Sleepyhead shakes off Covid cramps on $1.4b production hub
Key hearing set back but company raring to do its part to revive economy
All systems are still go with planning for the Sleepyhead $1.4 billion manufacturing and housing estate at hinewai, although Covid-19 has knocked back the hearing date for the big north Waikato project.
Commissioners were to hear a zoning change application next month to allow for the development by Comfort Group, Australasia’s biggest bed and sleeping products maker, but that’s now scheduled for September, said director Craig Turner.
Like most businesses, the Kiwi family-owned company would have to wait six months to a year to know the full damage to its balance sheet from the Covid-19 emergency response, he said, but “Ōhinewai is probably more urgent now given the potential unemployment numbers”.
“Productivity investment is essential. Unemployment is going to be a serious issue in my view. Everyone . . . has to own this problem. The Government is there as facilitators but we are the ones who have to make this work.
“It’s not acceptable to do nothing. We have to get into it and do the best we can. I want to make sure apprenticeship schemes are revitalised and a lot more training is going on.”
Before Covid-19, the manufacturing and exporting company, which owns the Sleepyhead, Sleepmaker and Dunlop Foams brands, had been urgently seeking the green light for a zoning change in the proposed Waikato District Plan to be able to start building this year on 176 hectares of marginal rural land at hinewai, 5km north of Huntly. The hearing had been brought forward five months to June, and a scheduled decision by nearly a full year, in response to the company’s plea to Waikato District Council because it had run out of manufacturing room in Auckland and its China business was growing substantially.
Its three sites in Otahuhu, Avondale and Glen Innes had to shut for five weeks in alert level 4. There was no work for 303 people and 158 worked from home, Turner said. No one had been laid off aside from casuals who left at this time of the year anyway, he said.
The group’s Australian business kept operating. The company employs more than 500 people across the two countries.
Comfort Group plans a mixed-used community at hinewai with up to 1100 new homes and a cutting edge manufacturing centre which would boost its manufacturing space from 30,000sq m to 100,000sq m over 10 years. hinewai would be the group’s new headquarters.
The first stage would be a foam manufacturing centre which, before Covid-19, was expected to be operational by mid-2022.
The housing plan is an integral part of the development because Comfort Group wants to help its staff into their own homes, impossible now for many with the cost of Auckland housing, Turner said.
Before the virus response, the company had been training Waikato-Tainui people in preparation for the Ōhinewai development, transporting them to Auckland daily.
Turner said talks with Tainui about training and combating unemployment had resumed and the company was also working with the Ministry of Social Development “to help with unemployment in our own small way”.
Planning for Ōhinewai was probably past the point where the Government’s plan to fast track the RMA process could help, he said.
“We have the previous process in place. We have the commissioners lined up. We have done our work and we’re just going to stay on track. We are well advanced and still on the programme.”
Turner said the company was exporting again.
“We’re back in full flight. Orders are strong. So far the business is tracking okay. I’m reasonably comfortable with where we’re at.”
Key numbers from an economic impact report on the hinewai proposal say capital investment in the district over the decade would likely result in direct economic benefits of $1.3b and create about 410 jobs a year.
For the economy of the immediate local area, Huntly and Ōhinewai, the development would likely inject $100m over 10 years and create 42 more jobs a year.
For ongoing operational impacts, Sleepyhead’s operations and the housing development alone were estimated to have a $193m-a-year positive economic effect on the wider region, supporting 1265 jobs. Within the immediate area, ongoing benefits were put at a further $35m in retail spend and an additional 1088 jobs, including Sleepyhead staff.
A bulk factory outlet associated with the manufacturing business is planned on 9.5ha of the site, selling beds, mattresses, bedding, drapes, soft furnishings and furniture. Homeware stores, neighbourhood shops and a service centre are also planned.
In its submission to Waikato District Council, the company said it intends to set up a scheme to help staff and their families into house ownership as part of their employment.
We’re back in full flight. Orders are strong. So far the business is tracking okay.
Craig Turner, director, Sleepyhead