Katikati company scores US deal

Dental products specialist Triodent Corporation has struck an exclusive distribution deal with a major United States manufacturer - but as a result the award-winning Katikati company is again looking at trimming its staff.

Triodent, Bay of Plenty's top exporter of the year last year, is changing from selling direct in its main market of United States to the traditional distribution route because its "marketing costs were spiralling out of control".

From April 1 Salt Lake City-based Ultradent Products will buy Triodent's dental tools and sell and distribute them through its large customer base.

"We are very happy with the deal. We've put together a strong partnership," said Triodent founder and chief executive, Simon McDonald. "Ultradent deals in top-end dental products, has high integrity and employs 1000 people.

"I didn't think we would take the traditional (distribution) route but the numbers were showing our direct operations were costing us a a lot of money, and it made sense to change."

Fifty per cent of Triodent's sales, now reaching $20million a year, are made in the United States.

The Katikati manufacturer, which designs its own products, has its own sales reps in the United States and a call centre in Katikati. It also sells through direct mailing and attends many trade shows.

"The direct approach was crucial while we were a small company and we were able to build up a brand and reputation. If we had gone to traditional distribution straight away, we would have ended up at the back of the catalogue," said Dr McDonald.

Triodent supplies about 15,000 dentists in the United States, out of a total 140,000. "Each week dentists in the US have 20 reps knocking on their doors and part of the receptionists' jobs is shooing them away. That was a difficulty we were having, and Ultradent already has a foot in the door."

Ultradent, established 25 years ago by dentist Dr Dan Fischer, will also represent Triodent at trade shows, allocating part of its display booth to the New Zealand-made products. Triodent will still prepare the marketing and promotional material.

The tie-up with Ultradent means Triodent is reviewing its present staff numbers and it is halfway through a consultation process with its eight-strong sales force in New Zealand and seven staff in the United States. "Everything is a proposal," said Dr McDonald. "One proposal is to restructure our sales positions. It's the worst part of doing business. We want to keep as many staff as we can.

"If a position was to be disestablished, then we will try to offer alternative forms of work in production. If that helps our people, then we are happy to do that. The factory is flat out, running 24 hours a day, and we have to increase staff in that area," he said.

Triodent reached a peak of 120 employees last year - 100 in Katikati operating out of three buildings and 20 overseas. But six months ago it reduced its staff by 20 after another restructure to meet continuing changes in business operation.

"A number of jobs were disestablished as we re-aligned the business," Dr McDonald said. "If we don't change quickly when the market shifts, we risk the whole company and everyone's jobs."

He expected to build the staff past 120 before long - mainly in production - as volumes had doubled in the past 12 months.

Triodent, established in 2003, is currently a finalist in two categories of the New Zealand International Business awards. The winners will be announced at a gala dinner in Auckland on March 21. It is one of seven finalists in Best Business Operating Internationally, $10million-$50million; and one of five in Best Use of Design in International Business.