R&D focus spells end for F&P’s Auckland manufacturing

Stuart Broadhurst, Fisher & Paykel Appliances chief executive

A research and development focus will spell the end of manufacturing by Fisher & Paykel Appliances in Auckland.

Chinese-owned F&P is spending $5.5 million refitting a building at its East Tamaki site with laboratories and product testing equipment, which will have a capacity of 400 research and development staff – which means another 160 staff might be added.

It will take on 50 more engineers, on top 80 new hires in the last year.

Chief executive Stuart Broadhurst told NBR ONLINE its Auckland facility will close at some point, and F&P is actively reviewing the future of all manufacturing sites, including Auckland.

The Auckland manufacturing facility is 40 years old, he says, and demand is falling for the products it makes – small fridges and chest freezers.

“The platform on which it’s built is beyond maturity, really, and we’re not re-investing in a shrinking part of the market and we’re investing our money in high-end premium, segments like French-door built-in refrigerators, high-end cooking product and laundry, rather than small bar fridges and small refrigerators that we used to make 30 years ago.

“We do not have plans to have a large-scale cutback beyond business as usual in this 12-month period.”

Mr Broadhurst says shareholder Haier, the Chinese whiteware giant, is supportive of F&P’s expansion plans – with ambitions to lift revenue from $1 billion to $4 billion within 15 years – but its investments need to be wise.

“If we aren’t getting the results, we will slow down the investment; if we aren’t growing in markets, we won’t be investing as much in products.”

R&D expansion

In a statement released last night, Mr Broadhurst says its redeveloped facility will house its growing Auckland-based research and development team.

That follows the Dunedin City Council's announcement last week it is spending $2.3 million expanding its central city building because of F&P's anticipated 40% increase in design staff numbers by 2018.

A year ago, the company announced its two-year growth plans included creating 100 new research and development roles in Auckland and Dunedin.

Mr Broadhurst said 80 new engineering roles have already been filled, which will lead to more new products in coming years.

The company launched 70 new products last year.

The redevelopment at East Tamaki should be finished in the middle of this year, the statement says, with dates for Dunedin to be firmed up in the next few months.

Mr Broadhurst says its East Tamaki plan underlines the company's long-term commitment to research and development in New Zealand.

The statement mentioned the word "research" seven times – "manufacturing" was not mentioned once.

Fisher & Paykel was previously listed but was taken over by Haier – previously a 20% shareholder – in late 2012 and de-listed from the NZX.

dwilliams@nbr.co.nz

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