Mainfreight on acquisitions mission

Mainfreight chief Don Braid says New Zealand has to believe in the companies that are doing well here. Picture / Martin Sykes

The New Zealand logistics company Mainfreight is shifting its headquarters to a new $30 million facility while aggressively seeking acquisition opportunities in Australia and the US.

Mainfreight managing director Don Braid said the company was keenly looking to acquire logistics, freight-forwarding and domestic operations in Australia, and freight-forwarding operations in the US.

"It has to be the right business, and is not a question of when but if the business fits well with our model," Braid said. "Once we find that business, we will move aggressively."

Overseas operations are becoming increasingly important for Mainfreight, with more than half of the company's revenue coming from overseas last year.

Braid has just returned from a business trip to Asia and America, and is upbeat about Mainfreight's prospects abroad. In Australia, it plans to substantially increase its 10 per cent share of the international freight-forwarding market and 5 per cent stake in the domestic road sector.

"Customers have started to realise that logistics is an important part of their supply chain requirements," he said. "In Australia the logistics sector is expected to grow at a faster rate than its gross domestic product."

Also, Braid said Mainfreight had freight-forwarding operations in Shanghai, Ningbo, Shenzhen and Hong Kong that would enable it to take advantage of the continued increase in trade volumes between China, the US and Australia.

Mainfreight had increased its focus overseas, but that did not mean growth was stopping in New Zealand.

In September, Mainfreight would move its 150 staff from its south Auckland Penrose headquarters to a $30 million facility in Otahuhu.

"It is a large investment, but we are positive that it will create more efficiencies in the business."

A branch off the main railway line would run through the middle of the new building, allowing Mainfreight to load freight efficiently under cover, and its trucking operations would have close access to the main southbound motorway, said Braid.

Mainfreight's subsidiary business, Owens, will take over Mainfreight's building in Southdown Lane. Owens' operations in Felix St will be sold when it shifts to Southdown Lane in January.

Braid said he believed Mainfreight, which held 30 per cent of the logistics market in New Zealand, was unique because it was the only business with a philosophy for its overseas businesses of both organic growth and growth through acquisitions.

He was not fazed by the large number of Kiwi companies being taken over by Australian companies.

He was determined to remain Kiwi-owned, and believed if the company was performing well, and forging into markets overseas, it made a hard target for a takeover.

" We are a passionate New Zealand-owned company. We don't see any benefit in an offshore company taking over Mainfreight," said Braid, who owns 2 per cent of the shares in the company.

"As a country, we have to stop worrying about what is coming at us and start believing in the companies which are doing well here."

Mainfreight shares closed up 7c at $5.40 on Friday.

Performance

* Mainfreight, last financial year:

* Overseas business contributed 43 per cent to its earnings.

* Overseas revenue was over 52 per cent of total sales.

* Australian earnings jumped 114 per cent to $17 million.

* US operations went up $4 million.

* Overall net profit increased by 115 per cent to $29 million.