North Shore-based electric motor maker Wellington Drive Technologies has signed a distribution deal with an American manufacturer that will see its products being sold in the United States through its new partner's extensive sales network.
Under the deal, A.O. Smith - a Wisconsin-based maker of residential and commercial water-heating equipment
- would co-brand with Wellington, meaning both firms' names would appear on Wellington's products.
The US firm would sell Wellington's ECR One and ECR85/95 refrigeration motors, predominantly for use in supermarket display cases, bottle coolers and cold storage rooms.
Wellington Drive Technologies chief executive Ross Green said American consumers expected local service, and A.O. Smith was able to provide that, with more than 600 salespeople in the US alone.
"We are delighted to have secured this deal as it further consolidates our growing and very strong position in the American market for electricity-saving commercial motors."
Green said A.O. Smith would benefit from being associated with Wellington's name.
"It allows them to build on the success we've already had," he said.
Wellington's share price closed up 23.8 per cent at 9.9c last night.
Green said Wellington would benefit from stringent energy-saving regulations in many parts of the US that required commercial fridges to be powered by electronically controlled, highly efficient motors.
"That means ... the market can accept a higher price point, and people like us who are prepared with a product can hope to capitalise on that."
The company sold 666,000 motors last year, with sales growing by 105 per cent.
Green said Wellington had about 600,000 of its motors in service in Mexico alone.
But the company has still not managed to turn a profit, reporting a loss of $17 million last year.
Green said it kept funding itself through its "strong and loyal" institutional and retail shareholder base.
The firm's investors understood that developing "disruptive" technologies took time, he said.
"Like anyone else they'd like things to happen faster ... it's taken a lot longer than I expected ... the whole point of it is that you have to put the groundwork in."
Wellington Drive Technologies:
* Founded in 1986, but significantly restructured in 1998.
* Makers of energy-efficient electric motors used in refrigerators, cold storage cases and cool rooms.
* Head office and R&D staff based in Albany, but manufactures its products in Singapore and China.
* Reported a loss of $17 million last year.
