Hi-tech firm epitomises Kiwi innovation
Agritech is a chance for Kiwis to shine globally. Kashka Tunstall takes a look at a Waikato success story.
How do you build a business when you know zero about the product or the sector? You go global.
That's what Will Rouse did.
He's the chief executive of Simcro, a Waikato agritech business that makes animal health delivery systems, mainly for farm animals.
It's a company that is one of the most successful and innovative businesses operating out of the region.
In this week's 2012 TIN100 Report which measures the performance of New Zealand's top hi-tech export companies, Simcro was ranked as the 75th most successful on revenue measurement.
It's all down to a global mindset.
"If you want to grow aggressively, you've got to look globally," Rouse says.
"A lot of the companies here will be number one or two in terms of the market and they can't grow . . . [New Zealand is] only so big and there are only so many people."
Europe makes up half of Simcro's business and South America is a burgeoning area. Asian development is on the five-year plan and Rouse says North America will end up being a major buyer in the next few years.
"That's why I liked this business and wanted to get into it, because of the growth opportunity," he says.
"If you're only New Zealand focused, immediately that defines how big you can be, whether you're selling ovens or anything else."
Rouse, along with three other shareholders, bought the company in 2007. It had already been running for 15 years but had begun to stagnate with a lack of direction and no real growth plan.
It is the second business that Rouse has owned. He was previously in the financial markets and built a business in that sector, growing it to the point where it became an attractive purchase for a listed Australian company.
"I was looking for a business to try and grow and do the same thing," he says.
"Everyone in 2007 was being a property developer, buying 110 per cent of a property's value and I wanted to do something different," he says.
"The sector I was keen on was food or agritech so I looked around in that space."
That's when Simcro came up for a tender sale with PricewaterhouseCoopers.
It was a difficult proposition and there were a few different parties interested in buying the business, Rouse says.
But it became clear that the company needed real hands-on involvement which he could offer while other potential buyers wouldn't have been able to put in that time, he says.
There was just one problem: Rouse didn't know much about the agri-sector.
In fact, he describes his knowledge base as "less than zilch."
"I knew what a cow was," he says.
"I had no background but I looked at the numbers and at the sector and figured we could take the company somewhere."
For the first couple of years, work was put into internal fix-ups like setting up trading on the right platform, redesigning processes and procedures and restructuring the company.
Rouse flushed out the salaried staff and brought new people on board who would streamline the growth process.
The company now employs about 80.
"We had to set up to grow up without getting speed wobbles," he says.
Simcro had always produced delivery systems for production animals but the new management partnered up with the big pharmaceuticals to launch their products in conjunction with new pharma products.
The move paid off. Sales have grown steadily and Rouse says it is stable business because of the relationships.
Simcro sits in on design phase meetings and has strategic input with the companies rather than being relegated to a purchaser-manager only relationship.
"We've got a recognised brand within the pharmaceutical community; people come to us first to look at everything," Rouse says.
Simcro had to become more experimental and discovery-focused to pair successfully with the drug companies, which has meant a large focus is placed on research and development.
"I think New Zealand has a DNA around innovation," Rouse says.
"We all came here on ships and had to figure it out with the tools we had in front of us so New Zealand has quite a good position globally when it comes to agritech."
Simcro won an industrial design award for its Optiline sheep drencher last year in the Industrial Design Excellence awards (medical and scientific category).
It's breaking out of its traditional farm animal focus.
Companion animals - cats and dogs - are the new market for research and development.
He declined to comment on the company's revenue but the Tin100 industry analysis report estimates it at about $21.4 million.