Innovation and diversification: Lessons from REDARC
Anthony Kittel has taken REDARC Electronics from operating out of a tin shed to a multi-million dollar company with its own purpose-built advanced manufacturing facility. Purchasing the business and taking over as CEO and Managing Director in 1997 after its founder, Bob Mackie, sadly passed away, Anthony’s business journey is one of innovation, fast-paced growth and a huge amount of hard work.
Targeting markets as they emerge
In the late-1990s, REDARC was still making its signature product – a voltage converter that mainly targeted trucking vehicles. However, by 2001 there had been a major technological change, and new products in the market meant that REDARC’s own service looked like it could become obsolete. Taking into account this considerable risk to the business, Anthony decided to look at diversification.
He started to develop products for the four-wheel drive and caravan industry, which at the time was just beginning to take off in Australia thanks to the start of the retirement age for baby boomers. What product did REDARC come up with? A solar-enabled battery management system that allowed people travelling around Australia to charge their batteries without having to go to a powered site.
Realising the need for constant innovation in business, Anthony decided to set up a research and development (R&D) business called REDARC Technologies in 2002. Each year, Anthony invests 15 per cent of REDARC Electronics’ sales into this business. ‘We’ve gone from one engineer to 35, and that R&D investment has been a significant factor in our success. It helps us design and manufacture the best products, not only in Australian markets but globally as well,’ explains Anthony.
The next big milestone for Anthony was building REDARC’s own purpose-built manufacturing facility in Lonsdale. Investing $5 million in it at a time when REDARC’s overall revenue was only $5 million, it was a big step. ‘It was a significant risk for us – we only had 34 employees at the time – but I had confidence that it would succeed.’ This was certainly the case – REDARC now has 175 employees, turns over more than $50 million in revenue annually and has a growth target of $100 million in revenue by 2020.
The three pillars of success
Anthony aims to achieve this growth by exporting to new markets, particularly the US and Europe. As always, R&D will be a key pillar of this. “We want to continue to remain relevant, both at home and abroad, and R&D will help us achieve this,” says Anthony. REDARC will also invest $20 million in doubling the size of their current factory. ‘We’re going to introduce a whole lot of new, highly advanced manufacturing equipment, so that we’ve got one of the world’s best manufacturing facilities.’
R&D is only the first part of what Anthony believes makes a great business. Developing great people and having the best service in the industry are the other two foundation stones Anthony has built REDARC on. For example, the company funds all of its employees’ training needs. ‘If someone wants to study an apprenticeship, a degree or a Masters, we’ll fund that for them. I believe that, if we can develop the best people in the world, we’ll be one of the best companies in the world,’ says Anthony.
Anthony has also worked hard over the years to build a reputation for great customer service. REDARC’s employees are available across email, telephone and social media at all times, and provide for all their customers’ needs, big and small.
R&D, employee development and excellent customer service – these three foundation pillars have certainly seen success for REDARC. In the past five years, the company has been awarded Telstra Australian business of the year, two gold excellence awards in manufacturing, has won manufacturer of the year and was named in Westpac’s top 20 businesses of tomorrow.
The camaraderie of TEC
Anthony got involved in TEC when he was looking to ramp up REDARC’s growth, seeing TEC membership as a great opportunity to create an advisory and support network. ‘It can be a lonely journey as a CEO – you don’t have that support that you’ve had before. TEC offers a way of overcoming that. You’re able to discuss complex issues in your business that you wouldn’t share with anyone else, and get feedback from CEOs who’ve gone though it all before,’ says Anthony.
He also spoke of the camaraderie of TEC. ‘I enjoy getting to know everyone on a personal level – TEC isn’t just about business, you develop a strong bond because of that trust you place in the other members.’
TEC are so happy to have people like Anthony on board. His hard work, emphasis on innovation and developing his employees, and the many successes he’s seen as CEO of REDARC are lessons we can all learn from.
Established in: 1979 (Anthony took over 1997)
Industry: Electronics manufacturing
Size: Two production sites, $50 million in revenue, looking to expand to $100 million by 2020.
Markets: Australia, US, Europe, New Zealand, South Africa and the Middle East. Over 5,000 customers in Australia alone.
Product range: Sell over 500 products.