Company puts survival down to 30 years of looking ahead

By Yoke Har Lee

Autex Industries has been in business 30 years and change is the only constant it has known.

Like a chameleon, the company has constantly adapted to meet what it perceives the market needs.

It started in 1967 making carpet underlay but over the years Autex has built and sold many businesses.

It has now transformed itself into a progressive carpet company, a fibre, insulation and acoustic system specialist and a company making bedware.

The Autex group comprises Autex Carpets, Autex Trim Fabrics, Autex Fibres, Autex Insulation, Quilting & Bedware and Autex Pty Ltd in Australia. The Australian operations process polyester and wool fibres.

Its carpet division makes non-woven carpets that are durable, stain-resistant and non-absorbent. This material is widely used in nursing homes, hospitals and schools.

Autex employs 78 people here and about 35 in Australia.

The managing director, Bill Cunningham, said Autex held one simple philosophy: to stay out of dying industries.

"When the Government removed import licensing, we knew the market would be flooded with a lot of competition in things we made. So we chopped off what we thought were sunset industries. We also spent a lot of time on forward strategic planning.

"In the 1970s, as the New Zealand economy started to move through a process of change, we decided it was important to look out far to the horizon to get into sunrise areas - tomorrow's industries, that's what we are all about."

During the company's early years, it moved away from making jute felt to polypropylene, needle-punched carpet. Autex pioneered the carpet tile concept, which was immensely successful. It later moved into the processing of polyester for the furnishing industry, making moulding products for the car industries.

Then Autex found its way into electrical manufacturing and later into semiconductors, becoming the only distributor in the world that sold to both Motorola and Texas Instruments.

Autex re-engineered whenever it anticipated competition would eat into its business. "We decided to sell all equipment in moulding products to another company in Auckland. This was done in such a way that the company could buy carpets from us, mould them and still make a profit," Mr Cunningham said.

It also got out of its semiconductors business, among others.

Another strategy is to reinvest and upgrade during economic down-cycles.

The company has a $40 million turnover, is based in Avondale, Auckland, and has spent over the past 18 months just under $5 million on its carpet plant.

"We have always worked on the theory that the best time to invest is when the economy is in a down-cycle and everyone else is putting up the shutters. When we placed our equipment order, the Kiwi was at 65USc and the building industry was in a downturn."

Another underlying philosophy guiding the company is to help its customers manage their cash.

"Our business is based on the belief that whatever we do, money management is the issue ultimately," Mr Cunningham said. "Our sales people have to understand how to take that philosophy of money management to customers."

Customers were supplied goods just in time for use. "No point having things sent to the customers so their inventories build up ... A customer hasn't completed his job until his cash register rings."

Mr Cunningham said the manufacturer's job was to get the goods to the stores when they were required and in the quantity required.

Autex's engineering system is geared so products can be made quickly and continuously. Its trade market Freight Blanket, which helps provide containers with insulation, can be produced as a continuous sheet at high speed, an innovation the company developed.

Mr Cunningham himself invented and patented a roofing screw system to solve a problem the company had been trying to overcome for years. The idea came out of a barrel of a pen.

Building an innovative company has a lot to do with empowering people in the organisation to contribute. "Staff on the shop floor are involved in the process. During product development meetings, the manufacturing people and sales and marketing people go through the process of checking the development barriers we are facing."

The factory floor, for instance, came up with a laminating process for what used to be fibreglass (now polyester) cladding for hot-water cylinders, said Mr Cunningham.

Industries stayed relevant by managing change. "The single most important thing is having control over change, or you lose your ability to set your own path to the future.

"Make sure that you enjoy change. This business embraces change. We manage to make change a fun process for all involved."

Pictured: Bill Cunningham. HERALD PICTURE / MARTIN SYKES