The victory party’s over and it is the morning after the night before at Christchurch’s Whisper Tech after winning a $300 million deal to supply products to Britain. Colleen Simpson reports.
Bill Highet’s phone has been running red-hot since news broke that Whisper Tech had netted a deal worth at least $300 million during the next five years.
It is a sweet irony for Mr Highet, general manager of the Christchurch firm, that he is being chased by the same investment bankers who not that long ago stopped short of lending the company money.
“We’ve had nine years of being told that we’re at the in-between stage and that we don’t qualify for that funding,” he said. “It’s been difficult getting new capital.”
He and technical director Don Clucas smile but look drawn and tired, confessing to sleepless nights wondering how they would deliver on the lucrative deal.
The road so far has been difficult ““ but the path ahead is still paved with hard yakka and difficult decisions.
“All my grey hair has come along in the last three years,” Mr Highet said.
This month Whisper Tech revealed it had agreed to supply British electricity and gas giant Powergen with 80,000 of its revolutionary WhisperGen units.
WhisperGen would save the average British household up to $600 a year, meaning the higher-than-a-boiler cost would be paid back over four years.
Using a Stirling engine, the bar fridge-sized WhisperGen runs on natural gas or heating oil and produces hot water for domestic and heating use, as well as generating electricity for homes or for transferring back to the national grid. It can be installed in kitchens or laundries.
Powergen ““ the trading arm of E.ON UK ““ is Britain’s second biggest energy supplier with more than eight million customers on its books and wants to make its market share grow. So keen was E.ON on WhisperGen that after a five-year trial it has negotiated exclusive rights to market the product in Britain.
Though huge in itself, the deal could prove the tip of an iceberg for the Christchurch manufacturer, which estimates the British market alone to be potentially worth a million systems a year while in Europe six million households replace their boilers annually.
Inroads into other Western Europe markets continue and other, potentially bigger, deals wait in the pipeline.
While still fizzing from landing the deal, both men are preoccupied with how to beef-up manufacturing capability to deliver on contractual obligations.
“I suppose that once the momentary euphoria passed after the great news, reality set in,” Mr Highet said. “We’ve got a pretty big contract to deliver on.”
The first step has been to write to 500 companies around the world ““ such as Bosch, General Electric and Fisher & Paykel ““ which could assemble all WhisperGen’s elements and create the finished product.
“While we’re going flat-out here to produce 1000 units (for an immediate $10 million order) we’ll also be putting in place the structure that we need to produce those volumes,” he said.
The job will probably be done by a company close to the market but nothing is certain yet. Once that partner is selected, the search will begin in the automotive industry for a core engine manufacturer to produce tens of thousands of hi-tech consumer units.
However, Whisper Tech will carry on making some of the key components in order to protect its intellectual property.
Mass commercialisation and production of the WhisperGen unit could mean they would be available in New Zealand within five years.
The firm believes its product will revolutionise domestic power supply options, to the extent that having a personal power station will be as commonplace as a personal computer.
Mr Clucas, a mechanical engineer, says though he he never lost faith that the concept could become a commercial reality, hurdles such as securing funding at times threatened to derail the research and development efforts.
The WhisperGen is Mr Clucas’s brainchild from his days at Canterbury University, where as a PhD student he set his sights on making a Stirling engine that was commercially viable ““ a feat that others had tried and failed to do at huge cost.
“A lot of people have put their reputations on the line based on something that I said a number of years ago would work,” he said.
The company has been careful to remain focused on one project and one market, a decision which has meant putting to one side other opportunities including the yacht market ““ with potential sales of 800,000 units a year. Mr Clucas believes that market is high margin and low volume, ripe for Whisper Tech’s DC unit.
While laying the groundwork to push out tens of thousands of WhisperGens, work is still being done to perfect the unit. The aim is to free Mr Clucas to work on other inventions.
But being full of ideas and knowing you may never be able to develop them is a difficult path to follow.
“One of the tensions in my life is knowing that I have to stay focused on this,” he said. “I don’t put time into some of the other projects that I’d like to be doing.”
One of those ideas is to develop an add-on device which could be attached to the unit allowing it to generate cool air ““ making Asia and Australia as potential markets.
And the Aussies are interested.
During a trip to Melbourne earlier this week, Mr Highet was received with open arms.
“I found myself in a room with representatives from about six or seven government departments who were all trying to help me understand why we must be able to do something more quickly (than planned),” he said.
While open to all options, Mr Clucas said the firm remained singularly focused on getting the British market “really flying”.
Other companies from various countries are developing similar products but are still some way from being ready for the market.
Rivals do not faze Mr Highet, who firmly believes that there is more than enough room for competition.
Canterbury ratepayers will be the biggest benefactors from the Powergen deal, through their ownership of Orion in which Christchurch city, Selwyn and Banks Peninsula district councils hold stakes. Following Orion’s 47.4 per cent stake is state-owned generator Meridian Energy with a 29.9 per cent holding. The remaining 22.7 per cent includes Mr Clucas’ 7 per cent, Canterbury University’s 1 per cent and Mr Highet’s less than 1 per cent.
From Stuff.co.nz