As we started delivering on the three-year plan we had considerable growth pains and as the owner of the business I soon found sharing the dream and working on the dream was becoming increasingly difficult.
I was working 100 hours plus per week and endlessly travelling. I needed to ensure that our DNA was intact but I couldn't be in two places at once so I asked for help … it came in the form of a facilitated session with my key staff. As part of the session we agreed that the senior key staff were really colleagues in the business. Being treated as colleagues that were trusted and shared the same dreams was a game changer and led to the creation of a very solid foundation of people that were going to be critical in the future growth of the organisation.
As the business grew within New Zealand we were approached to supply several chains in Australia, so the plan expanded to include exporting.
The initial exporting growth phase brought with it every mistake a company could make. Through determination and focus we managed to survive and have now grown to export 70 per cent of FPG manufactured products to more than 40 countries with a wholly owned factory in China, a joint venture factory in India, and sales representatives in NZ, Australia, Europe, UK, Indonesia and more recently, Mexico.
FPG works with New Zealand Trade and Enterprise in any major country where we supply. Our strategic planning and in market strategies are carried out in conjunction with each NZTE regional office and this has meant we minimise mistakes and have the best possible chance of success as we grow into new markets.
What was the main reason why you retained Napier as your New Zealand office and how is that received overseas?
Once a company starts to export the client's decision is usually based on "what supplier can provide me with the best solution I require?". The decision on using a manufacturer from New Zealand is based on us being the best, the most innovative, or the only one that can solve our problem.
The first problem a new client usually has is, "you are asleep when I am awake so how do we communicate easily by phone?". The next is "how will you support our equipment from the other side of the world?". We have a way of solving both that seems to be working well.
Our clients don't really care if we live in Eketahuna or Invercargill. What they do care about is the ability to deliver equipment on time every time and to provide support for the life of the equipment.
Hawke's Bay is my home and we have a fantastic region that is something to be proud of. FPG and most other local export businesses we know are also great hosts and hosting an international client in our region provides a unique experience that most remember for life.
For example we have major blue chip clients who visited some 20 years ago that still talk about their Hawke's Bay experience. We also have many clients who visit New Zealand for the first time to see FPG and have returned to Hawke's Bay with family and friends for vacation.
The biggest challenge we have internationally is the fact that we are on the wrong side of the world from our major markets and international competition is strong. It is through good planning and Kiwi ingenuity (common to most New Zealand companies) coupled with our significant investments in R&D that gives us a very strong selling proposition in faraway markets. As a manufacturer from New Zealand we need to be at the top of our game with innovation and design if we are to continue to succeed in foreign markets.
What are the logistical problems associated with running operations in several countries on different continents and how has Kiwi ingenuity played in overcoming them?
Shipping to most international markets is relatively straightforward when it comes to the movement of a box. The challenge for FPG is in meeting country-specific compliance and standards. The product compliance process from New Zealand is not only costly but very time consuming.
Gaining compliance for a single appliance can mean up to five months' work from an engineer, shipping samples to the USA and spending $50,000 to $60,000 plus on ongoing audits with massive paper trails to maintain.
We recently became the approved supplier to McDonald's for all of Middle East and Africa. The client started ordering equipment and then informed us we would require local compliance for a shipment to Kuwait … five months later we had worked with agencies in NZ, Hong Kong, Kuwait, Saudi Arabia, and Dubai and spent US$50,000 We finally received compliance - box ticked so we could start the shipping process. Four days after leaving Napier the goods arrived in Kuwait.
In a general sense, do you think NZ start-ups can really keep up with raising NZ-own capital and keep company ownership here? Or are NZ funds just not able to match the capital available overseas?
I admire the diversity in New Zealand start-ups, and organisations like the Icehouse are there to support, mentor and nurture newbies to the self-owned business world. As these companies grow we have plenty of options for funding locally apart from banks.
Within New Zealand there is a pool of mentors and angel investors that can bring everything from governance to investment that can lead to maximising success whilst minimising mistakes. We have Callaghan Innovation that will support with joint funding of Research and Development and have a massive pool of expertise. We also have NZTE that will assist when it comes to export.
New Zealanders generally have a can-do attitude and can bend No 8 wire a thousand different ways. Our start-ups just need to ask for help at the early stages and they will soon find we have plenty of capable people who have experience and passion to help others succeed.
The challenge for start-ups is to get relevant help. We have a culture of cutting tall poppies down when they do succeed and I for one have immense respect for anyone who gives it a go and asks for help to navigate the business world bumps.
What is the most important thing you look for when considering entering a new overseas market?
FPG is constantly looking at new opportunities in offshore markets. To date the majority of our expansion has come from our blue chip clients' own expansion into new markets. They ask us to go with them and we follow.
Once we are in a new market relationships are developed and it is through these relationships that we develop new opportunities. Any new opportunity starts with validating the market to understand the potential and also to understand if our offer is relevant.
