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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11/9/13

High Value Manufacturing Article - IkeGPS


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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 spoke to Leon Toorenburg and Glenn Milnes from ikeGPS about their products, experiences in exporting and ways to grow more high value added firms in New Zealand.

IkeGPS are a Wellington based high tech firm that specialise in creating measurement solutions, used in defense, intelligence and electric utility markets. Their solution is provided through a mix of their ikeGPS hardware unit, which contains a laser, GPS and camera to provide measurement information with onboard analysis and software that can be used to further analyse the information. This essentially means customers are able to measure the dimensions and locations of assets faster, more accurately and safer than competitors. The product received the award for Innovative Hi-tech Hardware Product at the 2013 Hi-Tech Awards.

Recently, much of the new value they have been able to add to customers has been through software improvements, allowing customer to measure and model things, such as power poles, based on pictures and data taken on the ikeGPS unit.

They operate globally, exporting 99% of their products, with the U.S being the biggest market due to their large electrical utility and defense markets. This means they have a global price point, set in US dollars. The appreciation of NZ dollar has had direct adverse effect on margins and cash flow, hitting them like a tax; although they planed for the exchange rate staying at the high levels, has helped to mitigate some of the impact.

In some markets, such as Australia, sales are made via distributors, whereas in the U.S, most sales are direct to customers.

IkeGPS choose to operate in New Zealand due to having a high quality core devolvement team based in Wellington. “We have guys who are truly the best in the world at doing what we do, and that expertise couldn’t be up and moved elsewhere. The cost of these development resources can be higher elsewhere, such as silicon valley.” explains Leon.

Market access has been their biggest challenge; an issue that is an ongoing hurdle. “We compete against multi-billion dollar incumbents, in what is a very concentrated industry. We are one of the very few smaller guys playing in this market. This brings challenges with brand and distribution.”

“The things we battle with everyday are market facing, because if you consider your product management, marketing, sales and corporate, you want to be close to your customers, and for us that’s the U.S. That’s the thing we keep looking at to improve and overcome the distance between us and the customer.” says Leon.

IkeGPS has been fortunate to receive much guidance from experts in the wider business community, facilitated largely through their investment partners. Additionally, they received funding and help with technology and market development through NZTE and Ministry of Science and Innovation (now Callaghan Innovation), which gave them great benefits.

Leon believes to help more high valued added firms, such as themselves, start up and grow, more collaboration is needed. He explains, “Offshore there are clusters of expertise and collaboration to build capability in a concentrated area. If New Zealand could foster these kinds of environments, it would make a big difference for similar business growth.”

Developing this collaboration and clustering is not an easy task, “The challenge in New Zealand is to find the “Gel” between firms that allows these types of cluster to happen, due to the small number of businesses operating in similar areas.” says Glenn.

New Zealand businesses can be very bad at networking, shared learning and collaboration, which hold back the formation of these collaborative environments. These are areas that have potential to provide great benefits if focused and improved. 

www.ikegps.com



tags: ikegps, leon toorenburg, glenn milnes, exporting, manufacturing, high tech, hi-tech awards

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