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Beachheads provide valuable support - report

Hon Trevor Mallard
Minister for Economic Development

1 November 2006 Media Statement
Embargoed until 10.45am
Beachheads provide valuable support - report

The government's Beachheads programme is providing valuable support in-market for businesses looking to expand offshore, according to an evaluation released by Economic Development Minister Trevor Mallard today.

Trevor Mallard announced the findings of the Ministry of Economic Development’s first review of the programme during a visit to Auckland-based company Methven, which has been a member of the Beachheads programme in the Americas since February 2006.

"The aim of the Beachheads programme is to support our companies into key markets. It provides office solutions, clustering with other New Zealand companies, access to expert in-market advice and support, and an entry point to the contacts and networks needed to grow a business.

"Opening up markets for New Zealand is a top government priority and the Beachheads programme is ideally placed to support that objective. Beachheads are in place in the UK, the Americas, Singapore, Dubai and Tokyo and more will be considered to meet the increasing demand. Work is also underway to develop options for the expansion of Beachhead services – particularly the Advisory Boards – to coincide with Export Year 2007."

The evaluation’s key conclusion was that the Beachhead programme appears to be providing a valuable service, particularly regarding the provision of practical business networks, and the programme should be continued in its current form with minor improvements. As a result of the findings of the evaluation, the programme’s principal focus in the future will be on expanding the networking, information and advice services at the regional Beachhead locations.

"The Beachheads programme will continue to play an important role in supporting the government’s economic transformation agenda by helping firms be more globally competitive. The internationalisation of New Zealand companies is something that we all need to focus on if we are to grow the New Zealand economy and raise New Zealanders’ standard of living," Trevor Mallard said.

"A move back to the basics; getting exporters offshore to understand the market and the competition, and giving them the support when there, are some of the features which we are building into our strategy to help build a strong platform for the future."

A fact sheet, information and comment from Methven are attached.

--

Notes for editors:
For more information on the Beachheads programme visit www.nzte.govt.nz/beachheads

The evaluation report is available on www.med.govt.nz/beachhead-evaluation/

About Methven
Methven’s taps and valves have been sold throughout Australasia for decades but in recent years the company’s designers have created Satinjet, a world-first shower design which won a prestigious Chicago Athenaeum 2005 Good Design Award. Key export markets include Australia and Europe where Methven has a licensing agreement with Italy’s leading tap and showerware supplier for distribution of Satinjet in Italy and France, Greece, Turkey and Russia. The company is also making a major push into the United States with its bathroom technology with the assistance of the Beachheads programme.

Comment from Methven on the Beachheads programme
CEO Rick Fala says that exporting can be a lonely road at times but the Beachheads programme has helped provide valuable networks and support.

"When we looked for people to talk to there were very few who had travelled the same road. Using NZTE’s offshore staff was really important because they could introduce us to contacts in the market, take us to visit stores that might sell our products and offer us introductions to other New Zealand exporters to share experiences.

"The Beachheads programme is not a substitute for a company doing its own homework and thorough research before deciding to launch into a new market. It does however provide a very good critique of the proposed programme as well as valuable on the ground support in the new market. I would strongly recommend any company who is looking at a new market to investigate the Beachheads programme. It is very good."

MORE

A fact sheet on the evaluation follows.


Fact sheet: Evaluation of Beachheads Programme

What is the Beachheads programme?
The objective of the Beachheads programme is to connect New Zealand firms in particular sectors to a range of services enabling them to establish and expand in key offshore markets. It is designed to accelerate firm growth in-market and is focused on firms regarded as having the potential to be globally competitive.

The programme began in May 2002 and beachheads now operate in key locations around the world: Singapore, UK/Europe, Americas, Dubai, Tokyo/Japan.

The budget for the Beachheads programme is $2.667 million (GST exclusive) (2006/07).

How many companies have benefited from the programme?
As at January 2006, 64 different firms had participated in the programme. At any one time, between 70 and 85 companies will be actively participating in the programme.

What were the key results of the evaluation?

- While the statistical and other evidence available is insufficient to fully determine the effectiveness of the Beachhead programme (due to its short history), the programme appears to be providing a valuable service, particularly regarding the provision of practical business networks, and should be continued in its current form with minor improvements.

- Developing and deepening these networks appears to be the most likely way to make a long-term impact on participants' success in-market.

- New Zealand Trade and Enterprise (NZTE) providing access to office space where participant firms could co-locate in markets such as Dubai and Tokyo also afforded significant benefit.

What changes are to be made to the programme?

- For new firms entering the programme from 1 January 2007, direct funding for rent reduction for office lease and broadband connection is to be redirected towards developing the services offered by both the Beachheads programme managers and the advisory boards. These services were found to be far more effective in accelerating firm growth in-market.

- The Ministry of Economic Development, NZTE and the New Zealand Beachheads Advisory Board will work to develop options for the expansion of programme services (namely the Advisory Boards and their services) and Beachhead locations in 2007/08 to coincide with Export Year 2007.

- The evaluation recommended the closure of Singapore and Fort Laudedale Beachheads. Beachhead services will continue to be provided in the Americas and Asia, just not out of these physical locations.


ENDS

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