New Zealand’s SMEs and start-ups encouraged to consider co-operative model

By Cooperative Business New Zealand | August 2020
Cooperative Business New Zealand is encouraging New Zealand’s SMEs and those looking to start up businesses to consider adopting the co-operative model.

Rob Kidd, NZPM

Cooperative Business New Zealand is encouraging New Zealand’s SMEs and those looking to start businesses to consider adopting the co-operative model.

Cooperative Business New Zealand CEO Roz Henry says many New Zealand businesses and individuals are struggling during these extremely tough times.

“There are businesses operating in isolation that could benefit greatly from coming together to share knowledge and leverage their collective strength,” she says.

Many co-operatives have formed in times of adversity because the business model is built to last, Ms Henry says.

“People are at the heart of co-operatives. The ethos is one of working together for the common good. Because they are created to meet the needs of the members first, rather than to maximise profit, they are well placed to weather economic storms.

“By coming together, these businesses have greater purchasing power which enables them to keep costs and prices down. Crucially, profits are also retained in New Zealand,” she says.

Making plumbing products cheaper for plumbers and customers was one of the key drivers behind the formation of the NZPM Co-operative, says Plumbing World General Manager Rob Kidd.

“When NZPM was formed in 1964, plumbing products were controlled by a restrictive licensing regime that made them more expensive. By joining together, the dozen or so plumbers who formed the co-operative were able to purchase the import licence to make their products more affordable and take control of their destiny,” Mr Kidd says.

Today NZPM, which operates Plumbing World and Metrix Imports, has more than 900 shareholders and 500 staff. Membership is open to plumbers, drain layers, gas fitters, builders and a number of associated industry trades. The co-operative has trading relationships with seven other New Zealand co-operatives.

“Aside from funds used to invest in and grow the business, all NZPM profits are retained for the co-operative shareholders. Our shareholders receive many benefits including dividends, competitive purchasing rates, overseas conventions and the ability to have their say in how the co-operative operates through electing the shareholder directors,” Mr Kidd says.

“Though co-operatives are built to stand the test of time, like any business, we must continually be nimble and adapt to change. That has been one of the secrets of our success.”

Ms Henry says New Zealand is one of the most co-operative countries in the world with co-operatives, societies and mutuals contributing approximately 19% of GDP. New Zealand’s co-operatives directly employ 50,000 staff and they have 1.5 million members (shareholders). The members can either be businesses in their own right, farmers, or individuals who are regularly transacting goods or services with the co-operative.

“New Zealand’s co-operatives are fundamental to the success of our economy. Some of our most enduring businesses are co-operatives, which are built on a proud history of shared ownership, participation and control.

“These businesses are major domestic employers, many are significant exporters, and many are vital food producers or providers of essential services.”

Ms Henry encouraged New Zealand businesses to contact Cooperative Business New Zealand to access resources and find out more about the benefits of working within a co-operative business model.

“Now more than ever, it is time for our businesses to co-operate, collaborate and help each other to thrive,” she says.

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