Making profit from weather

DAVE BURGESS
Last updated 05:00 11/01/2014

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To many, the MetService is simply New Zealand's weather forecaster. The reality is much more than that.

The MetService is a multi-faceted, government-owned organisation which operates in 26 countries.

It's true that MetService's core business is as the country's national weather service provider.

Under contracts with the Crown, MetService is the authorised provider of warnings and other public safety weather services to Kiwis.

It provides certified weather information to the aviation industry and all airlines flying into and within the country.

But the service also straddles the commercial world by packaging weather information hardware and selling it to retail outlets, energy companies, sports organisations, the armed forces, and companies in many other sectors.

MetService chief executive Peter Lennox said the extensive list of the company's local and international clients is impressive.

"We probably have the best blue chip clientele of any organisation in New Zealand."

It also provides services to media outlets in the United Kingdom, Australia, China and Hong Kong.

Lennox said access to weather-modelling super-computers, input from weather stations, radar, ladar, oceanographers, highly-talented staff, and a Met-Academy creating the next generation of meteorologists has the MetService at the top of its game.

All forecasts are not created equal - the forecast spectrum runs from MetService's "sophisticated" forecasts to something he labels "bling weather".

"Bling weather is like bling jewellery. It looks good and suits a purpose."

For example, if you wanted to know whether to take an umbrella to work then you might glance at the weather app on your smartphone.

"That is taken from a model that is free on the internet . . . and I'm not knocking it. There are great broadcasting companies that use models off the internet and make it look good."

By contrast, Lennox said the MetService creates a mosaic forecast using layered information that starts with weather modelling from five super-computers in Japan, the UK, Europe and the United States.

It is merged and dissected to find what is most appropriate for New Zealand. Added to the forecast brew is information from the MetService's automatic weather stations, satellite imagery, radars and ladars. That takes the forecasty to about 75 per cent accuracy, Lennox said.

"The big difference is in the people and experienced forecasters that we have. That is hard to replicate. That takes it up to over 90 per cent sometimes."

This mosaic of information - and it's being constantly improved and updated - spills over to the commercial side of MetService in what Lennox calls a "virtuous circle".

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"We [MetService] are that one to two extra degrees of accuracy . . . that's where the retailers, the energy companies make their money."

At this end of the game, high levels of forecasting accuracy can be the difference between company profits or deficits.

UK supermarket retailers use the forecasts to figure out whether they need to be stocking cold weather foods like soup, or warm weather treats such as ice cream.

Energy companies use the forecasts to plan whether to power their generating capacity up or down.

Spot traders on the energy market also use MetService forecasts as part of their buy/sell decision processes.

Lennox said money made from selling services to commercial companies is pumped back into MetService's infrastructure.

"That then comes back to public weather. It is a virtuous circle."

The MetService became a state-owned enterprise about 20 years ago.

During the process it was split from the National Institute of Water and Atmospheric Research (Niwa), a climatology-based organisation which takes a longer-term view of weather and weather patterns.

Lennox said the decision to split the organisations allowed the MetService to flourish in a commercial setting.

"It has allowed us to focus entirely on meteorology. Not many other national meteorological organisations can do that.

"Blue sky research [as done by Niwa] slows you down. It is very important, don't get me wrong, but we can focus on the now."

Earlier this year MetService bought a 49 per cent share in MetOcean Solutions, an innovative marine weather products and expert consultancy service providing local and overseas markets.

"This is an exceptional young company. Most of them are based in Raglan . . . because a lot of them got into oceanography because they're surfers.

"They already have fantastic contracts with the oil, gas and energy sectors, and with quite a number of companies in Australia.

"The expertise they have for oceanography will spill into the commercial things we are involved in."

As Lennox said, "you have to invest to progress" in today's world.

Two areas now under development are a refined radar imaging system with an outfit called National Lab in the US.

Another is new satellite technology which allows the MetService to look at cloud formations and volcanic ash to help keep the skies safe in the event of a volcanic eruption.

Lennox said that while the MetService has many strings to its bow, weather forecasting will remain a focus.

"It won't always be right. . . but you can have the confidence that we are one of the best performers in the world."

LONG-RANGE FORECAST

MetService chief executive Peter Lennox is full of surprises and they don't all relate to storm fronts, isobars, and wicked Wellington winds.

Conversation about his international career is peppered with references to Dolly, the world's first cloned sheep, golf maestro Rory McIlroy, whisky making and life in the Big Apple.

Northern Irishman Lennox, 56, speaks with a soft Irish lilt and self-effacing humour.

"I went to the same school [different years] as Rory McIllroy - not the same swing school unfortunately - in County Down in Northern Ireland.

"As the Irish would have it, it's spelt Holywood but pronounced Hollywood."

Lennox has post-graduate degrees in biochemistry and biological sciences from Queen's University in Belfast and Heriot-Watt University in Edinburgh.

Scotland loomed large in Lennox's early career. His focus moved from science to business when the whisky company he worked for helped him gain an MBA in finance and strategy, at Glasgow University.

"When you think about the whisky industry and its background, it takes a liquid that's foul-tasting to a lot of people and sells it all around the world as quality product.

"They've done that for over a hundred years. I learnt so much from that."

But luck also played its part, in that the whisky company he worked for was a "very expansive company".

"They looked at how they could stick to core business but add things."

These off-shoots included the establishment of a sucrose/glucose production plant for soft drink factories, the extraction of gluten from wheat used in the whisky making process, and the production of animal foodstuffs from whisky by-products.

When Lennox describes his experiences from this time, there's a twinkle in his eye.

"Because it was a privately owned company - and Scottish - they tended to look for second-hand equipment. As a result I spent a lot of time in central and eastern Europe before the Berlin Wall came down [in 1989] and after."

Lennox was poached by Scottish Enterprise, the national economic development agency of Scotland, as its biotechnology network director from 1999 to 2002. He was charged with doubling the number of biotech companies in Scotland to 100.

Scotland had already made a splash in the biotech world when, in 1996, PPL Therapeutics, at the Rosalin Institute just outside Edinburgh, created Dolly the sheep. Dolly was the first mammal to be cloned from an adult cell.

"We made that [Scotland's biotech industry] a cohesive community that had a presence on the world stage."

He was offered a job in Estonia but turned it down and headed to New York where he worked for Scotland's Foreign Direct Investment Agency.

On a visit to the Big Apple, the First Minister of Scotland persuaded Lennox to return to the land of whisky and tartan to lead the UK government export agency Scottish Trade International.

Lennox joined New Zealand Trade and Enterprise in July 2003, moving from Industry New Zealand, where he was biotechnology sector director.

He took over the reins at MetService in May 2011.

"It brings together all my international experience because we [MetService] have contracts in 26 countries."

Lennox is now guiding MetService's next phase of global growth.

- BusinessDay

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