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Home / Bay of Plenty Times / Business

Success is automatic my dears - 25 years on

Bay of Plenty Times
1 Jul, 2010 01:56 AM6 mins to read

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WHILE the latest winners were collecting their trophies at the Bay of Plenty Export awards dinner on Friday night, one company, Automation & Electronics, was holding its own celebration.
The directors of the Mount Maunganui automation company booked two tables, or 20 seats, for their staff as they dined out on 25 years in business.
"We thought it was good occasion to get everyone together and shout them drinks and a meal for all their hard work," said co-owner Brian Smith.
Five years earlier, Mr Smith and co-founder Tony Cable stepped up to collect the Supreme Exporter the Year award.
"That was the turning point for the company," said Mr Smith. "We had gained market share in Australia and New Zealand but the business had plateaued.
"We had more competition and sawmills were closing. We realised we needed to take the next step and invest more into research and market development."
Automation & Electronics, which provides computerised systems to run and monitor sawmilling machines, moved into the United States - and never looked back.
First, the Mount firm partnered one of its shareholders, Wellington-based Windsor Engineering - Windsor made kilns and machinery for US sawmills, and Automation & Electronics provided the controls and software. Then, Automation & Electronics bought American competitor Silvatech Corp, which had plunged into receivership. It was renamed Automation Electronics USA, based in Ruston, Louisiana.
This year, Automation & Electronics is planning to complete US$1 million ($1.41 million) worth of business in the US. It has quoted for US$4 million ($5.65 million) of work and believes its US turnover can reach the same mark within the next three to five years.
"The potential over there is huge," said Mr Smith, who is the international marketing manager. "We can double the size of our business in the next three to five years because of the demand in the US."
Silvatech installed 1382 control systems into sawmills in the US before it went into receivership, and Automation Electronics USA is aiming to contact as many of those customers as possible.
"They were left without support, and we are getting around them and offering them upgrades and other assistance. So far, we've sent circulars to half of them and had responses from a quarter," Mr Smith said.
Automation & Electronics has a team of three based in the US - two engineers and the president, Tracy Goss, a former manager at Claymark Sawmills near Katikati.
So far, they have visited 150 sawmills all over the US and, when Mr Smith joined them earlier this month, he visited 10 mills in five days from Virginia to Massachusetts.
During the past two decades, Automation & Electronics has made more than 600 installations in sawmills throughout New Zealand and Australia.
It also imports equipment such as moisture meters, industrial lasers, laser scanners and CCTV.
During this financial year, Automation & Electronics is aiming for $3.5 million worth of business in Australia and New Zealand, bringing its total turnover to nearly $5 million. And demand closer to home is picking up. "Some of our old customers are coming back," said Mr Smith. "We've been in business in the Bay for 25 years and local customers are now looking for strong support.
"They realise the technology and knowledge is right here on their doorstep. We can put quality control systems into play and give them 24/7 support."
Automation & Electronics is working with Orica Chemicals, Goodman Fielders' Champion Flour Mills, Dominion Salt, Fulton Hogan in Tauranga, Trevelyan's Pack and Cool in Te Puke, and Cadbury in Dunedin.
The Mount company has also sent engineers - it has 10 of them - to Papua New Guinea to install new software and laser systems into two balsa wood mills, producing products for wind turbines, superyachts and modelling.
"When we first started, we were simply a controls company," said Mr Smith. "As time evolved, the electricians became efficient in that line of work and we went to another level. The simple jobs were no longer there.
"We had to develop software for specialised applications to keep ahead of the competitors who provided systems out of Europe and the US."
Automation & Electronics developed digital computer systems to control machinery on the sawmilling lines (PLC), and Scada (supervisory control and data acquisition) software to keep a check on what's happening in production.
Through laser technology, the Scada system scans and produces a three-dimensional profile of the log going through the mill, identifying the best cuts and reducing waste.
At present, Automation & Electronics' latest software solutions are going into Edwards Lumber in North Carolina and Algomo Lumber in Wisconsin.
Windsor Engineering has just signed a US$8 million contract to supply two continuous drying kilns (CDK) for a Weyerhaeuser mill in North Carolina. The first CDK went into Rex Lumber at Bristol, north Florida.
The kilns, up to four times longer than conventional ones, have two lines of timber running in opposing directions at the same time, and can treble the throughput in one day.
Automation & Electronics is supplying the controls and software for the advanced kilns.
The company was established in May 1986 by a joint venture of electrician Wam Holdings and AA Edwards & Sons, marine and general engineer which operated on the old Tauranga Slipway.
Mr Smith, who worked for Tait Electronics in Hamilton, became general manager of Automation & Electronics, and Mr Cable transferred from Wam as the controls engineer.
Owens Group took over the joint venture, and then closed Edwards Engineering following the 1987 sharemarket crash, with Owens and Wam sharing 50 per cent each.
In 1988, Wam went into receivership and Mr Smith and Mr Cable ended up buying Automation & Electronics shares from Owens. Windsor Engineering came on board in 1997 and chief engineer Rainer Ansorge became a director and shareholder in 2000.
Automation & Electronics moved into purpose-built premises in Portside Drive - the two-level building incorporates a large workshop and assembly area to make electrical and control panels.
Today, Windsor has a 15 per cent stake in Automation & Electronics, the Windsor founder Bill Studd 8 per cent and the remainder is spread among eight other shareholders.
Messrs Smith, Cable and Ansorge, who worked in Germany and Malaysia, have remained active in the business, although Mr Cable - a leading engineer and radio officer on tankers during the Vietnam War - stepped down as a director in 2007.
"It's a great partnership ... we complement each other really well," said Mr Smith. "Tony and Rainer have the engineering skills and I'm more marketing orientated with a technical background.
"We can capitalise on each other's skills and bring new ideas to the table. Over the last three to four years, we have done the research and development spade work, and we can look forward to a bigger, brighter future," said Mr Smith.
"The economy has turned the corner and interest and inquiries are picking up. I think we are six months away from real momentum in the Australia, New Zealand and US market.
"We can tell by the number of quotes we are doing right now," he said.

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