Man of science honoured for service to Manawatu business industry
Chemist, businessman, and philanthropist Dr Richard Garland has been awarded the 2016 Lifetime Service Award at the Manawatu Business Awards. Reporter Paul Mitchell spoke to him about his long career at New Zealand Pharmaceuticals (NZP).
NZP is, in many ways, Dr Richard Garland's life's work.
One of the company's first employees, he rose through the ranks to become its managing director, and was integral in guiding NZP into the Manawatu success story it is today.
Under his leadership, for roughly half of its 45 years, NZP has developed into a world-leading exporter of pharmaceutical ingredients, which employs 115 staff in New Zealand, and 30 in the United Kingdom.
But Garland's contributions don't just stop with NZP.
He's also a key member of the Manawatu Investors Group, an "angel investment" fund that helps new start-up companies get off the ground. He has been on the Manawatu Chamber of Commerce, and has acted as a trustee for the Te Manawa Museums Trust and the Palmerston North Public Sculpture Trust.
Along with his wife of 30 years, Sue, Garland also helped Dick and Mary Earle finance the Earle Creativity Trust, which supports local innovation.
The highlight of Garland's scientific career was working on research that led to the creation of a process for extracting cholic acid from animal bile.
This breakthrough essentially turned a meat industry by-product into a commercially valuable substance
Cholic acid, often known as bile acid, is produced from cholesterol in the liver and is then released into the small intestines.
Once it's extracted from the bile, it can be used to make drugs that treat liver disease.
Garland says the process he developed was still the basis for NZP's main product, although it had been worked on and refined over the years.
But back in 1971, when Garland joined the newly formed company as its "green behind the ears" research chemist, the future seemed far from certain.
He was a fresh graduate, earning a PhD in organic chemistry from the University of Canterbury that same year, but found himself the most senior chemist on NZP's key project.
"I just wanted a career in the industry, I had no real idea how business and commerce works. I was oblivious to the decisions, the risks that were being taken then.
"When I look back on it, it's a great business case study."
They had been working out of various labs, including the Temporary Veterinary Labs, in Massey University's biotech department for over two years.
He explains it as "bucket chemistry" - too big for test tubes but not big enough for a full plant.
Their product wasn't ready, they had no customers and the big European pharmaceutical firms just weren't biting.
They had their own sources of bile acid, and were trying to discourage a potential competitor from getting into the market, Garland says.
By 1973, the meat industry consortium that owned 60 per cent of NZP was getting nervous.
They'd already poured a lot of money into building a pilot plant in an old dairy factory near Massey, where the Biocommerce Building now stands, and that needed to be justified to the board.
It was crucial to prove the process worked before that meeting. They needed a lot of hard work, and a little good luck, or everything could fold.
And Garland says wasn't enough to just run through the process through once or twice, they had to cycle through it enough to prove it was constant at mass production levels.
The only way to get enough cycles done was to run the plant non-stop. So they took a worker each and split into shifts, running the process 24/7 for three weeks.
"We were young, and this was what we had to do. It wasn't a question of 'oh it's half past four, I'm going home'. It was 'we've got to do this, or we haven't got a job, haven't got a career, haven't got a company'."
They got a workable process just in time. There still weren't any customers, but the NZP board took a risk and committed to building a full production plant in Palmerston North.
"By chance, at that stage there was a shortage of bile acid around the world, and suddenly [some] French buyers were coming to visit."
The French took a contract for NZP's production for the first two years.
"It only lasted a year, but that saved the business and got it off the ground."
This, and later leading a management buyout of NZP, are his proudest professional achievements, Garland says.
But the Lifetime Service Award is far from the first accolade he's won since he began at NZP.
He was the first to win the New Zealand Institute of Chemistry's Industrial Chemistry prize in 1976 for his work on NZP's extraction process. The award has since been won by two other NZP scientists.
He became an Officer of the New Zealand Order of Merit in 2008, and the Royal Society of New Zealand's Thomson Medal the year after – cited for "his outstanding leadership in the development and application of science and technology to New Zealand business development".
And in 2012 his alma mater, the University of Canterbury, gave him a Honorary Doctor of Science.
Despite being proud of his work, Garland always feels a bit embarrassed to be singled out for awards.
"When you're running a business, obviously, the leader is important but you've got all these people who've done the stuff that's enabled you to be successful," he says.
"But somehow it's always the leader who gets all the recognition."
Long-time NZP employee Selwyn Yorke says he wasn't surprised at Garland's ambivalence, but felt he was selling the importance of his leadership short.
Yorke was brought on by Garland as a junior manager in 1992, and is now the company's business manager. He still looks to Garland as an example of a good boss.
"He inspired the team; he was just a natural leader. He wasn't always easy, but he always knew what he was doing.
"I looked up to him. I wanted to be him, and I wasn't the only one."
NZP chief executive Andy Lewis considers Garland a mentor. Garland recruited Lewis as a general manager in 2005, and was his manager until stepping down as managing director in 2010.
"What is particularly special about Richard is his honesty and integrity, which pervades everything he does. I know it sounds cliche, but he is genuinely a good guy.
"[He] was always great to work for. He is always considerate of others, and respects everyone in the company."
Yorke says Garland always encouraged an atmosphere of shared responsibility among staff - of everyone being in it together.
An example of that philosophy was the company's 30th anniversary, when its entire staff was taken on a trip to the Gold Coast, including being given a little spending money, he says.
And one of Yorke's fondest memories of his early days at NZP was how Garland would invite managers to his office for a beer after work each day.
The junior managers sat right alongside senior management, just shooting the breeze.
"I'd rotate through with the other junior managers. That was always nice of him."
But when factory staff were not allowed alcohol on site, that tradition stopped.
"If the workers couldn't have a beer, the managers couldn't either. That was the kind of boss he was, the same rules for everyone."
Garland's leadership skills, and the trust and support of his fellow managers, were the foundation of the management buyout of NZP he led in 1998.
In 1994, Imperial Chemical Industries (ICI) bought out the meat industry consortium, taking sole ownership of NZP shares.
Garland says ICI had always treated NZP like part of their company, even as minority owners, providing management training and support. That gave Garland and NZP's leadership the skills and confidence to see an opportunity in ICI's buyout.
"[By that time], we were comfortable enough with what we were doing to see we weren't actually a strategic fit for them."
ICI had bought NZP's original 40 per cent owners in 1976. While NZP was built around extracting bile acids, ICI's business was a separate area as they mainly made synthetic ingredients and materials.
"They bought the agricultural chemical business of TVL, we became a part of ICI almost by accident. It was never a strategic purchase," Garland says.
Garland started organising the management buyout from the moment the meat consortium decided to sell. By then, NZP's managers knew they wanted to buy the company.
When their attempt to buy a minority stake fell through, Garland advocated playing the long game - letting the strategic reports speak for themselves and easing into a buyout.
"We spent the next four years turning ICI into willing sellers."
It finally started to pay off in 1997 when NZP was under strategic review and Garland was making a presentation to some ICI directors.
"I'd done a big paper on the opportunities, and blah, blah, blah, you could see it wasn't a fit."
"Once they all left, I thought 'well, that's interesting.' And sure enough, one week later [ICI] says 'hey, we're going to sell you'."
When the NZP managers floated the idea of a management buyout, ICI turned them down flat. At first.
"They just said 'Oh, no. We've sold more companies that you've had hot breakfasts, we'll sell you around the world'."
But Garland, and NZP's managers, knew it wouldn't be that easy. NZP was a very specialist company, and would only appeal to very specific buyers.
"It was just a matter of being patient, waiting for them to see the obvious. When they couldn't get the price they wanted overseas we were able to make an acceptable offer. At a stretch, but it turned out fine."
The buyout was a major turning point for NZP, and was an opportunity for all its employees to take a shares in the company.
Garland, who turns 70 in late November, is still associated with the company, as an executive director, but now prefers to dedicate more time to his other business and community interests, and his family.
1971 - NZP starts. Garland graduates with PhD in Organic Chemistry and becomes NZP's research chemist.
1973 - Run their pilot plant 24/7 for three weeks to prove the extraction process works before a crucial board meeting.
1975 - Main NZP plant opens.
1987 - Garland takes over as general manager.
1993 - Garland named managing director.
1994 - ICI buys out NZ Meat Industry Association and owns 100% of NZP. Garland and senior management begin working on making ICI "willing sellers".
1998 - Garland leads a Management Buy-Out of NZP; shareholdings are offered to all employees.
2007 - New $10 million processing plant opened in Palmerston North.
2008 - New Zealand Order of Merit for services to chemistry and pharmaceuticals.
2009 - NZP buys British company Dextra Labs, to reinforce it's bile acid knowledge. Garland receives Royal Society of NZ Thomson Medal.
2010 - Garland steps down as managing director, remains on the board of directors and as and advisor to "several NZP projects".
2012 - Garland and his wife Sue become involved in the Earle Creativity Trust. University of Canterbury gives Garland an honourary Doctorate of Science degree.
2013 - $15 million upgrade to Palmerson North plant almost doubles production capacity and future proofs against increasingly tight regulations.