By Andrew Patterson
Zee Tags is one of those under the radar businesses that few New Zealanders will have heard about ... unless you happen to be a farmer.
With the country’s livestock population more than 10 times the size of its human population this is a business with a target market that exceeds 40 million - a significant advantage over those targeting the two legged customer variety.
Founded in 1991 by current CEO Mike Gardner, Zee Tags has developed and patented a unique livestock identification system that allows farmers to keep track of their herds, whether that’s dairy, beef, sheep, deer or even pigs.
Starting with a one piece tag, which is still included in the company’s product range to this day, the plastic tag is affixed to the ear of the animal using a unique applicator device.
From those early foundations, the business quickly grew into Australia and then globally and today Zee Tags has established distribution arrangements in more than 49 countries.
Its product range has also grown with a range of devices designed to cover the needs of farmers requiring a variety of tagging systems.
General Manager, Matt Cashmore, who joined the company in 2012, says innovation and entrepreneurship have been the hallmarks of the company’s success.
“There are a variety of other systems available in the market, but internationally we would be considered the market leader which is reflected in the global footprint that we’ve been able to establish,” he said.
It’s obvious things have come a long way for Zee Tags since those first tags rolled off the product line more than two decades ago.
“In the early days it was pretty much a plastic tag with a number on it and the farmer would have a series of hand written records with a record of the animal’s history. Today, that information is all included on a computerised data base and interfaces with an RFID system (Radio Frequency Identity) so the technology has changed dramatically. Cows for instance, will generally have an electronic tag in one ear for the RFID system and a plastic number based identification in the other.”
The introduction of RFID has been something of a revolution in dairy farming.
The system uses radio-frequency electromagnetic fields to transfer data from a tag attached to the animal’s ear so that it can be appropriately identified and tracked. The tag itself contains electronically stored information which can be read from up to several meters away.
“However, there are some sectors where this technology is still to be taken up. Sheep farming for instance, where outside of the high value, fine wool sector you still see animals with no tagging at all.”
New identification regulations
In July last year New Zealand adopted new statutory regulations which now require all cattle to be properly identified with an appropriate tag and the same rules will apply from March of this year to deer.
The moves are intended to significantly strengthen the country’s bio security commitments in order to be able to provide a high level of traceability, should this be required.
“If ever there was an outbreak of foot and mouth, and obviously we hope there isn’t, then this system has the ability to trace it right back to its farm of origin.”
While on the face of it, the new regulation would seem to be good for business, Matt Cashmore says that’s not actually the case.
“What’s happened is that effectively we’ve lost one tag and gained another so there’s been a netting out effect."
“Obviously traceability is a good thing and it’s our products that play an important part in being able to make the system work effectively.”
New Zealand’s harsh climate, particularly our very high UV readings, has previously created challenges to ensure the numbers on the tags don’t fade over time.
“The impact of UV is alive and well still, but in terms of the plastics and the ink we use these days, our products are far superior to some of our very earlier versions.
“However, the real strength of our product is the innovation in the design of the applicators which are used to apply the tag to the animal’s ear."
“We’ve developed snap back arms so you can’t pressure or bruise the ear, so the animal can’t be injured by the person applying the tag. In addition, we’ve been able to eliminate ripped ears which aids retention of the tag itself."
“Retention is actually key. You have to have the tag remaining in the ear at all times, otherwise its expensive to replace and you’ve lost the ability to retain the information associated with the tag."
Protection of the IP that has been employed to develop the product has also been important for Zee Tags.
“In the tag itself there’s a lot of patented material and technology that makes it quite unique."
“In the case of the RFID tags, it’s obviously important that they are robust and continue to operate for years into the future.”
With 49 countries included in its international footprint, Zee Tags still believes it has significant growth potential in the future.
The United States remains its single biggest market.
“There’s still potential for us to grow in all our markets. Technology has shown that with the introduction of RFID."
“In the US we started there with our single tag in 1991 and we now offer a range of products in that market and sales there continue to grow for us.”
Innovation / R&D
Zee Tags has developed its own dedicated R&D team within the business which is led by CEO Mike Gardner.
“We ensure all our products are put through an extensive and rigorous period of trials and tests before they are released on to the market."
“For us the customer is king and we maintain a very customer-centric approach in the way we operate."
“Obviously it’s one thing to have innovation but if it doesn’t meet the needs of the market there’s no point in releasing it."
“So our sales teams, our technical team and our R&D team are liaising with customers and end users constantly to ensure both our current product range, as well as new products in development, are all meeting their expectations.”
Now into its third decade, Zee Tags isn’t resting on its laurels.
The nature of its business has also allowed it to largely escape the fallout from the global financial crisis and benefit from the recent growth in dairy conversions.
“We’ve set some fairly audacious goals for ourselves in the future to drive growth, particularly around the financial side of the business."
“In fact, our goal is to grow the business exponentially in the coming years."
“So we’re currently gearing up with people on the ground and expanding our production processes to ensure we actually deliver on that growth."
“He have production facilities both here and in Australia as well as in the U.S. and all our applicators are hand made here in NZ.”
Less than a year into his role as General Manager at Zee Tags, Matt Cashmore says he’s excited about the potential for the business to deliver on its self-imposed targets.
“Our products are fantastic and this is a great business both in terms of its culture and its innovation."
“Fundamentally, we’re in a good spot, but we’re not resting on our laurels and we’re pushing hard to achieve the next phase of our growth.”
|Staff:||84 (NZ based: 45)|
|International offices:||Australia & US|
|Export / Domestic sales split:||90% : 10%|
|Recent highlights:||Currently ranked 67th in the TIN100 index|
|Likely to IPO:||No|