Man of steel ready to build on his successes

By Yoke Har Lee

From small beginnings, an engineering business has brought new dimensions and standards to the construction industry.

Entrepreneur Derek Lawley has no regrets about selling a business he has built up over 15 years - the company, which he still runs, has the financial muscle to do bigger things.

Glenfield-based Reid Engineering Systems had its origins as a little business run out of Mr Lawley's home office. Today, the company's name is synonymous with standards set in the reinforcing steel-bar business.

Reid, a pioneer in bringing in lifting products for the construction industry, can now pursue wider ambitions since it was sold to an Australian company, National Consolidated, which has itself been sold to Austrim.

"We have had no source of capital," Mr Lawley said.

"When you're doing new things, without capital you're hampered and slowed down in development."

Over the years, the company had to plough back every dollar into the business.

The shareholders, which included the Australian founding family of the Reid Engineering business (Mr Lawley built the New Zealand arm) put the company on the market hoping to find someone willing to come in at 50 per cent.

"As it turned out, we found a company we were comfortable with. It made us an offer on the basis that I stayed on to run the business.

"We have been under the new owners for two years and have had more resources to develop things."

Often an entrepreneur owned the company, built it up and sold it to someone, but then became disillusioned, said Mr Lawley. This was not true in his case.

He is looking forward to developing services and products for the concrete housing market and expects the reinforced steel-bar business to develop rapidly.

The company now has two broad areas of business: as a supplier of specialist engineering solutions and a supplier of general masonry fasteners.

The reinforced bars are manufactured by Pacific Steel, while the masonry products are imported from various sources.

Early in its evolution, Reid sought to develop itself as a specialist, providing unique engineering products to the market.

It first hit on the idea of supplying lifting anchors used in precast building concrete works.

"The Germans had the product. We borrowed the idea and developed it further after having the licence to sell and make the lifting anchors."

The problem was that no one was very interested in trying out this new way of building with precast concrete.

"Tilt-up construction wasn't very popular. Nobody was using that method and nobody wanted to know," said Mr Lawley.

The company had to construct buildings using precast concrete with lifting anchors cast into them.

"Once we built a few buildings using that method, people started to take notice. Architects and engineers were more willing to design tilt-up buildings."

But after the 1987 crash, Mr Lawley had to reshape his business.

"Almost all the precast builders went broke. We have had to make some very quick decisions - we needed a product that was going to be of use to everyone," he said.

"So we thought we needed to be more a generalist; to get a bread-and-butter product."

The company began supplying masonry fasteners.

The two broad areas of business have grown over the years. In specialist engineering, Reid has had to ensure it had the solutions to specific problems.

"We developed programmes to be able to lift panels quickly. We had to design programmes to test the stress levels the panels can take without cracking.

"We developed systems for propping up panels; we designed bolting systems, band breakers to stop concrete from sticking. We also had to make the system cost-efficient."

Often the company has had to design the hardware to go with the solutions it needed to implement.

One of its big developments was to make reinforcing steel bars with threads running through them, revolutionising the way such products were made.

"The building industry has always had problems joining the reinforced steel bars. We thought, why not make the steel bars with threads on so pieces could be screwed on later."

Using a grant from Technology New Zealand's Graduate Research in Industry Fellowship programme, the company managed, after 18 months of research, to prove the idea worked.

It also had to convince the manufacturing company to change its machinery to make the threaded bars.

The product added a new dimension to construction.

In the past, multistorey buildings needed to have many small-diameter bars in beams and columns to meet earthquake building standards.

Now, a smaller number of bars with larger diameters can be used as the threaded steel bars can be joined to each other through connectors, enhanced by footplates to provide stability.

Over the years, the company has been making bigger and bigger bars.

"We started off with a 16mm size three years ago and the bars have just gotten larger, to 32 mm," said Mr Lawley.

"We are sending a big order to Hong Kong for the Macau Tower."

One coup for the company is clinching the contract to supply about $3 million worth of rock bolts to support the tunnel walls at the Manapouri hydropower tunnel project in the South Island.

Reid Engineering now has a turnover of about $11 million. But marketing has been Mr Lawley's toughest job.

"We knew we had the products but knowing how to best get the word out to the industry was difficult."

The company uses seminars on innovative and cost-effective building systems to market ideas.

Printing of technical brochures and the technical press were other effective marketing channels, he said.

Another turning point in the company's progress was capturing a big supply contract with Placemakers.

"We found that we were at the crossroads [in the masonry fasteners business]. We've got the size, we've got the range. So we have had to make a decision on how the market is to be treated."

Reid Engineering had to edge Placemakers into doing some research on whether the chain's products were getting into the market in the best manner, and it found that its top 50 customers were buying direct from their previous supplier.

Reid Engineering has since become Placemakers' preferred supplier for masonry fasteners.

Pictured: Derek Lawley with his threaded steel bars for reinforced concrete. HERALD PICTURE / MARTIN SYKES