Mace all at sea and profiting

By Rod Oram

Just half a dozen blocks south of Christchurch Cathedral, large parts of Anzac frigates are machined at Mace Group. The components are one sign of the way the company has internationalised to help it maintain a heavy engineering base as the New Zealand economy has changed.

The frigate programme required it to link up with foreign companies to learn from them new technology and skills such as quality assurance. Not only has the upskilling paid off across other parts of its business but Mace is now working with its foreign partners to seek other defence work.

With them and through other channels Mace scouts for niche engineering products it can export, drawing on its general engineering and foundry expertise, says Ted Mace, managing director.

However, another chunk of its business reflects a different era of New Zealand manufacturing. Its expertise making tyre moulds and machinery dates back to the closed economy when government decree ensured cars were assembled and tyres made here.

Mace continues to profit from the business. At home it still has customers such as South Pacific Tyres in Wellington which has survived the end of car assembly thanks to exporting tyres. Mace also has export markets in Thailand, China, South Africa and the Philippines.

"A lack of domestic business here would hurt us but we could still build customers abroad," Mr Mace says.

The company has a natural hedge for times when a high dollar makes exporting less profitable: it imports and resells vehicle parts and irrigation pumps in New Zealand and Australia.

Maintaining skills is one of Mace's main concerns. Over recent years, "we've seen a real shakeout among our local suppliers." To compensate, the company searches the world via the Internet and uses the contacts it has built up through the frigate programme. It often uses air freight for fast delivery of the imported components and materials.

But Mr Mace is concerned that the changing New Zealand culture means far fewer young people are attracted to engineering as a career. One sign of that is that "boys these days don't spend time down in the shed with their fathers."

The main help Mr Mace needs from government is stability of policy. Without it, he says, the economy performs in a "saw-tooth" fashion with marked peaks and troughs.