Innovation in Pultron’s DNA
An innovation company that manufactures is how Pultron Composites managing director Jasper Holdsworth likes to see the Gisborne-based business.
HIGH IN FIBRE: Pultron Composites managing director Jasper Holdsworth inspects polymer fibres before they are processed and pultruded at their plant in Gisborne’s industrial subdivision. Picture by Liam Clayton
PULTRON has expanded its Gisborne plant, is among 43 high-tech companies able to access a new $70 million R&D fund, and is targeting major growth from its Dubai operation.
A plan for the Middle East
The Dubai plant will be renamed Mateen Corporation after the high-strength product Pultron developed that it has called Mateenbar (Mateen is an Arabic word that means strong and durable).
Mateenbar is a heavy-duty, corrosion-resistant, light-weight, steel-alternative, fibre reinforced polymer (FRP) pultrusion. In high-corrosion environments such as Dubai, it is a cost-effective, more durable substitute for steel reinforcement.
“We’re looking at strategic alternatives for Mateen use. We want to capture a share of the market. We think we are the best in the world,” says Mr Holdsworth.
“For the Mateenbar in the Middle East, we think we have the lowest cost and the best strength per dollar. What we’re looking to do is focus on a go-to market strategy.”
Pultron has employed technology-focused private equity investor Sky Kurtz to help achieve its goal of becoming an industry leader. Mr Kurtz will join the company as strategy and corporate development consultant, and chief executive of Mateen Corporation in Dubai.
His role is to pursue strategic initiatives so Pultron can determine the best route to market. “For Mateen Corporation it could mean a capital-raising or aligning ourselves with a strategic investor,” Mr Holdsworth says. “It might involve increasing our expenditure in a business development and sales force.”
Pultron’s major buyers of Mateenbar are countries whose leaders are cost and life-span focused. The use of Mateenbar in foundations is one of Pultron’s major growth lines, says Mr Holdsworth. “We can adapt Mateenbar to any structure.”
In for the long term
The high-strength product is only at the beginning of its market-place life cycle. “Five years ago, it was extraordinarily hard to sell Mateenbar because it was new. Now it is just a case of determining if it is economically compelling.
“This is a function of the time horizon of the client. Generally, if the project lifespan is greater than 15 years the net present value, or the internal rate of return or payback period, is compelling.
“The market potential is still in the very early days. That is why we have invested in the Middle East. Using the macro-economics of operations in the Middle East, and our world-leading technology, our goal is to be the leader for fibreglass reinforcing rod. You do need to think long-term.”
The company was one of 43 in New Zealand granted access to a new $70 million Ministry of Business, Innovation and Employment research and development fund in 2014.
“That means the government believes we are a credible research and development organisation,” says Mr Holdsworth.
“Innovation has been a major element of Pultron’s DNA. Every dollar we spend on research and development, 20 percent of that expenditure is credited back to us. This means we can invest more in this area.”
Investment means more staff and the freedom to take more risks, he says. It also means growth.
“Earlier this year we expanded one of the finishing facilities by 30 percent and we’re increasing the site size by 20 percent. We recently bought some land in case we need it.”
Risk-taking is key if development gets to a cross-roads in a project, says Mr Holdsworth. “There might be three paths to go down. What you can do is go down all three. That doesn’t happen all the time, but what that means is you can push through. Sometimes spin-offs from research and development are greater than the original objective.”
One example is a product development in which Pultron’s polymer scientist lifted the tensile strength and modulus of elasticity. Also known as Young’s Modulus, the modulus of elasticity is a measure of how a material or structure will deform and strain when placed under stress. The strength of a material is measured in gigapascals (GPa).
“We’ve lifted our modulus from 50 to 60 GPa. This means you can use less fibreglass to get the same performance,” he says. “A key factor in the organisation is that the people who generate ideas need to have the psychological safety to give something a go.
“When you do R&D, you do have failures. The critical thing is to fail quickly and cheaply. If you are in an organisation where your staff don’t feel comfortable taking risks, that is a risk.”
Cross-bars in cross hairs
Pultron foresees a need to replace the wooden cross-bars on New Zealand’s power-poles.
“The cross-bar is a target for us,” says Mr Holdsworth. “The wooden cross-bar industry will be displaced in five years time. Environmentally it means less harvesting of hardwood.
“Fibreglass is the obvious alternative. It is stronger, safer and longer lasting. What is exciting is we are in the substitution business.”
A co-operative approach known as industry clustering is on the table for this district since the Economic Development Agency (EDA) was formed in Gisborne. An industry cluster is a geographic concentration of interconnected businesses, suppliers and associated institutions in a particular field. Clusters can increase productivity.
“That could potentially open up some markets that do not otherwise exist,” Mr Holdsworth says.
The object of the cluster is to realise latent potential in Gisborne by sharing information from company to company to help drive economic activity, and he believes the strongest economies have clusters of businesses.
An industry cluster represents an entire chain of an industry, from suppliers to end products. It includes supporting services and specialised infrastructure.
According to a San Diego Association of Governments website, cluster industries are geographically concentrated and “inter-connected by the flow of goods and services, which is stronger than the flow linking them to the rest of the economy. Clusters include both high and low-value added employment.”
The industry cluster concept was popularised by Michael Porter in his 1990 book The Competitive Advantage of Nations. Clusters have the potential to affect competition in three ways according to Porter: by increasing productivity of the companies in the cluster, by driving innovation in the field, and by stimulating new businesses in the field.
“One of the interesting things is if there is a forestry cluster, Pultron would join such a cluster because we could fertilise that industry with our knowledge,” says Mr Holdsworth. “That would create economic growth for the region and ourselves.
“If the modulus of wood is 10 GPa and fibreglass is 50 GPa, we could introduce a fibreglass step into a wooden beam so it is a composite of wood and fibreglass. This would increase the modulus of the beam from 10 GPa to 16GPa.”