Right climate for bright idea

By DANIEL RIORDAN

The idea was sparked at the racetrack, nurtured by a forestry giant, and now its developers hope to turn it into a multimillion dollar business.

Climate, a company with what it says is a revolutionary method of colour-coating wood, started a year ago as the brainchild of schoolfriends Jeff Stewart and Kyle True, both then aged 22.

Mr Stewart, who runs a finishing company in Tauranga, was gazing absentmindedly at black racetrack palings when his lightbulb flickered.

He tinkered with the idea and shared it with Mr True, a human resources manager at Carter Holt Harvey's Putaruru sawmill.

They massaged the concept and last July submitted it to CHH's inhouse "ideas to business" (i2b) venture programme - one of 500 ideas submitted in the programme's inaugural year.

Over the rest of the year, the proposal passed various inhouse hurdles, with seed capital and mentoring advice from within CHH.

On Christmas Eve, the partners heard theirs was one of five proposals chosen to move into CHH's new ventures incubation unit.

They have since become the first to gain funding from CHH's $15 million venture capital fund.

Mr True left Putaruru and CHH in March to work full time on Climate as sales and marketing manager.

At the same time Guy Wills, a former marketing manager at Heinz Wattie - and like Mr True and Mr Stewart a St Peter's College, Cambridge old boy - joined as chief executive.

Mr True said he and Mr Stewart chose to submit the idea to the CHH programme rather than try to make a go of it outside the corporate structure for several reasons.

"We were young and had limited financial resources and experience, so going it alone would have been difficult.

"So we sold ourselves to Carter Holt as being the best people to go forward with the business. Now we have a smaller piece of a much larger pie."

The company has contracts to supply customers that include one of the country's biggest office furniture manufacturers and one of CHH's operating divisions.

Mr Wills, at 32 the wise old head, says the company is selling more than widgets.

"We offer more than a coating solution. We're working with our customers to develop the industry."

He says the product enables customers to expand the kinds of products they make.

But what exactly is the product?

Here, the partners go secret squirrel. They say it's not a paint, laminate or a vinyl. Pushed, they call it a plastic coating.

"It's very tough, colourful, flexible coating that you apply to the product after it's been painted.

"It goes on uniformly - you don't have to finish off a desktop with PVC edging, for example.

"We can do interior doors, mouldings and trims - all coated before installation."

For now, the business is based at the International Centre for Entrepreneurship (Icehouse) in Parnell, a newly created office space supported by nine large organisations, including CHH, that will eventually house 15 start-up businesses.

Climate will move to new premises in October at a factory being readied for the company in South Auckland. A pilot plant outside Auckland will continue making the product till then.

Three equal equity stakes in the company are held by CHH, Direct Capital Private Equity (the venture capital firm which has been involved with the CHH venture fund from the start) and management - Mr Wills, Mr Stewart and Mr True.

Other startups from last year's i2b programme at CHH include Smart Forests, a method of increasing the accuracy of pre-harvest forest valuations, Moods, a branding and licensing concept that extends CHH's brand of coloured paper and CHH Capital, an asset leasing business aimed at the forestry and fibre processing industries.

This year's "ideas base" is three times the size of last year's.