Scott seeks targeted growth in all markets

Scott Technology chief executive John Kippenberger. PHOTO: LINDA ROBERTSON
Scott Technology chief executive John Kippenberger. PHOTO: LINDA ROBERTSON
Dunedin engineering and automation business Scott Technology is undertaking a strategic overhaul to help ignite its global performance.

Newly installed chief executive John Kippenberger said the company had come to the end of a series of acquisitions over a short period of time.

The spate of acquisitions, which included Belgian warehouse automation company Alvey Group, follows the acquisition of a controlling stake in Scott Technology by food manufacturing giant JBS in 2016.

The company now employs about 800 people across 12 countries and has a portfolio of more than 200 patents and around 80 trademarks.

Last year it reported a 4% increase in earnings to $20million, with bank debt at $16.4million, against total shareholder funds of just under $112million.

Mr Kippenberger has spent the first two months in the role visiting international offices, with a view to ensuring the company was able to leverage its capabilities and move into new markets.

"We now need to take stock, work through the individual nuances of our markets and build a focused growth strategy in country-specific markets."

He said the recent contract with Rio Tinto for an automated mine site lab for the Koodaideri project in Western Australia was "extremely positive" and reflected a combination of the company’s technologies and experience in providing automated, end to end laboratory systems.

"Our growing mining sector business and our meat robotics, are an important part of the growth story for the company."

He said there was also scope for organic expansion in the material handling and logistics business, which would come largely through the capabilities of the Alvey Group in Europe.

"There is a core capability from that business, so we need to look at applications in markets outside of Europe, for example how to take the technology and grow a business with it in the US market."

He said at the time the company would review other areas which were not necessarily being productive.

"We have a lot of good products and a lot of good people and we need to take a closer look at all of that in developing our strategy."

He said the expansion of the Dunedin site, at a cost of $4million, reflected its importance to the group and the recent decision to close its Dunedin engineering company DC Ross, with the loss of eight jobs, had not been taken lightly.

"The team tried to make it work before we reached that decision to close it up, but it had never really been a good fit for the company."

Mr Kippenberger said it was "early days" as to its plans for provincial growth funding of $5.8million for an agriculture technology business unit, there were certainly opportunities in that space.

"Overall, our strategy in this respect would need to align with our core business and global capabilities and there are a lot of moving parts around that," he said.

Scott Technology last traded at $2.23, down 15% over the past year, valuing it at a market capitalisation of $174.6million.

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