New Zealand-based global food processing technology company MHM Automation has set ambitious growth targets, looking to double revenue, and treble profitability, in the next three years.

The New Zealand listed company is basing its forecast on growing sales, and a bulging order book for its automated systems and equipment, which go to the global dairy, meat, horticulture, timber processing and agriculture sectors. 

Ambitious targets: Richard Rookes
Ambitious targets: Richard Rookes

CEO Richard Rookes has unveiled an aggressive three-year growth strategy, which includes increasing investment in R&D to develop new automation products, and making further acquisitions of companies with products and services “that align well” with those of MHM Automation. Rookes says the strategy is expected to double revenue to $100m and almost treble EBITDA to $10m by 2025.

During the Covid year 2020-21 sales rose by 6 per cent to $51m, and EBITDA increased by 50 per cent to $3.73m, delivering total income to shareholders of $6m, and driving a 156 per cent increase in share price during the year. Almost 70 per cent of revenue was from export sales.

Rookes credited the growth to the global trend towards automating operations in food processing businesses, the strength of IP owned by MHM Automation, and a dedicated and skilled team. “Our technology is recognised as world leading. Several of our products are recognised as being in the top three globally in their given market sector,” he said.

Rookes cited bespoke robotic packing systems recently deployed for Rockit Apples in Hawkes Bay, New Zealand, and large scale SSO plate freezers installed at Midfield Meats in Australia as examples of the company’s industry-leading technologies being delivered to key customers, under a solutions-based partnership approach.

“Our customers are telling us they are choosing to work with MHM Automation not only because of the technologies we offer, but also because we add real value to their business by reviewing their wider operating process and understanding their business objectives. In most cases our solutions are improving health and safety metrics as well as benefiting their bottom line,” he said.

MHM Automation has a near-full order book for the coming year, with $42m of contracted revenue as at 30 September. The company is expecting growth and profitability to continue in the 2021-22 year, with a half-year forecast of $27-30m revenue, and at least $2m EBITDA for the 6 months to 30 November.

The company paid a $1m special dividend in September this year and indicated it will announce a dividend policy with its half year results in February 2022.

Rookes said, “The past three years have seen the evolution our business towards automation and technology, diversification and expansion of our customer base. This has been successful and the logical next step for us is to step up that strategy again to accelerate our growth. It is an exciting time for our team and our shareholders.”

MHM Automation supplied robotic technology to apple producer Rockit Global, which it says is one of the driving forces behind the major New Zealand apple exporter’s expansion.

Rockit Global exports snack-sized apples packed into handy tubes for on-the-go consumption to more than 30 countries, and installed the MHM Automation system in its Hastings plant.

It says installation of the apple tube filling machines has enabled a threefold increase in Rockit Global’s packing throughput, to 20 tubes and 100 apples per minute. Rockit Global expects throughput in the first year of the new plant’s operations to total 100 million apples, with a goal to increase that to 400 million apples in future seasons as additional automation is introduced. 

Automated: Milmeq plate freezing
Automated: Milmeq plate freezing

Alongside its 120 permanent staff and 300 seasonal contractors, four H&C apple tube filling machines which each contain three robots, automate the picking and packing of apples into Rockit’s signature tube packaging. The robots were custom designed by MHM Automation.

Described by Rockit Global CEO Mark O’Donnell as the biggest innovation in the new packhouse, the robots are equipped with specially designed tooling to receive the tube, and then place the apples into the tube.

An integrated vision system identifies the height of each apple to allow the robots to select the right sized apples to “perfectly fill” each tube.

“While packing apples into tubes sounds simple, in reality it is incredible technology. The robots are reading the size and shape of each apple as it goes past, and working out which apples to put into their tube to maximise the fill of that tube; it’s really clever stuff,” said O’Donnell.

Apple filling: Rockit Global
Apple filling: Rockit Global

With sales of their apples continuing to grow significantly year-on-year, Rockit Global recognised automation as the key to enabling the company to scale-up its packing operations to keep up with customer demand. The company engaged MHM Automation as a strategic partner in the design of its new packhouse. “MHM Automation was a natural choice as it is a global leader in their field. As an added advantage, they also happen to be just down the road from us,” O’Donnell said.

Tasked with automating the labour-intensive task of picking and packing the apples, the MHM Automation team developed a system specifically to meet Rockit’s needs. “Our product development process included design, prototyping, testing and proving, and then fine-tuning the design, before producing the final machines now installed at Rockit Global,” explained MHM Automation CEO Rookes.

“Working on a challenge like this, where we are automating a task that has never been automated before, is what gets us really excited. The apple tube filling machines are one-of-a-kind and as such are world-leading technology,” he said.

MHM Automation continues to work with Rockit Global on further lifting its capacity through automation, with focus now turning to automating the orientation and placement of apples onto the infeed conveyor, prior to filling the tubes.

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