Engineering company steeled for global work

NDA Engineering of Hamilton is probably the largest fabricator of stainless steel in the southern hemisphere.

It owes the accolade to the large volume of work it has done for decades for the dairy industry in New Zealand and, more recently, for Australian industries such as dairy, pharmaceuticals and petrochemicals.

Building on that experience and its links with customers and technology partners, it is venturing much further afield.

NDA recently won a contract to supply equipment to an eastern European customer thanks to a lead given it by the Australian company managing the project.

Such competitiveness is all the more remarkable because roughly half NDA's costs are in the stainless steel, an internationally traded commodity.

In fact, for the eastern European job, NDA will ship stainless steel from Europe to Hamilton to fabricate, and then ship the equipment to Europe.

"The fact we can compete in Europe has surprised us," says Gary Mollard, NDA's chief executive. "But it's not entirely driven by the low New Zealand dollar. Our skills count too."

Nonetheless, NDA is disadvantaged in international co-ventures because New Zealand does not play the export game the way other countries do.

Last year, for example, it was working closely with Stork, the Dutch dairy equipment maker, to bid for a project in Paraguay.

But NDA was bumped from the project because it could not contribute competitive export finance. Instead, Stork used a Dutch fabricator so it could qualify for Dutch Government export finance.

The pressure is on NDA to find a growing proportion of work abroad because the New Zealand dairy industry is coming to the end of a big burst of capital spending.

However, some foreign work is coming its way thanks to the internationalisation of our dairy industry. It has built equipment, for example, for the Dairy Board's new Malaysian plant, which reconstitutes milk powder into liquid products.

In skill training, NDA is a relatively unusual company these days because it is still a heavy employer of apprentices.

Of its 105 workshop staff, some 15 are apprentices.

"It makes economic sense. They quite quickly earn their pay."

Banks are one of Mr Mollard's biggest frustrations. Last year he and management colleagues bought out NDA from its dairy cooperative owners.

"Despite the inherently conservative nature of the transaction, it was bloody hard. The banking industry is ill-equipped to do transactions like this."