1 00:00:00,280 --> 00:00:02,520 Speaker 1: The information provided in this program is of a general 2 00:00:02,600 --> 00:00:05,320 Speaker 1: nature and is not intended to be personalized financial advice. 3 00:00:05,360 --> 00:00:07,760 Speaker 1: We encourage you to seek appropriate advice from a qualified 4 00:00:07,760 --> 00:00:11,400 Speaker 1: professional to suit your individual circumstances. Razine Paints has been 5 00:00:11,440 --> 00:00:14,720 Speaker 1: a company of color for seventy eight years, but now 6 00:00:14,760 --> 00:00:18,640 Speaker 1: the third generation family owned business is facing margin pressure. 7 00:00:19,040 --> 00:00:21,239 Speaker 2: At CFO explains why the. 8 00:00:21,239 --> 00:00:24,000 Speaker 3: Main business, which is the Razine business you'd be familiar with, 9 00:00:24,600 --> 00:00:27,280 Speaker 3: is you know, like everybody else, is strugman. 10 00:00:27,760 --> 00:00:30,520 Speaker 1: Has it ever taken on external investment or debt or 11 00:00:30,560 --> 00:00:32,080 Speaker 1: has it been entirely bootstrapped? 12 00:00:32,159 --> 00:00:36,559 Speaker 3: Tiy bootstrap the family run business that's incredibles, staunchly kiwi 13 00:00:36,680 --> 00:00:38,320 Speaker 3: and we're proud of it. 14 00:00:51,200 --> 00:00:54,880 Speaker 1: Razine Paints Chief financial Officer Mike Durkin is taking us 15 00:00:54,880 --> 00:00:56,200 Speaker 1: inside its factory. 16 00:00:57,560 --> 00:01:00,960 Speaker 4: It's the entrance point for the raw materih I just 17 00:01:00,960 --> 00:01:01,960 Speaker 4: got a whiff of paint. 18 00:01:02,080 --> 00:01:05,600 Speaker 3: Yeah, And the simplest form, we've got pikes coming through 19 00:01:05,680 --> 00:01:07,840 Speaker 3: under the floor adio. We've been something more. 20 00:01:07,840 --> 00:01:10,679 Speaker 4: We call risin then lights cheap seat and then and 21 00:01:10,800 --> 00:01:13,160 Speaker 4: they add in there. We pump it into the end 22 00:01:13,200 --> 00:01:15,800 Speaker 4: of the fashion, comed up through the floors into these 23 00:01:15,840 --> 00:01:16,399 Speaker 4: big babs. 24 00:01:16,720 --> 00:01:20,160 Speaker 1: So why keep manufacturing and well into it's obviously more 25 00:01:20,200 --> 00:01:22,000 Speaker 1: expensive here to manufacture the other. 26 00:01:21,840 --> 00:01:22,520 Speaker 2: Places in the world. 27 00:01:22,560 --> 00:01:28,960 Speaker 4: But it's an earthquake Joan's wicker fuel, I know. So yeah, 28 00:01:29,000 --> 00:01:31,440 Speaker 4: it's that's a punything come for you and we want 29 00:01:31,480 --> 00:01:32,160 Speaker 4: to keep it in want. 30 00:01:32,520 --> 00:01:35,240 Speaker 1: Therese very few good things made in Labah, very good 31 00:01:35,280 --> 00:01:36,560 Speaker 1: you know, raisine, paint and me. 32 00:01:37,360 --> 00:01:39,320 Speaker 2: But you're the half hill lot of the moment. I 33 00:01:39,360 --> 00:01:40,520 Speaker 2: don't tell many people about. 34 00:01:40,760 --> 00:01:44,120 Speaker 3: Like right up with the set, we're safe the news. 35 00:01:43,959 --> 00:01:44,240 Speaker 2: Thank you. 36 00:01:45,360 --> 00:01:47,880 Speaker 1: Mike showed us the vats where it's been mixing all 37 00:01:47,920 --> 00:01:50,680 Speaker 1: the materials to make paint here for decades. 38 00:01:52,560 --> 00:01:56,360 Speaker 2: You can see the colors in it. Yellow, green, red, black, gray. 39 00:01:56,520 --> 00:01:58,800 Speaker 4: Here there's a green one underways, and then from here 40 00:01:58,840 --> 00:02:01,800 Speaker 4: it's pretty sufflquent. They are platform so gravity that leep 41 00:02:01,880 --> 00:02:04,400 Speaker 4: it that'll go into one we call the canning line, 42 00:02:04,800 --> 00:02:06,400 Speaker 4: and it goes into the packaging from here. 43 00:02:06,960 --> 00:02:09,400 Speaker 2: But it's just sober while this is happening. 44 00:02:09,480 --> 00:02:11,440 Speaker 4: They're taking examples and they're testing it. 45 00:02:11,760 --> 00:02:14,240 Speaker 2: This is a warehouse where it all ends up. It's 46 00:02:14,320 --> 00:02:19,120 Speaker 2: a Diire's dream. So is this all color coded? Micot 47 00:02:19,160 --> 00:02:19,400 Speaker 2: to do it? 48 00:02:19,520 --> 00:02:23,160 Speaker 3: That was really good. Definitely all color coded, product coded, 49 00:02:23,240 --> 00:02:23,880 Speaker 3: color coded. 50 00:02:24,639 --> 00:02:26,919 Speaker 1: The company is proudly in New Zealand, owned by the 51 00:02:27,040 --> 00:02:30,919 Speaker 1: founder's family. It's with many cycles and it's near eighty 52 00:02:31,040 --> 00:02:31,800 Speaker 1: year lifetime. 53 00:02:32,160 --> 00:02:36,960 Speaker 3: Good example. So the first year of COVID to the lockdown, 54 00:02:37,880 --> 00:02:41,000 Speaker 3: the first sort of three weeks of lockdown, obviously nothing happened, 55 00:02:41,040 --> 00:02:43,000 Speaker 3: it was dead. And then then the next sort of 56 00:02:43,080 --> 00:02:45,119 Speaker 3: nine months we did like two and a half years 57 00:02:45,160 --> 00:02:48,520 Speaker 3: and six months. So it was huge, huge increase from 58 00:02:48,560 --> 00:02:53,400 Speaker 3: when I said increase, So the financials were was basically 59 00:02:53,440 --> 00:02:57,760 Speaker 3: a process of cost control and then unlimited demand and 60 00:02:58,960 --> 00:03:01,320 Speaker 3: went completely opposite rate that we expected it. 61 00:03:01,360 --> 00:03:05,440 Speaker 2: To and you were making more margin off more volume. Wow. 62 00:03:05,840 --> 00:03:09,040 Speaker 3: And then but you know, the recessions started kicking in 63 00:03:09,160 --> 00:03:11,440 Speaker 3: a year later and then we've started to buy. But 64 00:03:12,320 --> 00:03:15,519 Speaker 3: so that we've been questioned by that particular year, which 65 00:03:15,600 --> 00:03:18,840 Speaker 3: was the twenty twenty one year. You know, that's filled 66 00:03:18,880 --> 00:03:20,519 Speaker 3: up the loft and the coffers if you like it, 67 00:03:20,760 --> 00:03:22,400 Speaker 3: and we've sort of relied on that since. But the 68 00:03:22,480 --> 00:03:26,080 Speaker 3: last two years has been tight, really tight. Yeah. I mean, 69 00:03:26,120 --> 00:03:29,400 Speaker 3: if you've watched the building industry, we feed off the 70 00:03:29,440 --> 00:03:31,880 Speaker 3: building industry. So ten percent of our revenue comes from 71 00:03:31,919 --> 00:03:38,480 Speaker 3: New builds, so residential and the big footprint retirement homes 72 00:03:38,480 --> 00:03:41,520 Speaker 3: for instance, but some of those aren't being building, exilting 73 00:03:41,760 --> 00:03:43,480 Speaker 3: a lot of a lot of land bank and going on. 74 00:03:43,880 --> 00:03:46,720 Speaker 3: Developers are just not building because the cost isre and. 75 00:03:46,760 --> 00:03:48,480 Speaker 2: Interest rates is so high. That kind of important to 76 00:03:48,480 --> 00:03:49,280 Speaker 2: continue to develop. 77 00:03:49,440 --> 00:03:53,040 Speaker 3: I can't name companies I can, but some of the 78 00:03:53,080 --> 00:03:57,120 Speaker 3: big group housing companies who are our customer, their consents 79 00:03:57,160 --> 00:04:00,160 Speaker 3: year on year forty percent down to us. That all 80 00:04:00,240 --> 00:04:04,600 Speaker 3: main of those issues and I just consent issued. That 81 00:04:04,760 --> 00:04:06,640 Speaker 3: means in twelve to fifteen months time, they won't want 82 00:04:06,680 --> 00:04:08,840 Speaker 3: paint on them. That is future product that is not 83 00:04:10,000 --> 00:04:11,680 Speaker 3: So we've gone a ride up to now and we're 84 00:04:11,680 --> 00:04:14,200 Speaker 3: sort of hanging in there. Our smaller companies have actually 85 00:04:14,240 --> 00:04:16,279 Speaker 3: kept us in the game because they are in different markets, 86 00:04:16,320 --> 00:04:19,280 Speaker 3: not the residential market. There's like aircraft, and there's made 87 00:04:19,320 --> 00:04:23,440 Speaker 3: of vehicles, and there's steel and flame protection, fire protection, 88 00:04:23,520 --> 00:04:25,560 Speaker 3: all that sort of stuff is on a smaller scale. 89 00:04:25,960 --> 00:04:28,240 Speaker 3: But we're doing all right in nose spaces. But the 90 00:04:28,320 --> 00:04:31,000 Speaker 3: main business, which is the razine business you'd be familiar with, 91 00:04:31,600 --> 00:04:34,320 Speaker 3: as you know, like everybody else was straighting. 92 00:04:35,120 --> 00:04:37,160 Speaker 2: This is what many will think of when they hear 93 00:04:37,240 --> 00:04:38,280 Speaker 2: the name Razine. 94 00:04:38,640 --> 00:04:41,520 Speaker 3: This is a keen face that IP this is iconic Razine. 95 00:04:41,600 --> 00:04:46,719 Speaker 2: The chart forty two a Razine color shop. My mum 96 00:04:46,880 --> 00:04:47,800 Speaker 2: is in interiors. 97 00:04:48,800 --> 00:04:51,440 Speaker 1: This was my childhood, so these were all over my 98 00:04:51,560 --> 00:04:55,599 Speaker 1: kitchen table all the time, especially this one half black. 99 00:04:55,440 --> 00:04:58,080 Speaker 2: White called black white. What really is the difference? 100 00:04:59,000 --> 00:05:03,120 Speaker 3: Well light, That's why you should wander around the house 101 00:05:03,279 --> 00:05:06,159 Speaker 3: with the different colors in different light at different times 102 00:05:06,200 --> 00:05:08,159 Speaker 3: of the day. They all all look quite different. 103 00:05:08,600 --> 00:05:11,960 Speaker 1: It mixes every color in its catalogs from just thirteen 104 00:05:12,120 --> 00:05:14,760 Speaker 1: at base colors, then tents on top. 105 00:05:14,600 --> 00:05:18,040 Speaker 3: Of that, so they are the base and you can 106 00:05:18,160 --> 00:05:22,080 Speaker 3: do it. You can do a vtn Z orange where 107 00:05:22,080 --> 00:05:24,440 Speaker 3: you could do a BP green or you could know. 108 00:05:24,560 --> 00:05:27,360 Speaker 3: All of those are corporate colors that are specific to those. 109 00:05:27,279 --> 00:05:30,680 Speaker 1: Companies and Razine has made there and they're all trademarch 110 00:05:30,760 --> 00:05:31,280 Speaker 1: for that brand. 111 00:05:31,400 --> 00:05:34,320 Speaker 3: Yeah. Absolutely, b people will say, we want BP green 112 00:05:34,880 --> 00:05:36,719 Speaker 3: and BP green is different to other green. 113 00:05:37,920 --> 00:05:40,400 Speaker 2: Can we make our markets as now we. 114 00:05:40,480 --> 00:05:42,640 Speaker 3: Could make a market with medicine, what color do we 115 00:05:42,720 --> 00:05:45,200 Speaker 3: go for the option? Stually come up with that. 116 00:05:45,600 --> 00:05:47,120 Speaker 2: Well, when I first made the show, I went with 117 00:05:47,200 --> 00:05:50,160 Speaker 2: an indigo purple. And you know why because apparently that 118 00:05:50,320 --> 00:05:51,920 Speaker 2: exudes luxury and wealth. 119 00:05:52,320 --> 00:05:52,919 Speaker 3: Well you should. 120 00:05:53,360 --> 00:05:54,800 Speaker 2: If you, I should stick with that. 121 00:05:55,040 --> 00:05:56,480 Speaker 3: You can act with the color. We'll make it for you. 122 00:05:56,839 --> 00:05:59,520 Speaker 1: They've made hundreds of thousands of colors over the years, 123 00:06:00,120 --> 00:06:03,400 Speaker 1: can make any paint from history for any customer today. 124 00:06:03,920 --> 00:06:06,200 Speaker 1: I have a serious question, my Mike, how do you 125 00:06:06,320 --> 00:06:08,920 Speaker 1: come up with all of the names? Because there's what 126 00:06:09,400 --> 00:06:11,560 Speaker 1: called a moonbean, a lot of red wine and. 127 00:06:13,560 --> 00:06:16,200 Speaker 3: A lot of red it's red. It's red wine in 128 00:06:16,240 --> 00:06:18,240 Speaker 3: the boardroom, I tell you not. There's there's a there's 129 00:06:18,240 --> 00:06:21,320 Speaker 3: a obviously a suggestions box for the staff. It is 130 00:06:21,400 --> 00:06:23,920 Speaker 3: incredible about the big The big ones are all done 131 00:06:24,360 --> 00:06:26,960 Speaker 3: after a couple of wines, like there's one called I 132 00:06:27,000 --> 00:06:30,200 Speaker 3: don't know if you're familiar with Monty Python, no Norwegian Blue. 133 00:06:30,400 --> 00:06:32,760 Speaker 3: Have you read in Norwegian Blue remark or bird the 134 00:06:32,800 --> 00:06:36,400 Speaker 3: Norwegian blue in it? Beautiful plumage. The parrot, the parrot 135 00:06:37,000 --> 00:06:39,120 Speaker 3: and the color of the parrot is one of our colors. 136 00:06:40,200 --> 00:06:43,760 Speaker 3: That's amazing. If you're Wondy Python fan, you'll know that. 137 00:06:48,360 --> 00:06:51,240 Speaker 1: It made the decision to create its own retowl network 138 00:06:51,440 --> 00:06:53,560 Speaker 1: decades ago and it's paid off. 139 00:06:53,880 --> 00:06:56,040 Speaker 2: When did that become part of the strategy you want, Oh, 140 00:06:56,279 --> 00:06:56,920 Speaker 2: that would have been. 141 00:06:57,520 --> 00:07:00,320 Speaker 3: That was a game that was kind of a chant ants. 142 00:07:00,839 --> 00:07:05,080 Speaker 3: So it was way back. We were in the in cview, 143 00:07:05,640 --> 00:07:08,840 Speaker 3: so there was in desparate buildings and it was principally 144 00:07:10,200 --> 00:07:13,000 Speaker 3: a trade business at that stage, and we were locked 145 00:07:13,040 --> 00:07:15,640 Speaker 3: out of a lot of the urban centers by the competition. 146 00:07:16,240 --> 00:07:18,720 Speaker 1: It since cut a deal to sell through a major 147 00:07:18,800 --> 00:07:19,560 Speaker 1: retail chain. 148 00:07:19,920 --> 00:07:22,480 Speaker 3: We're in with miny ten and that fits with us 149 00:07:22,480 --> 00:07:24,800 Speaker 3: because it's a New Zealand company, New Zealand branding and 150 00:07:25,160 --> 00:07:27,320 Speaker 3: we sort of go to the market together. So we're 151 00:07:27,400 --> 00:07:30,840 Speaker 3: in seventy two minor teen stores, wow, sixty seven around 152 00:07:30,960 --> 00:07:34,880 Speaker 3: of our own stores which which we lease off Mum 153 00:07:34,960 --> 00:07:38,080 Speaker 3: and Pop investors. So that's that's kind of how the market. 154 00:07:38,640 --> 00:07:40,920 Speaker 3: Our network is probably the biggest by far, I think 155 00:07:41,200 --> 00:07:43,240 Speaker 3: for all the paint stores, and. 156 00:07:43,280 --> 00:07:47,040 Speaker 1: They're of a margin difference through direct sale FROMS and 157 00:07:47,120 --> 00:07:49,320 Speaker 1: glob Shop and partners. 158 00:07:49,720 --> 00:07:51,840 Speaker 3: Of course we're not playing different Well, we're not paying 159 00:07:51,880 --> 00:07:55,440 Speaker 3: rent in our in mighty ten of course, so that 160 00:07:55,760 --> 00:07:56,520 Speaker 3: kind of evens out. 161 00:07:56,800 --> 00:07:57,760 Speaker 2: Don't they clip the ticket? 162 00:07:58,280 --> 00:08:01,800 Speaker 3: Yeah, they clipped the ticket and they come into too 163 00:08:01,880 --> 00:08:02,160 Speaker 3: much of it. 164 00:08:03,640 --> 00:08:05,840 Speaker 1: Well, imagine that different and the price has to be 165 00:08:05,920 --> 00:08:07,560 Speaker 1: the same, right, because the customer has to be able 166 00:08:07,600 --> 00:08:08,160 Speaker 1: to get the same price. 167 00:08:08,200 --> 00:08:10,200 Speaker 2: Where was the Heller shop. It's as smart at ten. 168 00:08:10,280 --> 00:08:12,240 Speaker 3: Yeah, you can't sell it lower than us or higher 169 00:08:12,280 --> 00:08:16,360 Speaker 3: than us, So we regulate whether it might atteen exam 170 00:08:16,520 --> 00:08:18,840 Speaker 3: for example. That so you know, when we have a 171 00:08:18,920 --> 00:08:21,280 Speaker 3: promotion they get they get a promotion, they can sell 172 00:08:21,280 --> 00:08:22,960 Speaker 3: it at that price. We can sell it at that price. 173 00:08:23,240 --> 00:08:25,240 Speaker 3: We give them a promotional price when they buy it 174 00:08:25,320 --> 00:08:28,040 Speaker 3: office and the market's happy because they don't get confused 175 00:08:28,080 --> 00:08:30,080 Speaker 3: with different pricing. So that's kind of our words. 176 00:08:30,320 --> 00:08:31,960 Speaker 2: So what's the strategy on that going forward? 177 00:08:32,000 --> 00:08:35,040 Speaker 1: Would you rather grow direct sales or would you rather 178 00:08:35,120 --> 00:08:35,920 Speaker 1: grow distribution? 179 00:08:36,200 --> 00:08:38,920 Speaker 3: It's kind of as different because you don't you don't 180 00:08:39,000 --> 00:08:41,520 Speaker 3: get the same level of advice so. 181 00:08:41,720 --> 00:08:44,400 Speaker 2: That you can control direct sales better. 182 00:08:44,559 --> 00:08:47,040 Speaker 3: Yeah, and all our training goes into our own staff, 183 00:08:47,120 --> 00:08:49,240 Speaker 3: of course, so we give them that and they get 184 00:08:49,320 --> 00:08:53,160 Speaker 3: incentivized for being more knowledgeable. So they go through intents 185 00:08:53,200 --> 00:08:56,160 Speaker 3: and training programs and it's and it's ongoing. Whereas the 186 00:08:56,200 --> 00:08:58,440 Speaker 3: staff and might attends. It's more like a supermarket, right, 187 00:08:58,520 --> 00:09:00,880 Speaker 3: so you're going there and you buy some hammer and nails, 188 00:09:00,920 --> 00:09:02,880 Speaker 3: and you buy some bit of that. I might buy 189 00:09:02,920 --> 00:09:05,599 Speaker 3: some paint and they might sell on you now you 190 00:09:05,720 --> 00:09:08,120 Speaker 3: tell you, or whatever paint you know you need that. 191 00:09:08,280 --> 00:09:12,599 Speaker 3: They don't have the same little a school, so you 192 00:09:12,720 --> 00:09:15,520 Speaker 3: can't survive with either. I think without without the others. 193 00:09:15,760 --> 00:09:18,000 Speaker 2: The company has survived through plenty. 194 00:09:18,720 --> 00:09:21,280 Speaker 1: After the tour, Mike and I sat down to discuss 195 00:09:21,360 --> 00:09:24,520 Speaker 1: the company's current state in more detail and why it 196 00:09:24,600 --> 00:09:27,240 Speaker 1: wants to remain in New Zealand hands no matter what. 197 00:09:28,720 --> 00:09:30,120 Speaker 2: Mike, thank you so much for doing that. It's good 198 00:09:30,160 --> 00:09:30,480 Speaker 2: to see you. 199 00:09:30,679 --> 00:09:31,480 Speaker 3: Pleaser pleasure. 200 00:09:31,600 --> 00:09:34,240 Speaker 2: Should we share the story of how this opportunity came 201 00:09:34,280 --> 00:09:34,439 Speaker 2: to be? 202 00:09:34,920 --> 00:09:35,319 Speaker 3: We should? 203 00:09:35,600 --> 00:09:38,200 Speaker 1: I met you at a CFO summit and you were 204 00:09:38,240 --> 00:09:40,959 Speaker 1: writing down notes furiously. You're probably the only CFO of 205 00:09:40,960 --> 00:09:43,120 Speaker 1: the room actually paying attention. It wasn't just a day 206 00:09:43,120 --> 00:09:43,520 Speaker 1: off work. 207 00:09:43,640 --> 00:09:45,080 Speaker 3: I was the only guy with no mates, so there's 208 00:09:45,080 --> 00:09:46,680 Speaker 3: no one else at the table, right, And. 209 00:09:46,760 --> 00:09:48,599 Speaker 2: I was so interested. I was like, well, who do 210 00:09:48,679 --> 00:09:49,680 Speaker 2: you work for? What are you doing? 211 00:09:49,760 --> 00:09:53,719 Speaker 3: And you said razime yep and offered to have a 212 00:09:53,760 --> 00:09:56,079 Speaker 3: look around the site and hear the story. It's a 213 00:09:56,120 --> 00:09:59,520 Speaker 3: good story. It's an iconic New Zealand company. I'm always 214 00:09:59,520 --> 00:10:02,280 Speaker 3: happy to tell the story. We always we're always calling 215 00:10:02,280 --> 00:10:04,560 Speaker 3: about getting the right people on the bus. We don't 216 00:10:04,559 --> 00:10:06,520 Speaker 3: really care where the bus is going. Figure that out 217 00:10:06,600 --> 00:10:07,920 Speaker 3: later to get the right people on the bus and 218 00:10:08,000 --> 00:10:08,319 Speaker 3: off you go. 219 00:10:08,559 --> 00:10:10,120 Speaker 1: Well, thank you so much for having us on the bus. 220 00:10:10,280 --> 00:10:12,280 Speaker 1: This has been good fun. But look, I want this 221 00:10:12,480 --> 00:10:14,480 Speaker 1: to go into more of the economics of the business. 222 00:10:14,559 --> 00:10:16,439 Speaker 1: So you told us when we were on the manufacturing 223 00:10:16,520 --> 00:10:19,640 Speaker 1: floor that margins are under pressure. Sure, talk to me 224 00:10:19,720 --> 00:10:22,360 Speaker 1: about how much pressure and where that pressure is coming from. 225 00:10:22,679 --> 00:10:25,400 Speaker 3: Well, you know, at the moment and within the recession, 226 00:10:25,840 --> 00:10:28,400 Speaker 3: we are treading water. But we are aware a well 227 00:10:28,480 --> 00:10:30,640 Speaker 3: diversified business, so we've got a number of businesses in 228 00:10:30,720 --> 00:10:34,079 Speaker 3: different areas. Our core business is what people will be 229 00:10:34,160 --> 00:10:36,880 Speaker 3: more familiar with, but we've got protective coatings which are 230 00:10:36,920 --> 00:10:41,680 Speaker 3: in commercial areas like commercial marine and steel and fire protection, 231 00:10:41,800 --> 00:10:43,960 Speaker 3: those sort of things, so those things are still ticking away. 232 00:10:44,640 --> 00:10:49,000 Speaker 3: Buying and selling residential homes is quiet, which is obviously 233 00:10:49,760 --> 00:10:53,360 Speaker 3: a keep out of their business, and new builds construction 234 00:10:53,520 --> 00:10:57,320 Speaker 3: industry under pressure, so there's demand pressure there. Consensor down. 235 00:10:58,040 --> 00:11:00,120 Speaker 3: You don't put paint on buildings until they're built to 236 00:11:00,200 --> 00:11:02,319 Speaker 3: this twelve to fifteen month leg so we have a 237 00:11:02,440 --> 00:11:06,439 Speaker 3: leg after the bill and you've got the building contractors 238 00:11:06,800 --> 00:11:08,880 Speaker 3: are slow. We don't feel it for another twelve to 239 00:11:08,960 --> 00:11:12,319 Speaker 3: fifteen months. So we're okay now, But who's to know 240 00:11:12,360 --> 00:11:14,040 Speaker 3: what's going to happen in twelve to fifteen months when 241 00:11:14,080 --> 00:11:16,920 Speaker 3: those consents for the buildings that would have been built 242 00:11:16,920 --> 00:11:18,800 Speaker 3: and we will be painting them. Where are we going 243 00:11:18,840 --> 00:11:20,559 Speaker 3: to be then? So there is pressure, and we know 244 00:11:20,600 --> 00:11:25,240 Speaker 3: there's more pressure coming now. There's wage pressure. Wages are 245 00:11:25,280 --> 00:11:29,439 Speaker 3: going up now quicker than inflation. What else is going on? 246 00:11:29,559 --> 00:11:32,600 Speaker 3: The freight international freight we import most of the materials 247 00:11:32,640 --> 00:11:34,840 Speaker 3: we used to manufacture the paint. That's all going up. 248 00:11:35,480 --> 00:11:39,719 Speaker 3: And wars don't help us. Like Red Sea that's now 249 00:11:39,840 --> 00:11:42,600 Speaker 3: not an issue. We have to go around the Caper 250 00:11:42,640 --> 00:11:45,559 Speaker 3: good Horn, I think it is. What else is going on? 251 00:11:45,760 --> 00:11:48,679 Speaker 3: The Ukraine war has put up the cost of hydrocarbons 252 00:11:48,760 --> 00:11:51,680 Speaker 3: some of the material that goes into a paints. There's 253 00:11:51,760 --> 00:11:56,720 Speaker 3: hydrocarbon based currency. Currency is under pressure. 254 00:11:56,720 --> 00:11:58,319 Speaker 2: It doesn't help when you're playing goods off shore. 255 00:11:58,440 --> 00:12:01,000 Speaker 3: If you're an importer currency, you know you want it, 256 00:12:01,120 --> 00:12:03,120 Speaker 3: you want it to be up. So it's kind of 257 00:12:03,160 --> 00:12:06,559 Speaker 3: a perfect storm. We've always been on record to be 258 00:12:07,040 --> 00:12:09,559 Speaker 3: a people company and an innovative company. We rely on 259 00:12:09,600 --> 00:12:12,040 Speaker 3: people to manufacture the paint, but we are being forced 260 00:12:12,040 --> 00:12:14,640 Speaker 3: a little bit at the moment to capital invest and 261 00:12:14,679 --> 00:12:17,440 Speaker 3: buy some machinery and technology, which is not what we've 262 00:12:17,440 --> 00:12:21,000 Speaker 3: had to do before. But you know, economics is forcing 263 00:12:21,080 --> 00:12:21,840 Speaker 3: us down that track. 264 00:12:22,600 --> 00:12:24,920 Speaker 2: I find it so interesting and this is why I 265 00:12:25,000 --> 00:12:26,240 Speaker 2: wanted to do this interview as well. 266 00:12:26,280 --> 00:12:29,840 Speaker 1: When you told me how many products this company imports 267 00:12:30,240 --> 00:12:33,160 Speaker 1: of lots, it's immense, Like you would be one of 268 00:12:33,240 --> 00:12:36,280 Speaker 1: the biggest importers of raw goods into New Zealand. 269 00:12:36,520 --> 00:12:38,640 Speaker 3: And they come in from in a lot of different 270 00:12:38,640 --> 00:12:42,240 Speaker 3: places like this does Europe. There's Germany, there's Belgium, this's France, 271 00:12:42,800 --> 00:12:46,640 Speaker 3: there's We bring material in from Italy, were bringing in 272 00:12:46,720 --> 00:12:49,240 Speaker 3: from China, We're bringing in from the US, we bring 273 00:12:49,280 --> 00:12:52,640 Speaker 3: it in from Mexico, a number of different places. And 274 00:12:52,800 --> 00:12:55,160 Speaker 3: anytime there's any sort of blockage in those supply chain, 275 00:12:56,000 --> 00:12:59,560 Speaker 3: you know we're impacted. So you know, there's talk can 276 00:12:59,640 --> 00:13:02,800 Speaker 3: we build res resilience into our supply chain or we 277 00:13:02,840 --> 00:13:06,199 Speaker 3: can't really because the material doesn't actually originate from New Zealand, 278 00:13:06,240 --> 00:13:08,920 Speaker 3: so we can't pull it all back. You know, we 279 00:13:09,080 --> 00:13:10,480 Speaker 3: just have to go with the ebbs and flow of 280 00:13:10,840 --> 00:13:11,240 Speaker 3: the market. 281 00:13:11,559 --> 00:13:13,760 Speaker 2: So tell me about all the materials that are critical 282 00:13:13,840 --> 00:13:14,520 Speaker 2: to go into paint. 283 00:13:14,600 --> 00:13:18,679 Speaker 1: You've mentioned resin water, there's thinners, and then titanium is 284 00:13:18,720 --> 00:13:19,360 Speaker 1: the big one, right. 285 00:13:19,600 --> 00:13:22,120 Speaker 3: Well, Titanium is a material that we choose to use 286 00:13:22,160 --> 00:13:25,599 Speaker 3: because it creates high quality products. Titanium dioxide is a 287 00:13:25,960 --> 00:13:29,079 Speaker 3: white powdered material. Most people who know about their titanium 288 00:13:29,120 --> 00:13:31,600 Speaker 3: golf club, but it's made out of the same material. 289 00:13:32,040 --> 00:13:35,120 Speaker 3: When it dries, it's it's very hard and very durable, 290 00:13:35,200 --> 00:13:39,960 Speaker 3: so we put it in their paint. There's resin, which 291 00:13:40,040 --> 00:13:42,920 Speaker 3: is which is a glutenous material like PBA. It's like 292 00:13:43,000 --> 00:13:47,280 Speaker 3: a like a glue that hasn't dried. That's hydrocobon based generally, 293 00:13:47,480 --> 00:13:50,840 Speaker 3: and it comes from large global manufacturers, so that comes 294 00:13:50,880 --> 00:13:55,839 Speaker 3: into large quantities. We work with the R and D 295 00:13:56,240 --> 00:13:58,959 Speaker 3: side of those global resin manufacturers to tell them what 296 00:13:59,040 --> 00:14:01,199 Speaker 3: we actually need and what it needs the properties it 297 00:14:01,320 --> 00:14:03,679 Speaker 3: needs because not all reason there's the same reason, so 298 00:14:03,840 --> 00:14:06,360 Speaker 3: we have there's not one type of reason, that's one 299 00:14:06,400 --> 00:14:08,680 Speaker 3: type of reason for this product, one type of reason 300 00:14:08,720 --> 00:14:11,679 Speaker 3: for this product. So there's lots of different combinations and 301 00:14:11,800 --> 00:14:15,280 Speaker 3: again that creates risk, lots of different shipments and lots 302 00:14:15,280 --> 00:14:17,959 Speaker 3: of different products, lots of different quality issues. If it 303 00:14:18,000 --> 00:14:19,640 Speaker 3: doesn't get here and it's not the right product and 304 00:14:20,120 --> 00:14:22,200 Speaker 3: it's not the right grade, there's a lot, there's a 305 00:14:22,320 --> 00:14:23,560 Speaker 3: lot of failure points. 306 00:14:23,800 --> 00:14:26,080 Speaker 1: If you're like so, that then begs the question, Mike, 307 00:14:26,200 --> 00:14:29,800 Speaker 1: why manufacture the paint and Wellington, New Zealand of all 308 00:14:29,880 --> 00:14:33,160 Speaker 1: places if it makes that supply chain so complex. 309 00:14:33,320 --> 00:14:36,120 Speaker 3: That's a fair question. But we're a Wellington based company. 310 00:14:36,240 --> 00:14:39,160 Speaker 3: We're a family company. We're private and you know we 311 00:14:39,680 --> 00:14:42,120 Speaker 3: support a thousand families and we're going to continue to 312 00:14:42,160 --> 00:14:44,760 Speaker 3: do so. We've got no intention of moving. We just 313 00:14:45,480 --> 00:14:48,120 Speaker 3: roll with the punchers as a Welling to New Zealand 314 00:14:48,120 --> 00:14:51,640 Speaker 3: based business. And we don't want to be manufacturing in China, 315 00:14:51,680 --> 00:14:54,400 Speaker 3: we don't want to be manufacturing in Australia, and well, 316 00:14:54,640 --> 00:14:56,400 Speaker 3: you know, we'll just deal with That's what we do. 317 00:14:56,600 --> 00:15:00,680 Speaker 3: So it's more pressure and it's financially hard, but that's 318 00:15:00,880 --> 00:15:03,080 Speaker 3: that's that's who we are. We're a keepy company. 319 00:15:03,720 --> 00:15:05,800 Speaker 2: Can you give me some figures on how hard? And 320 00:15:05,880 --> 00:15:08,080 Speaker 2: I respect that you're privately owned business, so I only tell. 321 00:15:07,960 --> 00:15:10,360 Speaker 1: Us how much you want to, but how much have 322 00:15:10,560 --> 00:15:15,440 Speaker 1: margins reduced and how much have costs increased and as 323 00:15:15,440 --> 00:15:17,200 Speaker 1: a result, how much of your price has had to 324 00:15:17,280 --> 00:15:17,880 Speaker 1: increase off. 325 00:15:17,800 --> 00:15:18,240 Speaker 2: The back of that. 326 00:15:18,640 --> 00:15:20,640 Speaker 3: Well, some of the costs have gone up twenty five percent, 327 00:15:21,040 --> 00:15:23,280 Speaker 3: and what a year or over over a couple of 328 00:15:23,400 --> 00:15:28,800 Speaker 3: years of some of the it's an elastic product. We 329 00:15:29,040 --> 00:15:31,400 Speaker 3: were already at a premium to the market in terms 330 00:15:31,440 --> 00:15:33,680 Speaker 3: of our pricing, so there's a ceiling on what we 331 00:15:33,760 --> 00:15:36,920 Speaker 3: can charge. We can't pass it on, so so ceilings 332 00:15:36,960 --> 00:15:40,680 Speaker 3: staying the same, costs going up, margin getting pressed pressure 333 00:15:40,720 --> 00:15:44,520 Speaker 3: in the middle, So input costs. It's not a piece 334 00:15:44,560 --> 00:15:47,960 Speaker 3: of oil or you know, a transistor and a piece 335 00:15:48,000 --> 00:15:51,400 Speaker 3: of digital equipment. It's actually people creating products, as you 336 00:15:51,440 --> 00:15:54,560 Speaker 3: can see in the fattery. So they have to be fed. 337 00:15:54,640 --> 00:15:56,240 Speaker 3: They have to go home and feed their families. We 338 00:15:56,360 --> 00:15:59,600 Speaker 3: paid you know, we paid them accordingly, so you know 339 00:15:59,720 --> 00:16:01,440 Speaker 3: it's it's a tough gigent. 340 00:16:02,000 --> 00:16:04,080 Speaker 1: You said that Razin can continue to roll with the 341 00:16:04,120 --> 00:16:07,760 Speaker 1: punctures and is committed to manufacturing on shore still, but 342 00:16:07,920 --> 00:16:10,080 Speaker 1: is that realistic? I mean, if you are under that 343 00:16:10,200 --> 00:16:12,640 Speaker 1: much financial pressure right now, can you actually hold. 344 00:16:12,480 --> 00:16:15,880 Speaker 2: On for absolutely absolutely there's a run rate there. 345 00:16:16,160 --> 00:16:17,720 Speaker 3: There's a run rate now you can see it. And 346 00:16:18,400 --> 00:16:21,000 Speaker 3: we think the recession is going to continue for another 347 00:16:21,160 --> 00:16:23,520 Speaker 3: nine months or so and then the interest rates are 348 00:16:23,560 --> 00:16:26,200 Speaker 3: going to start to have a calming effect, if you like. 349 00:16:26,480 --> 00:16:28,840 Speaker 3: But we won't see that change and probably to another 350 00:16:28,880 --> 00:16:32,640 Speaker 3: twelve months. So we lag the construction industry and which 351 00:16:32,760 --> 00:16:36,960 Speaker 3: is under pressure. We've got more than new builds that 352 00:16:37,040 --> 00:16:39,080 Speaker 3: we can lean on. Lots of people are buying and 353 00:16:39,160 --> 00:16:41,640 Speaker 3: selling houses that are already built. They want to paint 354 00:16:41,680 --> 00:16:43,080 Speaker 3: them when they sell them. They want to paint them 355 00:16:43,120 --> 00:16:46,240 Speaker 3: when they buy them, and they want to change the 356 00:16:46,280 --> 00:16:47,920 Speaker 3: color because they don't like your color. 357 00:16:48,920 --> 00:16:50,880 Speaker 1: So what's the split for this business in terms of 358 00:16:51,080 --> 00:16:55,840 Speaker 1: sales between commercial projects like the housing developments or buildings 359 00:16:56,000 --> 00:16:57,400 Speaker 1: or businesses versus. 360 00:16:57,720 --> 00:17:00,080 Speaker 3: The scene of our customers are commercial customers. Well of 361 00:17:00,160 --> 00:17:03,320 Speaker 3: thirty is just as we call it, retail, but it's 362 00:17:03,400 --> 00:17:06,000 Speaker 3: people coming into our stores wanting to buy some paint 363 00:17:06,080 --> 00:17:08,200 Speaker 3: for the for their house or their fence or their 364 00:17:09,520 --> 00:17:12,920 Speaker 3: If you go into a into an architect's office and 365 00:17:13,000 --> 00:17:15,240 Speaker 3: you you know they're doing the work for you and 366 00:17:15,320 --> 00:17:18,520 Speaker 3: you buy the paint, that that's really a retail sale. 367 00:17:18,720 --> 00:17:20,359 Speaker 3: They don't buy it from the architect, but they will 368 00:17:20,440 --> 00:17:22,879 Speaker 3: specify what and what the colors should be and what 369 00:17:22,920 --> 00:17:25,400 Speaker 3: the products are, and then you come into our stores 370 00:17:25,440 --> 00:17:27,520 Speaker 3: and buy that. That's what we would call a retail sale. 371 00:17:27,920 --> 00:17:30,119 Speaker 3: A commercial sale is you know you're too lazy to 372 00:17:30,160 --> 00:17:33,160 Speaker 3: paint your house. You call up the pain painting contractor. 373 00:17:33,240 --> 00:17:36,160 Speaker 3: They come in. They're our customer. So in that case, 374 00:17:36,280 --> 00:17:37,200 Speaker 3: you're not our customer. 375 00:17:37,480 --> 00:17:40,680 Speaker 2: The communitial considered commercial might be a retail on the 376 00:17:40,720 --> 00:17:41,879 Speaker 2: other air, so you're you're. 377 00:17:41,760 --> 00:17:44,639 Speaker 3: The end customer. You're the customer of the painting contractor. 378 00:17:44,680 --> 00:17:46,800 Speaker 3: But the painting contractor is our customer and that in 379 00:17:46,880 --> 00:17:50,119 Speaker 3: that situation. So and they have different needs to what 380 00:17:50,240 --> 00:17:52,840 Speaker 3: we call it DII or a retail need. We have 381 00:17:52,960 --> 00:17:55,359 Speaker 3: to make the paint very easy to use and pretty 382 00:17:55,400 --> 00:17:58,480 Speaker 3: much fail proof for a retail So it's different paint 383 00:17:58,600 --> 00:18:00,960 Speaker 3: to what we're selling with the trade guys. There are 384 00:18:00,960 --> 00:18:04,600 Speaker 3: a lot more experience. They're using it every day. They 385 00:18:04,760 --> 00:18:10,000 Speaker 3: just know how to use it. I've got all the tools. Okay, 386 00:18:10,200 --> 00:18:12,959 Speaker 3: I couldn't do it. I've done it one. I've done 387 00:18:13,000 --> 00:18:15,399 Speaker 3: it one more than I'm try and do exactly. 388 00:18:15,520 --> 00:18:18,240 Speaker 1: So, so what are the fundamentals that you're seeing in 389 00:18:18,440 --> 00:18:20,679 Speaker 1: each of those different customer categories. 390 00:18:21,040 --> 00:18:24,760 Speaker 2: How is the retail customer challenge at the moment. 391 00:18:24,920 --> 00:18:27,000 Speaker 3: Retail don't have any disposable income at the moment. I 392 00:18:27,040 --> 00:18:30,480 Speaker 3: think they're spending all their money on mortgages, and that's 393 00:18:30,480 --> 00:18:32,440 Speaker 3: obviously not going to change for another few months. Yet 394 00:18:33,040 --> 00:18:34,960 Speaker 3: there is light at the end of that tunnel, and 395 00:18:35,040 --> 00:18:37,639 Speaker 3: I think there is pick up in the residential market, 396 00:18:37,920 --> 00:18:41,440 Speaker 3: so that will ease. That will see their ease, but 397 00:18:41,600 --> 00:18:44,280 Speaker 3: the commercial market is still going to take some time. 398 00:18:44,560 --> 00:18:47,480 Speaker 1: How much of that downturn and retail specifically is also 399 00:18:47,520 --> 00:18:49,680 Speaker 1: a bit of a hangover from the number of DIY 400 00:18:49,800 --> 00:18:53,880 Speaker 1: projects people did during COVID when that they aren't doing 401 00:18:53,920 --> 00:18:54,240 Speaker 1: them now. 402 00:18:54,520 --> 00:18:57,920 Speaker 3: Yeah, that's there was a lot of demand when the 403 00:18:57,960 --> 00:19:01,840 Speaker 3: lockdown occurred. People literally for the lockdown. There was forty 404 00:19:01,840 --> 00:19:03,720 Speaker 3: eight hours. We were given notice on a Monday that 405 00:19:04,200 --> 00:19:07,680 Speaker 3: midnight midnight Wednesday they were shutting down. I remember that. 406 00:19:08,520 --> 00:19:12,560 Speaker 3: So our stores generally closed at five o'clock. There were 407 00:19:12,760 --> 00:19:16,160 Speaker 3: shoes outside the stores nationwide. 408 00:19:15,720 --> 00:19:17,000 Speaker 2: But anything to get out of the house. 409 00:19:18,520 --> 00:19:21,280 Speaker 3: At at five o'clock. They were literally queues down the 410 00:19:21,359 --> 00:19:24,640 Speaker 3: street of people wanting to buy paint so they could 411 00:19:24,880 --> 00:19:28,240 Speaker 3: do something during the six week lockdown, and that literally 412 00:19:28,320 --> 00:19:33,120 Speaker 3: happened round the clock until midnight on on the Wednesday, 413 00:19:33,200 --> 00:19:35,840 Speaker 3: So the trucks were still leaving here at that time 414 00:19:36,760 --> 00:19:38,480 Speaker 3: and they were stopped on the street by the police 415 00:19:38,760 --> 00:19:41,960 Speaker 3: at midnight. All the trucks were stopped, they got sent 416 00:19:42,040 --> 00:19:45,680 Speaker 3: back to the Marshaling warehouses not here, to the straightforwarders, 417 00:19:45,960 --> 00:19:47,920 Speaker 3: and all the paint just sort of sat there. So 418 00:19:48,080 --> 00:19:51,199 Speaker 3: when it came round to starting up again, all our 419 00:19:51,200 --> 00:19:53,679 Speaker 3: stores were actually empty because you know, we'd sold all them, 420 00:19:54,000 --> 00:19:55,760 Speaker 3: so there was you know, there was ebbs and flows, 421 00:19:56,640 --> 00:19:59,760 Speaker 3: the online e commace platform that we've got. We're crazy 422 00:20:00,119 --> 00:20:03,880 Speaker 3: that time. It's a pretty crazy time. 423 00:20:04,119 --> 00:20:07,760 Speaker 1: So how much did revenue increase by net during that 424 00:20:07,920 --> 00:20:09,720 Speaker 1: time and then how much does it come off? 425 00:20:10,160 --> 00:20:15,040 Speaker 3: Well that the year from the March twenty twenty lockdown 426 00:20:15,320 --> 00:20:18,680 Speaker 3: until now year runs until June during the following year 427 00:20:19,200 --> 00:20:22,040 Speaker 3: was two years. Effectively, we had a two years and 428 00:20:22,160 --> 00:20:27,200 Speaker 3: one bernanda if you like. But it's been tight ever since. 429 00:20:27,560 --> 00:20:31,480 Speaker 3: That's when the recession started late twenty twenty one. High 430 00:20:31,560 --> 00:20:37,920 Speaker 3: of the retail market that's ever since then, for March 431 00:20:38,000 --> 00:20:40,399 Speaker 3: twenty two until now has been recessionary. 432 00:20:41,280 --> 00:20:42,960 Speaker 2: Can you give us a figure on how much revenue 433 00:20:43,080 --> 00:20:44,679 Speaker 2: is decreased by in that period. 434 00:20:45,119 --> 00:20:48,359 Speaker 3: Revenue has has been maintained, right, but. 435 00:20:48,440 --> 00:20:50,800 Speaker 2: It's the costs that are just eating away at that. 436 00:20:50,960 --> 00:20:52,680 Speaker 3: Yeah, so we're just we're sort of flat lining on 437 00:20:52,760 --> 00:20:57,000 Speaker 3: revenue that staying there, but costs are zoomed up and 438 00:20:57,119 --> 00:21:01,760 Speaker 3: particularly getting material into the country. That did correct, but 439 00:21:01,880 --> 00:21:05,280 Speaker 3: then when the Israeli war started, that really picked it 440 00:21:05,359 --> 00:21:09,440 Speaker 3: up again, and again when Ukraine started and we saw 441 00:21:09,480 --> 00:21:10,080 Speaker 3: the same problem. 442 00:21:10,680 --> 00:21:13,840 Speaker 2: So Razim is a third generation family owned business. 443 00:21:14,880 --> 00:21:17,120 Speaker 1: Tell me about the history of this company and also 444 00:21:17,200 --> 00:21:19,880 Speaker 1: how it's been financed over that time. Has it ever 445 00:21:19,960 --> 00:21:22,639 Speaker 1: taken on external investment or debt or has it been 446 00:21:22,800 --> 00:21:23,720 Speaker 1: entirely bootstrapped? 447 00:21:23,880 --> 00:21:29,400 Speaker 3: Tiler bootstrapped, family run business, that's incredible. Started nineteen forty 448 00:21:29,400 --> 00:21:33,159 Speaker 3: six in Esport. He was a builder and back in 449 00:21:33,240 --> 00:21:37,080 Speaker 3: the day there was all a concrete foundation, concrete buildings, 450 00:21:37,280 --> 00:21:40,960 Speaker 3: no color. So he started playing around with resin or 451 00:21:41,359 --> 00:21:45,280 Speaker 3: concrete coatings and he started selling that product to his 452 00:21:45,400 --> 00:21:47,680 Speaker 3: mates who are also builders, and not long after that 453 00:21:47,800 --> 00:21:50,440 Speaker 3: he gave up the building and continuing down the civic 454 00:21:50,480 --> 00:21:53,240 Speaker 3: coatings par So that was ten night ago. He started it. 455 00:21:53,720 --> 00:21:56,760 Speaker 3: It's always been a Wellington based business. His son took 456 00:21:56,880 --> 00:22:01,359 Speaker 3: over probably fifteen years or so late. He took it 457 00:22:01,480 --> 00:22:05,080 Speaker 3: from twenty five staff up to seven hundred staff, and 458 00:22:05,119 --> 00:22:07,680 Speaker 3: that would have happened over a fifteen year period, so 459 00:22:07,840 --> 00:22:12,640 Speaker 3: he made some big changes. Test Pots is a clessic example. 460 00:22:13,040 --> 00:22:14,760 Speaker 2: This isn't, This isn't. Can you tell us about the 461 00:22:14,800 --> 00:22:17,080 Speaker 2: story because this is wild to me. You told me 462 00:22:17,119 --> 00:22:17,720 Speaker 2: about this earlier. 463 00:22:17,880 --> 00:22:20,440 Speaker 3: So test pots came about because he was trying to 464 00:22:20,480 --> 00:22:22,639 Speaker 3: figure out a way to get the paint on the 465 00:22:22,680 --> 00:22:24,399 Speaker 3: wall so people could actually see what it looked like 466 00:22:24,960 --> 00:22:27,280 Speaker 3: because prior to that, you bought a can of paint 467 00:22:27,320 --> 00:22:28,840 Speaker 3: and you didn't really know what it was until you 468 00:22:28,920 --> 00:22:31,120 Speaker 3: literally put it on the wall. If it was wrong color, 469 00:22:31,200 --> 00:22:33,680 Speaker 3: you were like, oh, what do I do now? So 470 00:22:33,840 --> 00:22:36,960 Speaker 3: it was his idea to have a little sample and 471 00:22:37,040 --> 00:22:40,200 Speaker 3: put it in an all pot and then wander around 472 00:22:40,240 --> 00:22:42,000 Speaker 3: your house and try it out and see if it 473 00:22:42,119 --> 00:22:45,760 Speaker 3: was actually the color that you wanted. That was Razzem 474 00:22:45,840 --> 00:22:48,040 Speaker 3: was the first company that actually came up with it globally, 475 00:22:48,320 --> 00:22:51,080 Speaker 3: so it'd never been done before. People pooh pooed the idea. 476 00:22:51,119 --> 00:22:54,040 Speaker 3: They thought it was madness. And now it's a global phenomenal. 477 00:22:54,160 --> 00:22:56,520 Speaker 3: Everyone uses it. I mean, it's such a common thing 478 00:22:56,560 --> 00:22:58,840 Speaker 3: to do, right, Why wouldn't you try that out? Why 479 00:22:58,880 --> 00:23:00,240 Speaker 3: were you try it before you buy it? Right? You 480 00:23:00,320 --> 00:23:03,080 Speaker 3: try before you started here and started busing try before 481 00:23:03,119 --> 00:23:07,920 Speaker 3: you buy. It's just a standard concept, right, So he yeah, 482 00:23:08,000 --> 00:23:10,680 Speaker 3: he was very innovative. The company grew because he was 483 00:23:10,680 --> 00:23:12,600 Speaker 3: a very good salesman. He was a visionary and he 484 00:23:12,720 --> 00:23:15,040 Speaker 3: also had a very strong partner who was the chemist, 485 00:23:15,600 --> 00:23:19,040 Speaker 3: and the two of them worked together, the salesman telling 486 00:23:19,040 --> 00:23:20,960 Speaker 3: the chemists what the products needed to do based on 487 00:23:21,320 --> 00:23:23,920 Speaker 3: what the customers were asking for, and the chemists running 488 00:23:23,920 --> 00:23:26,920 Speaker 3: around the background designing the new products to meet that demand. 489 00:23:27,000 --> 00:23:30,360 Speaker 3: So it was always innovative, always coming up with new ideas. 490 00:23:30,960 --> 00:23:33,199 Speaker 3: And we talked about the sand and the paint right there. 491 00:23:33,440 --> 00:23:35,480 Speaker 3: I think it is a good example. Right. He's driving 492 00:23:35,520 --> 00:23:39,280 Speaker 3: home one Nightgown to Eastbourne. There's a howling northwester coming 493 00:23:39,320 --> 00:23:41,760 Speaker 3: across the harbor and there's sand blowing up onto the road, 494 00:23:41,800 --> 00:23:44,920 Speaker 3: and instead of getting annoyed about the weather, he thought, hmm, 495 00:23:45,119 --> 00:23:47,600 Speaker 3: I can use this. So he scooped a piece of 496 00:23:47,640 --> 00:23:50,800 Speaker 3: the very lightest sand that actually had blown across the road. 497 00:23:51,240 --> 00:23:53,960 Speaker 3: Took about the next day and then that product became 498 00:23:54,080 --> 00:23:56,600 Speaker 3: part of the non slip product range. But there's a 499 00:23:56,800 --> 00:23:58,840 Speaker 3: number of products in that area now, so there's literally 500 00:23:58,920 --> 00:24:00,800 Speaker 3: sand in the paint, so if you walk on a 501 00:24:01,280 --> 00:24:02,840 Speaker 3: wet foot path, you are going to fall over if 502 00:24:02,880 --> 00:24:03,560 Speaker 3: it's been painting. 503 00:24:04,000 --> 00:24:05,440 Speaker 2: And then he just came up with it. 504 00:24:05,520 --> 00:24:07,360 Speaker 3: He came up with the idea on his way home 505 00:24:07,840 --> 00:24:09,879 Speaker 3: and they sort of talk together about what it would do. 506 00:24:10,000 --> 00:24:13,679 Speaker 3: And now it's reason we stand in the industry now 507 00:24:13,720 --> 00:24:16,399 Speaker 3: of it and just takes that little bit of you know, 508 00:24:16,560 --> 00:24:18,720 Speaker 3: out of the box thinking to come up with something 509 00:24:18,800 --> 00:24:18,960 Speaker 3: like that. 510 00:24:19,240 --> 00:24:21,680 Speaker 1: And it's still being run by a third generation family 511 00:24:21,760 --> 00:24:25,760 Speaker 1: member zinc. Correct, And how is innovation still flourishing in 512 00:24:25,840 --> 00:24:27,639 Speaker 1: this business? Have they kept that ethos today? 513 00:24:27,760 --> 00:24:30,600 Speaker 3: Yeah, they look at all sorts of different products, you know, others. 514 00:24:30,840 --> 00:24:34,240 Speaker 3: Now they talk about stains and what the does permeate 515 00:24:34,320 --> 00:24:36,840 Speaker 3: the wood? Does it protect the wood? Now that it's 516 00:24:37,119 --> 00:24:39,920 Speaker 3: it's always about, you know, this is not just the cooding. 517 00:24:39,960 --> 00:24:42,800 Speaker 3: How can we because it's generally the biggest and most expensive, 518 00:24:43,080 --> 00:24:45,719 Speaker 3: most valuable asset that people own, So if we can 519 00:24:45,800 --> 00:24:48,800 Speaker 3: preserve it and actually make it easier for them to 520 00:24:48,840 --> 00:24:53,080 Speaker 3: preserve it and give it and give it some decorative spark. 521 00:24:53,800 --> 00:24:55,720 Speaker 3: You know, we're actually helping a lot of people. So 522 00:24:56,359 --> 00:24:58,880 Speaker 3: that's the ethos behind the company. It's about it's about 523 00:24:58,920 --> 00:25:01,879 Speaker 3: the culture of the company. It's an innovation. We always 524 00:25:01,920 --> 00:25:05,720 Speaker 3: talk about the bust. The staff have to be of 525 00:25:05,840 --> 00:25:07,680 Speaker 3: a type. We don't really know what the type is, 526 00:25:08,000 --> 00:25:10,320 Speaker 3: but you do know what the type is not. So 527 00:25:10,480 --> 00:25:13,120 Speaker 3: we have Razine people, get them on the bus, figure 528 00:25:13,119 --> 00:25:15,560 Speaker 3: out where the bus goes later. So we we talk 529 00:25:15,600 --> 00:25:19,920 Speaker 3: about the bus a lot our culture as it's along 530 00:25:20,000 --> 00:25:20,680 Speaker 3: those sort of loans. 531 00:25:20,960 --> 00:25:22,520 Speaker 2: So where does the Razine bus go next? 532 00:25:26,160 --> 00:25:29,000 Speaker 3: I think we continue down the same path. We look 533 00:25:29,080 --> 00:25:31,480 Speaker 3: for growth. We're looking for growth where it's trying to 534 00:25:31,520 --> 00:25:34,800 Speaker 3: steal market share off the opposition. I think we've got 535 00:25:34,840 --> 00:25:37,199 Speaker 3: a better story than the opposition. People people like us, 536 00:25:37,800 --> 00:25:39,399 Speaker 3: and as long as they like us, they're going to 537 00:25:39,480 --> 00:25:40,119 Speaker 3: keep buying office. 538 00:25:40,119 --> 00:25:44,600 Speaker 1: I think it's tell me about competition in this market 539 00:25:44,640 --> 00:25:46,959 Speaker 1: because Razine isn't almost has been around for us. 540 00:25:47,280 --> 00:25:50,480 Speaker 3: We have to be nimble because we're up against multinationals 541 00:25:50,520 --> 00:25:53,720 Speaker 3: with deep pockets and we're a private company and they're 542 00:25:53,720 --> 00:25:56,520 Speaker 3: a regional scize company, but we were very small compared 543 00:25:56,520 --> 00:25:59,359 Speaker 3: to the globals. So we have to have innovative products 544 00:25:59,359 --> 00:26:01,440 Speaker 3: and we have to provide good service and good advice, 545 00:26:01,800 --> 00:26:05,320 Speaker 3: and that's that's our kicker over the opposition. They don't 546 00:26:05,359 --> 00:26:11,159 Speaker 3: have the same network in terms of distribution network, access 547 00:26:11,200 --> 00:26:13,679 Speaker 3: to market, they don't have the full range of products 548 00:26:13,680 --> 00:26:15,440 Speaker 3: that we do, and they certainly don't have the people 549 00:26:15,520 --> 00:26:18,200 Speaker 3: that we do. So that that's how we can compete. 550 00:26:18,840 --> 00:26:24,639 Speaker 3: We've put extra expensive and more durable and more quality 551 00:26:24,760 --> 00:26:29,080 Speaker 3: products together, so we sell out a higher price point, 552 00:26:30,280 --> 00:26:34,040 Speaker 3: but we do pay for that. But if you've painted 553 00:26:34,520 --> 00:26:37,000 Speaker 3: with the Razine, you're going to probably repaint in seven 554 00:26:37,080 --> 00:26:39,240 Speaker 3: or eight years. If you paint with the opposition, you're 555 00:26:39,280 --> 00:26:42,600 Speaker 3: going to paint three to four years. So you pay 556 00:26:42,600 --> 00:26:44,400 Speaker 3: a bit more, but you don't have to do it again. 557 00:26:44,920 --> 00:26:47,639 Speaker 1: So the prices that you're having to pay now, the 558 00:26:47,760 --> 00:26:49,960 Speaker 1: cost of manufacturing on shore, the cost of it was 559 00:26:50,000 --> 00:26:52,120 Speaker 1: input goods, is actually your competitive edge. 560 00:26:52,400 --> 00:26:55,920 Speaker 3: Yes, yes, yes, so you know, like I said, we're 561 00:26:55,920 --> 00:26:58,360 Speaker 3: not we don't intend to change in terms of where 562 00:26:58,640 --> 00:27:02,520 Speaker 3: we manufacture the product. We're staunchly Kiwi and were and 563 00:27:02,600 --> 00:27:03,280 Speaker 3: we're proud of that. 564 00:27:04,080 --> 00:27:08,800 Speaker 1: A lot of historic iconic Kiwi companies have been purchased 565 00:27:09,000 --> 00:27:11,000 Speaker 1: by offshore. 566 00:27:11,520 --> 00:27:13,240 Speaker 2: Opposition a trade cities. 567 00:27:14,320 --> 00:27:15,480 Speaker 1: I was going to ask if you had to do 568 00:27:15,560 --> 00:27:17,679 Speaker 1: some private equity due diligence at any stage. 569 00:27:18,600 --> 00:27:21,800 Speaker 3: More people have approached us to purchase other companies. And 570 00:27:22,200 --> 00:27:24,520 Speaker 3: you know, Net gets a tap on the shoulder Quae 571 00:27:24,520 --> 00:27:27,560 Speaker 3: regularly to sell his business. But there's there's no intention 572 00:27:27,640 --> 00:27:30,639 Speaker 3: of doing that. The business will never be sold in 573 00:27:30,720 --> 00:27:32,639 Speaker 3: his lifetime. It's not going to be I p O. 574 00:27:32,840 --> 00:27:37,040 Speaker 3: There won't be a trade sale. It's just and he 575 00:27:37,240 --> 00:27:40,040 Speaker 3: and he tells it to the staff, says the staff 576 00:27:40,200 --> 00:27:43,479 Speaker 3: know that they secure. That's who we are. 577 00:27:43,960 --> 00:27:46,399 Speaker 1: It's amazing. Congratulations and all the success. Can't wait to 578 00:27:46,440 --> 00:27:48,240 Speaker 1: see what colors do you come up with next? 579 00:27:48,600 --> 00:27:49,760 Speaker 3: Maybe you're having your own color. 580 00:27:50,000 --> 00:27:51,720 Speaker 2: I look forward to that. I'll be back for that. 581 00:27:52,040 --> 00:27:52,879 Speaker 2: Thank you so much, Mike. 582 00:27:52,960 --> 00:27:54,639 Speaker 3: This has been so pleasing. I'm pleas good to have 583 00:27:54,720 --> 00:27:54,920 Speaker 3: you here.