Dairy company looks to grow

Dean Bell, chief executive of Waikato Milking Systems. Photo / Alan Gibson

Waikato Milking Systems' new owners - Tainui Group Holdings, Ngai Tahu Capital and Pioneer Capital - are keen to grow the company, either "organically" or through acquisitions, chief executive Dean Bell says.

Tainui Group, which manages the commercial assets of the Waikato-Tainui people, and Ngai Tahu Capital, which which holds investments sitting outside the tribe's subsidiaries, together with Pioneer, bought around a third each of the Hamilton-based company in April.

The company is New Zealand's biggest manufacturer and designer of milking systems - from the stainless steel to the software that helps run the cowsheds - with annual turnover approaching $100 million.

Bell joined the company for 24 years ago when it was part of Carter Holt Harvey (CHH).

When CHH was sold to International Paper in 1996, Waikato Milking Systems was sold to Dairy Equipment Company (DEC) of the United States. Bell worked for a division DEC in the US and returned to New Zealand in 2004 when DEC went into Chapter 11 bankruptcy protection.

Around the same time, the New Zealand operation was bought by management. In April this year, the company was bought by Tainui, Ngai Tahu and Pioneer Capital. Top management has retained a small holding.

Now the new owners want to pour more money into the company to fund "organic" growth and for acquisitions, Bell told APNZ in an interview.

"We are a bigger fish in a very small pond and we are looking to tap into some key growth markets that respect and value what we do," Bell says.

"We are keen to look at takeover targets that would further the growth of the company," Bell told APNZ at the company's exhibition at Fieldays.

Of the handful of offshore markets that the company is targeting, China features strongly.
In the People's Republic, Waikato Milking Systems service only the very serious players such as China Mengniu Dairy and Bright Dairy.

For Mengniu, the company has installed two 80-bail milking systems that sit side by side, milking 7500 cows three times a day, continuously.

Waikato Milking Systems is involved in developing dairy markets, such as Russia. In China, the company supplies 13 large-scale milking systems, in partnership with Israeli herd management company Afimilk.

In the America, the company has a subsidiary, Waikato Milking Systems USA, and its main markets include the United Kingdom, Europe, Australia, South Africa and Asia.

What is not made by the company itself is manufactured by other New Zealand companies, and Bell says it trades heavily on the "NZ Inc" reputation.

In New Zealand, the company's systems "talks" to Livestock Improvement Corp's "Minda" herd management system that most dairy farmers use. Overseas, its products link in with Afimilk's herd management systems.

The company's range covers rotary and herringbone milking systems, devices that improve and simplify the milking routine, to technology designed to improve animal health and herd management.