When Anthony Kittel and his wife Michele bought REDARC in 1997, it was a struggling small electronics business with eight staff and annual revenue of less than $1 million.
Now, having been transformed into an innovative, globally-minded company employing almost 100 people, the company is barely recognisable from those early days. Neither is its balance sheet, with REDARC on track to achieve sales revenue of $30 million this financial year.
The Adelaide-based manufacturer sells more than 240 products, such as battery charging, portable solar and electronic safety accessories. REDARC’s customers include 4WD enthusiasts, grey nomads, and bus, rail, trucking, mining and emergency vehicle industries.
On buying the company Mr Kittel, a former mechanical engineer at BHP, immediately introduced a culture of innovation and skills training, which he believes is crucial to staying ahead of the curve – particularly in Australia’s tough manufacturing climate.
“The key thing in Australia is we’re not going to be high volume. If it comes down to competing on cents, we’re going to lose every time,” he says.
As a result, REDARC focuses on niche markets and value adding. Price should never be the number one criteria.
Fortunately for REDARC, quality is a huge priority for its customers, particularly for say, a grey nomad towing a caravan across the inhospitable Pilbara. “They don’t want to break down, they can’t afford to (because of the risks),” says Kittel.
He believes five major factors are needed to foster innovation: a strong learning culture, a great environment to work in, investment in R&D, the newest technology and strong communication and listening.
Key to its success is a state-of-the-art, one-stop-shop facility which the company moved to in 2007 and doubled in size in 2011.
REDARC has also invested heavily in innovation, directing 15 per cent of sales revenue back into research. About 25 per cent of staff focus purely on R&D and innovation.
A strong strategic plan, under which the company plans to double its revenue every five years, has also been instrumental. A major focus now is export markets, and in the next few years REDARC will place a significant investment into cracking the US.
REDARC already sells its battery management products into countries from Samoa to Spain. France’s motorhome enthusiasts are a particularly solid customer base already. The company is also working on a proposal to warehouse products in Poland, which would act as its European distribution hub.
Because of the huge potential in export markets, REDARC now designs “future-proof” products that must be suitable for different countries across the globe.
“If we’re designing a new product we can’t just consider Australia and New Zealand,” says Kittel.