Materials
Oceana Gold expands mining operations in Otago
Melbourne-based Oceana Gold Corporation has a strong presence in New Zealand. It is listed in this country as well as Australia and Canada.
Its profile as a good investment has leapt since a recent announcement it expects to be mining profitably underground at Macraes Mine near Palmerston in East Otago until 2017. This is three years beyond the forecast date of 2014.
Oceana Gold has received resource consents to enlarge its underground operations at Macraes Mine which includes both an underground mine and an open cast mine. Resource consents last year were extended to 2019.
This decision was released by the Otago Regional Council and the Waitaki District Council, both of which had jurisdiction in the matter.
A hearing panel appointed by the councils heard the application for the consents in September 2011 and recommended that the application to permit the Macraes Phase III by Oceana Gold be granted subject to certain conditions.
The mine contributes significantly to the "socioeconomic wellbeing of the district, region, and to a lesser extent, the nation," the panel's report said.
The physical effects of the project could be "tolerated, avoided, mitigated or remedied".
The open cast and underground mines at Macraes Flat are the largest gold mine in New Zealand.
Commissioned by Oceana Gold in 1990, the mines lie in open countryside at Macraes Flat which is about 30km from the nearest town of Palmerston in East Otago.
When the mine was commissioned it had the capacity to process 1.5 million tonnes of ore annually.
However with improved techniques and technology Macraes Mine now has the company processing almost six million tonnes of ore per year.
Since it was commissioned, the mine has produced about 5.2 million ounces of gold for Oceana Gold and a survey of the unmined areas concludes there could well be a significant amount of gold still in the mine.
The company proposed an extension of its current operations and also to re-work areas it has previously mined for gold.
The latter consent was sought because the price of gold on world markets now makes it economic to mine at deeper levels than when the mine was originally operating.
Under the new consents Oceana Gold must establish a new tailings storage facility as well as other facilities. The company had been asked to review the timing and implementation of its closure strategy which was revised after consultation with affected parties.
Oceana Gold will direct funds to a $2 million community trust to enhance the future wellbeing of the local community.
Still Oceana Gold has lodged an appeal against parts of this consent condition on the grounds that they were “unnecessary and onerous.”
With the recent drop in the price of gold and a dip in its share price, Oceana Gold maintains a conservative outlook for 2012, setting it at 230,000 to 250,000 ounces of gold at a cash cost of about NZ$1,196 an ounce.
This forecast includes forecast production from the company’s Didipio and Reefton operations as well as Macraes.
OceanaGold, says gold production grew in the fourth quarter, with improvements from both of its New Zealand goldfields, although the total still fell short of projected levels.
It said gold production in the three months to December 31 came in at 65,750 ounces, an 11 percent improvement on the third quarter. That brought total production for the 2011 calendar year to 252,499 ounces. This equated to revenues of US$106.6 million in the three months, calculated at an average gold price of US$1705 per ounce.
"This was slightly below expectations for the quarter and subsequently the year," the company said in a statement. It expects to release its full year results on February 16.
The bulk of fourth quarter production came from OceanaGold's Macraes goldfield, situated in Otago, with 44,451 ounces produced, up 5 percent on the previous three months.
Concrete planning makes a big splash in Rotorua
Construction of the concrete flume section in Rotorua of Rainbow Springs new Big Splash water ride broke all records thanks to the Barfoote Group, an innovative Northland based company.
With 400 kilometres of road separating their Whangarei base and the construction site in Rotorua, the company decided to take an innovative approach to building the 431-metre concrete flume section of the ride.
After being told by Swiss based ride design company Intamin, that the flume had to be poured on site as there was barely a couple of millimetres leeway allowable in the finished flume size, Kiwi ingenuity came to the fore.
"We knew we could do it, so we designed moulds to pour the concrete flume in sections that could then be easily transported to Rotorua and slotted into place," says Barfoote Group managing director Trevor Barfoote.
"We poured the first one, put it on the back of the ute and drove to Rainbow Springs, and that's how we won the contract."
Ever since then a steady flow of concrete flume sections arrived on site from Whangarei. This innovative method sped up construction of the ride eliminating the need to pour the concrete on site, which was a weather dependent job with the potential to delay a time critical project.
Due to the success of pre-casting the flume Intamin is considering using this construction method for future rides it builds around the world.
The nine-minute long Big Splash ride is a journey through time that will feature an informative narrative, state-of-the-art animation bringing to life dinosaurs, moa and the haast eagle, with an adrenalin boosting plunge at the end.
It opened to the public on January 20.
Amcor Australasia’s South Auckland manufacturing plant opens
By Les Watkins
Current annual production of about 300 million aluminium beverage cans is expected to be doubled with Amcor Australia investing a further $40 million in its South Auckland plant.
The new production line was officially launched last month, offering beverage makers innovative technology, including an eight-colour print process, never before available in New Zealand.
“The new plant will also provide greater production volumes and speeds, enabling cans to be produced and delivered to businesses faster than ever before,” says Amcor Australasia managing director Michael Garrard.
“With enhanced printing capabilities and high-quality graphics, products will offer originality and product break-through for our New Zealand customers.”
The principal supplier of electrical components in the new plant was Rockwell Automation - including the Allen-Bradley Compact GuardLogix programmable automation controller which has already proved its value for Amcor at its Revesby plant in Australia (see opposite page).
“In a high-speed, multi-stage manufacturing process, automatic line control is critical for efficient operation,” says site manager Nabil Askari.
“In Amcor’s case, where several can sizes are produced on each line, automation provides better visibility and control at various process parameters leading to consistent and efficient operation.”
Mr Garrard stresses that investment in innovation is essential for the manufacturing sector.
“It is critical to achieving the productivity improvements that our sector needs,” he says.
“Delivering world-competitive capabilities more efficiently to our New Zealand beverage customers will help them continue to drive innovation and stay ahead of their local and global competitors.
Smart lifting helps ensure efficiency and safety
In its first production base for infrastructure materials outside of Japan, Nippon Steel has set up a company in Vietnam for the manufacture of steel pipe piles used for wharf pilings, motorway foundations, wall retention during excavation, land protection from sea encroachment, and similar applications.
Nippon Steel Pipe Vietnam chose the Phu My II industrial zone in the Ba Ria-Vung Tau province, southeast of Ho Chi Minh City, for its new factory.
It began producing spiral welded pipe and seamless steel pipe from hot coil and ribbed hot coil this year.
Konecranes provided the large overhead cranes needed to lift and move the hot coil as well as the manufactured product about the factory.
The three Konecranes cranes used at the Vietnam plant include one 35 ton overhead crane for moving the raw materials and two 23 ton overhead cranes that are commonly employed in tandem for lifting and shifting the long lengths of manufactured pipe.
Steel pipe piles are typically made in lengths up to 30 metres, with orders for hundreds of pipes at a time. The pipes have high drivability into earth substructures and high reliability in use. As well, they require only a small foundation size and a short construction period.
The Konecranes cranes at NPV are a new type of high performance crane called SMARTON, designed as a customised, intelligent and environmentally sustainable solution for demanding heavy process uses. SMARTON cranes are designed to maximise safety while minimising energy consumption and downtime.
“We chose the Konecranes brand because of their advanced technology and safety,” says general manager (Mechanical), Construction Group, Yoichi Maeda.
The company benefits from an innovative tandem-crane method of moving the lengthy completed pipes within the factory. This method has improved the handling of the pipes, while contributing to operator safety and ease of use, and also extending the life of the crane lifting cables.
“Using the two cranes in tandem works very well for us,” Mr Maeda says.
“By suspending the long sections of pipe from two points at once, we have good control over the lifting process. The pipe doesn’t sway, which is a big safety benefit for the protection of the operators on the factory floor.
“The operators don’t require specialised knowledge or training in moving and positioning loads when the tandem method of lifting is used. They find it very good and simple.
“Prevention of swaying of the load also ensures long life of the wire ropes supporting the load. They’re not subject to stressful twisting motions,” he said.
Further safety protection for the crane operators is provided by the radio controls of the overhead cranes, which means that the operators can be well clear of the load when it is moved, Mr Maeda says.
For more information:
Steve Gagnuss
Konecranes South-East Asia
Tel: 65 6861 2233
Website: www.konecranes.com.sg
Composites make Lisa Airplane’s stunning, light amphibious ski-plane
French company Lisa Airplanes has developed the Akoya, a unique light airplane able to land on either ground, water or snow, offering previously unthinkable transportation possibilities. This innovation was launched in the international market last month.
Entirely designed in composite materials and powered by a 100 hp Rotax engine, the Akoya has a unique, streamlined design that is equipped with cutting-edge innovations.
Multi-AccessTM technology allows the Akoya to take off and land over less than 200 metres – private land, airfield, airport, lake, river, sea or snow-covered runway.
Pivoting wings enable the Akoya to be stored or transported with ease. The technical feat is made possible by the development of the SeafoilsTM hydrofoil, a unique innovation in the world of aviation.
Located under the fuselage, the hydrofoils are connected to a retractable landing gear equipped with skis and pivoting wings.
Professional EPNER test pilot Gérald Ducoin said the Seafoils are “truly revolutionary” and offer both fast lift-off and stability.
“They also considerably simplify landing manoeuvres and taking off from water. In spite of its impressive technical capabilities, the Akoya is a very accessible aircraft,” Ducoin said.
The Akoya is a completely equipped, high-end airplane. Numerous safety devices have been included to assist the pilot in all phases of flight, including a full parachute that will bring the plane and its passengers to ground in total safety in case of a major problem.
Its many new features enable it to reach unprecedented seaplane performance levels. With just 70 litres of unleaded gasoline, it can fly over 1100 km at a speed above 210 km/h.
In other words, taking off from the Washington suburbs and landing in a lagoon in the Gulf of Mexico, going from Madagascar to the Seychelles or taking off from a snow-covered surface in the Swiss Alps, making a stop at a cove in Sardinia and continuing on to Tunis are just some examples among many of the choices offered by the Akoya. Work out the kiwi options.
“Offering more than just another new plane on the market, Lisa Airplanes brings a further dimension to light aviation by developing the concept of recreational flying, where going from Point A to Point B becomes both simpler and faster, making it a real pleasure once again,” says president and co-founder of Lisa Airplanes Rick Herzberger.
From the beginning, Lisa Airplanes co-founders Herzberger, Luc Bernole, Benoît Senellart and Jean-François Clavreul have affirmed a strong company identity by building a team with varied cultural backgrounds, which today counts 25 members.
Synergy among the different Lisa Airplane team experts – in research and development, design and quality – led to the creation of the Akoya.
LISA Airplanes anticipates receiving Light Sport Aircraft certification – the new American standard that is to become an international standard – in mid 2012.
For more information:
LISA Airplanes
Tel: +33 479 657 599
Visit: www.lisa-airplanes.com
Altitude lightens the load with composites
The delivery last month of the first 787-8 Dreamliner, claimed by Boeing to be 20 percent more fuel efficient than similar-sized current planes, highlights the importance of lightweight composite materials in the aviation industry.
Air New Zealand’s wholly-owned subsidiary Altitude Aerospace Interiors is in the thick of shedding weight in airline interiors, is launch customer for the longer 787-9 version with an order of eight aircraft.
Aviation has always been a big driver of composites use, and the airline industry has always used composites. That’s because aircraft are relatively high-performance vehicles that can’t afford to have weight where it’s not necessary.
Air New Zealand, the country’s flag carrier, has quite a large composites capability largely focused on the repair and maintenance of aircraft. For new interior fits and refits, its wholly-owned subsidiary Altitude Aerospace Interiors is in the forefront.
Altitude is a supplier of customized aircraft interiors for both commercial jet transport aircraft and VIP aircraft.
Baden Smith, head of commercial - airlines at Altitude said the company has the engineering design and certification teams necessary to produce the interiors, and it manages the entire supply chain.
“We design for a particular aircraft for retrofitting, or install new equipment in a new aircraft. What we do is try to increase an aircraft’s performance, using materials with a high specific strength and specific stiffness and reduce its weight. So virtually all the interiors that we build will be of composite,” Baden said.
Weight is one of the biggest constraints in an aircraft interior because ultimately it has to get it up in the air and operate in the most cost-efficient manner.
Costing will be different for each aircraft but Baden said US$400/year/kg of weight is a ballpark figure.
“So if you’re talking about a lifespan of 15 years, that’s a lot of money.
“A 747 is a couple of hundred tonnes. Any weight you can get out of that interior is a huge benefit to the airline for two reasons – the opportunity to save money via fuel which is good for the environment as well, or earn revenue by potentially loading another passenger or carry some more cargo.”
Altitude does all its interior design in New Zealand.
For a commercial transport aircraft, it manufactures the composite products mostly in Tulsa, Oklahoma in the US.
“There’s a bunch of reasons for that,” Baden said. “It’s just a lot easier because the aircraft has to be US FAA-certified. To have it done in the US is a lot easier.
“In New Zealand, the CAA refers to the same design standards as the US FAA Part 25 which defines the standards for the design of new and modified aircraft. There’s differences in the interpretation of those rules and the way you show compliance against those rules but it’s always the same rule.”
Interior installation is largely done at the Boeing, Airbus or the manufacturer’s facility.
It’s different for a VIP transport aircraft. It comes out of Boeing or Airbus or wherever it is empty with no interior at all. It will be flown down to either Auckland or Christchurch where a complete interior is fitted by Altitude.
“But we still manage the entire design. We might do some of the manufacturing in New Zealand and overseas but all the installation of that interior is done here,” Baden said.
When manufacturing is done in New Zealand, it is often at the engineering facilities of Air New Zealand. Occasionally, Altitude subcontracts some parts to other manufacturers.
Altitude has virtually never used anything but composites for primary structural components.
“We might use metallic materials from time to time like aluminium but largely they’re just for fittings, attachments and things that you need to machine or makes more sense to machine because of the way it’s going to be attached to the aircraft or something else is going to be attached to it,” Baden said.
Interior composite structures are sandwich-constructed to maximise local bending stiffness. The external skins are made of fibreglass reinforced composite and a phenolic honeycomb makes the core. In some specific circumstances the core may be replaced with aluminium honeycomb. In some very unusual situations carbon fibre skins with a honeycomb core is used.
The combination of phenolic honeycomb and fibreglass or carbon fibre meet flammability requirements.
“The fibre materials and the resin systems that we use tend to be very limited because of the flammability criteria,” Baden said.
“We’d use carbon fibre when we’re really at the limits of the strength that the material needs to carry. We try not to use it because fibreglass tends to suit us in most situations as it’s a relatively cost-effective material. Fibreglass is strong and stiff but also quite tough. With carbon fibre, you start to have to worry about things like galvanic cell corrosion if you’re using it close to any metallic material,” Baden said.
Carbon fibre will not corrode but it may create a situation which encourages corrosion in metallic materials, and of course, in an aircraft metallic materials are everywhere. With fibreglass that doesn’t happen.
While Kevlar may be used in different parts of the exterior of the aircraft, Altitude hardly ever uses it in interior components.
“Kevlar is a hygroscopic material. You don’t want to use it on the interior of the aircraft. You don’t want absorption of water into the material because it adds weight. It also creates health and safety issues.
As a provider of a very niche product for the international market, Baden said the future of composites is “very rosy”.
“The activity that we’re doing at the moment and the types of work that we’re doing with composites have a very strong application internationally and we expect that to continue.
“Right now, we’re working on programmes where one airline has a fleet of five aircraft, another has a fleet of seven, and another has 20 aircraft, and again another has 62.
“For us it’s not necessarily a volume game, it’s about how many different programmes we can be on because that’s where we really add value as a design and engineering company.”
Altitude has a mixture of 65 designers and engineers.
“Like any good designer or engineer you have to consider a good range of factors. Certainly you have to make sure that your design complies with the rules and meets certain regulatory standards like crash load considerations. They have to account for forward load under emergency landing considerations. There are certain flight loads that need to be considered both up, down and side loads that need to be considered if you’re experiencing turbulence for example.
“A flammability criterion needs to be considered, making sure that you’re not using a build up of material that is ultimately going to produce a product that doesn’t pass the flammability test.
“Abuse loads, passengers and flight crew/attendants walking through the aircraft, leaning or swinging on doors. In some situations it could be having to allow for a thousand pounds of load on a door because that’s the sort of abuse load criteria that you’re likely to see.
“Those are just quantitative criteria. Then there are the qualitative criteria as well like having to consider manufacturing methods and constraints and aesthetics.”
One of the biggest areas of value in the aircraft interiors market is the use of monocoque construction.
It does not have a whole lot of joints and no separate pieces of composite joined together with aluminium extrusions. It’s a single piece structure with load bearing capability.
“That’s where we’re a little bit different compared to some of our competitors internationally. They will build up a lot of their interiors from flat panel composites and then join them together with aluminium edge extrusions, just bolt them together.
“What we try to do, if the situation allows, is to try to have single piece construction.
“There’s a whole bunch of Boeing 777s flying around with all of the closets in the business class section designed by us. I know that sounds simple, just closets, but if you build a closet in a standard way, it will weigh a certain amount. The way that we design and have them built gives us anywhere between 20 and 30 percent reduction in weight.
“That’s the sort of thing that you could do with composites that you couldn’t do with metallic materials.”
For more information:
Altitude Aerospace Interiors
Baden Smith
Tel: 09 2558909
Email: 021 713209
Visit: www.altitude-ai.com
Canny survivor of cheap import competition thrives on innovation and niche markets
By Romy Udanga
Finding market niches and employing innovative skills to fabricate quality products have transformed Rex Industrial Equipment from a small general engineering business into one of New Zealand’s leading industrial castor and materials’ handling manufacturer.
Rex endured the onslaught of imported industrial goods over the last two decades that has decimated traditional manufacturing bases in New Zealand to emerge with a facility that produces more than 60 percent of the castors, wheels, conveyors and trolleys that it supplies directly to businesses through its network of 10 branches nationwide.
Peter Blackett, managing director at the family-owned company, says the ability to design and create products to suit individual needs balanced by “quality importation” is the future of manufacturing in New Zealand.
“Over the last 15 years that we’d been balancing our import- production business to remain competitive, we found that gearing sales, marketing, design and production systems to address client requirements and delivering products on a short turnaround gives us the edge over imported products.
“Retaining our manufacturing base locally means that we’ve been able to customise and adjust our production quite quickly during times when we’ve got large orders,” Mr Blackett says.
It has also resulted in a zero design and manufacturing failure for the fit-for-purpose materials handling products, like conveyors, airline food locker trailers and picking trolleys, they produce, he says.
“We’re really struggling to name any areas where our products have failed.”
Rex manufactures all of the tubular steel that go into its materials handling products. Tasman Engineering, its wholly-owned subsidiary that has three production facilities in Auckland, produces cast and precision components enabling Rex to control costs.
Over the last two years, it completely redeveloped about 75 percent of its materials handling trolley ranges, modernising their designs and finish to cater to the needs of the “warehouse-office-showroom type” of businesses that had emerged.
At its headquarters in North Shore, Auckland, Rex assembles about 70 different castors for light to heavy duty applications, including those with polyurethane tires – and imports a similar number for “special applications” from an American company that is manufacturing out of China.
It imports Genie hydraulic lifting equipment and Bushman hand trucks from the USA, and lifting tables from Japan to boost its materials handling line, which includes hoists, lifters and stackers.
Rex traces a 70-year history from its original formation in 1942 as Rex Manufacturing. It became a family-owned company in 1988 after Peter’s father Bruce, now 80 but still active as a director of the company, purchased the wheels and castors and conveyors systems business units to spin off Rex Wheels and Castors Ltd, and renamed it to Rex Industrial Equipment in 2006.
Mr Blackett says his family’s business philosophy over the last 30 years “has always been about people in the business and their customers.
“It has not been about being the cheapest but providing the balance of good service, good quality and reasonable price. Without that as combination we would not have been able to reinvest in the process of providing good products.”
He says the philosophy extends to company staff who are treated “like family”.
“We look out for each other and we are very loyal to our staff and our staff are very loyal to us. About 50 percent of our 30 or so staff have been with us for more than 15 years, some more than 20. And we have very low staff turnover,” Mr Blackett says.
Marketing manager Stewart Atkinson, who’s been with Rex for more than 10 years, says the philosophy extends to the marketing model of the company which is “largely business-to-business”.
“We go to end users rather than run our business through distributors. We have thousands of business customers rather than one or two large distributors. This has resulted in us covering about 50 percent of the market we are in,” Mr Atkinson says.
Tell me it can’t be done – and we’ll do it
By Les Watkins
A thin trail of flour across the floor of a supermarket, together with patches of it on customers’ shoes and supermarket checkout counters showed there was clearly a problem. It was a problem which would be impossible to resolve. At least, that’s what international experts told Aurora Process Equipment director Mike Goddin.
“But impossible is a word we don’t like,” he says. “In fact, we hardly understand what it means.”
Mr Goddin’s typical Kiwi can-do attitude explains why he claims with confidence that his Hamilton-based company does more than sell essential equipment to the fluid processing and materials handling sectors.
“No, it goes far beyond that,” he says. “We are selling efficient solutions.”
Solutions, for example, to that persistent trouble with the flour.
It stemmed from the manufacturer wanting a totally new type of user-friendly packaging, which could be filled through the top but still retain the plastic carry handles.
“At that time no satisfactory way had been found to seal the bottom valve after the filling the bag and so the flour kept dribbling out,” says Mr Goddin.
“A leading American firm which we represented here told us there was no way this could be satisfactorily fixed and that, of course, was a challenge we couldn’t resist”
Mr Goddin and his team designed a new type of bag which could be filled at the top, where the handles were to be fitted, and the leaking flour became history.
“We have a team of design and installation engineers who, in addition to providing exactly what customers request, are qualified to give the best advice,” he says.
“What sort of bagging plant do they really need?
“How exactly do they plan to use it?
“How much do they want to invest?”
“We can cover everything from a basic manual system at very low cost to something highly automated – and make sure customers get the right equipment without spending a cent more than is necessary. We feel that we haven’t done our job if we and our customers are not completely happy.”
That was the pattern his father set when he started the company in 1995 and it has helped attract clients throughout New Zealand and Australia as well as the Pacific Islands.
The many top-quality lines offered by Aurora includes the comprehensive range of Galaxy bagging equipment for handling all aspects of the operation, such as open-mouth and valve bag filling, bag closing and bulk bag-loading and unloading.
Others of particular importance for process industry – which can save immense sums from being wasted and reputations from being sullied – are Aurora Magnetic Separators.
Huge costs have been incurred by companies around the world, including New Zealand, from product recalls from metallic contamination.
“Here we can be talking of costs well into the hundreds of thousands of dollars,” says Mr Goddin.
“Apart from the most obvious ones, such those incurred in the return and disposal of contaminated product, a major recall can severely damage a brand’s reputation and consumer confidence. “
And there are so many potential causes.
“Flour, for instance, is extremely vulnerable – starting from when the wheat is harvested. Tiny fragments of broken metal or flakes of rust from the harvesting equipment can end up in the grain. These may then go into the silos and flour mills and eventually into the final product.
“And, what’s more, expensive equipment can be seriously damaged by a few pieces of rust to fine metallic particles getting into the equipment,” says Mr Goddin.
Aurora Magnetics reduce the risk by removing metal contaminants including work-hardened stainless steel and magnetic stone fragments.
However, the fight against contaminants needs to be continued after the flour has been cleansed by the separators.
Bread-makers and biscuit manufacturers, for example, also use metal equipment in their processes and so recontamination is a distinct possibility and highly risky at this stage – so close to the final products.
This can also be effectively tackled by Aurora Magnetics, especially the high quality MAGNATTACK range.
The range is suitable for viscous liquid lines as well as dry product lines. It offers sealed pipeline magnets for liquid and slurry units as well as grate and probe magnets for powder or granular products.
These are just a few of the quality products provided by Aurora.
“We understand the business of keeping your process running, we know it’s important to you and that makes it important to Aurora,” says Mr Goddin.
For more information:
Tel: 0800 55 77 33
Visit: www.aurora-nz.com
Sharing responsibilities and rewards is a key to the success of the lean, Green family team
By Les Watkins
Why are photographs of needy children in South America being published with a story about a company making steel tubes in Hamilton? That’s a good question and, of course, there is a good answer.
The pictures illustrate a key motivation at Industrial Tube Manufacturing – a generously charitable philosophy established by the late Peter Green who founded the firm 25 years ago.
The youngsters live in a poverty-stricken area of Nicaragua and their pictures are on a head office corridor wall above the names of staff who have adopted 45 of them.
The workers write to them regularly and send birthday cards and presents. And the company provides money for them through World Vision.
This is part of the dream Peter Green had when, in his mid 30’s, he stopped repairing and renovating vintage cars to launch a company making steel tubes – a business about which he knew virtually nothing.
And which, in the early days, plunged his family into financial peril.
His widow Margaret, now a director, explains that Mr Green visualised a company that could allow him to indulge his passion – channeling funds into youth and community activities as well as programmes such as translating and distributing the Bible.
He researched tube-making in the USA, then the company borrowed $250,000 at a crippling 25 percent interest rate and he bought a discarded second-hand Yoder mill for $220,000.
His avowed vision was for Industrial Tube Manufacturing Ltd “to be the benchmark for quality, service, integrity and innovation for steel tube and related manufactured products, ensuring a financial platform for charitable works in the global community”.
“But for years it didn’t look like working out that way,” says Mrs Green. “I had a job in a bank, we had four small kids to support and the accountant repeatedly advised Pete to shut the doors before we lost everything.”
It took about 15 years for the company to make a healthy profit, achieving that about the time Mr Green died – but right from the start he had somehow managed to support charitable work.
It was also his declared intent to have a management team “who value and appreciate our staff – our most valuable asset”.
That attitude to the staff, now 55 in New Zealand and 18 in Australia, is evident throughout the operation. Employees are encouraged to advise on how the company-provided annual community funding should be allocated, and to devise ways to make production “keener and leaner”.
Executive director Julian Green, one of Peter Green’s two sons, gives a simple but important example of how staff ideas can speed progress and improve output.
“A machinist may realise that a tool he uses 20 times a day is stored a 30-second walk away. Fetching and returning it can mean 40 unproductive minutes a day – well over three hours in a five-day week.
“Other workers may have tools as inconveniently stored and the total time wasted can be significant. Keeping the tools closer makes sound sense.
“One problem is that this business is extremely capital-intensive,” says Mr Green.
“The mills that actually make the tubing cost about $1.5 million each and we have two here and another in Brisbane.
Then there are things here like our 10 overhead gantry cranes which cost between $50,000 and $70,000 each.”
However, more and more sophisticated equipment has been recently installed.
“Manufacturing environments in New Zealand and Australia are extremely tough now with our customers facing huge pressure from imported finished goods from cheap labour sources,” says Mr Green.
“So it’s essential for us to do all we can to help them
stay competitive.
“That’s why we’ve invested in even more efficient technology to provide them with more cost-effective ways to operate.
Previously, for example, they might have spent up big to have holes drilled in thousands of pieces but now we can do that automatically for them with special equipment.”
Industrial Tube customers cover a broad range of industries including automotive, furniture manufacturers and producers of display fittings for shops.
This precision-crafted tubing, available in all shapes and almost any design or size, is also increasingly in demand as an alternative to treated timber in the kiwifruit and horticulture industries.
“Yes, this is a challenging time for engineering firms,” concludes Mr Green. “But for those with the nerve and initiative there are plenty of opportunities for success.”
For further information:
Industrial Tube Manufacturing
Tel: 07 847 5333
Visit: www.steeltube.co.nz
Nerves of steel as Culham continues to grow in style
by Romy Udanga
Culham Engineering has become one of the largest family-owned and operated businesses in the heavy engineering sector after its yearly turnover jumped from some $10 million to $15 million a decade ago to about $40 million today.
Steel fabricator Culham Engineering is looking to enter the Australian market and increase its capitalisation to sustain the growth momentum it has been experiencing over the last decade.
Shane Culham is managing director of the Whangarei-based steel fabricator. The company was established in 1958 by Dave Culham, Shane’s dad.
The company primarily services the construction, petro-chemical and marine/ship repair industries.
With a 12,000-square meter covered workshop and a 400-tonne capacity slipway to the Whangarei Harbour on its eight hectare site, Culham Engineering produces steel structures for buildings, bridges and structural support, pressure piping systems and storage tanks.
It also provides industrial coatings, hot zinc spray and shot blasting, heavy lifts and haulage services.
The company invested about $1.5 million a year ago to install Python X, a 6-axis CNC robotic plasma cutting machine that can flexibly fabricate structural steel. With the robotic system, production capacity increased by about 400 percent, Shane says.
“We can now produce up to 80 tonnes a day. This is the only robotic system of its kind in New Zealand. There’s another one in New South Wales and one in Western Australia.”
With the newly acquired production capacity, Shane is looking to grow the company even further by venturing into projects in Australia.
“We see that as key to our growth. With all the projects happening at the moment, there has to be capacity uptake. You look at the projects in Queensland and in the Northern Territory; they’re all multi-multi-billion dollar projects. I’m pretty sure New Zealand can get into some of the contracts.”
The company had earlier forays into the Australian market but Shane says the timing was not optimal.
“We’ve been to see some key people in eastern Australia and southern Australia. We’ve made some pretty good relationships over there. They are more aware of our presence now than they were before.”
Looking to the future, Shane says they have to think about the “next leap” in terms of management and company structure.
“Reinvesting in our business rather than ourselves would be critical,” he says. Part of the thinking is investing several millions more in robotic infrastructure for some of the “very significant” projects the company is working on.
The recapitalisation may be best managed by getting a minority partner from New Zealand or offshore, and opening up the board to external directors, Shane says.
“I would probably prefer someone who is interested in a means to an end, in terms of growing Culham Engineering, and interested in what it does and where it’s going.”
Shane recalls working in the company with only about 60 employees in the late 90’s. It now employs more than 160.
“We had the equivalent of 250 full-time employees in 2009/2010, which was the best year we’ve had in our 52-year history. The past year was not really good, coming out of the global recession, but we are starting to see a lift in the industry again.”
Shane says Culham Engineering, which is ISO 9001:2008 certified, “prides itself in continually improving its facilities and investing in new technology” to gain competitive advantage.
Because of the scale of the projects it undertakes, the company “tended to concentrate” its business on about a dozen of clients, which includes The New Zealand Refining Company and Fletcher Construction. Shane says they want to keep it that way but the challenge of growth “means being open to other markets.”
Culham Engineering supplied the façade structure and video stands for the upgraded Eden Park Stadium and is currently fabricating steel structures for construction projects at the AUT University and the Auckland Viaduct.
Success Tips
Challenge your processes, invest in technology
Shane says that while Culham Engineering continually invests in new technology, its latest foray into robotic equipment is a direct result of the company challenging its processes.
What started it off was the simple process of drilling holes, Shane says.
“We were in the structural market and we couldn’t compete just by the typical old methods of physically drilling them.”
The company came across the Python X system, which was a plasma system that thermal-cut, not mechanical-cut, holes.
But previous engineering work codes did not allow thermal cutting of holes, Shane said.
“Not because they weaken the structure, but because generally, when components don’t line up, workers would take out the gas and cut holes to join them. So we looked at the codes as well.”
After 18 months of “due diligence” they finally acquired the CNC robotic system, which significantly increased their production capacity.
“It’s more efficient, more accurate. And it’s got a manpower cost ratio of 30:1”.
The next process the company is looking into is its information system, Shane says.
“We are linking all our departments together – drawing, design, estimating, procurement, production. It’s one of those ‘eurekas’ of this game. We’re growing in numbers and there’s information all over the place. We need a system that will allow full modeling capability to support our equipment.”
Watch for dangers when scaling up
Business plans don’t necessarily turn out to be as planned, and this is especially true when scaling up or when growing a company, Shane says.
“Managing growth is just as difficult as growing the company, basically. And you’re continually doing rain checks on yourself.
“Don’t just punch above your weight. It’s very easy to get a mess of it if you don’t read what’s coming.”
He cites as an example the impact of increased capacity to their production flow after they installed their CNC robotic system in 2010. It raised production volume by 400 per cent to between 60 to 80 tonnes daily but at the same time it introduced an anomaly in their process.
“We also do shot blasting and painting. So while we have steel flying out of the workshop, we realised we created a bottleneck in the blasting and painting section.
“Now we are looking for a solution so we can blast and paint what we produce.
“At least it’s a good problem to have.”
Scaling up also changes the “cost of doing business” equation, Shane says.
“It may just be bureaucracy but the cost of doing business eats into your margin.
“When we were a smaller company, we had the basic compliance requirements and just got on and did our business.
“But now, we make a point of being ISO 9000 certified, tertiary certified for ACC, and so on. Doing business comes at a significant cost.
“So whenever your margin shrinks significantly, that means you’ve got to get smarter at what you’re doing and be more productive.”
Have a succession plan in place
Shane says a succession plan, especially in family-owned and run companies, is very important.
For a better part of half a century, Culham Engineering was managed by its founder and family patriarch, Dave Culham. Some 15 years ago, Dave put a succession plan in place that saw Shane at the company helm.
“I’m the only son, and I’ve got two sisters. When I was sixteen, Dad wanted me to serve my time and that is exactly what I did.”
Shane’s management transition was a gradual process, spanning 12 to 15 years. “There was no specific time frame. Dad and I still work together. He’s 80 now and he still sits on the board, but he comes to work less and less often.”
Now at 54, Shane is finding it “pretty hard” to run the $30 million company by himself.
“I have a son who’s in the same trade who wants to be involved. But like my father before me, I said, ‘You gotta earn your stripes first, mate,’ and that is what he is doing. He doesn’t work for me, he works in Auckland,” Shane says.
“I’ve got Rob Kirwan, the general manager here to help me. I’m too busy trying to do the top end of the business now. I have to start working on it rather than in it.”
He says the coming five years may see some “integrated management” or “some participation of independent directors”, especially if the company’s planned recapitalisation pushes through.
But a succession plan and a recapitalisation programme are not just a catalyst for further growth, Shane says.
“The recapitalisation may be best managed by getting a minority partner from New Zealand or offshore. I’d rather have someone with a more secure tenure and have buy-in. Money talks, but it’s not all of that, it’s about having relationships.”
For more information:
Culham Engineering
Shane Culham
Tel: 09 438 7145
Visit: www.culham.co.nz
Metals New Zealand forms under an initiative by HERA
On December 21 last year, the inaugural general meeting of Metals New Zealand was held with its rules being adopted and the required signatures collected for its registration as an incorporated society.
The new organisation will be officially launched by a Government minister at its first major event, the 2011 Metals New Zealand Industry Conference on the April 14 in Wellington.
The interim executive is in place and final executive will be determined when a membership drive has been completed.
Foundation organisational members have agreed to pay the annual subscription of $1000. They are Casting Technology NZ (CTNZ), Galvanising Association New Zealand (GANZ), Light Alloys Manufacturing New Zealand (LAMNZ), Heavy Engineering Research Association (HERA), National Association of Steel-framed Housing (NASH), New Zealand Stainless Steel Development Association (NZSSDA), Steel Construction New Zealand and the Titanium Industry Development Association
A large corporate membership is expected via ordinary corporate membership and affiliate membership.
Ordinary corporate members pay an annual subscription of $500 and have the right to nominate representatives to the executive.
Examples of ordinary corporate foundation members include NZ Steel and OneSteel. Recruitment of executive members will be achieved through this membership category.
However, the majority of corporate members will most likely come via the affiliate member pathway through free membership of the members of existing organisations’ members – for example HERA or SCNZ members will be entitled to free affiliate membership.
So what are the additional individual benefits when there are already existing sector organisations such as HERA?
Ultimately, corporate members will benefit from a much stronger industry voice being provided by Metals New Zealand which carries the weight of multiple sector associations.
For this to be demonstrated, Metals NZ needs wider member representation.
So to be successful, it will need you, the members, to participate, and through the free affiliate member access option it is possible for all industry members to lend their voice.
Industry members also benefit indirectly through efficiency gains of the participating organisational members, as resources will be shared.
Metals New Zealand is not meant to supplant existing industry associations, but rather consolidate and focus their energies into one voice for the wider engineering industry, particularly to government but also to the global market.
You can download a Metals NZ membership form from the Metals NZ web site and sign up as either a free affiliate member or ordinary corporate member.
Who are we?
Metals New Zealand (Metals NZ) is an incorporated society serving the needs of New Zealand’s metals related industry.
Launched at the beginning of 2011, it consists of organisation members made up from metals-related industry associations, ordinary corporate members made up from key stakeholder companies and affiliate members, who are generally the members of the organisation members. Its executive consists largely of leaders of New Zealand’s major metals engineering organisations operating in the metals-based sectors.
The executive members are nominated by Metals NZ members because they are recognised as “captains of the industry”.
They offer their time to contribute to strategic thinking and planning; and believe, as leaders, that they have a responsibility to the industry and need to speak out on its behalf and also that of the wider community.
The Secretariat for Metals NZ is provided through the NZ Heavy Engineering Research Association (HERA) with the HERA Director Dr. Wolfgang Scholz being the current secretary.
Our vision
Metals NZ is a pan-industry sector organisation whose vision is to position the industry to be a prosperous, vibrant, sustainable and socially responsible contributor to the New Zealand economy.
Our mission
Metals NZ will achieve this vision through advocacy and strategic leadership on issues thata ffect the entire metals engineering industry.
Our approach
The Metals NZ executive believes that through the co-ordinated effort of the many metals industry sector groups, the overall metals industry performance can be improved. Based on objective research, open dialogue and understanding of the interests of each of the sub-sectors, it is believed that sound industry policies can be developed and promoted. Joint activities such as the Metals Industry Conference, the Sustainable Steel Council, and shared administration and resources are delivering significant benefits for members and the industry as a whole.
Metals NZ will limit its activities to matters of specific relevance to the metals industry as a whole. It will co-operate with other industry and business development organisations on common issues.
Independence and funding
Metals NZ represents the interest of the NZ metals-related industry. It is, however, independent of any specific company or organisations’ interest. It is currently funded through membership contributions from sector organisations and companies.
Key initiatives
Metals NZ is currently working on the following initiatives:
• Industry position on government policies such as research and development, local industry participation, government position on sector development – currently inequitable.
• Sustainability of metal products
• Threats from imported metal products
• Developing projects of national significance – ANZAC Centenary Bridge, Marine Energy Centre and Geothermal Industry cluster.

