Dunedin-based company Techion has been developing products to count parasites in farm animals since the 90s. After years developing their lead product FECPAK, they’ve just had great validation in research by UK supermarket chain Sainsbury’s. Techion managing director Greg Mirams explains to ExporterToday what it all means.
FECPAK was originally developed in 1992. But in 2011 the Dunedin-based company began development of FECPAKG2, an innovative new remote location online parasite diagnostics platform. The core technology used in FECPAKG2 was co-developed with the University of Otago. Techion has since established a European-based business and continues to expand its research and commercial partnerships around the world. FECPAKG2 is being used by Ghent University, Swiss Medical Research Institute and the Bill & Melinda Gates Foundation in projects which aim to reduce the world’s second largest killer of humans in the third world, soil-transmitted helminths (parasitic worms).
ET: Taking the historically rocky road you’ve experienced in the UK market to date, including the fallout from the foot-and-mouth outbreak, how significant is this new research from Sainsbury’s? How do you see it impacting on sales to that market and what additional roadblocks in the UK/Europe market do you anticipate going forward? Will Brexit make a difference?
Greg: The Sainsbury’s project is massively significant for Techion because it’s a supply chain-led initiative. Across the developed world we are seeing changing consumer expectations about buying meat. Consumers expect transparency across the supply chain to understand where their meat comes from, how the animals were treated and the quality of meat products.
As a supermarket with direct relationships with consumers, Sainsbury’s understands this. Significantly Sainsbury’s also have direct relationships with farmers, therefore they are in a position to help farmers understand changing consumer behaviours and educate them about how to change farming practices to ensure they match consumer red meat supply chain expectations.
Farming is often a business which is run very traditionally and that can make introducing new practises and technology challenging. Sainsbury’s, via their processor partners, are able to play a key role in demystifying technology like FECPAKG2 and helping farmers understand why it is vital for them to evolve the way they manage their land and their animals.
In terms of the results of the research we have undertaken with Sainsbury’s its early days, but one thing we are sure about is that pressures on supply chain transparency and integrity will continue. All of this adds up to create an environment which makes it more important for farmers to move to evidence based treatment of animals, potentially reducing inputs such as drench – and this will have a positive impact on sales of FECPAKG2 .
With regard to Brexit, our belief is that it’s unlikely to impact Techion in Europe and the UK. FECPAKG2 technology is unique and supplies a specialist market, so we are unlikely to be tied up in border disputes. Again, the drive by consumers in Europe and UK for transparency in food supply, and supermarkets such as Sainsbury’s considering evidence based disease management platforms for their farmers, will make technologies such as ours more important.
ET: Where are you at with Techion’s sales at the moment, both in the domestic and international markets? Has recent growth met your expectations?
Greg: We’re pleased with our sales, which are tracking where we would expect for an early-stage, disruptive technology product. In particular we’re seeing good growth from Australia. Australian farming is very different to New Zealand because of the vast size of the continent, climate differences and the scale of many farms. Australian farmers also face significant challenges with drench resistance and limited access to parasite testing services.
After having an agent in the UK we opened our own office there in 2013, primarily because we needed to have a local presence to collaborate with and execute the Sainsbury’s project. That decision has been affirmed and we’re seeing expediential sales growth from the UK office.
In general we’re pleased with sales growth and expect to continue to see an upward trajectory.
ET: What are currently the biggest challenges to your export growth? And looking back is there any way you could have grown sales quicker?
Greg: Finding and establishing the right in-market support partner is the biggest challenge to our growth outside New Zealand. Building partnerships takes time and there are no shortcuts for this. In our experience it takes 18 to 24 months to find the right in-market partner and develop the relationship so they understand Techion and the potential markets for our products. Certainly, if we were able to find distributors/in-market partners more quickly we would have grown more quickly.
Additionally, if we had access to a high level of business development funding earlier, we would have been able to exploit our global networks earlier which would have resulted in finding and setting up more key commercial partnerships.
ET: Have you got any advice for up and coming agri-tech businesses in New Zealand that will help them get established in export markets? And in particular the UK?
Greg: When we began in the early 1990s the business environment was different, technology wasn’t as evolved and that made exporting from Dunedin more challenging. Today, cloud computing allows us to be borderless. Now we can work from our base at Invermay, just out of Dunedin, and operate in markets anywhere in a world.
However, nothing beats building personal relationships and that is one of the keys to growing business. By continuing to knock on doors and attending overseas conferences and seminars we have built up a strong industry network. This enabled us to partner with Sainsbury’s on the recent research project and start working with Ghent University, the Swiss Medical Research Institute and the Bill & Melinda Gates Foundation.
So, while a new business can operate from New Zealand, it’s vital to get into the market and meet the key players and build relationships, that’s the only way to build overseas sales.
ET: It’s been 26 years since you first launched your technology. What have been some of the biggest lessons you’ve learnt along your business journey?
Greg: There are three major things I have learned over this journey so far. First, knowing how to raise capital and getting the right people involved is key for any technology business with aspirations for growth. Raising capital is vital, as is getting the ‘right’ investors around you which will add value as well as provide investment funding.
Second: continue telling your story – there are always potential customers who don’t know your business and how you can make their lives easier.
Third: technology is evolving and changing the world at a rapid rate. Be open to new technologies and stay abreast of changing consumer demands. In our case, technology has enabled our business to be far bigger than our original vision. We began with the aim of only working with sheep in New Zealand, now technology has made it possible for us to work across all animals and even in the most remote parts of the world.
ET: What’s your focus for the next three to five years?
Greg: We have a big vision – Techion intends to dominate the global parasite diagnostic market. To do this we are pivoting from a research-led business to one with marketing and customer focus. We have developed a strategy to achieve this and implementing this plan is our focus.
