Beating the high dollar is child’s play
A NEW Zealand plastic components manufacturer is growing its export sales, defying the high New Zealand dollar and cheaper Asian competitors.
Auckland-based Jakaar Industries is a family-owned injection-moulding company that produces around 3000 plastic products ranging from lawnmower wheels to storage boxes and ground-stabilisation mats.
The company exports about 80 per cent of its production, and while many manufacturers have been lamenting the effects the high exchange rate and competition from cheap overseas suppliers have had on their businesses, Jakaar is focused on growth.
Managing director Ken Holt said his goal was to double the company’s annual turnover to around $20 million in the next few years, with most of the extra business expected to come from exports.
Holt has learned to live with the high value of the New Zealand dollar.
‘‘Your customers keep you honest,’’ he said, suggesting that if the exchange rate fell substantially, Jakaar’s overseas customers would expect to see that reflected in their prices.
It would also push up the cost of the company’s raw materials.
‘‘So there’s a quid pro quo,’’ he said.
Instead of trying to compete on price, Jakaar had invested heavily in its design and technical manufacturing ability and concentrated on producing highquality products with shortmanufacturing lead times.
It was also quick on its feet when reacting to changing markets.
Jakaar had manufactured the wheels for Masport lawnmowers for 22 years, but lost the business when Masport shifted its manufacturing operations overseas.
But the loss was more than made up for when the company won a contract to supply wheels and other plastic componentry for Honda lawnmowers and garden equipment.
Honda had high-quality standards and wanted to deal with component suppliers that had the same standards, Holt said.
Design innovation was also a hallmark of the company’s success.
Jakaar worked with the Conservation Department, which was importing ground stabilisation mats used to prevent soil erosion on remote hiking trails.
Jakaar produced an alternative only half as bulky as the imported version, which meant twice as playhouses and other structures.
The idea for the product was ignited when an employee made a winter visit to friends in the United States. Their friends’ children were complaining because it was too cold for them to go outside and use their playhouse.
The employee came back with the idea of designing a playhouse made from plastic parts which could be easily assembled and disassembled, allowing it to be used indoors or outside and packed away when not in use.
The project gained impetus when the design team realised the educational potential of Imaginz.
Holt said the company spent nearly $1 million developing the product, which is a system of modular, interlocking components made of lightweight but durable polypropylene.
These can be assembled into a variety of structures, such as a car, a plane, a shop or a playhouse.
Holt said schools and early childhood education centres were using the system to teach children to imagine a structure and then learn how to put it together.
They would start by building something very simple and then move on to more complicated constructions.
And when they were finished it could be dismantled and packed up.
Another product the company has just launched could not be more different.
It’s an expandable plastic bung used to hold explosives in place, which Jakaar has developed for the Australian mining industry.