New Zealand-made lawnmowers to be manufactured offshore
Production of the last New Zealand-made lawnmowers will shift offshore, as Palmerston North business Steelfort ceases in-house manufacturing, according to a recent stuff.co.nz report.
The company will no longer manufacture mowers in its Palmerston North facility and will outsource to Beijing from July this year. While the Lawnmaster brand will remain, it will no longer be New Zealand made, according to the report.
Steelfort Owner and Managing Director, John McOviney, said the decision came after years of trying to make ends meet and lower the costs associated with manufacturing locally.
Ten jobs would be cut, but Steelfort had tried its best to re-employ affected workers in other parts of the company.
Mr McOviney said the decision had been in the works for a while, and all affected staff had been given lots of warning and were involved in the discussions.
However, he did say he found this decision difficult.
“I have put it off for more than I should have done,” he said in the report.
Mr McOviney also said in the report, that Steelfort had been losing money for “quite some years”, because it was becoming increasingly difficult to manufacture locally due to minimum pay requirements and costs.
“We are unable to manufacture competitively in New Zealand, particularly under this administration with all new labour rates and compliance requirements.”
Costs were high and the firm was struggling to compete with China, which did not have the same rules and regulations, he said.
The new manufacturer was based in Beijing and had been associated with Steelfort for around six years.
Steelfort was already importing the company’s products.
He said the change would make Steelfort competitive again. “Instead of losing money we will hopefully make some.”
According to the stuff.co.nz report, commercial products, including fabrication and refrigeration, would not be affected and distribution would still be done on-site.
Steelfort was established in Manawatū in 1946, is family-owned and has about 100 employees.
Business NZ executive director Catherine Beard said although many manufacturers were paying their staff more than minimum wage, to keep up relativity they would still need to increase wages.
Ms Beard said it was difficult for New Zealand businesses to keep up with China, because the two countries had different costs associated with doing business.
Not only were wages more expensive in New Zealand, China had larger-scale businesses.
“Typically, the bigger the unit the cheaper the price is.”
She said some New Zealand manufacturers were keeping the design and innovation in-house, but were resorting to making their products in countries where it was cheaper.