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Her Magazine April/May 2013

Her Magazine is New Zealand’s only women’s business lifestyle magazine! Her Magazine highlights the achievements of successful and rising New Zealand businesswomen. Her Magazine encourages a healthy work/life balance.

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:growing too fast The failure of Mainzeal, a reputable force in the construction industry provides invaluable lessons for any business... no matter the size The trap of GROWING too fast How Mainzeal began… Mainzeal was New Zealand's third largest construction firm before it went into receivership on Waitangi Day this year. The receivers for Mainzeal are PriceWaterhouse Coopers partn ers Colin McCloy and David Bridgman. Founded in 1968, it was brought in 1996 by China-based company Richina. Richina was owned by Richard Yan who became the director of Mainzeal. He first focused on Asia for business and was said to be chasing contracts worth more than $150 million. Richina Pacific owned Mainzeal up until 2009 before the company staged a buy-back and went private splitting the original company into four. Richard Yan remained the largest shareholder. In 2012 Mainzeal changed its business structure in an effort to survive in the difficult business environment. They changed their company name from Mainzeal Operations to Mainzeal Group with four subsidiary companies underneath it; Mainzeal Ltd, Mainzeal Construction, Mainzeal Construction SI and MPC NZ Ltd. They did this to spread overheads to a broader base of business and ensure operations to be 42 | www.h e rma gaz i n e . c o. n z regionally focused. Overall they were a well-recognised brand in the construction sector, with ex-prime minister Dame Jenny Shipley being on the board of directors. What went wrong… Not only was the business structure of Mainzeal complex but so were all the reasons as to what went wrong. Specific factors have been identified as: impact of legacy issues around leaky buildings, large contract with disputed payments and a Chinese supply chain scheduling and delivery challenge. Over 2000 creditor claims were made against them. Yan said the company's collapse was due to a "series of adverse events" and blamed external circumstances such as bad weather and the global financial crisis for their failure. Major projects still under construction that Mainzeal couldn't finish include: -$250 million Manukau Institute of Technology Campus -$14 million redevelopment of Shed 10 on Auckland's Princes Wharf -$67 million Hub project at Victoria University It appears a combination of a heavy workload combined with unforeseen circumstances that led to the failure of this company. If Mainzeal hadn't taken on so many large scale projects they may have been able to work through the issues at hand. In the end the pressures were too much resulting in a collapse in business.

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