4RF Communications: Carry on investing

Innovation is vital to attract overseas buyers, says Ian Troughton. Photo / Mark Mitchell

When economic crisis arrives, Wellington's 4RF has an advantage over many companies.

The firm made its name internationally by providing high-tech wireless communication links, for critical sectors such as power, gas, military and emergency services.

"We're lucky we have a very diverse customer base and our equipment is used to support critical infrastructure," says chief executive Ian Troughton. "So we were much more sheltered from the economic crisis than companies targeting more traditionally cyclical sectors, like telecommunications.

"We used this relative strength to our advantage by hiring first-class talent looking to join a company with good sales prospects, even in a weak economic environment.

"During the past two years we've also been able to reduce our net bank debt to zero. So in fact we're actually in a much stronger position than we were before the economic crisis began."

Started from scratch in 1998 by a team of engineers, 4RF quickly transformed from an R&D workshop to a company focusing on export sales. It now sells 98 per cent of its products overseas, to customers in 118 countries.

"It feels good in the sense that we've made tremendous progress in developing an entirely new product portfolio from scratch and invested heavily in world-class sales expertise," says Troughton. "But it's frustrating too because the economic environment in effect masked the real progress we've made as a company."

However there were speed bumps during the downturn, when customers delayed projects, rather than cancelling them. "The indications are these projects are now coming back online and we expect to see an upturn as the year progresses."

Troughton is "genuinely excited" about 4RF's prospects, particularly with a new product - the Aprisa SR security-enhanced radio used by oil, gas, and utility companies to monitor and control data from the field or offshore rigs.

"We continued to invest, particularly in sales and R&D, because the board took a long-term view of the potential of the company's prospects," he says.

Support from the Foundation for Research, Science & Technology also helped 4RF, which has 75 staff.

"For a European utility to buy high technology from New Zealand, they have to choose us over a wide selection of much larger local suppliers. For them to want to do this, it's imperative companies such as 4RF continue to invest in innovation and smarts."

Ian Troughton
CEO, 4RF Communications

* Your big hope?
That there's no major economic setback that will detrimentally affect the investment appetite of our customers.

* What would help right now?
Given the opportunity, we would love to invest more in our growth. There is a mismatch between the demand for products like ours and our ability to resource their development.