Tait increases focus on innovation

21:22, Oct 21 2012
ONE STOP: Tait Communications chief executive Frank Owen with a model of the  new campus which will be park-like and open to the public.
ONE STOP: Tait Communications chief executive Frank Owen with a model of the new campus which will be park-like and open to the public.

Half the Cabinet have been through Tait Communications' factory in Christchurch and chief executive Frank Owen says the first comment ministers make is usually the same: "I didn't expect it to be this big".

They could be forgiven. According to Owen, Tait is the largest electronics manufacturer in the southern hemisphere, based on the number of components it handles and its floor area. It manufactures hundreds of thousands of radio communication devices each year for public safety agencies, utilities and transport operators, exporting 95 per cent of its production to more than 100 countries.

About 10,000 London buses use a digital radio network supplied and supported by Tait. Earlier this month Tait hosted prospective customers from Brazil, where authorities are gearing up to host the 2014 Football World Cup.

"It is not by accident that you get successful radio-communications companies coming out of small isolated countries or states with low levels of infrastructure," Owen says.

"Whether it is Nokia in Finland or even Motorola from the US MidWest or Tait from New Zealand. It is a needs-must driven industry."

Tait believes it is also Christchurch's largest private sector employer, with 630 staff in the city and another 300 in offices overseas providing a beacon of economic stability for the earthquake-recovering city.


But what perhaps sets Tait aside above all else is that the company is footing it in international markets against large competitors such as Motorola while distributing all of its dividends to worthy causes, which include Canterbury University.

The company's constitution, drafted by its late founder Sir Angus Tait several years before his death in 2007, requires that all its shares be owned by charitable trusts. Sir Angus' legacy to the company he viewed as his second family prevents Tait going the same way as many other high-profile technology firms, such as Navman, and being acquired by an overseas buyer.

Owen says revenues - reported at $150m in 2007 and $190m in 2009 - are now north of $200m and he expects further growth this year. It ploughs back 15 per cent of its revenues into research and development. Tait's profit and distributions to charity are not disclosed.

"We are not a ‘flicker-switch growth' company but you can see the progression in those numbers."

The statistics hide faster underlying changes at Tait, which as well as evolving from a hardware manufacturer into a hardware and services firm, is also adopting more "agile" ways of working.

"If we look back a few years, less than 5 per cent of our revenue was services-based; this year it will be 25 per cent," Owen says. "If we want to realise our ambition of being the leading company in the world in the delivery and management of critical communications systems then there are things we need to aspire towards."

The most tangible indication of those aspirations is Tait's plan to consolidate its two Christchurch offices - which are currently separated by a busy road to the airport - into a single campus with space for partners and customers to work alongside its technicians.

Over the past two years, Tait has acquired eight hectares of adjoining land, previously used to "grow tomatoes", to add to its existing 3ha site. Owen hopes construction will start on the first new building on the land next month - a 7000 sqm facility able to accommodate 400 people and which will feature a cafe that will be open to the public, set in grounds with public walkways and cycle ways "a bit like Silicon Valley" .

A model on display outside Tait's reception shows several other new low-rise buildings grouped around the Styx River which runs through the expanded campus, though Owen says these are concepts only, contingent on future growth.

The need for a more collaborative working environment reflects the growing complexity of the solutions customers are seeking. Analogue radio networks are being upgraded to digital radio the world over, providing a steady stream of work for Tait, but utilities and public sector agencies are also looking at the potential for broadband - and 4G in particular - to augment "narrowband" digital radio.

Advances could let public safety workers stream live footage of accidents, fire or earthquake scenes back to a central command room, video-conference and quickly access large files and documents far more routinely than is possible today using expensive alternatives such as satellite technology.

Tait set up New Zealand's first test-bed 4G network last year with cell sites at its factory and on the Port Hills with the goal of proving it could provide emergency services in the field the same kind of broadband-hungry applications that office workers expect at their desks.

Integrating such "extras" with reliable radio communications is where Tait's expertise will increasingly come to bear.

One challenge is to forecast what new applications customers want and what they will get funding for, and that means getting ever closer to its customers.

"What we are trying to do is create a much more innovation-based environment," Owen says.

"Gone are the days when you'd go to the market, ask the customers what they needed, spend two years developing it and then pop out and go ‘ta-da'.

"It's now about what we call ‘launching to learn' and rapid prototyping. That's the reason why Apple can do what they do. We have embraced a great deal of that thinking here and it is starting to happen across New Zealand."


Staff numbers: 930 Revenues: "More than $200m"

Net profit after tax: Not disclosed

Export as percentage of revenue: 95%

Locations: New Zealand, US, Australia, UK, Austria, Canada, France, Germany, Singapore

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