Waikato Milking Systems is a mature New Zealand exporter that has established itself as a world-leading producer of revolutionary rotary milking systems and smart semi-robotic technologies across the global dairy industry. With offices and warehouses across New Zealand, Ireland, UK, Australia, China, and the US, Waikato Milking Systems employs a total of 130 staff specialised in manufacturing and maintaining their vast catalogue of milking solutions. These cutting-edge solutions adapt traditional products and processes with intelligent automated technology that enables farms to grow the productive value of their dairy. In recognising the company’s domestic and international success, ExportNZ awarded Waikato Milking Systems the “Exporter of the Year” in the $10-25 million category, as well as the “Supreme Award” in 2016. For more information, check out Waikato Milking System’s website here.
With a plethora of crucial knowledge and experience amassed from over 30 years in the export space and 54 years in manufacturing, Waikato Milking Systems epitomises Kiwi success on the world stage. For Export NZ’s 50th Anniversary, we sought to capture some of this success in an interview with Waikato Milking System’s CEO Richard Aubrey and provide insight for current and future Kiwi exporters. Over the course of the interview, Aubrey discusses key anecdotes, lessons, and future opportunities for the business in their industry. For anyone interested in the dairy industry, Aubrey’s perspective emphasises just how modernised and exciting the dairy industry is becoming globally.
The Captivating Origins of Waikato Milking Systems
Waikato Milking Systems has a well-established history of designing, manufacturing, and distributing innovative industry-defining dairy technology. Beginning in 1966, Waikato Milking Systems, or Alex Harvey Industries as it was known then, exported their designed and patented milking components to the United Kingdom. By 1976, the business had established an export base for their signature Waikato Mark 5 Milk Meter and began a long process of shifting towards creating entire milking systems. Amongst a multitude of other highly successful component products by 1986, the business established their first milking system. At this time, Alex Harvey Industries entered a merger with Calhol Harvey to become one of New Zealand’s largest companies under the new brand Carter Holt Harvey (CHH) (CHH Official Website). With their combined efforts, the newly formed CHH began introducing milking components and systems into the US market for the first time. However, CHH’s diversified involvement across multiple industries isolated the focused development of milking systems and components to their small Agriculture and Plastic Products Divisions.
Fast forward to 1992 and the brand Waikato Milking Systems was officially launched under the CHH banner. Aubrey explains that the inspiration for the brand name emerged from Alex Harvey’s aforementioned signature product which still continues to present day, the Waikato Mark 5 Milk Meter. When CHH was later acquired by the International Paper Company in 1995, CHH management and equity investors recognized the potential for Kiwi owned and developed milking technology and successfully bought out Waikato Milking Systems in 2001. Based in Hamilton today, the industry-leading company has split ownership between Ngai Tahu, Tainui Group Holdings, and Pioneer Capital.
Renewal, Endurance and Durability – Waikato Milking Systems 21st Century Exporter Journey:
In the last 20 years, Aubrey specifically attributes the company’s success to the Rotary Milking System which has been hailed by industry experts as the revolutionary future for dairy farming. However, this product is only as successful as the distributors who facilitate each transaction. Aubrey explains that it can take up to five to six years of gaining support and trust with the right customers and distributor(s) in a market before solid regular turnover is achieved. In this regard, Aubrey believes that patience is one key characteristic every exporter should possess to determine when is best to allocate resources into new markets. In his words, “be realistic about the opportunity and the size of the prize because expanding into new markets will likely take more time and resources than you initially expect.” With distribution now spanning over 34 countries across Asia, Europe, Africa, and the Americas, Waikato Milking System’s has honed this process. As stated by Aubrey, “backing the right distributor is essential as they can be the difference between early failure or success in entering new markets.”
In the last 15 years particularly, Aubrey details that globalization has made the world far closer than ever before. Methods of shipping and air freight have significantly eased whilst new supply chains have negated the threat of geographic isolation that New Zealand once faced. Combined with developments in Information Technology, this has allowed Kiwi exporters to meet the needs of customers regardless of where they are in the world.
In terms of threats to Waikato Milking System’s operational capability over the last two decades, Aubrey particularly emphasizes the 2015 Dairy Crash and more recently COVID-19. The 2015 Dairy Crash was caused by a combination of controversial events that narrowed the international demand for dairy products whilst dairy production increased uncontrollably. The resulting effect was a significant over-production of milk that was unmet by global demand, causing the average price of milk to drastically lower. This in turn squeezed dairy farmers’ purchasing power and the industries growth to a minimum. In these circumstances, Waikato Milking Systems was suddenly met with customers deferring projects and growth stalled in many of its core markets. According to Aubrey, turnover for the business was reduced especially for capital projects. However, Waikato Milking Systems used this period of market volatility as an opportunity to expand into diversified and better performing export markets.
COVID-19 had an immediate effect on the operational capability of Waikato Milking System by preventing the business from meeting customers in an industry that relies on building inter-personal relationships. During this time, Aubrey explains that technical support for overseas staff had to be extremely adaptable to ensure that customers could be met and supported amidst increasing market uncertainty. While export growth plateaued, Waikato Milking Systems were fortunate that the NZ dairy industry remained strong throughout multiple lockdowns which ultimately ensured continued domestic growth and revenue. Aubrey believes that this is the core benefit of being a global exporter, with export ensuring that when one market is flat, another market is buoyant.
Waikato Milking System’s renewed continuation into the 21st Century demonstrates the necessity of their products and services towards developing the global dairy industry. From touring salesmen to permanent overseas offices and warehouses, their durability as a key player in the market has fostered a brand recognized globally for advanced milking technology and service reliability. This reputation has served to continuously attract and retain customers and has remained central to why Waikato Milking System’s has reached maturity in their ‘cash-cow’ industry. New Zealand’s core tenets of transparency, integrity, and clean-green technology has also helped supplement this relationship with customers. In New Zealand itself, Waikato Milking Systems have consistently toppled competitors to become market leaders with an estimated 55% share in the domestic dairy technology industry.
The Future of Waikato Milking Systems and New Zealand’s Dairy Industry:
Waikato Milking Systems strives to expand their product range to provide further game-changing technological solutions to the modernizing industry of dairy farming. As time progresses, Aubrey believes that NZ’s dairy industry growth will flatten whilst the international dairy industry will experience large growth. It is therefore essential in Aubrey’s view that Waikato Milking Systems invests heavily into research and development to remain agile against strong competitors in overseas markets. Expanding the business’s dealer network globally with the right dealers in the right place is instrumental to ensuring the profitability of each new product. Getting those products to market at the right price point with the recently skyrocketed costs in development will likely be the largest obstacle to profitability. As stated by Aubrey, “remaining flat foot in any export market runs the risk of losing market share and distributors.” In alignment with this future strategy, Waikato Milking Systems are potentially releasing a new product to market next year called Ergo Pod. Industry experts believe the Ergo Pod will further revolutionize Rotary Milking Systems with never seen before patented features and functions.
Aubrey also emphasizes the future of the dairy industry at large in NZ and globally, stating “The dairy industry is a great occupation for technology and technical development. The struggle found particularly in New Zealand is getting younger people into the industry where the industry’s reputation is associated with old-fashioned manual labour. That reputation today is changing. Farmers over the past 30-40 years have increasingly needed information-based farming data and labour-saving devices that maximise production efficiency. Putting these devices in front of farmers remains a huge opportunity in the industry for young people to develop their skills in science, commerce, and engineering.” In this regard, Waikato Milking Systems will not only strive to grow as a world-leading exporter but will also remain one of many opportunities for young people to enter the advancing industry.
Special acknowledgement: James O’Riley (a bright young 2nd year Otago University student studying Management, History, Politics) interviewed exporters over the last few months. James has written some excellent pieces for us. This is the first in a series celebrating 50 years of ExportNZ.
