Scott Technology sharpens focus on global growth

CEO John Kippenberger said that after he joined in 2020, the guiding question was "how do we scale Scott?" (Image: Scott Technology)

Scott Technology chief executive John Kippenberger said the decision to move away from bespoke solutions and focus on selling polished products was about figuring out the best approach to scaling the company.

One of the company's flagship products is a fully automated meat processing solution that combines robots, computer vision and even x-ray to slice and dice carcasses into their component parts.

The system, Kippenberger told BusinessDesk, costs between $10 million and $15m and is one of the core products that Scott is going all in on to continue its global expansion.

This renewed focus has, so far, led Scott Tech back to profit after taking a big hit in 2020 as the Covid-19 pandemic shut down borders.

Although the company is still facing supply chain issues, which led to a drop in the company's operating cashflow drop by more than half in the financial year to August, Scott Tech is currently boasting a record forward order book with $190m in the pipeline.

Kippenberger is confident that Scott Tech is on the right track to realise its global aspirations.

Scott 2025

Shortly after Kippenberger joined Scott Tech at the end of 2019, the company's leaders undertook a review that resulted in the Scott 2025 strategic plan.

Kippenberger said the question they were focused on was how to scale Scott.

"Is it going to be an engineering-based company that designs one-offs? Or are we a company that backs ourselves to say, 'We've got several examples of world-leading technology that we might have sold a few times, but there's a big addressable market so how do we focus on selling that technology many, many times over'?"

He said that by focusing on a few core products in a few core markets, the company could see greater efficiencies and reduce risk.

"Often, bespoke can have an element of risk to it, and if you don't have absolute knowledge of that risk, if you haven't dealt with that area before and you get it wrong, it can end up costing shareholders a lot of money."

Working the core

There are three core sectors - meat processing, materials handling and logistics - and three core regions - Australasia, Europe and North America - where Scott Tech has focused its energies.

Australia and NZ account for 48 per cent of total group revenue, but Scott Tech, like many tech exporters, has eyes on the US.

Kippenberger said that the recent deal with JBS Canada has helped boost the company's profile in the region.

"All the large food companies in particular [are] all struggling for labour supply, they're all under pressure in terms of short turnaround and delivery times, they're all under constant efficiency, optimisation programmes, and they've all got an underlying safety component.

"The demand drivers in America for Scott automation technologies, we see as being very strong so particularly going forward, we look at America as one of our largest markets in the next five to 10 years."

First steps on carbon accounting

Kippenberger also highlighted the company's efforts towards improving its position on the environment, sustainability, and governance (ESG).

He said that Scott Tech has recently finished carbon scoping for 70 per cent of its global business, including auditing by McHugh & Shaw in Australia and NZ, and Vincotte in Europe.

While the company isn't ready to commit to any time-bounded goals, Kippenberger said that it was only the start.

"We think that's good early progress, there's obviously a long way to go but that's starting to finetune our thinking in terms of strategies of use of solar, how do we drive efficiency in terms of freight, carbon footprints and so forth."

He said that the company chose not to set up a separate internal team at this point, but to work with those within the company who are keen to affect change.

"There's a lot of bright, highly qualified people across the whole Scott organisation and they get these things, they understand the need to drive efficiency and energy reduction and carbon footprint reduction, so the dialogue's hugely open and positive."