Southern manufacturing companies facing uncertainty

Southland manufacturers are among many nationwide struggling to get supplies into the country in a timely fashion so production can continue and orders met.

Otago-Southland Employers’ Association chief executive Virginia Nicholls said the hold-up of shipping containers at Auckland Port was a significant issue for many manufacturers.

Manufacturers who imported stock and ingredients from overseas needed it arriving on time so work could continue.

“Now they have to hold a bit more because they don’t know when the container is coming, so there’s a lot of uncertainty out there,” Nicholls said.

There were “not too many” manufacturers who weren’t affected.

Among those facing challenges were engineering companies and food companies.

Ceri Macleod, general manager of Sorec, a professional body representing the manufacturing engineering sector across the southern region, said a number of its members had reported delays in receiving goods from overseas.

“This puts additional pressure on the manufacturing engineering sector, particularly in the southern region,” she said.

“Delays can have a significant impact on production and ability to fulfil orders on time.”

Some of the issues could be addressed by pulling together as a network, but it placed extra pressure on its members and their businesses.

Gareth Lyness, sales and supply chain manager of Blue River Dairy, an Invercargill business that exports infant formula from sheep, goat and cow milk, said the company sourced most of its ingredients and packaging from New Zealand.

But some came from overseas and “what used to take four weeks takes eight weeks … or it could take 12.”

Despite not having to stop production at any stage, a number of shipping containers with plastic tops for infant formula cans were delayed at the port. But Blue River had other products it was able to manufacture to cover the delay, he said.

The company had bought in more “safety stock” so it was sitting there in case ingredients didn’t arrive.

“There’s a cost to that but the effect of not doing it and not producing is much greater.”

The company’s logistics team had been able to manage the situation by dealing with suppliers and using multiple ports and shipping lines, he said.

Fonterra global supply chain director Gordon Carlyle said it was experiencing some challenges getting a very small amount packaging and ingredients into the country.

“However, our ability to adapt our operations and product mix means our manufacturing operations are not impacted. At this stage there are no supply issues at our Edendale site.”

Lance Coupland, managing director of Coupland’s Bakeries said it had machinery coming from America that would be two months late and its suppliers of coconut and condensed milk had experienced constraints in getting it into the country, but the company hadn’t been too badly affected.

Retailers were also struggling to get enough product into the country to sell, with the issue highlighted before the Christmas buying rush.

“It’s been a significant issue, no doubt,” Nicholls said.

“And it’s going to take a long time to solve all of this, it won’t be solved in the next few months.”