Tru-Test Limited
Registered Office Address
25 Carbine Rd
Mt Wellington
Auckland
Directors
SMITH, Philip Michael
TURKINGTON, Don James
CONGREVE, Robin
History
Incorporated: 20-AUG-1984
Tru-Test are a multinational company who design and develop, manufacture and
market agritech solutions through an international distribution network.
They have lead the world in milk metering and electronic livestock weighing
for decades. They are a major force in electric fencing globally with three
world leading brands - Stafix, Speedrite and PEL, since the acquisition of
PEL Industries in May 2001.
An ISO9001 registered company, Tru-Test recently relocated to a new
operational site in Auckland, New Zealand that covers 15,000 m2 of
world-class manufacturing facilities.
Tru-Test offices, international distributors and dealers are located through
out the world, giving a sound base from which to service markets. Tru-Test
products are approved and distributed in more than 70 countries worldwide.
Major Shareholders
Rangatira Ltd - 13%
ANZ Private Equity - 14.5%
Accident Compensation Corporation - 5%
Website
www.trutest.co.nz
News
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08.12.2001 - New Zealand Herald
Tru-Test buys rural arm
New Zealand agricultural technology firm Tru-Test said yesterday that it had bought the rural
division of Sunbeam Australia and would use debt and equity to pay for the acquisition. The
terms were not given.
The Sunbeam unit manufactures and markets sheep-shearing equipment and machinery, and has
annual revenue of about $20 million.
Tru-Test managing director Des Scott said the form the capital raising will take would be
announced in due course.
The company previously said it aimed to make a public offer of shares and list on the New
Zealand Stock Exchange next year or in 2003.
Scott said the acquisition would expand Tru-Test's distribution network in Australia and
result in significant cost savings once integration of the two entities was complete.
Tru-Test has annual sales of $100 million, 450 employees, and exports to more than 80
countries, including the US, Australia and Mexico. Existing shareholders include its
employees and ANZ Banking Group.
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21 October 2001, by Garry Sheeran
Billion-dollar firm in sights
The big question for Des Scott is simple but daunting: how do you take a $100 million company
and transform it into a New Zealand-domiciled billion dollar corporation?
He already has the first part of the equation: Tru-Test, a business with annual turnover of
$100m-plus and arguably our largest agri-tech company.
It's been around for 40 years, researching, developing, manufacturing and marketing
agricultural tools and systems.
It also does electronic contracting which takes it into fields beyond the farmyard. That
includes aviation electronics and developing command and control systems for guns on our new
frigates.
Now it's busy buying new businesses, joint venturing with others and putting itself at the
forefront of a small but growing group of knowledge wave enterprises in New Zealand.
Annual sales have grown from $12.3m a decade ago to $107m this year; it estimates return on
capital last year was 35.1%, putting it among New Zealand's top 10 economic value added
concerns; it exports around 80% of what it manufactures and it still wants to grow.
The next bit (the one billion dollars) may seem pie-in-the-sky stuff, but Scott is not so
sure. "That's only turnover growth of 10 times, and should be achievable. After all, Tru-Test
has averaged annual growth of more than 20% for the past 14 years."
Tru-Test's intentions are demonstrated by recent purchases (electric fence maker PEL
Industries, and Cyclone, bought from Fletcher Building) to make it the number two electric
fence manufacturer in the world.
"Six years ago we weren't in electric fences, but in 18 months we'll be number one," said
Scott.
It is also negotiating a joint venture arrangement with NeuronZ, the local research-based
pharmaceutical company trialling drugs to control Parkinson's and Alzheimer's diseases and
multiple sclerosis.
Things have been stirring in the boardroom as well. Rangatira Ltd, a long-time institutional
investor in Tru-Test and holder of a 13% stake, has been joined by ANZ Private Equity (which
took a 14.5% stake in the company when it provided $10m of capital to buy PEL), and the
Accident Compensation Corporation, which bought a 5% stake.
Tru-Test staff own most of the rest of the private company.
Recent additions to the board have been professional directors Robin Congreve and Mike Smith
(both former Lion Nathan directors) and Forsyth Barr-Frater Williams executive director Don
Turkington.
All of which has got the rumour mill picking a public listing for Tru-Test. Those rumours
have been in the wings for five years, but events seem to be leading that way with more
purpose, despite the events of September 11 and volatile financial markets.
Scott said Tru-Test was hunting more acquisitions, and wanted to act swiftly should the
opportunity arise.
He said Tru-Test was a great cash generator. In the 14 years he has been at the company, it
has funded its considerable expansion from earnings, apart from a $3m capital notes issue,
and $5m of the $10m provided by ANZ Private Equity earlier this year.
But doubling turnover from $100m to $200m would require a good deal more capital than it
needed to take sales from $12.3m in 1991 to $26.6m three years later.
Scott said there was no shortage of capital within New Zealand for companies which created
value. "You don't have to go offshore to find money. Good deals will always be funded."
What Tru-Test may have to increasingly go offshore for are new markets. "In New Zealand we
may have peaked, or nearly so, in some of our markets. But there is potentially huge growth
for us in Europe and the US, where we have only 5% of the electric fence market. That spells
big opportunity for us."
Overseas markets are already crucial for Tru-Test. Testimony to that is the huge distribution
network the company owns and operates offshore.
Behind Scott's Mt Wellington, Auckland, office is a modern 14,000sq m plant where Tru-Test
researches and manufactures its products. It has 32,500sq m of mainly manufacturing space in
total.
It makes electronic milk meters which tell farmers how much each cow produces and its
quality, while sophisticated weighing machines tell farmers gains being made by cattle.
"It's all about productivity, telling farmers exactly what output they're getting for
inputs... whether they should continue feeding a beast, or send it to the works."
Tru-Test has 92% of the milk meter market and 60% of the weighing machine market.
Then there are electric fences and contract electronics, "but sales and marketing are our
core competencies", said Scott.
"It's sexy to talk about knowledge waves and research and development. But effective
distribution underlies everything we do."
Scott said Tru-Test had tried to market its products worldwide through overseas-owned
distributors. But it soon found "it didn't have to suffer" and now has distribution
subsidiaries in Fort Worth Texas, Australia, Mexico & a joint venture arrangement in Brazil.
Possible new acquisitions had put public listing firmly on the agenda; timing was the issue.
And as for the billion dollar target, "we are not lacking in vision".
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