Finding a niche in midst of crisis

When the Obama Administration in the United States unveiled its multi-trillion-dollar budget last week, a cheer was heard from a West Auckland company that has become a world leader in airport baggage handling.

Glidepath, which employs 90 people in Glen Eden and a further 120 overseas, is well placed to profit from a splurge of recession-fighting infrastructure spending around the world.

While the company is an extreme case, a surprising number of New Zealand manufacturers are finding recession-proof niches in the teeth of the economic crisis.

"China Airports are looking at boosting the pace at which they develop their airports," said Glidepath managing director Ken Stevens.

"In the US, Obama has put US$1.1 billion [$2.2 billion] into the Federal Aviation Administration's airport-improvement programme and another US$1 billion into our area - explosive detection systems seeking bombs and nasty stuff in baggage and making it much more comfortable to the travelling public," he said. "We are the direct beneficiary of that.

"We haven't slowed. Our order book is the best we have ever done. If our US sales team is any more successful we'll have to pull them off the road!"

Overall, manufacturing is still reeling badly. Statistics NZ's quarterly employment survey recorded a loss of 10,650 manufacturing jobs in the year to December, or one in every 20 industrial jobs existing in December 2007.

But the Christchurch-based NZ Manufacturers and Exporters Association, which has become a national voice for export-oriented manufacturers with a third of its members now in the North Island, says its members' exports in January were up 7 per cent from a year before, while domestic sales dropped 3 per cent.

"It's far from doom and gloom everywhere," said chief executive John Walley. "If you're in the consumer electronics or auto supply chains it's a different story, but business-to-business is a little stronger than business-to-consumer."

Bank of New Zealand economist Craig Ebert said local manufacturers were also gaining from the fall in the Kiwi dollar, which could be sustained if overseas lenders stay permanently less willing to fund consumers spending more than they earn.

In principle, a lower dollar helps to rebalance the economy. Higher import prices both dampen overspending and make local production more competitive, as well as boosting exports.

WINNERS INCLUDE

INFRASTRUCTURE
Apart from exporters like Glidepath, local suppliers such as Avondale's Etel Transformers are prospering on the back of steady expansion of the electricity network, with the bonus of a new product for wind farms. It added about 30 staff late last year and now employs 130 people.

SAFETY
Wanganui-based Pacific Helmets, which supplies most fire services in New Zealand and Australia and sells helmets to 80 countries, is busy with new orders from fire-ravaged Victoria. It expects to keep its 60 or so staff.

ECO-PRODUCTS
Auckland's Ecostore employs 25 people at its Pakuranga factory and reports growing sales of its "green" home cleaning, baby and personal care products to Australia and the US. It started selling in US grocery chain Meijer last week and chief executive Mitch Cuevas said the company aimed to grow 10-fold in the next few years.

FOOD TECHNOLOGY
Albany-based energy-efficient motor designer Wellington Drive expects to more than double its business this year. Chief executive Ross Green said the company's advantages in a recession were that it saved its customers energy costs and its leading products were used in supermarket and vending machine refrigeration. "Supermarkets and places like McDonald's tend to do well."

HEALTHY FOOD
Mt Wellington-based health-food maker Healtheries reports continued sales increases. "People are still wanting to look after themselves and eat healthily," said managing director Sarah Kennedy.

HEALTHCARE
Walrus NZ started as a spinoff from Reid Rubber making wetsuits and other marine gear but has found a safer market by transforming itself into a niche manufacturer of orthopaedic braces, mostly exported to unusual places such as Mexico and Switzerland. Its 14 staff have secure jobs.

ANYONE EXPORTING TO INDIA
"It doesn't seem like there's anything like a recession up there," says Mr Stevens of Glidepath. "We are completing our sixth job there and have another four to go."