Strong foundations in city

Rick Herd might only be seven weeks into his role as chief executive of Dunedin-based construction firm Naylor Love but already he is talking like a true southerner. Business editor Dene Mackenzie met Mr Herd earlier this week.

Inevitably, the conversation with new Naylor Love chief executive Rick Herd starts with progress, or lack of it, on the rebuilding of Christchurch.

It had been a tough couple of years for the construction industry, probably the toughest in his 40 years in the industry - and that included the period after the 1987 sharemarket crash and following the global recession, Mr Herd said.

The recent collapse of construction firm Mainzeal was an example of just how tough it was out there.

''Things are on the up - driven by the Christchurch earthquake rebuild. But while progress is not at a glacial pace, it is still not coming on with the speed that people expected.''

The slowness of the rebuild had allowed other construction companies to establish themselves in the South Island's largest city and competition for contracts was tough, he said.

Although Naylor Love had established itself in the city about 20 years ago, establishing a reputation took time.

''We had to establish a team and deliver three or four big projects to get a reputation people can trust. There is work from the Christchurch rebuild emerging but it is not coming through in volume. Large projects like the convention centre and the health precinct take a lot of planning.''

That was no surprise, Mr Herd said. The gestation of large projects took years. The fact that projects were on drawing boards two years after a major earthquake was a sign significant work was being done. However, there was still a long way to go.

During a downturn, it was a struggle for construction firms like Naylor Love to keep a team together. The firm wanted to keep its best people focused, motivated and challenged.

''The hardest thing in our generation is to hire good people and keep them. We have a good culture within Naylor Love that helps us.''

The collapse of Mainzeal had given Naylor Love, and others, the chance to take on extra skilled staff. With up to 400 people looking for work, it was an opportunity that came along only rarely, Mr Herd said.

Naylor Love was recently named as part of the successful consortium for the Queenstown convention centre project and there were indications it would be involved in other projects in the region.

''We are seeing growth in the level of bidding opportunities in Auckland, Wellington and Christchurch.''

There would likely be opportunities for Dunedin workers to be involved in the rebuilding of Christchurch but Mr Herd did not envisage large numbers of Naylor Love workers leaving the city for Christchurch. A Dunedin team might take on one or two jobs, but the company was based in Dunedin with an Otago focus. It also had an office in Queenstown.

''We have been based here in Dunedin for 100 years and we will continue to be based here,'' he said.

Staff numbers were growing rapidly in both Auckland and Christchurch as ex-pat New Zealanders returned looking for work and immigrants from the United Kingdom and other places sought employment.

In Auckland, the office had 16 nationalities among the 80 staff - a real United Nations, Mr Herd said.

Christchurch had its difficulties. While work would come, the negatives included an accommodation shortage and being an expensive place to live.

Mr Herd was optimistic about the future of construction with the opportunities emerging after a two-year downturn but also appreciated that full recovery was some time off. Construction was the first area to go into decline in a downturn but one of the first to respond when confidence improved. The industry was cyclical and was affected by things like the high value of the New Zealand dollar. Fonterra and Solid Energy were both examples of how the high dollar meant some projects were shelved. Solid Energy was affected by a high exchange rate and the falling price for coal. Fonterra was affected by the higher dollar but high commodity prices provided a buffer, he said.

Naylor Love continued to be a huge supporter of apprentices and was one of the largest employers of them in the country. It also had a project management cadet scheme.

When Mr Herd was chairman of the Nelson College for Boys' board of trustees, he oversaw the building of a trades faculty to encourage young people into trades as a career. As a country, New Zealand had under-rated apprenticeships, he said.

''We have been too busy telling kids to go to university to get a degree and undervaluing trades. It is a cultural thing. Our parents kept telling us we need to go to university to get a business degree. Some people are suited for academic life but there are people more suited for trades.''

Among those employed by Naylor Love were tradespeople, quantity surveyors and project managers, all of whom needed qualifications, he said.

Although Naylor Love was a national company, the head office was in Dunedin and Mr Herd said he would be in the city regularly. The company had a long trading history in Otago and he wanted to continue that heritage.

There was no reason a company head office could not be run from anywhere in New Zealand with the development of IT and communications technology, he said.

''We have good people here who want to live here and we want to keep them here.''

Asked about his goals in his new role, Mr Herd said they were the same as the firm's - to be the best construction company in New Zealand. That did not mean being the largest, just the best.

''When contracts come up we want to be the first choice. We have a fantastic reputation in Dunedin. We want that reputation nationwide.''

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Rick Herd
Chief executive of Naylor Love
Age: 56

• Forty-year career in the construction industry.
• Married to Sue, with two children - Jessica, a barrister and solicitor in Nelson, and Alex, a commerce student at Victoria University.
• Mr Herd started work in 1973 on an engineering cadetship with the Ministry of Works in Christchurch, working on hydro, bridge, road and irrigation projects around the South Island. Moved to Wellington with the Ministry of Works and was involved in contract supervision on Wellington motorway construction in central Wellington then the construction of the Ngauranga Gorge interchange. A keen rugby player, he played with Oriental Rongotai in Wellington. He met his future wife a few weeks after arriving in Wellington. Mrs Herd later took a job with Mainzeal, followed by Mr Herd.
Mr Herd lived in Otematata working for Mainzeal on completing the converter station at the Benmore Dam. He also worked under secondment in Bangkok on a large hotel project and built a hotel in Port Vila, Vanuatu, for Fletcher Building. In 1993, he was appointed South Island construction manager for Mainzeal, based in Christchurch.
• In 2000, he joined Nelson Pine Industries as general manager. In 2005, he joined Brightwater Engineering as chief executive.
Local link: Mr Herd's uncle, Jim Herd, was based at the Caversham Police Station during the 1960s and was a senior police officer in Dunedin until he retired.

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- dene.mackenzie@odt.co.nz