Bedmaker Sleepyhead Manufacturing is investing $45 million in a new Auckland facility as it looks to boost exports to Asia.
The new 40,000sq m centre in Manukau - part of a Sleepyhead strategy that will create 40 new jobs over the next three years - will bring together the company's 400 employees from other sites in Otahuhu and Albany.
Sleepyhead is hoping to have the facility, which will have a research centre and also host the company's head office, operating by 2017.
Sleepyhead joint managing director Craig Turner said the investment in the project would provide jobs during the design and build and "long-term manufacturing jobs for Aucklanders into the future".
The project follows growth in Sleepyhead's exports to countries like China. "Our exports in China are already worth several million dollars and we expect them to double year on year, creating more jobs in Auckland," Turner said.
New Zealand's free trade agreement with China had given Sleepyhead a "good opening" into that country and made it more competitive than other players exporting there. "This facility will enable us to get the production to be able to export further into China. Currently we're having to limit supply because we just can't meet demand," he said.
"We're just constrained with the size here, we can't make foam [products] in our current facilities to supply their markets so we've had to back off our export drive in that area."
Around 11 per cent of what the company produces is exported outside Australasia but Turner said it could be as high as 30 per cent in the next five years. The new facility will make mattresses, bed bases, foam, carpet underlay and other products such as pillows.
The expansion in Auckland comes on the back of building facilities in Christchurch, Sydney and Melbourne in the past two years. A new plant is also being built in Western Australia next year.
Turner said Sleepyhead had always believed in keeping manufacturing in this part of the world.
"New Zealand's manufacturing base is a very committed and good base to build from ... as long as you can have your manufacturing costs under control, why not manufacture onshore?" he said. "A lot of manufacturing has gone out of New Zealand and Australia. It's just tragic. But it needn't if manufacturers address the cost-base of their business, which is part of the new [Sleepyhead] facility's opportunity."
Sleepyhead owner The Comfort Group, which is fully owned by the Turner family, is the largest bedding and foam manufacturer in Australasia, employs more than 1100 staff and makes 650,000 pieces of bedding each year. About half of its staff are located in Australia.
Turner is forecasting strong growth for the 78-year-old business over the next 24 months.