Global technology group Gallagher has sold its fuel systems business to long time managing director Richard Coxon, who has an eye on hydrogen-fuelled growth.
Gallagher Fuel Systems commands 90 per cent of the New Zealand forecourt fuel pump dispensing market and 40 per cent of Australia's.
The Marton-based business invented the first petrol pump with a microprocessor and has been owned by Gallagher since 1999, when the group purchased PEC.
PEC had three divisions: retail electronics; fuel dispensers and a security card access control manufacturing operation. Gallagher sold the retail arm, moved the security card operation to its Hamilton headquarters to develop what is now an end-to-end global security offering, and the design and development of fuel dispensers stayed in Marton.
Coxon has led the Marton business for 17 years and has been with Gallagher Group for 31 years.
He has bought the fuel systems business with his wife Jo.
It will remain in the Manawatu town and retain its 100 staff, Coxon said. He anticipates staff will increase by 50 per cent in the next few years under current growth plans.
Annual revenue is between $20 million and mid-$30m, he said. The deal price is confidential.
Unwinding close links with Gallagher is expected to take a couple of years. The name of the business will change, but Coxon has yet to decide on a name.
The company will continue to provide electronics for Gallagher and its contract manufacturing arm, which provides electronics for more than 20 companies in New Zealand and Australia, will remain an important part of its activities. This operation brings in one third to one half of total annual revenue, Coxon said.
Its forecourt equipment technology extends to vapour recovery and media displays driving station customers to convenience stores.
Coxon said opportunity in the transformation from traditional fuels to new fuels and what it would mean for NZ Inc was a critical part of the couple's decision to buy the business.
"There's an exciting future ahead. A new generation of energy and energy sources are going to have to be invested for the country - and for the world."
Hydrogen featured strongly in the current and future development of alternative energy sources for small to large transport, from cars to aircraft, ships and trains.
"Hydrogen is abundant and green hydrogen is totally renewable. Fuel cells are the method of turning the hydrogen into energy and we see significant future opportunities for the business in this space."
He expected export activities to remain focused on Australia.
The pandemic had highlighted the importance of New Zealand manufacturing and strong relationships with partners. It has also underlined how New Zealand companies wanted control of their supply chains, Coxon said.
"Utilising the skillsets and machinery used to develop our fuel dispensers, our contract manufacturing business is going from strength to strength, particularly as companies look to bring the manufacture of products to New Zealand as a result of Covid-19."
The company had a 40 year partnership with Japan's Tatsuno Corporation which provided access to quality components.
Gallagher chief executive and executive director Kahl Betham said with business models for fuel sources and systems being re-invented it was the right time to sell so Gallagher could focus on its two core businesses, animal management and human security.
Coxon said with major fuel transitions over the next 20 years, the Marton business working "remotely", with the Gallagher board in Hamilton trying to provide direction "wasn't going to work that well".