if you’re launching a world-class boat business from the city of sails, you need a bank that’s more than just a fair weather friend, as North Shore-based Weta Marine has discovered.
Father and son team Chris and Roger Kitchen embody the continuing tradition of Kiwi garage innovators. Keen sailors, they decided to have a crack at building their own trimaran back in 2004.
The resulting prototype exceeded expectations on the water, so they took it to the Auckland boat show to see how it would perform on land. The feedback was overwhelmingly positive, and what had been intended as a hobby gradually grew into a successful international business selling the 4.4m Weta Trimaran worldwide.
Weta Marine has been successful in a very flat global economy and highly competitive industry through this innovative small boat design – easy enough for anyone to sail and excellent in most wind and weather conditions. Its cutting edge performance was recognised by Sailing World in the US, which crowned it Small Boat of the Year in 2010.
“It started off through passion,” Chris Kitchen says. “We saw an opportunity and went for it. There have been constant challenges and it’s definitely been harder than expected. There are times when you ask yourself if you’d do it again, knowing what we know now, but when we see how much enjoyment people get from sailing a Weta, it makes the challenge all worth while.”
BNZ has been on board from the outset. Jason Smith from BNZ Partners says he could see Weta Marine was a good, family-orientated business.
“They were two smart business people who had innovative ideas and were willing to take risks to pursue their dream. Like with most start-ups, there’s significant capital outlay at the start with not a lot of cash flowing in. They were able to give us the necessary information to support that.”
They restructured family loans, extended the options for getting capital behind the business, planned for foreign currency transactions and set up services like internet banking that made all this easy to manage. Meanwhile, Weta Marine was focusing on getting production rolling in New Zealand and building up a network of distributors around the world. After two years of making boats, they found the cost of producing a labour-intensive product locally was holding up the company’s progress.
“We were burnt by three different manufacturers,” Kitchen says. “Their quotes on cost and time were blown out by, in the worst case, a factor of about four. People we talked to were geared up for unique, one-off projects where they could use their creativity and design, rather than mass production.”
So they switched manufacturing to China, and encountered more challenges. After a misunderstanding with the original Chinese manufacturer, Weta Marine found itself locked out of the factory with all its valuable moulds still inside. Things were ironed out with some swift diplomacy, and production shifted to another Chinese partner.
And then things started to click into place. You can now buy Weta Trimarans in at least 27 countries worldwide, with about 40 percent of trading happening in the US and just under a third in Europe. The company has sold close to 1,000 boats to date and has high hopes for further expansion, especially as the emerging middle classes across high-growth economies, such as China, take to sailing.
“We feel like we are just scratching the surface with volume at the moment,” Kitchen says. “We want to build on the momentum to reach towards producing 500 boats a year. We’re still very focused on the US and Europe. They are massive markets and have a strong sailing history, but at the moment people are struggling with disposable income. China has significant potential, with cultural and political issues to overcome along the way. We are making inroads and see this market as a great long-term opportunity.”
Like every business, its hopes have to be based on solid financial planning, and Weta Marine is working hard with BNZ to ensure that.
"They shared our passion for cracking the global market and backed up every step of the way,” Kitchen says. “Our banking partner is always on-call and actively trying to help. They come to us with potential solutions, giving advice based on what they think is best. Ultimately for Weta Marine, it got us finance- ready and made for stress free transactions.”
Smith says it was all about understanding the business and then working in partnership.
“Being able to support them, even when all the boxes weren’t necessarily ticked.”
Chris and Roger Kitchen from Weta Marine have turned a hobby project building their own trimaran into a world-class business. They brought BNZ on board from the outset, building a partnership that has helped steer them through fair weather and foul.
To find out more about how BNZ can help your start-up or small business, phone 0800 269 763 or visit www.bnz.co.nz.
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