Solar-heating cause motivates Senztek

Brian Knolles spent 16 years making industrial automation technology. Photo / Steven McNicholl

The chill winds of recession have yet to cool down opportunities for Auckland company Senztek, which produces energy-efficiency technology for hot water systems.

In fact, sales of its device for getting the best out of solar hot-water systems are up almost 300 per cent this year.

Chief executive Brian Knolles puts that success down to the awareness of energy efficiency as an alternative to building new power stations and the Australian Government's $42 billion stimulus package, which underpins the company's main market.

Senztek is benefiting from an Australian Government initiative to install 300,000 solar systems in homes and from rules to phase out the installation of electric-only hot water cylinders.

Senztek is one of five companies chosen as finalists in the University of Auckland Business School Entrepreneurs' Challenge. It was selected from more than a hundred companies which put their hands up for up to $1 million in funding.

Established with a $3 million donation from expat businessman Charles Bidwill, the Entrepreneurs Challenge aims to boost the growth potential of New Zealand companies.

Knolles is looking for a share of the funding to crack the European market.

The company Knolles, a long-time Telecom manager, bought into three years ago alongside Senztek employees Lance Allen and Kevin Murphy was a different beast to what it is today.

Before the management buyout, Senztek had spent 16 years making industrial automation technology.

"We realised we needed to have a different niche in order to grow the company," said Knolles. "We also realised we needed to export."

Playing to the company's strengths in control-system technology, the focus switched to the energy sector, in particular solar water-heating systems.

Its hot water control product range includes Solastat for solar systems and Ecostat for regular electric hot water cylinders, both of which can be retrofitted to existing systems.

In the case of Solastat, the controller manages the flow of solar-heated water, kicking in the electric booster element when needed.

Ecostat works by firing up the hot water cylinder only at peak times, say morning and evening, rather than keeping 180 litres of water in the cylinder constantly hot 24 hours a day.

He said Ecostat could knock around $200 off annual power costs, paying for itself in two to three years.

While the Ecostat and Solastat products have found commercial success in the Australian and New Zealand markets - 1500 Solastat controllers were sold to Australia last month, up from 400 in January - Senztek is currently developing more product lines to take to Europe.

European homes are often heated with hot water-based systems using a more complex array of technologies.

The company aims to target the UK first because of its relatively recent adoption of solar water-heating technology compared with the rest of Europe.

"It's a brand new market and that represents an opportunity to us because our competitors, the bigger European manufacturers, don't really look to the UK as a viable market. It's just too small, but for us it represents an opportunity," Knolles said.

For the remainder of the European market, Senztek would provide the controller technology to another New Zealand company at present making headway there.

The change of direction has paid off. Revenues of just over $1 million three years ago are now expected to exceed $4 million in the current financial year.

Turbo-charging the company's growth is behind the decision to enter the Entrepreneurs' Challenge. If successful, funding would be channelled into R&D and marketing the new products for the European market, including Knolles' moving to Europe to establish an office.

"We do have some pretty clear ideas about how we'd utilise that money."

THE CHALLENGE

* Run for the first time this year.
* Offers one or more companies a share of $1 million in funding.
* Money to be paid back in three years, creating an evergreen fund.
* Established with $3 million donation from businessman Charles Bidwill.
* The winner will be announced next month.