There’s an impressive clarity about Nigel Bamford’s thinking.
The 30-year-old Dunedin gas fire manufacturer has definite thoughts on how to approach life, how to approach business, the importance of family, and New Zealand’s economic direction.
All these things are important to him and he is far from shy about expressing his opinions on them.
For example, says Bamford, New Zealand has to “get over” the notion that manufacturing is sunset industry, and that “the answer to all manufacturing is China”.
“That’s very naïve and inappropriate mindset because it [manufacturing] makes up massive part of our GDP,” Bamford says.
“Wherever you look around the world, every first world economy has strong manufacturing sector; every third world economy does not.”
It’s potent argument, but Bamford is just getting started.
“New Zealand has to ask itself whether it wants to have first-world health system, first-world education system.”
If the answer is yes, it needs structured, highly profitable manufacturing sector, he says. “It’s not good enough just to say: ‘oh well, everything can get made in China’.”
Bamford says New Zealand’s smallness is its strength, which needs to be exploited more than it has been.
“If you want to grow decent business, you’re forced to sell offshore, so you’re forced to become an open-minded company which understands the needs of other markets.”
Businesspeople with lot more experience than Bamford might regard him as an uppity newcomer but despite his relatively short work history, he’s already earned considerable respect locally and nationally. Last year, Wellington policy-makers shoulder-tapped him to be member of government advisory group on manufacturing, which in November released strategic framework called “A Vision for World Leading New Zealand Manufacturers.”
His company Escea has been trailblazer on the business scene, picking up accolades and awards locally and nationally with almost giddying frequency.
Escea won the Emerging Business of the Year award at the 2006 Westpac Otago Chamber of Commerce Business Excellence Awards in December. Bamford was also named Young Business Person of the Year at the same event. His is one of just two Dunedin companies (Southern Hospitality is the other) to make it onto the 2006 Deloitte Unlimited Fast 50 index as one of New Zealand’s fastest growing companies.
Escea came in at number six having clocked up revenue growth of 519.9 percent over two years.
Bamford is understandably proud of that achievement.
“That was important to us, because managing growth has been big challenge.”
He’s also determined it won’t be one-off event.
“While we were immensely proud to be in sixth place, our ultimate aim is to be on that index consistently over coming years – even if it’s at the bottom of it. The companies I really admire are the ones that achieve growth year after year.”
He believes achieving initial growth from small base is far more difficult than achieving sustained growth from large base.
As design business, says Bamford, Escea was turning over $400,000 year. During its first year as manufacturer that grew to $2.5 million. This financial year the company is on track for about $4 million. Its next target is to double its turnover again – to the $8 million mark.
Goal setting seems to be something of habit – as does meeting goals.
Bamford was just 18 and at high school in his home town of Balclutha, South Otago when he decided not only to do something in business but in one that could derive income from several markets.
He wasn’t quite sure what, but applied himself to nailing it down. This turned into seven-year journey that included four years as production designer for Dunedin manufacturing company, followed by three years managing gas appliance retail store in Nelson. Along the way Bamford also studied for New Zealand certificate in mechanical engineering at Otago Polytechnic.
The Nelson experience gave him “great insight” into the needs, wants, and desires of consumers – an important apprenticeship for what was to come.
“It provided me with lot of feedback about the strengths and weaknesses of the other products on the market. Every night I would go home and write down what people had said and add to my design brief.”
He compiled database of potential suppliers, including “vague details” of what his product would be like. And, having clocked up some life and work experience as well as market insights, he chose Dunedin as launching pad for his own business venture in 2002.
“I moved from thinking about it to doing it.”
Why Dunedin?
Bamford chuckles when asked if he saw Dunedin’s cold student flats as good potential market for fireplaces. No – the selection of Dunedin as base was deliberate and at least partly strategic.
Making gas fireplaces appealed, he says, because they are “part art, part furniture, and part function”. There is room to really differentiate with design.
“A product which was purely functional or purely aesthetic didn’t really appeal to me, but product which brought together several of those elements was far more interesting.”
The selection of Dunedin as home base was deliberate because it met criteria needed for the start-up business.
“We looked at the map and asked: ‘what’s good city to set this business up in?’ It had to have access to port, because we intended to manufacture and export; it had to have good supply of commercial real estate at reasonable rental rates; and quality workforce which we could draw upon.
“It also needed strong engineering infrastructure because we’re not company that has gone out and built whole lot of machinery. Hence we’re very reliant on having good supply of companies that make components for us. Dunedin has that.
“Our products are made predominantly with computer-controlled sheet metal fabrication, so it’s not very trade-based process. The skills we require are less trade-based than, say, boat building.”
Escea sources lot of componentry from within Dunedin, and that has an important economic multiplier effect locally.
“We probably have almost half as many indirect employees as we do direct employees. In coming years those feeder companies will grow but at the moment they can service our needs without taking on great numbers of new staff.”
Bamford says there are no inherent advantages from marketing perspective in being based in Dunedin.
“Nationally people like to support New Zealand-based company. Internationally there are times to play the ‘Made in New Zealand’ card and there are times not to. You make the decision based on the market you’re going into.”
Bamford says Escea does play the ‘southern card’ where possible when hosting clients from overseas. Dunedin’s proximity to Queenstown, for example, means there are opportunities for clients, prospective and otherwise, to mix business with pleasure.
Managing for growth
Bamford and his team spent their first three years at Escea purely on product design.
“We had very very lean operation. We were also doing contract product design, which gave us small income stream.”
The Escea business model didn’t revolve around having millions of dollars sunk into the company from shareholders and/or government grants. In fact the contributions Bamford and fellow shareholding directors Garth Milmine and Alan McGregor made were “quite modest”.
“Yes, we could have gone out there and got big bucket of capital, but essentially the lower-key approach was model that worked well for us. It wasn’t conscious decision not to spend our own millions – we just didn’t have our own millions.”
The company structure is simple. Milmine runs Escea’s finance and administration division, while McGregor is in charge of research and development. Bamford says having two “very good people” running key divisions semi-autonomously allows him to have oversight of the business and its 30 employees without having to micro-manage.
“We’re quite fanatical about not getting sucked into corporate
