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Kiwi company Milmeq wins innovation award after doubling export revenue in two years

26 Mar 15

Milmeq, which designs, engineers and manufactures systems for primary food processing, has doubled export revenue in the past two years.

Its technology success has not gone unnoticed - earlier in the month it won both the supreme and export awards at the Westpac Business Awards and tonight won the innovation category of the New Zealand International Business Awards. The supreme winner was Magic Memories which has built a $50 million global business taking photographs at tourist attractions and theme parks.

Milmeq, ultimately owned by Rich listers the Goodfellow family, has flown under the radar for most of its 63-year existence, said chief executive Mike Lightfoot.

"The key for me is when we win something, it is recognition for the staff of how smart they are. When people put a piece of meat on their plate they have no idea where it has come from," he said.

The company was set up when New Zealand's primary produce markets needed better refrigeration engineering to help take their products global. Following an internal company restructuring in 2011, Milmeq emerged with a new name and new purpose to become the global leader in chilling and freezing, materials handling, and primary food process systems for the protein industry.

Award judges said the company operates in an industry that is still traditional in its approach but Milmeq had achieved substantial international growth by deeply embedding innovation processes across its business.

Lightfoot arrived from Buckley Systems two years ago and he's been hell-bent on beefing up its export focus, which has grown from around 50 percent of revenue to 97 percent today. As a privately-owned company, it doesn't reveal its financial figures though staff numbers are at 130.

Last year Milmeq got a $600,000 NZ Trade & Enterprise grant over three years to expand into eastern Europe but the Ukraine crisis put paid to that plan. It instead focused on south America where Lightfoot said it had already made good inroads, particularly in Brazil.

NZTE customer manager Terry Allen said the International Growth Fund aims to get a company return of four to five times any co-investment. He said Milmeq had invested heavily in quite difficult technology that was now paying off and been smart about what offshore markets it targeted.

The quicker meat is chilled, the better the end taste and Lightfoot said its export success hinged on clients being able to develop higher quality products that taste better to consumers.

New Zealand's geographic isolation meant Milmeq relied on developing its own equipment for the protein industry but it took a while to cotton on that its technology was actually setting the standard globally. More than 80 percent of its work now comes through referrals or invitations to tender and quote.

Its early breakthrough technology was developing the world's largest plate freezers, typically used for freezing cartons of red meat. It recently used the same technology to effectively freeze liquid cream in the Waikato in a way that easily allows it to be palletised and exported.

Milmeq also pioneered inverted processing in the sheep industry, saving time by proceeding lambs upside down rather than being hung.

And its world-leading tunnel systems technology has now been copied by larger competitors. Lightfoot said it recently used the technology to overcome a problem for Fonterra's Te Rapa factory with cream cheese cracking if it was chilled too quickly. Milmeq was able to build a process that cools the cheese over a period of hours without cracking.

"After we developed that we had Kraft in the US ring up and ask for us to make it one. We're just providing a quotation," he said.

Other applications outside of protein including freezing tobacco grown in Mexico by British American Tobacco. The system freezes the tobacco, killing a mite that was infecting the leaf, and then a hot tunnel thaws it out again at a rate that doesn't damage the leaf.

Milmeq has also patented a new design for chilled and frozen automated storage and retrieval, the Milmeq Fully Automated Storage Transfer System. It makes labour savings by eliminating difficult tasks through robotic automation and provides sorting, storage and retrieval of cartons for large food-processing operations while still meeting strict hygiene standards.

Its latest innovation has been developed in its biggest market, Australia, where its systems account for more than 90 percent of plate freezer installations. With Australian meat industry support, Lightfoot said it had designed a new system that opens through a single station. Under the original design, cartons are sandwiched between two giant plates but a lot of freezer time is lost when the top plate is lifted to retrieve cartons. The new system opens smaller sections at a time, meaning significant savings in energy costs and reducing freezing times by four hours per carton.

The only way to stay ahead of its competitors is to continue that innovation, with around 8 to 9 percent of annual revenue spent on research and development and 600 patents. Lightfoot is staying mum on other innovations in the pipeline but said a key focus is further energy savings.

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