Michael Smythe: We could make better use of world-class iron sands

New Zealand Steel's Glenbrook Mill is supplying the highly competitive industrial end of the market and diversification could open up new avenues for its products. Photo / Greg Bowker

Opinion

• Michael Smythe is a design strategist with Creationz Consultants and the author of New Zealand by Design, a history of New Zealand product design.

The future of New Zealand Steel is being discussed in terms of international trade rules and a peculiar political direction. Rather than mourn the loss of the protectionist era in which the company began we can look back 120 years to rethink the way forward.

Our Government is aiming to make a mockery of our trade agreements by passing an Anti-Dumping and Countervailing Measures Bill. In an opinion piece entitled 'Fair trade essential for our industry to survive' last Thursday, New Zealand Steel general manager John Nowlan said the bill will "make it harder for New Zealand industry to secure trade remedies at a time when a glut of cheap products is being dumped on world markets."

The subsequent Herald editorial on Monday called for us to "think deeply about the steel industry". We can argue the integrity of trade agreements versus the benefits of access to cheap building materials but we can also backtrack and ask if we have extracted maximum value from our iron sands.

As early as 1842, samples from Taranaki were analysed in England and found to be possibly the most valuable iron in the world - superior to Dannemora ore from Sweden. Both central and provincial governments offered incentives to investors willing to build iron works.

At least three enterprises failed because they could not overcome technical problems. Undeterred, a Mr E. Purser addressed the Royal Society of New Zealand in 1895. He concluded: "If New Zealand is to become the great nation which nature intended her to be, by the rich endowments of mineral wealth, the time is none too soon when we should make a great effort to develop them; and, above all, her iron deposits are the most valuable ..."

He continued, "Owing to the vastly superior article got from the titaniferous sand, it is not hoping for too much that at an early date New Zealand will become a powerful competitor with the world in the production of both iron and steel.

"While giving employment to a large portion of the population, the spending-power of the people would be such as to justify the manufacture locally of many classes of goods that are now imported."

Purser's vision may have included competing with imported cutlery from Sheffield. At Auckland Museum we can see an elegant carving set made in 1862 from Taranaki steel by Mosely and Sons in London.

But when the Government-owned New Zealand Steel plant opened at Glenbrook in 1970 the output graduated from steel billets to pipes and roofing iron.

Today, the company (privatised in 1987 and now a subsidiary of an Australian business) offers an industrial product range at the branded, high-quality, service-driven end of the spectrum. It is a field exposed to competitive forces driven by big business and political interests. Diversification may help.

The founding chairman of New Zealand Steel was Woolf Fisher. The domestic appliance company he created with Maurice Paykel in 1934 constantly anticipated and adapted to changing economic and political circumstances.

While it was unfortunate that Fisher & Paykel Appliances was caught with a high inventory when the GFC struck, it is significant that its Chinese owners have chosen to invest heavily in the innovative design and engineering resources based in Dunedin and Auckland.

Meanwhile, the off-shoot company Fisher & Paykel Healthcare has built a global niche market. Its commitment to user-focused research and development has made it one of the best performers on our sharemarket. Can New Zealand Steel emulate this?

The Fisher & Paykel businesses built value from our human capital. New Zealand Steel has the extra benefit of "possibly the most valuable iron in the world".

Decades of dedication to innovation, quality and continuous improvement have positioned our food and wine at the upper end of global markets. Can we add maximum value to our world-class titaniferous sand by setting up a cutlery industry to rival the quality of Sheffield and the designs of Scandinavia?

A hint of the design potential simmering in our midst was glimpsed when young Auckland-based industrial designer Jamie McLellan created his stacked cutlery concept. Such small-scale high-value use of our titanium-rich sand deserves serious investigation.