Winner: Gallagher Group Ltd
From humble beginnings on a Waikato farm to sales today of around $160 million annually, Gallagher Group has won the award for Best Commercialisation of Intellectual Property in International Business in the 2009 New Zealand International Business Awards.
This Kiwi success story began with Bill Gallagher (senior), a farmer whose ingenuity led to the creation of New Zealand’s first electric fence. A business was formed and over the intervening years Gallagher Group has continued to lead the market by delivering excellent and innovative technological solutions, including many world-firsts.
Based in Hamilton, the Group is comprised of a number of divisions that manufacture and export a range of products to more than 130 countries. Products include animal management systems – electric fencing, livestock weighing and electronic identification systems; security management systems; people, assets and access control; fuel dispensing systems; plastic injection and die-cast tooling; and a specialist plastic moulding company.
“While each division is highly successful in its own right, what sets us apart is the ability to leverage the unique competencies and resources of each division across the Group,” explains Chief Executive Bill Gallagher.
The company markets its systems and products through an established and expansive network of distribution channels worldwide.
To grow its security business – which grew out of its electric fence expertise – and secure appropriate distributors, it adopted some innovative marketing strategies. In the US it encouraged a prison facility to undertake a ‘mock riot’ to test the security fence. Hundreds of students were hired to play the part of the ‘prisoners’ and the fence held.
Gallagher Group employs 1,000 people throughout the world. Of its 600-strong New Zealand workforce, nearly 90 work in research and development.
“That’s heavy duty,” says Mr Gallagher, “but it really is opening the gap between us and those following. R&D is never easy. It’s a risky game and we put a lot of resources into it, but that’s alright as long as we’ve got more winners than losers.
“We take it by stages and are relatively sensible. If it’s not going to work out we take resources and put them into another project. We have 20 to 30 projects running parallel at any one time.”
The size of that R&D investment, from conception to getting a new product or technology to market, can be very significant. The software that sits behind its Cardax Access Control systems, for example, cost $50 million to develop, says Mr Gallagher.
To protect its intellectual property, the Group has more than 160 patents worldwide which it aggressively monitors, taking legal action when followers copy, which Mr Gallagher says they almost inevitably do.
“Patents are never totally waterproof; it’s a bit like a James Bond movie – you are out in front and the baddies are behind you. Patents are like throwing oil and tacks on the road. For some followers that’s the end of it, others will swerve around them but it will slow them up.”
With 70 percent of sales to international markets, Mr Gallagher says the Group is very dependent on foreign exchange earnings, and one of its biggest challenges is how to make a profit when the New Zealand dollar “heads north”.
Despite that, he says the last year has been the best ever, with record profits and turnover.
“Our portfolio of businesses provides protection against the effects of specific industry volatility,” says Mr Gallagher. “In addition, our private ownership structure also means the business can take a long term view rather than having to react to short term market pressures.”
Gallagher Group continues to set itself ambitious growth targets, which Mr Gallagher says will be achieved through ongoing market development underpinned by industry leading R&D, and strategic acquisitions locally and globally.
For more information
Margaret Comer, Corporate Services Executive, Gallagher Group Ltd, 07 838 9800, margaret.comer@gallagher.co, www.gallagher.co
Ann Clifford, Corporate Communications Manager, New Zealand Trade and Enterprise, 04 816 8321, 027 283 3858, ann.clifford@nzte.govt.nz
