Scott Kippenberger. Photo / Supplied
Scott Technology, specialising in automation and robotic systems, may be tucked away in Dunedin but over the past four years, it has become a true New Zealand global manufacturer and distributor.
For some 100 years, Scott has quietly operated as a skilful engineering firm making bespoke design and build systems. It branched out in 2018 and bought businesses around the world including Europe and the US, acquiring different technology, skills and capability along the way.
Scott identified three core sectors for growth in production lines and processes — meat and protein processing, mining, and materials handling and logistics (warehousing automation) — and established a high-performance 2025 strategy.
The public-listed company — it joined the NZX in 1997 — is 18 months into its new strategy and has booked a record pipeline of $190 million worth of new projects — with most of the orders completed within a year and replenished every month. Scott has nearly doubled its revenue over the past four years or so.
Reset and delivery has earned the established and innovative company the top place in the Best Growth category of the Deloitte Top 200 awards.
Chief executive John Kippenberger said “the growth has come from products where we have proven experience, and instead of designing and building from scratch, we sell trusted technology to large markets multiple times over.
“What we call a product is a $15m to $20m automation system, and of course, we will still tailor it to suit the client’s environment. All large automated systems have a high level of complexity with x-ray machines, vision technology and robotics. And the system needs to deal with so much data at speed.
“We have increased our sales efforts and drive efficiency in the manufacturing operations — same product, same technology, more times over. We’ve been able to expand our European materials handling business into the high-growth North American market.”
Scott has established full manufacturing facilities in Qingdao (China), Belgium, Czech Republic, Charlotte (United States), Melbourne and Sydney (Australia), as well as in Dunedin, Christchurch, and Auckland (through Rocklabs, which it bought in 2008 for its automated sample preparation equipment in the mining industry).
It has sales and service offices in France, Germany, UK, Chile, Perth and Brisbane.
Scott operates in the big league and has completed logistics and warehouse automation projects with McCain, Danone, PepsiCo, Cargill, Bosch, Electrolux, GE Appliances and Pfizer; creating transportation for large tyres around Bridgestone’s plants; and automated mine laboratory systems for Rio Tinto and BHP. This year Scott signed a US$37m (NZ$59m) project with JBS Foods Canada for a fully-automated warehouse with a 10,000-carton capacity.
There’s also an agreement with Caterpillar, the world’s leading manufacturer of construction and mining equipment, to develop an automated connection to support stationary charging of electrified machines. Scott will be modifying its Robofuel product, which automates traditional diesel refuelling of mining vehicles. It has delivered automated processing (Lamb Primal) systems for New Zealand’s leading meat processors Silver Fern Farms, Alliance Group and Anzco Foods, as well as Thomas Foods International in Australia.
For the past financial year ending August, Scott recorded revenue from continuing operations of $221.75m, up 8 per cent; operating earnings (ebitda) of 23.9m, up 14 per cent; and net profit of $12.65m, an increase of 50 per cent.
The judges said Scott was a long-standing Dunedin success story and has continued to carve a path globally, now generating more than $220m in revenue compared with $133m in 2017.
The world has caught up with the company’s forward-thinking and innovative approach. “Scott’s time has come as more businesses are investing in technology and automation, or robotics as you and I may know it,” said judge Ross George, managing director of Direct Capital. “With impressive operator John Kippenberger at the helm, Scott created a strategy of driving more revenue from repeatable products and services. Its two-year annualised total shareholder returns are 28 per cent.”
It was great to have Scott waving the New Zealand flag in such a future-focused industry, George said.
Finalist: Freightways
Since Freightways is into express delivery, it’s no surprise it doesn’t intend to stand still — always keeping an eye out to grow its business.
Freightways chief executive Mark Troughear said the company had bought 47 businesses in Australia and New Zealand over the past 18 years. “Some may have been a single man and truck doing document destruction in regional Victoria. We might look at 50 businesses a year and buy four on average — anything from $100,000 to $200 million in revenue.”
Listed in 2003, Freightways has implemented a “three horizons” growth strategy based on four operating divisions: Express package and business mail (NZ Couriers, Post Haste and others); temperature-controlled delivery (Big Chill Distribution); information management; and waste renewal (document destruction and recycling).
Freightways is leveraging its assets by adding innovation, efficiency and services to what it already has.
“We’ve tried 31 different ideas,” said Troughear. “We look for new ways that add value. You trial them; if they don’t work, you shut them down.”
Three of the ideas are up and running and earning good revenue. There’s Kiwi Express Oversize for packages more than 25kg, such as flat pack furniture; new warehouse racking and IT systems for couriers to “pick up, pack and despatch” and take advantage of the growing e-commerce trade; and a new online tool, MyChecks, that completes background checks through Ministry of Justice, NZTA, ACC and others on potential employees.
Recently Freightways bought Allied Express, one of Australia’s largest independently owned courier and express freight providers with 450 staff and 1750 clients, for A$160m (NZ$172.6m). This presented a significant entry point into the Australian market for Freightways’ express package division.
The company now operates a sales team of 200, out of a total staff of 6000, in New Zealand and Australia, looking for business opportunities and managing existing customers. It runs 1200 couriers, 200 refrigerated trucks, 250 posties (DX Mail) and 50 document destruction and archive vehicles in New Zealand; and 700 couriers, 200 waste collection vehicles and 80 archive vans in Australia.
In the financial year ending June, Freightways grew its revenue 9.1 per cent to $873.09m, operating earnings (ebitda) 1 per cent to $130.2m, and net profit 4.1 per cent to $73.9m.
Judge Ross George said Freightways’ track record of sustained performance continued again this year.
“Freightways redefined its business model several years ago and positioned themselves with a focus on last-mile delivery to our front doors. The recent rapid growth of online purchases has rewarded this well-thought-out strategy.”
“The company’s long-time focus on systems, innovation, efficiency and future scalability has seen long-term growth in total shareholder return to an annualised 14.5 per cent over the last 10 years,” the judges said.
Finalist: Toyota
Four years ago, Toyota NZ made a bold step by changing the way it sells its new vehicles and introduced the Drive Happy Project.
The move worked wonders.
Toyota, one of the top three trusted consumer brands in New Zealand for some time, changed to an agency model with the same transparent, haggle-free pricing — considerably lower than previously recommended retail prices.
Based in Palmerston North, Toyota invested $40m in its network of 67 stores, including integrated management systems (there’s even an online care builder), and salespeople were re-trained as vehicle consultants, product experts and store concierges.
It was a new way of doing business with private, business, fleet and lease customers.
The driveaway price included delivery costs, number plates, registration, a full tank of fuel, floor mats, 1000km of road user charges on diesel vehicles and a seven-day money-back policy, if required.
Every new Toyota came with five years warranty, a warrant of fitness coverage, roadside assistance, and capped-price servicing.
Customers have more options to get the exact model in the colour they want from a pool of vehicles held in Auckland, Wellington and Christchurch.
“We’ve been on the journey for five years and if you take a hard look back through the lens of the customer, the car buying experience was awful,” said Toyota NZ chief executive Neeraj Lala.
“We wanted the customer to feel comfortable and respected in our stores and not feel ‘cheated’ in the negotiating process.
“The issue was that our biggest competitors were other Toyota dealers,” he said. “It was a lottery on what you paid for a car and we can’t have that level of confusion.”
Lala is delighted to report that 50 per cent of customers have paid for the first three years of servicing upfront and 91 per cent of them have stuck to the schedule for the first service.
The customers are also better served with Toyota based in Palmerston North as it is the only city with a 24-hour airport and parts can be delivered anywhere overnight.
During the height of the Covid pandemic, Toyota lost 30 per cent of its new car and 35 per cent of its used car business. The company is now dealing with large back-orders and a waiting list of up to six months.
“We’ve had 18 consecutive months where we have taken more orders than delivered vehicles. It’s an incredible position to be in — our business was not designed for that level of (supply chain) disruption,” Lala said. Forty per cent of the sales are hybrid vehicles.
“Let’s be honest,” said judge Ross George, “we’ve all owned a Toyota at some stage.”
Toyota NZ has more than doubled its profit, increasing to $81m from $37m in 2021, and revenue rose by a whopping $172m over the past year.
Toyota withstood Covid border closures, increased demand for vehicles and a difficult supply chain, the judges said. The company’s innovative agency business model in New Zealand paid off handsomely.
“Toyota has a strong focus on sustainable business practices, dominating the taxi and fleet market because there’s a lower total cost of ownership, and making a meaningful impact on passenger decarbonisation (it has a science-based goal of reducing tailpipe emissions 46 per cent by next year).
“This year, it has also partnered with eight New Zealand businesses trialling a car-sharing fleet of hydrogen Toyota vehicles,” the judges said.
· The Best Growth Strategy award is sponsored by 2Degrees.
OPINION: Tensions are likely to become more evident next year.