Clear vision for fibre-optic success
Monday, September 17, 2007/
Kingfisher International developed its winning technology concurrently with a wide global network – and the world is steadily catching up. By MIKE PRESTON.
By Mike Preston
Kingfisher International is a rare find in the Australian business firmament – a manufacturing success story.
From modest beginnings in a spare room of its founders, Rosmin and Bruce Robertson, the fibre-optic testing equipment maker has become an internationally focused, fast-growing business with more than $5 million revenue that defies the manufacturing doom and gloom – although not without surviving some bumpy patches along the way.
The Kingfisher story starts in 1986 when Bruce Robertson, an electronics expert who had just finished working for a big British communications firm, convinced his wife that there was a gap in the market for hand-held testing equipment for fibre-optics, then a still emerging technology.
While Bruce set about designing a device that would meet the market need, Rosmin went about building the global networks that would later become the key to Kingfisher’s success. Rosmin built a business distributing existing communications testing equipment that not only generated a cashflow to fund product development, but also enabled her to forge relationships with manufacturers, distributors and retailers all over the world.
Less than two years later, Bruce had developed a market-ready device. With her keen awareness of what the market needed, how much clients would be prepared to pay (and, most importantly, who to talk to about getting a deal off the ground), Rosmin was quickly able to get three export contracts – in New Zealand, Japan and the US, the last with aerospace giant Boeing.
With these initial deals under their belt, the Robertsons were able to land larger contracts in France and finally with Telstra in Australia. In each case, contacts Rosmin had built through the distribution business were vital to getting in front of the right people so that Kingfisher could show what its technology could do.
Rosmin also worked to build awareness of Kingfisher’s products by mounting a one-woman global PR campaign.
“We took photographs of the products and wrote the press releases ourselves, and then we went through trade boards, people we met at trade shows and even existing electronics magazines to build a bank of contacts; it was just the cheapest way I could think of to get our name out there, so we went and did it,” Rosmin says.
During this early period of growth Rosmin (who became and remains managing director of Kingfisher) and Bruce decided they would fund the further expansion of the business through cashflow rather than taking on debt or bringing in external investors.
This decision, while meeting their objectives of maintaining control and minimising risk, also meant that Kingfisher could not sustain the overheads that would go with setting up sales outlets overseas.
“It was the right decision to take, but it made for a hard few years – always worrying about wages and putting every last cent back into the business,” Rosmin says.
To keep costs low, Rosmin decided to pursue a strategy of building a global network of resellers to represent Kingfisher in overseas markets. From the beginning, this move was a success, with overseas sales steadily increasing without cost blowouts. For Rosmin, managing relationships with resellers remains a vital part of her role within the business.
Steady revenue growth enabled Kingfisher to finally make the move into its own custom-fitted factory in Melbourne in 1991, putting the business on an even stronger footing for expansion. What seemed to be assured continuing profitability for the business came to a shuddering halt in 2000 with the bursting of the dot-com bubble.
The dot-com crash shook the industry to its core, with many of Kingfisher’s competitors going out of business or being sold. For Kingfisher, plummeting orders put the business under tremendous stress; it only broke even between 2001 and 2005.
But the low-debt, low-risk strategy Kingfisher had pursued meant it was able to batten down the hatches and survive.
“Having full control over the business meant we were able to hold on when many of our competitors went bust,” Rosmin says. “We were quickly able to cut back on travel, cut back on all costs – and that meant we could stay viable and, really importantly, hold on to our staff.”
Then, as now, there was a temptation to cut costs by moving manufacturing completely to China or another low-labour cost country, but Rosmin believes much of the savings advocated by such a strategy are false economies.
“We source parts from all over the world, but we are keeping final assembly in Australia, which means we retain control over IP and over quality,” she says. “It’s true that labour is more expensive here, but the flipside is we have 20 employees who are highly trained and don’t need intensive management like they would in somewhere like China.”
Looking forward, Rosmin says it won’t be cost cutting, but rather the further rapid spread of fibre-optic technology in everything from national broadband networks to buildings and transport, that will drive Kingfisher’s growth. Last year the company experienced revenue growth of almost 90%, a rate Rosmin says should come down to a less hectic 20% to 30% next year.
“Everyone wants higher bandwidth, and fibre will carry that,” she says. “There is fibre-to-the-node on the cards here, so we’ve got lots of opportunities to increase market share.”
Further international expansion will also be a priority, with plans to open a support office in the US by the end of this year to provide technical support to Kingfisher resellers in that market.
Rosmin believes it is realistic to plan to grow the present 3–4% of the global market to something closer to 20% in the next five to 10 years.
But Kingfisher is firm in its determination not to pay for that growth by bringing in external investors or floating – and the Robertsons also say they will not side with the manufacturing naysayers by moving offshore.
“We have our own ways of staying lean and mean, and while we will continue to source components from overseas, excellent infrastructure, well-trained staff, steady government and a good lifestyle means Australia will always be our base,” Rosmin says.
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