Govt gives exporters kick-start

Small firms helped to expand abroad

The Press

Comedy duo Jemaine Clement and Bret McKenzie of Flight of the Conchords fame may be unlikely poster boys for Kiwi exporters, but in their parodying ways the pair have shown the world "it's business time" for enterprising New Zealanders. Amanda Morrall finds out how savvy small businesses are wooing international markets and getting big abroad.

Bumblers Jemaine Clement and Bret McKenzie are hardly the serious face of business.

They have crooned their way into the collective consciousness of TV audiences worlds away with mocking, self-deprecating musical displays of goofy genius.

In doing so, they have proven Kiwi ingenuity does not have to come in a conventional package to get noticed and international markets are a willing bedfellow for New Zealand exports these days -- even if the duo is sometimes mistaken to be English.

The irony of the Conchords' rejection by television broadcasters at home and their ensuing success overseas is not lost on Economic Development Minister Pete Hodgson, but he will not be ringing them up for ambassadorship offers any time soon.

"I don't think you'd call these guys nationalists; these guys are seriously into anarchy I'd say," muses Hodgson, admitting to be a fan of their "bizarre sense of humour".

If Clement and McKenzie have put New Zealand on the map anew by taking the piss in a distinctly unpatriotic manner, Hodgson is not complaining.

He is determined to see more serious-minded Kiwi exports achieve the same level of success.

"They have to export if they're going to survive," Hodgson says of New Zealand's burgeoning class of SMEs (small and medium size enterprises.)

SMEs -- companies that employ 19 or less employees -- make up 95 per cent of New Zealand businesses and together constitute 39 per cent of the country's value-added production.

Their contributions to the national economy are not insignificant, but Hodgson says they have the potential to do a lot better.

But when it comes to exports, NZ business - both little and big - has been treading water for too long.

"Exports as a proportion of the growing economy have not been growing, that is they've been growing as fast as but no faster than the economy as a whole and the Government is looking at a whole range of strategies to change that," Hodgson says.

The problem?

"The tyranny of distance" and the country's economic make-up, he says.

The answer?

More businesses have got to get off the island or else extend their reach in overseas markets.

To that end, trade officials have been busy setting up foreign offices to help Kiwis make the right connections, schooling SMEs on branding and export strategies and budgeting to support business in their efforts.

Since January 2005, the Ministry of Economic Development has handed out almost $77 million in grants to small and medium sized Kiwi businesses trying to make a go of it offshore.

What started as initial pool of $6.1m has grown to $50m driven by demand and growing recognition of the role exports will play in New Zealand's financial future.

So far, more than 700 companies have taken up the offer.

The money is earmarked specifically for marketing and other initiatives aimed at leveraging export potential.

Under the scheme, New Zealand Trade and Enterprise (NZTE) refunds up to half of a company's eligible costs, up to a maximum of $100,000 and no less than $20,000 annually - for up to five years.

It is early days to judge long-term results, but several exporters say it is making a difference.

Christchurch-based Bloomsberry & Co is among them.

The company designs trendy upmarket chocolate bars that combine art, humour, and feel-good ethical consumerism and box it up in a nifty little package. They do about $3.5m in business annually, mainly in exports.

The 100g bars of fairtrade chocolate are sold in colourful boxes, with quirky labels and matching designs with names like "Bochox" (which looks like a medical prescription) "Marital Bliss" (a disproportionately divided "50/50" bar) and "Emergency Chocolate" (resembling a Red Cross food drop.)

Graphic designer Giles Barker, who started the business with his chef wife, Vanessa Kettelwell, said the NZTE grant was instrumental in helping the company make a proper go of it in the US.

"It's been essential for American growth," says Barker, squeezing in a press interview before jetting off to Auckland for business meetings.

Barker says Bloomsberry & Co got in on the second year of a five-year programme and are approved for $100,000 in funding for each subsequent year.

The money, he says, finances travel and marketing expenses for Kettelwell, who has managed to get the product on the shelves of retail heavyweights Barnes & Noble, Borders, Macy's, Bloomingdales and Nordstrom. This past Christmas, their chocolates were also sold by a prestigous Parisian boutique shop by the name of Collette's and in London's posh Harvey Nichols.

Barker says penetrating those markets would not have been possible without face-to-face contact.

He says the pioneering Kiwi spirit and personality carries just as much weight as the product.

"It turns out travel is everything ... and the whole NZ thing is very useful and helpful. It helps with the cut through, getting to know people, it's more important than we think from back here. It does seem to resonate with people, and if they don't know much about New Zealand they never have a bad word to say about it."

Since minting their first bar in 2001, the couple has gone on to design more than 200 bars and are now selling in Australia, Singapore, Paris and London. Germany and Italy are also in their sights, but the United States forms their strongest export base.

Christchurch-based Wyma Engineering is also touted by NZTE as another exporting success story.

The company which makes machines that clean and package produce, has gone from a $2m business in 2001 to a forecasted $25m in 2007 with exports driving 90% of sales.

Sales and marketing manager Jason Gerrie says the NZTE grant played a role.

"It's been pivotal in assisting us to develop new markets and break new ground in Europe and North America," he says.

Rock Star Recipes is another Canterbury SME that has found purchase overseas.

The Christchurch company sells online music lessons for newbies and old-timers who are picking up a guitar or tickling the ivories for the first time in a while.

Foreign buyers account for 98 per cent of sales and products have been sold to more than 60,000 consumers in 71 countries.

Jon Coursey, managing director of Rock and Rock Recipes, says technology has enabled the company to operate as a borderless business.

"We are a true 21st century global company," says Coursey, who started the business with some university chums shortly after graduation.

Coursey and his young musical cohorts - most in their mid to late 20s - found a niche in a highly competitive and cutthroat industry by assembling a multi-media toolkit to help musos get a better handle on their instrument.

"We use a mix of text, score, tab and video - a mix of multi-media stuff. It's not just one thing. It's everything pulled together in one place," he says.

The company has been able to overcome the cold face of internet sales, by offering a product infused with a human touch and offerings that anticipate the problems faced by its users, he added.

This year the company, which does about $1.5m in sales, is hoping to expand its markets even further, putting a packaged product on the shelves of music chains in the US.

Although the company has made its mark thus far without minimal travel, Coursey says growing the business further will force him outside the office.

He is Los Angeles bound in a few weeks to attend an expo and make some contacts and plans to use the NZTE grant to recoup his costs.

"To have that kind of support is just brilliant ... we're at the stage where we want to push through some new developments and this will help get us there."

Technology may have tamed the tyranny of distance but for SMEs not satisfied with remaining small, travel is going to be an inevitable part of the "death of distance", Hodgson says.

And if the snappy catchphrase takes hold with exporters the way trade officials hope, it may be one to watch for on the cheap, wood-panel postered walls of Clement and McKenzie's next business meeting.