3D company set to roll over $14m Govt loan

Right Hemisphere has 40 staff based in the US, servicing its major aircraft-manufacturing clients. Photo / Supplied

3D graphics company Right Hemisphere has revealed it is likely to seek an extension to a $14 million loan it received from taxpayers nearly three years ago.

The deal, which was approved by then-Economic Development Minister Trevor Mallard, was controversial at the time as it went ahead despite Treasury advice it had "a low probability of resulting in net benefit to New Zealand".

Critics questioned whether there was a market failure that warranted such an ad hoc intervention, and deplored the precedent it set.

Right Hemisphere founder Mark Thomas said yesterday the loan had always been extendable from three years to five years at the company's choice.

"We will probably opt for the extension of the term, and the MED seem pleased about this as they want to extend the benefit of the spillover agreement," he said.

The agreement requires Right Hemisphere to develop a cluster of spin-off companies in which its American backers are also expected to invest. If it fails to create such "spillover" benefits, it has to pay 25 per cent interest on the loan.

Thomas said he was pleased with the way the 3D graphics industry was growing here, but would like to see more companies taking advantage of the services of Nextspace, a mentoring organisation also set up with taxpayer money to nurture such growth.

Despite the global recession, Right Hemisphere itself had experienced a significant growth in revenue - beating all its growth targets in the last five quarters, he said.

The company employs 40 R&D staff in New Zealand, and Thomas said it was looking to hire 10 more. It has another 40 staff based in the US, servicing its major clients such as Boeing, Lockheed Martin, Sikorsky, Bell Helicopters, Siemens Diagnostic, Spirit AeroSystems, Nasa and Chrysler.

It is understood to have recently signed a contract with a large American manufacturer that wants to stop making samples, and display virtual prototypes instead - prompting speculation that the 3D revolution is finally gaining momentum worldwide.

Last month, Right Hemisphere's worldwide head of sales won a Stevie award for being the best in America at his job.