Wood Tech Group reaps benefit from Covid diversification strategy

After revenue fell by $16m at the start of Covid, a former Brisbane tradie diversified his firm and it is now one of Australia’s largest producers of face masks.

Wood Tech managing director Ron Smyth moving into the Rogers Industries site at Hemmant which will be company's new headquarters.

When the Covid pandemic hit in 2020 and revenue plunged, Ron Smyth may have had more than a passing thought about whether The Wood Tech Group would actually be able to mark its 30th anniversary this year.

To survive, the Wood Tech managing director had to take Australia’s second largest distributor of commercial woodworking and stone processing equipment on a different path.

“It was tough. Revenue fell $16m in four months and it was very difficult,” Mr Smyth said.

What the 100 per cent Australian-owned and operated company did was to diversify.

They released their own in-house range of popular affordable commercial machinery for customers wanting European-like specs and launched a DIY range of planers, thicknessers (trimming boards to a consistent thickness) and lathes for the hobbyist and light commercial woodworkers.

They initiated a start up machinery packages and advice for the wave of tradies starting their own cabinet marking or construction businesses in the wake of the pandemic.

Finally, Wood Tech also established a Personal Protective Equipment (PPETech) manufacturing division, which is now one of Australia’s largest manufacturers of government endorsed P2/N95 respirator face masks.

Mr Smyth said they started making masks for the cabinet-makers and boat builders and the demand was huge.

“Before Covid $100m worth of masks came into Australia annually. Over 10 million industrial masks are used a month just in mining and other industrial sectors,” he said.

“We’re now making about 1.5 million masks a week.”

Wood Tech managing director Ron Smyth moving into the company's new headquarters at Hemmant. Picture: Tertius Pickard

However, Mr Smyth said despite applying, the Brisbane-based company received no Covid grants from the Government.

“All the guys who did get the grant, I don’t think any of them are still making masks with the exception of medical,” he said.

Their four-pronged strategy and government stimulus for the construction industry, alongside instant asset write-offs, helped Wood Tech’s machinery sales return a positive 2020/21.

From a $35m turnover in 2018/19 which dropped to $19m the next financial year, Mr Smyth said they were “looking at about $35m in 2021/22 and a $50m annual group turnover within the next two years”

The rebound came despite being in an industry where the main rivals are cashed up government-supported companies in Europe and Asia.

To compete and continue to grow, in late 2021 Wood Tech acquired Rogers Industries, a specialist plastics and aluminium manufacturer for $12.5m. Rogers Industries machinery also forms part of the deal, including injection moulding machines, CNC lathes, milling and machining centres plus multiple furnaces.

The existing Hemmant site already includes 7000sq m of factory space, with a further $3m investment announced for a 2500sq m purpose-built office to serve as the national group headquarters plus a $1.5m investment in new ISO (International Standards Organisation) clean rooms, automated production lines and a quality testing facility for face masks and other PPE.

An artist's impression of The Wood Tech Group's new head office at Hemmant.

“With the purchase of Rogers we’re looking at manufacturing hard hats, face shields, ear muffs and five different designs of P2 and medical face masks,” Mr Smyth said.

“We design the machines, they’re built overseas and we assemble them all here and we write the software to automate the lines. We also now manufacture spare parts which is why we bought Rogers.

“A big part of that growth will be the material handling division we’re starting at Rogers.

“We were looking to increase staff from 50 last year to about 100 by the middle of 2022. And I can report this has already been done”

A fitter and turner by trade Mr Smyth got his start as a 15-year-old apprentice as a wood machinist in a kitchen making company. He worked his way up through the sector and in 2013 bought Wood Tech which was founded in 1992.

At the time they had five private dealers in all the mainland states and over the next five years Mr Smyth bought all the branches except Adelaide which remains a dealer.

Mr Smyth said the pandemic was a lesson for Australia to become more self-sufficient which was evident in his industry when tool imports and spare parts dried up at the height of the pandemic.

“We fill that gap by making our own parts and tools. We are competing with China and other countries based on price and quality. You give me that drawing and what you want, and we can make it for the same price,” he said.

“Australia is easy to fix. Instead of bagging China and other countries who we compete with we should be emulating them because they are the best in the world. They do things faster and cheaper than anywhere else.”