by Rebecca Reed

What does your company do?

We have gone from a manufacturer of raw tube and exhaust systems to a manufacturer of steel tubular trellising solutions. Founded in Seaview, in the Hutt Valley, the company was forced to shift its focus from the automotive industry to the horticultural market when its work in manufacturing exhaust systems for cars dried up in the late 90s after New Zealand’s car assembly plants slowly disappeared.

We are one of one only two steel tube manufacturing plants in New Zealand. We buy coil, predominantly from N Z Steel, and make them into tube and up until 2010 we basically made tube for other people to make things (furniture etc). Some clever engineers at the time came across an opportunity to create tubular steel innovative trellising solutions for the horticulture industry for both new vineyard and the replacement of damaged wooden posts. Promoted under the ECO TRELLIS brand, these vineyard posts have proven to be a great sustainable option.

In the picture: Helen Down and Terry Carter.

More recently the development of two other trellis systems (one for orchards and one for Berries) called the Eco V & VP and ECO BERRY.

What sort of state was NZ Tube Mills in when you first started and how did you turn it around?

When I came on board in late 2012 the company was in trouble. They had a great product, but sales were down – in fact they were losing money hand over fist, and it was only a matter of time before they would be forced to shut shop.  My brief from the then Australian based Group CEO was ‘the business is struggling and needs volume’ as sales revenue was declining year on year.

When I started there was just one salesperson based in the South Island and that one person covered the whole of Australasia for all of the companies products. I soon worked out what we needed were more ‘arms and legs’ on the ground selling specific product to target markets. I basically got more people on the ground and the rest is history.

We added a dedicated vineyard salesperson and went to trade shows which turned out to be highly impactful. We now have a salesperson in every key wine growing state of Australia which has been instrumental in getting new business. I took it upon myself to handle all the exports to the other markets including the United States as well as market any new product that was developed.

In 2012, when I started, sales of ECO TRELLIS were $250,000 – last year we turned over $12 million dollars for this product alone. The growth has been exponential in the past 5 years, as more acceptance of the product has been received.

How are you finding current business conditions?

We are about 40% up on last year.  This is a result of 10 years of hard slog, and it boils down to the fact we have a great product. We are also in the right space for horticulture and viticulture.

The viticulture market is doing exceptionally well in NZ now because there is huge demand from overseas markets, and we are riding on the back of Sauvignon Blanc. We sell a lot of our ECO TRELLIS product to Constellation Brands in the USA which own the Kim Crawford brand – one of the original Sauvignon Blanc winemakers in NZ.

They grow that variety here and ship the grapes over in bulk and bottle it in the USA. Our Pinot Noir is also becoming increasingly popular to export, with vineyards investing in our trellis product, particularly in Central Otago.

 Where are the opportunities for your company?

It’s important to note everything we do as a company is very seasonal – we focus our activity on the NZ market from the start of April to September, so it was important to spend the other 6 months of the year focusing on moving into the Northern Hemisphere. It has been hard work and a challenge to tap into the United States marketplace, but we are now selling to three out of the top 5 wine brands in the country.

More expansion into the Northern hemisphere is next. We have just secured some funding from NZTE so a company based in France can carry out a specialised marketing investigation into six different countries in Europe. This will help us have a better understanding of who the players are and what barriers those countries might have (i.e. tariffs). From that data, we will hopefully be able to decide what countries to tap into first.

Do you export?

Yes, we export to Australia and the United States although as I mentioned we are looking to tap into Europe. In 2018 about 17% of our total business was export and now we are up over 35% export.

Is your company experiencing increased costs? If so, how do you deal with them…reduce staff, up prices, go offshore?

We are witnessing huge increases in steel prices and over 50% increase in raw materials since December. It hasn’t hit the market to any great degree but it’s about to. Steel is an international commodity, and it comes back to China which has become a net importer as opposed to an exporter. There is extremely high demand for steel, and limited supply combined with the fact the biggest player (China) is not exporting has resulted in a significant price increase.

Our vineyard product is typically 20% more expensive than timber. If steel prices keep increasing, we will have to increase our prices, and this could be detrimental to us as it will widen the gap between the ECO TRELLIS and timber products.

We don’t own the 8,000 square metre site we are currently located on in Seaview. Our lease comes up in 4 years and if we aren’t able to renew our lease, and that could happen given we are in a prime location, we will have to relocate and that will be challenging enough as there is limited supply of commercial space in the region!

We may then have to be forced to change our business model, focus only on ECO TRELLIS and buy more high-speed equipment if we were restricted on space. Relocation out of the Wellington area could be a real possibility.

What are some of the key action’s businesses can take to help themselves network and stay connected?

Be aware of what organisations, like Hutt Valley Chamber of Commerce are offering – attend those events that are important to you that will add value to your approach to business.

What role has the Hutt Valley Chamber of Commerce had in supporting your business?

Hutt Valley Chamber of Commerce has provided a good resource for business related matters, ably lead by Chief Executive Helen Down. The Chamber keeps us updated with what is happening from both Government and the wider business community which is beneficial to us. I also believe the Chamber is a great advocate for local businesses, so I feel comfortable knowing it has our back, so to speak.

 A recent Hutt Valley Chamber of Commerce Business Confidence survey found what businesses want the most is to connect with each other. What are some of the benefits for your business when it comes to being a member of the Chamber and why did you join?

The benefits include the ability to connect and talk to like minds about what is affecting them and why. Leading a business can be a lonely place, so it is good to have that access to others. We can share knowledge, build networks, and discuss any concerns which is definitely advantageous for us as a business.