Sunday Star Times February 8, 2004 Business D3 [NZ]

Kiwi icon moves to tap Aussie market

Thinking outside the square has given longtime Kiwi tapmaker Methven the tool it needs to spearhead its long planned drive into the untapped potential of the Australian bathroom and kitchen market.
From this week, Methven’s internationally-recognized flagship range of Isis tapware is available in Australia.
The Isis range will be sold through Flexispray, a leading Australian shower product supply company in which Methven gained a controlling stake in July last year.
A management team headed by Methven Chief Executive Rick Fala now owns 50% of the icon Kiwi tapmaker founded in Dunedin by George Methven in 1886.
The other 50% is owned by AMP Henderson Private Capital, with Pencarrow Private Equity managing AMP’s involvement.
“Back then we saw untapped opportunities for Methven we believed had not been played out,” said Fala.
And those opportunities involved glittering prizes awaiting the company in overseas markets – most immediately Australia.
Three years ago Methven employed 130 staff, had an annual turnover of $30 million, exported around 5% of its specialist values and tapware, and had a design team of five.
Today it employs 210 people, has lifted its turnover to $50m, is exporting around 40% of its product, and had expanded its design team to 17,
Fala said growth in turnover and staff numbers had been the result of acquisition as well as organic growth in the past few years.
And while exports have already climbed, he sees the day when exports account for 70% of its production.
But Fala says the key to Methven’s rebirth had been the success of the company’s growing industrial design team which had given the company the products it needs to sell to the world.
“Our design team is at the business end of what we are all about,” he said.
Two years ago Methven designer Shaun Craill decided tap design had become slow, safe and incremental.
He decided to break the mould, and came up with Methven’s flagship range of Isis tapware which last year reached the finals of two significant design awards, one an international design award programme in Germany.
Beyond the obvious aesthetic elegance of the taps are practical design features a casual user might appreciate, but unawares.
Like a cured surface on the spout which ensures drops of water quickly roll off the chrome surface: a tall mixer spout that means less awkward bending for the generally tall Kiwi and Australian population, and for the environmentally conscious, a smaller than usual tap outlet minimising splashing and reducing water usage by up to half.
Fala said the merger with Flexispray, which has now become Methven Australia, was already paying big dividends.
He expected sales of the Isis product to cement Methven’s place in the Australian market, which had already gained significant traction with sales of mid-range products.
Whilst Fala had his sights on export opportunities, he says these will not be pursued at the expense of Methven’s New Zealand business.
‘Exporting sounds sexy, but in the ‘90s they got Methven into a situation where it neglected its home market in the way that could have been catastrophic for the company,” he said.
“We learnt from that experience that New Zealand customers must always come first.”

Gary Sheeran – Sunday Star Times