By Andrew Patterson
Compac Sorting Equipment has become a global leader in fruit and vegetable sorting technology and was recently responsible for designing, building and configuring the world’s biggest fruit sorting installation.
It’s been tough times for New Zealand’s manufacturing sector in recent years with many businesses relocating to Asia, a stubbornly high kiwi dollar and a slowing global economy.
But one Auckland based engineering company is proving that combining innovation with world class systems design and software can literally place you at the top of the pack globally - or should that be top of the crate.
Compac Sorting Equipment is regarded internationally as one of the world’s leading suppliers of fruit and vegetable sorting equipment and has developed leading edge technology and IP solutions that are 100% home grown.
In fact, chances are if you’ve munched on an apple or a kiwifruit in recent days it’s been sorted by Compac who account for around 70% of local sorting installations.
Founded in 1984 by Hamish Kennedy, a young electrical engineering graduate, he decided to design and build a sorting system for his parent’s kiwifruit business in Kerikeri.
It wasn’t long before he was being approached to do the same for other local orchardists and so Compac was born and has quickly grown into the company that it is today employing more than 300 staff and operating in 30 countries globally.
Earlier this year, the company was responsible for manufacturing and installing what is now the world’s biggest fruit sorting system in California, a 90 line behemoth that can simultaneously sort, grade and process 30 million mandarins a day – a contract that netted the company, and the country, $NZ18 million in valuable export earnings.
It’s no surprise therefore that Compac was named the supreme winner at this year’s New Zealand High Tech Awards.
However, visit their non-descript manufacturing plant in the back blocks of Onehunga and, from the outside, there’s nothing high tech about its external appearance.
This is a business that still sees itself as the sort of engineering company that used to dot the landscape the length and breadth of the country with its raw ingredients still being steel and sheet metal.
Where Compac differs from those that have closed or been forced to shift overseas, is that it has kept pace with technology to create a fully integrated fruit and vegetable sorting system that is truly world class.
By sorting, we’re not just talking about size and shape.
This equipment can sort fruit based on colour thereby ensuring consistency in appearance, spot blemishes on the outside as well as being able to peer inside the fruit and handle produce in a way that it never gets damaged using a patented track design on each of its processing lines.
Commitment to quality
Compac combines start of the art engineering with some of the most sophisticated sorting and grading software available which it has pioneered and developed itself reflecting the kiwi ingenuity we like to pride ourselves on.
Director of international sales Dave Buys, who has been with the company since 1994, says Compac’s success is based on its commitment to quality and innovation.
“Sorting and packing is our core technology, but we also get involved in traceability as well so when the fruit arrives at our customers sites we have to track it through all the various stages and then get it packaged ready for despatch to market. A big focus of our business is food safety and the traceability that guarantees food safety.”
So while sorting is itself critical, size, colour and the internal quality of the fruit is also just as important as anyone who has brought a fresh apple, only to discover the inside of is brown, knows only too well!
“We have developed sophisticated technology where, even though an apple looks perfectly fine on the outside, we can separate out any that have a brown core in the middle because our system is able to detect that too.”
Customers are always trying to reduce costs and this is where Compac can develop solutions and enhancements in its design process to further automate and refine the sorting process.
"Most of our good ideas actually come from our customers. They have problems and challenges that need to be met and they generally come to us and say can you solve this problem?"
"Reducing labour costs is critical for our customers because these businesses are a long way from their intended markets, often in places like Europe, so there’s always a big push on reducing operating overheads. Automation is a big part of what we do to reduce labour costs so you end up using cameras and electronics to do the job a lot more effectively than sorters would have been able to do 20 years ago."
When it comes to innovation Compac maintains what it calls its “wish list.” Everything that customers and engineers have requested or dreamed up is added to the list and then a validation and prioritising process is undertaken to decide which ideas get moved on to the next level.
"This covers mechanical design, electronics and software and often it’s a combination of those three disciplines so we have to look at the resources we have available in order to determine which products or new features we’re going to develop."
Staying ahead of the competition
"The market validation process is an important part of the decision. Often we get requests that might benefit just the one customer, but if it’s really only just for them then it’s probably not going to be a valid market. So we have quite a disciplined approach when it comes to the innovation process."
But there’s no resting on the company’s laurels, despite Compac successfully achieving a global footprint.
"It’s a technology race and we’re always saying that technology, just like the fruit we sort, is very perishable in this business. What you develop today you cannot stop and rest on that for the next five years. You have to keep developing in order to win the research race and while we’re ahead today we don’t expect that will keep us ahead in the long term."
In addition to Compac’s NZ manufacturing base in Auckland, it has three other production facilities located in Italy, South Korea and Uruguay servicing the lucrative fruit growing regions in South America.
"When it comes to on-going servicing arrangements, most of these are in market because that part of the business has to be local but most of our training is actually conducted in NZ."
Call centre operations are also run in each market which often allows technicians to be able to resolve problems remotely.
However, not everything goes according to plan when you’re operating globally as the company discovered when it first moved into France.
"We discovered that all of our software had to be in French which is a requirement of the market so we had to go through a whole process of first of all designing what we wrote and then translating it into French which was a problem because we didn’t write the software with translation in mind. These days our software is produced in a whole range of languages but it was an important reminder for us that until you meet the requirements of the market you can’t succeed."
Every exporter is dealing with the impact of the high kiwi dollar right now, none more so than Compac which has many of its customers based in Europe where the NZ dollar this week hit an all-time high against the Euro of 65c.
Since November last year, the Kiwi/Euro cross rate has gained almost 20%.
Dave Buys says that has resulted in a significant squeeze on margins.
"We can’t just put up our prices and we’re competing against suppliers in both Europe and the U.S. who have much weaker currencies so it makes it extremely difficult for us. All we can do is point to our superior performance and service offering in the market but often it comes down to price and that’s where we’re at a disadvantage because of the high currency."
However, despite the vagaries of the currency, Compac sees a bright future ahead for itself.
"We do have the best technology today, and I chose that word today carefully because everyone is working and chasing hard to get better, but we really sell on performance and value so if our customers look at the value return equation on their investment we normally come out on top."
As for the company’s growth aspirations in the future it’s unequivocal about its outlook.
"With 300 existing staff today and customers in 30 countries we believe the potential is there to double our turnover in the next five years…we think that’s achievable."
Not bad for a business with humble beginnings in Kerikeri 28 years ago when a young engineering graduate simply wanted to design and build a device that sorted kiwifruit more efficiently for his parents.
|Sector:||Specialist high tech engineering equipment manufacturer|
|Staff:||300 (100 NZ / 200 International)|
|Head Office:||Onehunga, Auckland|
|Global footprint:||Customers in 30 countries with manufacturing operations in Italy, South Korea and Uruguay|
|Growth projection:||Turnover to double in five years|
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