Having developed equipment to handle regular shaped fruit and vegetables, Compac Sorting Equipment has secured $3.7 million of TechNZ funding to create sorters for small and delicate, as well as irregular shaped produce.
The Auckland-based private company must match the government funding in a 30 month project which aims to help expand its $65 million a year turnover into $100m a year by 2015.
“The investment’s to further develop our software and technology for produce that might be smaller such as cherries, or longer such as cucumbers, or in a more dirty environment,” says Compac general manager, Bob Show.
“It will increase the number of market segments we’re in, fast track its development and broaden our range of customers. The contractual documents signed with TechNZ have very clearly defined stages and end-stages that must be achieved in return for the government’s investment he says.
Show estimates that Compac is number three or four in the world in produce sorting equipment sales, with most of its major competition being European companies. Its equipment manufacturing is carried out in Uruguay, Korea and Italy, as well as in Auckland.
The company’s competitive advantage, extensively developed since its 1984 establishment, is software and technology that not only sorts produce by external blemishes, but also by its internal sugar levels and defects. In short, it provides grading to what retailers’ require.
“Other competitors can do this to varying degrees,” says Show, “but from a consistency and performance point of view, we see ourselves as number one.”
All of Compac’s research and development is carried out in-house, with 38 fulltime researchers across the electrical, electronic , software and mechanical disciplines.
The company has patents on some key elements of its sorting equipment, “though software has some natural barriers, not the least being years of development,” Show says. “What we’ve done can’t be replicated in five minutes.”
It mostly carries out its sales direct to customers through its own employees, though in South Africa and the north-west United States, because of their particular strengths, distributors are used for sales. “We run a mixed model, with some of our own company people, some joint ventures; its horses for courses really,” he says.
As for many other exporters, China is a market of particular interest, where Compac already has three sales staff.
“Growth in that market takes time,” Show says. “When Chinese retailers start making more demands on their suppliers and packers, that’s when we’ll be required.”
Show says this is partly a reflection of the different market maturities.
“Europe’s very mature; you have packers there that are third or fourth generation and very well established,” he says. “Asia’s only just starting, and many are only just moving up from a manual sorting system.”