Major steel fabrication companies placed on the market

Two businesses - and the property which sustains them in a premier industrial Napier location - have been placed on the market for sale.

The prominent steel fabrication and wire mesh manufacturing freehold going concern businesses at 22 Dunlop Road are heavily involved in New Zealand’s booming construction sector.

Much of the companies’ joint sales activities have been in the booming North Island construction sector - where commercial building has seen scores of new office towers and suburban warehousing and manufacturing plants built, along with swathes of new suburban residential build locations.

Reinforcing Steel & Mesh was established in 1987 and expanded nine years later to create sister company Meshmakers which specialises in the manufacture of welded steel mesh products.

Sales revenue is forecast to exceed $10million for the 2022 financial year.

While operating in slightly different markets, the two entities are seen as one business - sharing staff and operational resources, and are being marketed for sale under that format.

Operating in a parallel format, steel mesh products wholesaler Meshmakers supplies a small client base of construction and engineering firms nationwide – with all steel sourced from within New Zealand through Pacific Steel.

The combined Reinforcing Steel & Mesh/Meshmakes business employs 26 fulltime staff.

As the result of significant capital investment in setting up the plant and machinery over many years, there are formidable barriers to entry, resulting in limited competition for the two businesses.

The companies produces both stock-standard and bespoke products.

The property housing the two businesses at 22 Dunlop Road comprises three separate buildings with a combined total of 2321sq m on a land area of 3573sq m.

The main factory consists of 1398sq m of mixed high-stud and low-stud warehousing complete with multiple vehicle entry/exit points and housing four heavy-lifting gantry cranes, all set on sealed yard.

The site’s storage warehouse is 688sq m of high-stud space, while the company’s offices are contained in a 126sq m premises featuring full toilet and bathroom amenities.

The business is recognised nationally and has developed multiple customer relationships with construction companies around New Zealand over the past decade.

The Reinforcing Steel & Mesh and Meshmakers freehold going concern entity is now being marketed for sale by expressions of interest through Bayleys Napier, with the process closing on October 29.

Salespeople Rodger Howie and Rollo Vavasour said there was also the option of purchasing the business only with a long-term lease in place.

Howie said that under the leadership and vision of its current owners for the past 14 years, the company had continuously invested in the both equipment and personnel - not only increasing the efficiency of the business, but also continually improving productivity and sales revenues as a consequence.

“The business has invested heavily in computerised machinery which delivers much higher productivity rates compared to traditional manually-operated machinery. The digital processing also produces precision accuracy, and reduces the risks of human errors and re-works to an absolute minimum,” said Howie.

“Demand for the company’s goods and services remains high - with current forward work orders extending out well into the first quarter of 2022, sustained by strong margins.”

An inventory of modern engineering plant and machinery is included in the sale offering – ranging from Italian-made cutting, rolling and bending units, through to forklifts, and a fleet of trucks and utes.

The specialised engineering equipment alone has a book value of over $1.2 million.

Howie said this was a rare opportunity to acquire an established heavy industrial business and real estate that was well set up to take advantage of the frenetic demands of the construction industry over the foreseeable future.

He said the business’s Hawke’s Bay location enabled them to efficiently service customers in both the Upper and Lower North Island.

- Article supplied by Bayleys