Motor to power overseas sales

Ross Green

It's a company that has tended to fly under the radar but a string of notices to the stock exchange in recent months suggest Wellington Drive Technologies is getting ready to fire up its motor.

The manufacturer has been busy using the market to grow in recent years, raising another $5.3 million in December to advance commercialisation of its electric motors and to develop overseas markets.

And completion of its first full production run in China last month signalled its goal to be a large volume manufacturer was within sight.

Although managing director Ross Green was confident the coming year would reward the company, profits could still be a year away.

Wellington's electric motors are promoted as the world's most energy-efficient. Using about the same amount of energy as a lightbulb, they are powering household appliances such as fridges, dishwashers, rangehoods and air-conditioning units.

"If all such appliances around Auckland ran on a motor like ours there would be no need for an alternative power transmission line up the central part of the North Island," said Green.

However, the company has only a handful of local customers, focusing instead on the global market for small motors, estimated to be worth US$20 billion ($29 billion) and growing at more than 3 per cent a year.

Western Europe and the US are the main target, where the prevailing high cost of energy was fuelling sales.

On its books are large international companies, including European whiteware components group Aweco, Turkey-based global appliance manufacturer Arelik and the Australian air-conditioning manufacturer Seeley.

Although targeting the premium segment of the market, Green was confident Wellington motors could be competitive in even higher volume mass market applications in the future. The motors are up to three times more efficient than traditional electric motors. Made predominantly from plastics and using about 30 per cent steel and 30 per cent less copper, they are lighter, smaller and cheaper to make.

Wellington's biggest focus in the last four years has been ramping up its production capacity in Asia - crucial to reposition itself from simply supplying small quantities of trial units to fulfilling substantial orders.

There is enough capacity locally to manufacture between 50,000 and 100,000 of the smaller, less noisy motors a year, but several contract manufacturing arrangements in Asia now in place could be scaled to produce millions of units annually.

Green said the task now was to position the company so larger-scale customers were confident enough to place orders for volumes in the hundreds of thousands.

Achieving the goal for a good share of international markets has been difficult because conventional motors have long-dominated an industry that can be conservative and risk averse.

"But the satisfaction is we're allowing manufacturers who use our motors to do things in new ways and that's putting us at the front end of the international wedge," Green said.

"We act as a plug-in upgrade for larger companies that command huge market share and we're allowing them to turbo charge themselves."

Reaching this stage has seen the company motor through the cash, most recently raising $1.4 million through a share placement in December and an additional $3.9 million through a rights issue, after raising $7.4 million last year.

The money will meet medium-term plans for commercialisation and to expand markets.

Green said orders had picked up substantially during the past year and new customer products that incorporated company motors were coming on to the market.

Wellington's shares have ranged between 27.2c and 50.1c this year, and closed at 37c on Friday.