Comments

David Thompson Posted:
So very, very true. It beggars belief that we consider ourselves to be a developed nation when so much of our economy is based on selling milk powder or logs. BTW, I own a Plinius amplifier (my second) that drives a set of Theophany speakers.
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David Thompson Posted:
A robust but sobering report. It concerns me that confidence is rising, yet sales and exports are down and "manufacturers and exporters are still lagging behind other sectors". Surely we should wait until we're earning more money before we start spending more?
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siemens Posted:
Yes true! The only thing that will never die in this world is the nature and its science behind it. Great post.
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Kieran Ormandy Posted:
Thanks for the question Steven, Germany has seen increases in manufacturing employment since 2009, and Switzerland has had stable manufacturing employment between 2006 – 2011, even in the face of ongoing Euro-zone issues. Korea has seen increases in manufacturing employment since 2008 and Israel experienced large increases since 1998, while being stable over the last 4 years. Singapore has had increases in manufacturing employment over the last two years. These countries all value their manufacturing sectors and work to protect them, this is reflected in the above numbers and their performance through the GFC. Note data around the above examples was sourced from OECD labour market stats.
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John Walley Posted:
Point one: you should have no doubt what our Association says publically represent the views of our members. Point two: we don’t knee jerk responses, if you trace back our comments around NZPower you will see them link all the way back to our research in 2004 and 2005. All that material is fully linked from our comments above. Point three: you will note our comments on major users, sadly the same advantage does not accrue to smaller industrial users. The perverse incentives of the LRMC approach in all this are well known. Point four: the NZMEA is not like any other Association in New Zealand we admit only manufacturers and exporters into membership, and our public expressions are the views of that restricted membership.
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27/8/13

High Value Manufacturing Article - IZON


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The following is an article written by NZMEA President Brian Willoughby. He is writing a series of articles based on interviews with various high valued added manufacturers in New Zealand. These articles originally appear in BNZ Chief Economist, Tony Alexander’s monthly newsletters. 

www.tonyalexander.co.nz

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I recently met with Hans van der Voorn and Lloyd Bahlmann from Izon Science LTD, and had the chance to tour through their labs, see their impressive products and sit down for an interview:

Izon is a manufacturer of high value particle analysis systems, used mostly in the medical testing and research arena. Based in Christchurch and New Zealand owned, Executive Chairman Hans van der Voorn has no intention of leaving town. Izon exports to over 34 countries, with the US being the biggest market. The company was originally formed with a vision to sequence DNA, driven by the founding scientists, but it became obvious there was no business strategy suitable for that market. “We needed a product that people could buy immediately, and we came up with counting viruses”, says Hans.

The product has gone through various iterations, much of which was fueled by customer requests, being achieved by offering loan devices to institutes around the world, getting feed back on how research went, what features could be improved or added. Customer focus is important, providing support above and beyond the norm. Their system is a very technical platform offering many different solutions, so they need to ensure they fully understand what their customers are actually looking for, helping to build credibility with the science community. “We need to look past the immediate measurements that we do and aim to understand the wider context of what customers need. In addition we all feel good about helping medical science.”

Securing ongoing investment is one of the biggest challenges Izon has had to overcome. The investment culture in New Zealand doesn’t really favor companies offering unfamiliar highly technical solutions. They have received some Government grants. “These grants are very helpful for small companies like us, not only because they help us financially but they also serve to validate the firm to investors. However once a firm is large enough and profitable there should be less need. When we are worth $100m we would like to be handing out the grants.”

They also question the amount of funding public science bodies such as the Callaghan institute receive for commercialization and innovation. A firm that relies on generating revenue to survive will typically use the investment much more efficiently; more quickly create products to sell, fueling employment and wider economic benefits.

The world economic climate has been an issue, squeezing funding to institutions that desire their product; this general shortage of Government funding throughout Europe and US means scientists can no longer “snap” and buy. “The customers will eventually buy but the sales cycle is much longer than it was.” They are in a fortunate position to not be much affected by the exchange rate, as the margins are quite high and they have been able to partly adjust the price of the product upwards as capabilities keep improving. The products are the diametric opposite of commodities so not as price sensitive as selling into a mature industry sector.

Izon is a young persons company, providing a place to attract talented youth and provide further positive benefits.

“Young people like it, they want something different. It provides an eco system where it attracts people. We are lucky in having a lot of very bright people prepared to work hard. I hope someone who works here may eventually want to start their own company, having seen how it works. One day they may even get funded by us.”

Looking towards the future, they are hoping to achieve their first $1 million quarter, signaling they have clearly crossed the profitability line. They are also looking into floating the company, “I quite like the idea of floating, because shareholders need some way of measuring value and selling if they need to, not everyone wants to hold onto shares forever.”

www.Izon.com

   



tags: izon, brian willoughby, exports, science, manufacturing

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