Firm's tentacles go worldwide

In one way, McClunie Birch is a typical member of an industry cluster, working closely with its Hamilton neighbours such as NDA to tackle dairy projects.

But in another, it may be the forerunner of a new breed of New Zealand manufacturer: a member of a virtual international cluster.

The theory of clusters says that companies need to be physically close.

But a virtual cluster brings together partners from different countries to work on projects around the world.

Like NDA, McClunie Birch has established technology and project links with Stork, blending its own technology and skills with those of the Dutch maker of dairy equipment.

But McClunie Birch has taken a big step further by opening an office in Buenos Aires to seek opportunities in the burgeoning Argentine dairy industry.

On some, it will partner Stork.

"New Zealand technology is recognised as sound, innovative and affordable," says John Birch, one of the company's co-founders.

"We're good at designing high-efficiency, high-yield dairy plants and at taking European designs of major components and adapting them.

"Our productivity and quality are also significantly better than anybody else's."

South American projects might contain up to 30 per cent New Zealand content.

But Mr Birch says he has two concerns.

The first is that our skill base may erode because the
workforce is ageing and young people are less interested in engineering and, moreover, industry's ability to fund training is limited.

The second is that a lack of Government-backed export finance is hampering sales.

Mr Birch also sees a general problem with the small scale of many manufacturing and engineering enterprises in New Zealand.

"Owner-operators have low fixed costs but if they want to scale up to export, they need a leap in quality many of them can't make.

"We see a lot of good small businesses fall by the wayside when they should be developing."

It is partly a cultural problem - people like owning and running their own businesses.

But it is also a problem because of inadequate sources of finance, for example.

McClunie Birch, established only nine years ago, was fortunate in making the leap.

As a small company, it landed a big project at Kiwi Co-op Dairies in Taranaki.

Through astute financial management, McClunie Birch was able fund its expansion.

But Mr Birch reckons today's tighter financial controls in the dairy industry would prevent another small company following suit.