Taking on the big boys

By Keith Newman

Christchurch-based Tait Electronics prides itself on an ability to produce world-beating radio communications equipment for private and public mobile networks cheaper than multinational rivals.

The company regularly competes against Nokia and Motorola and has offices around the world selling and servicing its equipment. As the company has grown over the past 30 years to revenues of $150 million a year, dozens of support firms and related engineering enterprises have sprung up, making Christchurch the electronics capital of New Zealand.

But the company now faces a crucial technology transition from analogue-based systems to digital. The total investment could be $50 million spread over five years. They will have to partner and co-operate with other manufacturers to share the burden of investment.

"The technology involved in the next wave of digital equipment is so sophisticated, complex and expensive that the smaller players will inevitable band together and share the cost of arriving at a marketable product," said chairman Angus Tait. "Producing a new product in the analogue world would cost $5-6 million. To get into digital you can multiply that by a factor of 5-10. The dilemma for any small operator in a technologically complex industry is the investment required to keep up with the larger boys."

While Tait Electronics has looked at a number of acquisitions, it has not proceeded, but is still open to the idea.

He said work quality was pivotal."The world only has one standard - you can't sell second rate gear in the market. You have to produce equipment comparable with anything being built anywhere else."

While New Zealand had a good lifestyle it typically paid staff about 25 per cent less than in the US, UK or Australia and the challenge was to find suitable training people and to keep pace by investing in research and development.

"We have established ourselves at an international level through continuous re-investment of profits in technology. If you are prepared to put money into your technology it doesn't matter where you are."

Tait Electronics employs about 725 people in Christchurch and 225 in its offices in Beijing, Hong Kong, Taipei, Singapore, Germany, France, Britain and the United States.