Feature interview: Bruce Davies, Modtec Industries - Winner, Excellence in Exporting Award 2011
Modtec
Taking on the World from Silverdale
Vision
To reshape workspaces to increase sustainable productivity.
Mission
Engaging with our partners to
be faster, better, cheaper, easier, and safer.
Values
To work in an environment that is “unique” and “challenging” with “respect” for each other, including “our families” as we move Modtec from being a “good” to a “great” company.
Modtec will not be a name that means a lot to many. In fact, I have been an active member of the North Harbour Business Community for the past two decades and have never come across the name before. But their story is a fascinating one.
The journey starts way back in 1969, over 40 years ago. The company was founded by four chemists and then purchased a decade later by Bruce Davies, who is still the owner and driving force of the business today.
Modtec started out as a fence stain manufacturing company. While Silverdale is still their home, four decades on this is one of the most innovative engineering and manufacturing businesses in the country.
The move to engineering came in 1979. Up until 2000 the Modtec business was producing products, or intellectual property(IP). 90% of the time for others and only 10% for their own business. Eleven years on the company is a major exporter of their own IP and they have some ambitious plans for the future. These plans were clearly articulated following a Trade and Industry ‘Export Diagnostic Audit’ in 2001.
Meeting founder Bruce Davies is a refreshing experience. Bruce is certainly a veteran in business terms. But this is no old-style business. Yes, the values are traditional, but the thinking is all futuristic. The original business plan that took the company through until 2014 has recently been revised to 2020. The turnover goals are $50 million by 2020 and $100 million by 2026 – or sooner.
Before purchasing Modtec, the Mangere born-and-bred Bruce Davies cut his teeth in manufacturing as Production Manager for iconic Kiwi underwear brand Bendon. It was there that he learnt the principles of what he calls “modular manufacturing”. The combination of an “enquiring mind” and a desire “to make a buck” led the Industrial Engineer to “stick his neck out” and buy Modtec, 32 years ago.
When quizzed about the reasons for Modtec’s success, Bruce Davies produced a poster that clearly outlines the company’s vision, mission and values. “We have a very strong internal structure and the business is based around respect and values,” explained Bruce. “This applies to both customers and suppliers and we encourage our people to make mistakes. We are not afraid to delegate risk and let our people make mistakes as we have very strong measuring tools in place around the key elements of design, quality, service and delivery.”
Today there are five parts to the Modtec business. Integ is the brand that is making big strides locally and in export markets overseas. Integ is a range of workspace productivity tools – including modular LCD computer monitor arms, CPU (central processing unit) holders and accessories that deliver form, function and ergonomic benefits in the workplace. This brand is now sold in Australia, Singapore, China, India, USA and the UK, as well as New Zealand. Another part of the business is System40, an integrated modular desking system for the modern office work environment. Liberty Healthcare is a range of homecare solutions for those being cared for in their own homes (beds etc.). Modtec also manufactures a range of cages for the local transport sector. FreightPak is a collapsible, moveable freight cage which is used by courier and freight operators. The fifth part of the equation is a unique die-casting manufacturing system.
Modtec has a team of 40 at their Silverdale head office and there is a showroom in Bush Road, Albany. There are also sales offices in Shanghai (China), Bangalore (India) and four in Australia.
The Integ products are used widely in New Zealand in hospitals, airports, Telco’s, banks and large corporate institutions. They are sold through specifiers and OEM furniture manufacturers.
“We take a very consultative approach to selling and do not sell on price,” says Bruce Davies. “We have just received a huge opportunity in the US and we know that we are double the price
of the competition, but the quality of our offering is what will win
the day.”
International sales are achieved through attending most of the large trade shows around the world, which Bruce has been doing for 15 years.
Advertising and marketing is very niche, with a great deal of effort made below-the-line, targeting specifiers. In offshore markets they use well-known expat Kiwi’s to assist with promoting their products. The head of sales and marketing is Ian Cooper, who played a big part in marketing the hugely successful F&P Dish Drawers while working for several years at Fisher and Paykel.
While 2011 is the first time that Modtec has entered the local Westpac Business Excellence Awards, the company is no stranger to winning accolades. It won its first award back in 1999, which was an environmental recycling award from the New Zealand Packaging Industry; in 2004 it won an Auckland Exporter of the Year Award; in 2008 a Best Design Award (DINZ – Designers Institute); and in 2009, Best Use of Design in International Business Award (New Zealand Trade and Enterprise).
“Entering awards helps us to promote our vision and to get peer acknowledgement for our Modtec team,” explains Bruce Davies. “For specifiers it is good to know that they are working with a winner.”
So what advice can Bruce Davies share with others after 32 years in business?
“Key things I would advocate are patience; strong foundation and governance; investing in people; have good and easily understood processes; articulate your vision, mission and values; and walk the talk. All pretty self-explanatory.”
What mistakes have you learnt from along the way?
“Probably the biggest mistake we have made is growing faster than our processes could manage, which is why I advocate patience. We once received four orders from a new customer and due to our processes not been quite right we took a risk with credit that ultimately cost us around $350,000 when they went broke. We now have what we call an internal ‘Lean Management Team’ (LMT) in place who manage our systems. They are supported by a Process Improvement Team (PIT) who implements any changes that are required. We know that to expand globally we have to be efficient and eliminate waste. This is all part of our desire to meet ‘Standard Global Best Practice’ standards.”
“We have some clear goals around growing our business to $100 million turnover by 2026 or sooner,” adds Bruce Davies when asked about the long-term goals for Modtec. “We also want to win the ‘Best Employer Award’ by March 2016 and be the ‘preferred supplier’ of sustainable workspace productivity tools in India by 2020. These are goals that we have set as a Management Team.”
There is much more to Bruce Davies than Modtec. He has a strong commitment to both the community and the environment. He has recently become involved in Mainland Island Tapora to establish Kiwi and Weka on the Kaipara Harbour. He is also the founding chairman of Life Education Trust Rodney, an initiative of the Orewa Rotary club where Bruce has been a member since 1984. He also boasts about having had the same girlfriend all his life! He actually married her over 40 years ago and they have three sons and two grandchildren. Bruce and his ‘girlfriend’ Pam live at Wainui and his interests also include fishing and golf – at the Tapora Golf Club – where the family Bach is located.
