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Relationships help AuCom go international

Starting exporting was a no brainer for us. Our original patented technology was very energy efficient and, when the energy crisis struck at the end of the 1970s, people around the world were coming to us wanting our product. 

Going global - Brent Archer
Fri, 27 Aug 2010

Starting exporting was a no brainer for us. Our original patented technology was very energy efficient and, when the energy crisis struck at the end of the 1970s, people around the world were coming to us wanting our product. 

A bit later on we shifted focus – lots of people were producing energy saving technology and making claims about its benefits that were hard to substantiate. We moved to emphasising the ability of our products to reduce mechanical stress by slowly starting and stopping electric motors (soft starters) and threw in the energy saving capability for free.

While that gave us a niche in the marketplace, the technology was so new none of our distributors wanted to sell it. 

We were missionaries, opening our own offices in the UK and Australia to do it ourselves. It was hard grind. You had to target people, visit them and educate them about what our products could do. 

Once the technology was established, we started using distributors but finding them has always been a major challenge. We’ve tried everything, including going to industry events, direct approaches from us and to us, and using New Zealand Trade and Enterprise. Each strategy has brought some success but we’ve never found a silver bullet that works in every market. You just have to stick at it until you find the right partner and then spend time building a long-term relationship with them. 

We sell our standard range of soft starters under our own brand in more than 65 countries but we also manufacture for others. That came about because we realised we needed to add volume to grow faster. We found brand partners in European markets that needed soft starters and began working with them. We manufacture the product here in New Zealand but it looks and feels as if it comes out of their factory. 

China and India are two markets we are putting a lot of energy into and both illustrate how the right relationships can help you internationalise. 

We’d been looking at China for a while but the trigger point came when we were introduced to a Singaporean who knew our industry and had worked in China for 10 years. He went on to open an office for us and appoint a network of distributors. 

Similarly in India, getting traction there resulted from hiring an Indian staff member who introduced us to his former employer, engineering giant Larsen and Toubro. It took a few years but we eventually negotiated a distribution agreement with them. The latest move to be paying dividends is our decision to hire a senior technical executive who previously worked for one of our competitors in Israel. He has fantastic knowledge, experience and contacts around the world and that is helping us to internationalise our business further.

Rapid growth is not new for us – in AuCom’s early days we grew in one year from a few people in a garage to a company making quite a lot of money. That gave us a fantastic start and, in recent decades, we’ve been able to use cashflow to double our size every five years. 

But we’re entering a different league now. We want to become a global company and will borrow money to fund that expansion. What gives us confidence is the fact that we have world leading technology, we understand our market, and we make sure we know what our customers need.

Brent Archer is chief executive of AuCom Electronics

Christchurch-based AuCom Electronics is a world leader in soft start motor control technology products. It has been exporting since the 1970s and its product is sold in more than 65 countries around the world. www.aucom.com 

New Zealand Trade and Enterprise is the government’s economic development agency. www.nzte.govt.nz 

Going global - Brent Archer
Fri, 27 Aug 2010
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Relationships help AuCom go international
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