Market expansion behind new investment

Fisher  and Paykel product design manager Richard Butler in the Dunedin design space, which will be almost doubled in size. Photo by Peter McIntosh.
Fisher and Paykel product design manager Richard Butler in the Dunedin design space, which will be almost doubled in size. Photo by Peter McIntosh.

Fisher and Paykel Appliances' multimillion-dollar expansion of its laboratories and research and development facilities in Dunedin and East Tamaki, Auckland, is focused on expanding and new markets.

Last year, Fisher and Paykel created a record in delivering a range of 70 new products, including its first front-loader washing machine, incorporating SmartDrive technology, and its recent award-winning OB60 wall oven.

About 80 new jobs were created last year at both facilities, and the majority of about 65 new engineering and design, research and development jobs in Dunedin are expected to be filled in the next two years.

Dunedin-based Fisher and Paykel product design manager Richard Butler said most of the new employees would be tertiary-qualified in engineering, design or science, and applications were expected from around the country and overseas.

''We've got major projects under way in cooking and dishwashing, with an expanding market in China, but we want to grow [sales] in the United States and United Kingdom,'' Mr Butler said.

While not wanting to be held to creating 70 or more new products every year, he said there was enough new work and also design ''refreshment'' to adapt to differing country requirements to ''expect plenty of growth'' in years ahead.

The Dunedin deal is being financed by a Dunedin City Council contribution of $2.3 million, from the sale of unidentified, underperforming council properties, an about $2.3 million injection from Fisher and Paykel, and less than $1 million from Dunedin company Golden Block Developments, which has 51% of the Penrose Building, against 49% held by the council.

The council and GBD pay half each of the Penrose upgrade.

Giant Chinese whiteware manufacturer Haier owns Fisher and Paykel, but all the Dunedin research and development work goes into Fisher and Paykel-branded products, which generally sell at the rate of about 1 million units per year.

Extra technology and design work for Haier is separately charged back to Haier.

The Fisher and Paykel-branded units are now manufactured in Mexico, Thailand or Italy.

In mid-2009, Haier took an initial 20% stake in debt-laden Fisher and Paykel, and by late October 2012 had completed a 100% buy-out for about $741 million.

The company was delisted from the stock exchange later that year.

Mr Butler said the company had just signed a new 10-year lease with the council for the Wall Street space, and was negotiating for a similar lease of the Penrose space.

In the Dunedin development, about 18 car parks of Wall Street would be redeveloped into 550sq m of expanded laboratory space, while stages one and two of the Penrose development would encompass the top storey of the Penrose Building and be used by the new design and technology staff.

Fisher and Paykel chief executive Stuart Broadhurst said expansion plans announced in February last year were continuing to ramp up, benefiting the brand in New Zealand and internationally.

''As we move towards our 80th anniversary, our growth in research and development is continuing to accelerate, with 80 new engineering roles already in place in Dunedin and Auckland,'' he said in a statement.

The new front-loader had attracted ''phenomenal interest'', underpinning Fisher and Paykel's leading market position in laundry appliances in Australia, while demand for the new OB60 wall oven ''has exceeded expectations and attracted huge interest across all markets'', he said.

''We'll be looking to recruit further new roles to support the continued expansion of our research and development operations in both cities over the next two years, entrenching New Zealand as Fisher and Paykel's research and development hub.''

He said Fisher and Paykel had just ''signed off plans'' with Haier to redevelop a factory at its East Tamaki site to accommodate Auckland growth in its research and development team.

''This new state-of-the-art facility will contain our product development and industrial design teams and includes a full suite of quality and standards testing laboratories,'' he said.

The East Tamaki facility would be running by mid-2014, and Mr Broadhurst expected to confirm a date for Dunedin during the next two months.

• Almost six years ago, in April 2008, Dunedin-founded Fisher and Paykel slashed about 1000 jobs at plants worldwide, including 430 jobs in Mosgiel, which closed the plant, and closed plants in California and Cleveland in the United States and in Brisbane.

At its peak, the then 22-year-old Mosgiel plant employed 600-700 workers seasonally.

Initially, about 90 design jobs moved to Dunedin. That now stands at about 165, including fewer than 30 call-centre staff.

simon.hartley@odt.co.nz

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