New Zealand’s mega-startup: Which wealthy New Zealander is backing Rob Fyfe’s $100 million project?

“They are all interested in the outcome, and yes, we want this business to make money so it can survive. But the reality is that that will change in 10 years,” says Parton with the same enthusiasm he brought to Air New Zealand.

He left the airline as a shakeup loomed in 2018 after 22 years at the helm. After a break, he headed a travel agency that was emerging from the pandemic.

“I had a great time as CEO of House of Travel and moved into the business (mid this year) because I care passionately about it,” he says.

“One day I want to sit there with my kids and hope they will be proud of their dad for getting rid of single-use plastic bottles.”

He has a financial stake in a facility that could – at full capacity – produce half of the 1.1 billion cans currently produced in New Zealand. They are produced here mainly by two Australian competitors – Visy and Orora Beverage.

Australia imports between 150 million and 200 million cans, which Parton believes Recorp can supply instead, take market share from existing can manufacturers and benefit from organic growth in the aluminum packaging market, which was growing at 7% a year before the pandemic.

It’s high-volume production with slim margins and huge upfront costs for shiny new equipment, including a kilometer of conveyor belts imported from around the world and installed in a sprawling former Kmart warehouse that has been heavily refurbished.

“I’ve made a significant investment, so if it doesn’t work out, I’m not going to do as well,” Parton says. “I always do this. I think executives have to be willing to do it (invest) or move on to another job.”

Fyfe also has a stake in and is a director of the company, which was incorporated in 2022..

Also taking part are toy empire Zuru co-founder Anna Mowbray, property investment mogul Justin Wyborne and Forsyth Barr chief executive and investor Jonty Edgar.

Parton says sponsors are in this for the long haul.

“This is a New Zealand company, owned and operated by New Zealanders. These are smart, wealthy New Zealanders coming together, seeing a problem and being willing to invest.”

Mowbray also brings practical experience in mass production technologies in China.

“There are few who (she) don’t know about factories, how to run them and how to be efficient.”

While Fyfe retains more typical post-CEO roles (he heads Michael Hill and is a director at Air Canada), he has personally backed other Kiwi startups with money and time. Recorp is his largest venture.

Speaking on his way home from an Air Canada board meeting, Fife says going from idea stage to production line was more difficult than he could have imagined.

“Had I known from the outset how complex the project was and the scale of what we were undertaking, I’m not sure I would have taken it on. This is one of those projects that became bigger and more complex with each step and required all sorts of problems to be solved.”

But his enthusiasm for the project and his rationale for it have not waned.

“You learn more about the market and there’s not enough supply. There are a number of customers we didn’t even know about who are importing cans because they couldn’t find them in New Zealand,” he says.

“They are hungry for innovation and ways to differentiate their brands.”

Fyfe says investors had enough resources to fund an expansion—perhaps a recycling operation or another production line. He didn’t rule out a public listing, but that wasn’t the goal of creating the company and wasn’t on his radar right now.

Besides the big names, there were other small investors, which was good for running the company.

“It’s good to have a bunch of small investors. is that you run the company almost like a public company. You have good communication discipline, good audit discipline and you ensure that we consult with all shareholders before making any decisions.”

Parton, 58, says this will be his last big role and he’s enthusiastic. He says New Zealand is far behind the rest of the world when it comes to drinking from aluminum cans, which, unlike glass, don’t break, are much easier to transport and don’t pose the same environmental problems as plastic ones. Parton expresses alarm about plastic bottles clogging waterways and the health concerns associated with microplastics.

“Whether it’s our cans or our competitors’ cans, I’d like to see the end of all this production and see people just drinking aluminum.

“This country is lagging far behind – part of that is due to innovation being stifled, and we want to be part of changing that.”

Airline lessons

Parton joined Air NZ in 1996 and rose to senior positions at Fyfe and then Luxon and served as the airline’s chief operating officer for five years, where he was responsible for the company’s core operating lines, responsible for more than 7,000 employees.

Recorp’s highly automated factory floors have a much smaller workforce (about 11 dedicated operators per shift) and the overall work is less complex and vulnerable to the kinds of external events that plague airlines. Parton says he enjoyed working at Air NZ and still keeps in touch with former colleagues who left or continue to work there, but has no regrets about moving on and hasn’t looked back.

“Airlines are facing difficult times and Air New Zealand is no exception. I sympathize with them, and I have many war stories where I experienced the same thing. They are a good team and everything will work out, but it is quite difficult.”

Parton was running Air NZ when the company hit several speed bumps due to rapid growth, but that was before the pandemic, soaring inflation and crippling aircraft shortages.

He said as well as experience of dealing with the unexpected, he and Fyfe brought from Air NZ a commitment to technical innovation and the airline’s unrivaled ability to sell it, such as its first safety videos, which became a double international success. marketing and new passenger products such as Grabaseat.

There’s a showroom where buyers can see what’s on offer, and he cites one key difference between Recorp and its competitors is its ability to be more flexible when dealing with banks. Recorp is yet to reveal who its clients are, but they cover all drinks sectors and with small runs they have the ability to produce limited promotional items such as Christmas drinks. Agility required millions of dollars in additional upfront investment, but Parton says this sets Recorp apart from its Australian competitors.

“(What) Rob and I really do is go the extra mile, it’s all part of the client.”

In the lobby of a factory the size of a rugby field, there is a message on the wall saying so.

“We have purpose-built a state-of-the-art beverage can manufacturing facility that uses the most advanced technology to produce the widest range of can formats, offering customers a venue to realize their beverage vision with superior flexibility and efficiency.”

The company has developed a technology for attaching the top of a 250 ml can to the body of a 330 ml can. This is a simple but effective way to speed up production by eliminating the need to change equipment during production and saving weight.

“Our cans are around 5-6% lighter than our competitors, meaning they are cheaper and contain less aluminum. The lighter, the better the emissions,” says Parton. “All of this has value to the end consumer because at the end of the day it all comes down to price.”

While the potential for a sustainable aluminum recycling cycle exists, it is not yet available in New Zealand. Recorp imports seven-tonne rolls of raw aluminum sheet, primarily from China. It is made from recycled aluminum from around the world, but recycling in China relies heavily on fossil fuel energy.

“Essentially, we bring like everyone else. We are unable to source metal produced in New Zealand, so there are no flour mills producing aluminum in New Zealand. We’ll look into this sometime in the future. But this is not part of our immediate plans.”

Domestic stocks could have been boosted by a national can recycling program incentivized by the container deposit scheme, but this was delayed until the last election.

Fyfe says he would like to see work on the scheme resumed and while he wanted to talk to Luxon about it, he understood the government had a full agenda and other priorities.

Although some commercial launches have already taken place, the plant is still in the adaptation phase to optimize efficiency and get the final product right.

Parton says the company would rather be slow to breakeven than too fast.

At Recorp, it was extremely important to get the basics right.

“Going back to the days of Air New Zealand, you have to get the basics right and then go on, on, on.”

Grant Bradley has been with the Herald since 1993. He is deputy editor of the Business Herald and covers aviation and tourism issues.