CentrePort is a key strategic asset for central New Zealand
Facilitating economic growth in regions in the North and South Islands through safe and efficient movement of cargo.
Providing supply chain solutions and expertise.
Playing a key role in the New Zealand Lifelines Network.
The Board is pleased to report a return to pre-2016 Kaikoura earthquake levels of performance in most areas of the business, helping drive a strong financial result.
Healthy trade volumes saw revenue increase by 16 percent to $73.8m, which was achieved against the background of ongoing operational constraints.
Underlying net profit after tax and before fair value and earthquake impact adjustments was $11.8m — a 37 percent improvement on the previous year.
An excellent operational performance saw volumes of logs, vehicles , and petroleum at or surpassing pre-quake levels. The business is well on the way back in container volumes. CentrePort also experienced a bumper cruise ship season with a 15 percent increase in visitors arriving.
JR’s Orchards has relied on CentrePort to connect it with international markets for the past 10 years. JR’s Orchards plans to double its export volume by 2021, and will continue to grow with CentrePort.
JR’s Orchards Managing Director Jaimee Burns said with major shipping lines returning this year, the company has been able to maximise its returns.
“Last year CentrePort moved heaven and earth to ensure we had what we needed after the earthquakes. We can now grow together.”
For JR’s Orchards, CentrePort’s streamlined and customer-centric approach is what sets them apart.
JR’s Orchards is the largest exporter by volume in the Wairarapa. It employs 26 fulltime staff, which grows to 140 during the harvest season.
Jaimee Burns of JR's Orchards
The strong performance enabled the payment of a dividend of $2m to our shareholders (Greater Wellington Regional Council and Horizons Regional Council), no dividend the previous year due to capital requirements as a result of the Kaikoura quake.
Resilience to Regeneration
This year saw a short-term focus on the recovery of all business units, which was achieved. Our medium- and longer-term strategic priorities are designed to build resilience into the business, and continue growth to enable CentrePort to reach its full potential as a world-class freight-handling operation and regional asset for the central New Zealand economy. Several elements of the resilience work have already been completed or are underway.
The Board supports the business in developing a regeneration plan which will help create a 21st century strategic logistics asset benefitting the business, stakeholders, and the wider New Zealand economy in the decades to come.
I thank our shareholders, customers, and partners for their ongoing support.
I also thank my fellow Directors for their input.
The Board thanks the CentrePort team, including Chief Executive Derek Nind, for their hard work and great progress in the quake repair and remediation while getting on with "business as usual". Achieving growth whilst dealing with operational constraints was an excellent achievement.
"We have good ongoing relationships with customers built on trust over several years. That trust is built on doing what we say we’ll do. We said we would launch CentreRail, we did that. We said we’d establish the Waingawa log hub, we’ve done that. People know there’s a track record of CentrePort doing what it says it will do."
Ray Mudgway, GM Logistics (formerly GM Container Services)
Chief Executive's Report
Major progress was made both operationally and strategically. The business rebounded from the impact of the 2016 Kaikoura earthquake, while projects and strategies were progressed that are growing the business, building resilience, and setting the course for the future of CentrePort for decades to come.
Driving these achievements has been our people. Keeping our people healthy and safe was a major focus and all CentrePort’s metrics in this area showed significant improvement, with big shifts in some areas such as lost time through injury more than halving. While senior management and the Board strongly supported health and safety, it was the attitude and engagement of staff that was key.
I congratulate the efforts of our people, suppliers, and contractors for their hard work.
The business completed the rebound from the impacts of the 2016 Kaikoura earthquake. While repair, remediation, and resilience works continued, operationally the business returned to and in some cases surpassed pre-quake levels. Exporters and importers across central New Zealand and shipping lines returned to help achieve a year of record volumes in several areas including logs, vehicles, and petroleum.
The return to operation of the two ship-to-shore cranes in September 2017 after having been out of action for 10 months was a major boost. By year end we were tracking to return to pre-quake volumes with potential for strong growth. For example, CentrePort hit its highest ever January container volume in 2018.
Good progress was made on the three earthquake insurance claims. Settlement was reached in two of the claims in relation to joint venture activities (Wellington Port Coldstore and Commercial Properties). Port infrastructure remains to be settled.
To 30 June 2018 CentrePort had received a total of $233m on all three claims, with a further $100m received in July 2018. We continue to work closely with our engineers and insurers in relations to the Port claim. Of the total of $333m received to date, $210m relates to the Port infrastructure claim.
As at the end of the year, $61.4m had been spent on earthquake-related expenditure including the partial demolition of Thorndon Container Wharf and several buildings.
Investing in Resilience, Growth, and Regeneration
Investment and planning to improve resilience of the business remains a strong focus. Applying the lessons from the Kaikoura earthquake, we are building enduring assets, and investing in technology and — most important of all — our people.
That investment in people included over 12,500 hours of training for the Container Services team, crane drivers travelling to Belgium to access state of the art simulators, and marine pilots using the latest training technology in Australia. There are ongoing leadership training programmes and we have launched a future leader’s programme.
We continued to create space on-port through the demolition of damaged / destroyed buildings and assets including the former Statistics House, the Coldstore, part of Thorndon Container Wharf, Shed 51 (partial demolition) and storage sheds on the "E site" between Customhouse and the former BNZ building. This work has paved the way for projects, enhancing resilience. Work was underway or planning had commenced on projects including vehicle marshalling for the Strait NZ Bluebridge operation, a second log berth, and improved traffic flows.
We continue to work with partners on options for a multi-user ferry terminal, while the channel-deepening project remains part of our medium-term plans.
The inland hub strategy put in place in 2013 continues to drive growth in the business. The partnership with KiwiRail for the CentreRail service saw record volumes this year helping connect central New Zealand exporters and importers and shipping companies. We invested in further development of our hubs including the Smart Road facility in New Plymouth and Waingawa in the Wairarapa. Plans were developed for new hubs being created in the future.
A platform for growth plan was rolled out in the container services business. It focussed on ensuring the correct resources, management structures, ICT systems, business processes, and workforce models are in place. This will lay the foundation for our target to achieve further growth.
Open Country is a dairy ingredient manufacturer with four plants across New Zealand. It sources ingredients from 900 farms across the country, and works closely with CentrePort in Whanganui.
CentreRail is crucial to Open Country’s success in Taranaki and Manawatu. All of Open Country’s exports from its Whanganui plant go through the rail hub. The rail hub has made everything more efficient and has created a smoother supply chain.
During the latest dairy season, Open Country worked with the port to send its largest volume of exports ever through the Port. Logistics Lead Jameel Afiz said this is testament to the Port’s commitment to recovery and growth.
"Part of what sets CentrePort apart is their personal touch and commitment to their customers.""
"CentrePort generates so much value for their customers by working with cargo holders, carriers, and the port — they transcend the conventional boundaries."
Jameel Afiz, of Open Country
CentrePort has embarked on an ambitious plan to better serve the needs of our customers, our people, and our region. We are developing a plan to create a 21st century logistics supply asset in the decades to come. Enabling projects and programmes are already underway, such as the inland hub network. We are developing medium- and long-term plans to build resilience and grow capacity. Working with our stakeholders, including customers and partners, will help inform this planning.
We’re accessing world-class expertise to help ensure we make the right decisions. In the past year this has included working with world-renowned port planning company Hamburg Port Consulting, and engineering consultancy Royal Haskoning DHV from the Netherlands.
"The Port is changing so quickly, which has made it tough for our people. We spend a lot of time checking in on the basics — we’re making sure people are sleeping right, eating right and taking care of themselves so they can cope with the changes happening around them."
Murray Julian, GM People Safety and Culture
Senior Administrator for People and Capability
“How often do you get the chance to work for a port that’s regenerating? In the last year, we’ve hired more than 50 people who all want to be part of something unique.”
“We look for people who have a health and safety attitude that matches our own — it’s about making sure we all get home safely.”
Container Services Cargo
Handler and Trainer
“Everything is different from when I started and when I think about the future, I think everything will be bigger and better — bigger cranes, bigger ships, and more exports and imports.”
“On the job, we always look out for each other. When you walk through the gates to start your day you need to know you will always walk back out at the end.”
Container Services Depot Team Leader
“Technology will be a big part of our future. It has to be.”
“Our team wants to succeed and prove we're one of the best depots in the country. We work as hard as we can for each other to make that happen.”
“For us, health and safety is about taking our time and learning from one another.”
Captain Charles Smith
“I’m excited that we have a clear way forward. We’ll be welcoming more larger ships and I can’t wait to meet that challenge head-on.”
“Ships come and go at all hours of the day and night and in any kind of weather. We need to check for fatigue and make sure our team is safe out there. Health and safety is an ingrained attitude and everyone plays their part.”
Cargo Supervisor, Break Bulk Services
“After 21 years at the Port, I still love my job. Every day I get challenged, I meet great people, I have a laugh, and then I go home to my family. The Port is in my blood”
“Sometimes I’m surprised by how much volume we can move. It’s about having the right people with the right attitude.”
“Health and safety is crucial. It’s about leading by example from the moment we step into a company vehicle and for the entire time that we’re on the Port. We keep our eyes open to spot issues and learn from our mistakes.”
Health and Safety
Worker participation has been key to major progress being made across the board in health and safety performance at CentrePort. All key metrics saw positive trends, including lost time injuries more than halving.
General Manager People and Capability Murray Julian says while the Board and senior management are committed to a healthy and safe workplace, it’s been the actions and attitudes of workers that have helped achieve big gains.
“We’ve done a lot of work identifying safety leaders through the Safety Representative system. They’ve been trained and the business is utilising them to help people take ownership in their areas of the business to drive health and safety. The reps are helping drive innovation and improve cultures.
CENTREPORT HAS 29 HEALTH AND SAFETY REPS OUT OF 237 STAFF
“The mind-set has changed from how do we work operationally to how do we do things safely? That’s a big culture shift.
“Our bSafe reporting system has been brilliant at driving innovation and improvement. Improved levels and quality of reporting have helped us identify trends which allows us to design, with our workers, solutions and correction actions,” Murray said.
Ports are busy workplaces with up to 1000 people on CentrePort at various times, including multiple Persons Conducting Business or Undertakings (PCBUs). All PCBUs involving works on Port are put through a three-stage health and safety process.
In the past year:
contracting companies went through the CentrePort accreditation process
staff from those companies were inducted
Safe Work Method Statements /work methodologies were reviewed by the health and safety team
Capability and Capacity for Growth
CentrePort is in growth mode, and to be ready to handle that growth means having sufficient people capability and capacity.
There’s been a heavy emphasis on recruitment and ensuring the right people with the appropriate skills join the company. There were 59 new staff recruited in FY18, which contributed to a 10 percent growth in head count.
A comprehensive training programme is in place to ensure staff have the appropriate skills. Fifty-eight staff in Container Services received 12,678 hours of training.
Specialist world-class training was provided, such as cargo handlers attending a crane driving programme in Antwerp, Belgium. The Antwerp facility provides state-of-the-art crane simulators. The Marine Pilot training programme includes utilising a simulator at a facility in Brisbane that provides a 360-degree view of Wellington Harbour, and a manned ship model training facility at Port Ash, New South Wales.
There is an ongoing training programme to upskill current managers and team leaders, as well as a future leader’s programme.
An “absolutely revolutionary” Collective Employment Agreement (CEA) will be a major boost for staff, CentrePort and customers
Murray Julian, GM
In March 2018 the Terms of Settlement on a new three year CEA was ratified and signed off between CentrePort and three Unions – the Maritime Union of New Zealand (MUNZ), the Rail and Maritime Transport Union of New Zealand (RMTU), and Etu.
Murray Julian says the agreement allows the business to improve the way it utilises labour, allowing for flexibility of roles. It also provides greater certainty and better work-life balance for workers.
RMTU Organiser Todd Valster and MUNZ Wellington Branch Assistant Secretary John Whiting said the agreement was based on a strong working relationship between CentrePort and the Unions.
Murray Julian believes the agreement also positions CentrePort and its people well for the future.
“For a number of years volumes were relatively static and we ran a ‘defensive’ labour model. This agreement puts us in a prime position for growth,” he said.
CentrePort partners with organisations that reflect both community engagement with the local environment, and the business sector boosting the local economy.
The company continued its support of the CentrePort International Youth Match Racing Regatta staged by the Royal Port Nicholson Yacht Club. The event, held in fresh conditions on Wellington Harbour in February 2018, was won by Leonard Takahashi’s Pacific Racing Crew.
CentrePort was proud to sponsor the Export New Zealand "Medium to Large Exporter Award", which was won by innovative games publisher Pik Pok.
The Maritime Heritage Trust received continued support for its restoration of the Hikitea Floating Crane. This working piece of history receives ongoing maintenance and restoration from a group of dedicated volunteers. The 92-year-old Hikitea, built in Scotland and located in Wellington Harbour since 1926, is thought to be the oldest remaining self-propelled operable floating crane in the world.
CentrePort has a concrete commitment to environmental sustainability — literally.
The Waste Minimisation Project launched in August 2017 is dealing with the large amount of waste material being generated by ongoing remediation, repair, demolition, and resilience work on-port. Significant quantities of waste concrete, steel, and asphalt have potential environmental impacts and this programme seeks to manage those.
Instead of being trucked to landfills, waste concrete is recycled through crushing machines at a Kaiwharawhara Point site and turned into gravel fill. This is then used for remediation and construction projects on-port. To date 32,908 tonnes of concrete have been recycled.
With not a gram of the waste concrete leaving Port, to date the operation has saved more than 2,035 hours of truck movements on our roads. This has reduced emissions by 218 tonnes of CO2.
Improved storm water management
A new regulatory regime will improvement storm water management on Port. CentrePort engaged with the Greater Wellington Regional Council under the Proposed Natural Resources Plan (PNRP) process. An application was developed over the year and lodged for a ten year consent.
A thorough environmental control programme was applied to all Port activities, including the demolition, remediation and construction works. Extensive risk assessments were conducted as part of pre-planning. An adaptive approach was taken, amending plans as new risks were identified.
CentrePort’s environmental approach is guided by the Board's Health, Safety and Environment sub-committee that meets quarterly, an internal sustainability committee, and three meetings annually of the Environmental Consultative Committee, which includes representatives from community groups, the Greater Wellington Regional Council, and the Wellington City Council.
CentrePort Board of Directors
Mark Petersen (Director), Sophie Haslem (Director), Richard Janes (Director), David Benham (Director), Lachie Johnstone (Chairman), John Monaghan (Director).
CentrePort Executive Leadership Team
Nick Wareham (General Manager Property), Ray Mudgway (General Manager Container Services), Andrew Steele (General Manager Ferries and Bulk), Derek Nind (Chief Executive), Murray Julian (General Manager People Safety and Culture), Anthony Delaney (General Manager Infrastructure and Environment), Blair Spencer (General Manager Break Bulk), Kieran Sweetman (General Manager Capital). Absent Chris Gregory (Chief Financial Officer).