A custom-cut approach that reduces waste
The last few years have been challenging for Kawerau-based timber processing firm Sequal, namely due to Covid, yet it has grown 100% in that time.
Kiwibank worked with Sequal to understand what they were developing. We wanted to support them on their journey to create a viable, sustainable and environmentally friendly product that's also innovative in the manufacturing industry.
We quickly understood the impact of Sequal’s success in establishing a digital way to cut logs to meet customers’ precise needs, while minimising waste. The technology has been a game changer for Sequal, which supplies radiata pine to firms around the world to be used for packaging, furniture and the construction markets.
The company worked with the University of Auckland to develop the technology. Based on customer orders, the software runs millions of simulations daily to figure out the best cuts to ensure there's no waste. It means Sequal creates more value — and New Zealand doesn't just export raw timber.
“In New Zealand, we’ve predominantly been raw material exporters,” says Sequal CEO David Turner. “Sending raw materials overseas is so easy but we really hate to see our logs being exported in that raw form when we should be adding value to them here.
Innovation driving growth in global markets
What Sequal’s doing is novel in the timber processing industry — and that’s because it’s hard, says Turner. “It’s not easy but there is definitely demand for mass customisation. We've sold out of capacity to fill orders for the remainder of this year despite markets being lacklustre.”
Business was booming in 2019 due to signing a few large deals with overseas clients. But along came Covid and with it operational challenges.
“We were in a really interesting situation where we lost our ability to ship to our export markets in one particular area by containers. So we had to start chartering ships, which was a big change for us, and that completely changed our working capital requirements.”
That’s when the relationship with Kiwibank, which began three years ago, proved to be vital.
A banking partnership built on shared values
Kiwibank worked with us to support the growth of a new form of distribution. When you’re dealing with a lot of change and ambiguity, the key to being able to succeed is the ability to rely on partners and, for us, our relationship with Kiwibank was one of those key partnerships."David Turner, Sequal CEO
Like Sequal, who recognised the value in customising their product for clients, Kiwibank tailored its services for the Kawerau company, making large changes to its back office to meet specific needs.
Sequal needed technical support around trade finance and accessing offshore markets and funding. Rather than offer a standard solution, we worked with them to design a custom-built approach that would meet their needs.
One of the reasons David Turner wanted Sequal to work with us was because we share common values. Sequal is committed to giving back to the Kawerau community and contributes to local initiatives. It also focuses on supplying a sustainably harvested product and giving more back to the future.
Sequal already uses geothermal energy at its plant and constantly looks for better environmental practices. Woodchip left after the pine is cut is used for packaging, and sawdust is turned into wood pellets for biofuel.
Timber is a crucial part of a low carbon environment, and Kiwibank has the same aspirations for New Zealand that we do when it comes to reducing emissions and also seeing value-added manufacturing thrive in New Zealand,”David Turner, Sequal CEO
We value the fact that Sequal isn’t driven solely by revenue. The business has achieved significant growth by using technology to maximise what each log can deliver and supplying high-quality products every time, while remaining equally committed to social and environmental outcomes.
Many businesses say they care about their communities and the environment, but for some it’s largely a marketing exercise. When we partner with a business like Sequal — one that understands the importance of sustainability and knows that without its community and its people it is nothing — we genuinely want to support their success.
“We feel like we have really been on a journey with them, especially their business banker, Simon Whittington, who is their day-to-day contact. Their success feels like our success and we’re really proud when we see them continuing to grow.”
“This partnership gives us tremendous confidence because the last thing I have to worry about is my banking relationship,” says Turner. “All I have to focus on is making sure we’ve got the sales and production capabilities. Knowing that you’ve got someone like Kiwibank in your corner is just one less thing to think about.”
“It’s comforting to see more and more businesses today looking beyond just their bottom line and thinking more about the bigger picture,” Turner says. “At Kiwibank, we can customise our business banking facilities, we have an amazing team of people, and we want to do more for businesses. We have a huge appetite to grow and to fund businesses in New Zealand, and the capability to do it.”
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