Dunedin firms join forces against recession

Three Dunedin engineering businesses have combined their expertise to try to gain an international competitive advantage by procuring raw materials at a better cost.

Escea managing director Nigel Bamford said in an interview that the industry project funding for the three engineering firms - Escea, Farra Engineering and Allan's Sheet Metal and Engineering Services - recognised that Dunedin still had an engineering industry of some strength.

"There have been some hits in the last 50 years for the manufacturing sector but what's left is still vitally important locally, and it shouldn't be taken for granted."

When the engineering jobs in the city were added up, they would probably equal those of the University of Otago, Mr Bamford said.

The three firms collaborated to get a grant of $36,000 from the Dunedin City Council economic development unit.

The money would be used to hire a specialised procurement person.

Dunedin manufacturers could make the best products in the world, but to be viable they needed to be competitive internationally with what they made, he said.

That meant buying smarter and reducing costs in an intelligent way, through getting better prices or finding a different source, rather than "slashing and burning".

The procurement person would use the combined size of the three firms to source raw materials at a better price.

It was possible other non-competing businesses could join the scheme.

Escea, Farra and Allan's were using the current global downturn to examine the way they did business.

While Farra and Allan's were suppliers to Escea, they would also benefit from any purchasing gains, Mr Bamford said.

The downturn had affected business but although business was difficult, it was not impossible.

"The naughty thing is that businesses like ours should be focused on ongoing efficiency but the reality of business is that if you are flat out filling demand, you never get round to it.

"It's only when the market slows down that you get down to it."

By the time the recession ended, Escea and the other companies would be in a much stronger competitive position to trade internationally, he said.