuation for this category, ly achieving their certification in HERA Chairman construction did not see a hoped- it is justifying ongoing focus on conjunction with the HERA audit. for expansion. From industry feed- increasing our competitiveness. Another 12 companies have for- back, we also know that some mem- mally signed up to the scheme. bers had a tough business year. Steel Construction Certifi - cation Scheme Operational While demonstrating consistent Metals Based Exports Grew No doubt this year’s biggest industry quality and meeting international The heavy engineering import-ex- achievement in our effort to increase requirements is one driver; the port collective showed exports in competitiveness via the consistent critical factor has to be cost-effec- our tradable items sector grew by delivery of quality products was the tiveness. It is pleasing to see that for the first company achieving certification, the cost of remedial work in the year following imple- mentation reduced by over 75%. HERA and SCNZ’s role now is shift- ing towards ensuring large scale uptake and product user awareness of the benefits. Informing and work- ing with the regulator, it is pleasing to note that product conformance is taken more seriously in order to en- sure that all construction, and par- ticularly imported materials, meet the New Zealand requirements. Securing the Future of New Zealand Metals Engineering HERA’s strategic focus on securing a sustainable and high-value met- als engineering industry, achieved another milestone with the ap- pointment of Gary Hook as CEO of Metals NZ at the end of 2013. Gary is now running the “Secur- ing the Future of New Zealand Metals Engineering” programme. Source: Statistics New Zealand / HERA Recognising public sector procure- ment as the key client of our in- dustry and with the potential to be the most significant lead user in- novator for our sector, HERA, sup- ported by the Metals NZ activities, engaged extensively in the Gov- ernment’s procurement reforms. Outcomes included submissions to the All of Government (AoG) procurement initiatives, participa- tion in the Government Procure- ment Reform Business Refer- ence Group and ongoing high level advocacy on the issue. Having the Five Principles of Government Procurement as ap- proved Government policy in- cluding Get the Best Deal for Everyone, which includes the re- quirement for Balanced Decision Making, is a powerful require- ment supporting local industry participation and needs constant Note: Exports from NZ Steel and the NZ Aluminium Smelter are not included reinforcement to decision-mak- 3 Annual Report 2014 ers. HERA will continue working HEAVY ENGINEERING RESEARCH ASSOCIATION towards Metals NZ becoming government-industry co-funding self-funded and independent, from the previous Tech-NZ to the environment will no doubt re-ener- with the aim to effectively com- new Callaghan Innovation R&D gise all those working within HERA pliment HERA’s role as an R&D grant funding rules, and these is- House and our industry network. and education services provider. sues are still not fully resolved. Acknowledgement Financial Performance – Surplus However, progress made in ad- Looking back, it was a turnaround Marks Turnaround dressing the challenges has con- year for HERA; signalling regained