The resource boom in WA has been only one of the motivators behind the burgeoning Steel Blue safety footwear success. By LIBBY-JANE CHARLESTON.
By Libby-Jane Charleston
Steel Blue is one of many companies taking advantage of the extraordinary resource boom in Western Australia. More miners translates to more feet in need of safety boots and work shoes manufactured by Steel Blue.
Perth-based Steel Blue’s sales have grown 25% a year for the last six years; selling around 900,000 pairs of safety boots in 2005-06 – despite the fact that the boots are more expensive than their competitors’.
The company’s largest market is Australia, closely followed by Asia. Co-founder Peter Nichols says: “It’s a huge growing market for us. We sell to the Philippines, Malaysia, Thailand, Brunei, Papua New Guinea and Hong Kong.”
The company was founded in 1995 when Nichols (pictured third from left) and his business partners (from left) Brian Piggott, Ross Fitzgerald and Nev Hurring (who were all working for another safety footwear company) decided to go it alone.
“Footwear was always made for a budget price. The companies who were buying for staff didn’t want to spend too much money; they just wanted to protect their toes. So we recognised there was a niche market for people who were prepared to pay more,” says Nichols.
“So we came up with the concept to make a better cushion for safety shoes that would reduce the stress to the knees, feet, legs and lower back.”
Nichols was so confident the safety boots were a winner, that he took a risk – offering a 30-day money-back guarantee, or a promise to buy a customer a pair of his competitors’ shoes. “It took a bit of time to pay off, but it has paid off!” says Nichols.
Steel Blue is not only reaping the benefits of the mining boom, but also a world-wide trend of people taking better care of their feet.
“We have always worked closely with the big mining companies but, with the boom, we are working even more closely,” Nichols says.
“When the iron ore mines started working extended shifts, they found that the cheaper boots became very uncomfortable later in the shift. We proved to the companies that while Steel Blue boots are nearly 60% more expensive [than competitors’ boots] they are much more comfortable and healthier to wear, therefore the workforce is more productive and is not as fatigued at the end of the day.
“If a worker wearing cheap boots gets a blister that becomes infected, they could be off work for quite a few days, which could cost the company hundreds if not thousands of dollars in lost time,” he says.
Manufacturing footwear is extremely labour intensive. Recently, the iconic Tasmanian bootmaker Blundstone moved its manufacturing operations to Asia as it could no longer compete with cheap imports. Nichols claims part of Steel Blue’s success is due to manufacturing from the start fully in Indonesia and only partly in Perth.
Get SmartCompany FREE to your inbox every weekday
“From the very beginning we have had our leather uppers cut and sewn in Indonesia and sent to our Perth factory where we do the assembly and sole attachment that incorporates our patented Trisole Comfort Technology (TCT) soling system,” says Nichols.
“Due to the high percentage of new business we are creating each year we have now reached maximum capacity in our Perth factory, which is now used exclusively to supply the Australian market. We also make fully finished footwear in Indonesia for our expanding global markets and for supply to Australia during peak times.”
Developing an export market proved to be an additional challenge; particularly trying to sell expensive safety footwear into markets that are price sensitive.
“But we know from experience that there is a niche market that is prepared to buy something better. We have identified Europe and North America as key markets that have similar needs as the Australian market, and have developed a five-year business plan to succeed there,” says Nichols.
“We now have a global business development manager, who travels the world assessing potential distribution companies. We recently appointed a European sales manager based in the UK and established a warehouse in the Netherlands to service all of Europe.”
Steel Blue invests a great deal of time and money into research and development, and has three full-time product development officers who travel the world searching for new materials and ideas.
Nichols claims the company is not only innovative with its marketing (being the only safety footwear brand in the world to be sold with a money-back guarantee) but is also innovative in its footwear trials.
“We spend a lot of time conducting footwear trials both in-house and through independent scientific bodies to assess performance,” he says.
In 2004, our Steel Blue Argyle safety boot was independently comfort tested, and recorded the highest comfort rating ever by a safety boot. Steel Blue is one of only two brands of safety footwear in the world to be endorsed by the prestigious American Podiatric Medical Association with their ‘seal of acceptance’, which guarantees the product promotes good foot heath.”