Cubic Defence NZ targets corporate along with military and security customers

Monday 13th April 2015

High tech exporter Cubic Defence NZ is setting its sights on selling military training systems to corporate customers.

The Auckland based company, a subsidiary of the listed American defence and transportation company Cubic Corporation, has since the mid 1980s been selling high technology training simulators for defence and security forces which allow them to train troops in the field with a high degree of realism.

It has 130 staff, annual revenue in the range of $65 million to $75 million, and was a finalist in the recent NZTE International Business awards in the over $50 million category. Although a significantly sized company by New Zealand standards, Cubic has largely flown under the radar because it exports nearly all its products and many of its customers require confidentiality as part of the deal.

Earlier this year Australian Defence Magazine ranked Cubic Defence NZ as the top small to medium sized defence contractor in Australasia, while Cubic Defence Australia also made the top 20 listing.

Cubic Defence NZ chief engineer Paul Handley said its expertise is in navigation and wireless communications for equipment out in the field that needs to be unobtrusive and robust in often rugged environments.

“Given our abilities we could see that might work the same in an industrial environment, mainly through navigation and safety,” he said.

The company is initially targeting companies in the forestry and transportation sector and wants to bring a product to market in New Zealand and “do that really well” before taking it to the wider export market.

The key difference from selling to corporates rather the military and security forces is in the implementation, Handley said. It does purpose design equipment for defence customers because the orders number in the thousands. It would be uneconomic to do that for corporates where the quantities required are likely to be number in the tens.

Instead it will look to take existing product and then write a software system that generates the outputs each company is looking for, Handley said.

Cubic has identified likely corporate purchasers and done some initial development work with one.

“I would expect this calendar year to have made some steady progress and be working on at least one job. Most of these jobs take six to 12 months or even longer to develop,” Handley said.

The kiwi company was bought by its American parent in 2000. Another unit of the same company, Cubic Range Design Solutions (CRDS), this month won a US$6 million contract to design, supply and install a specialist ballistic fit-out package for the NZ Defence Force.

Handley said Cubic Defence NZ has had steady and resilient growth.

“We’re a New Zealand company that is footing it really well on the world stage against some strong overseas competition,” he said.

The most recent company accounts filed for the year ending Sept. 2011 showed revenue of just under $74 million and $18 million in net profit.

The company, formerly known as Oscmar International until 2007, has made headlines a couple of times in the past decade.

The Sunday Star Times, in a 2008 series on police investigations into peace activists, reported the Police Special Investigations Unit was following up on a tagging complaint against a former employee by Cubic whose Mt Eden premises had been spray painted with slogans.

And in 2005 no action was taken after a Customs Official inquiry into whether Oscmar exported the intellectual property to make laser detection harnesses , as claimed in leaked documents, in breach of laws controlling the movement of military goods and technology.

That followed its bid to export the military style equipment to Israeli’s Ministry of Defence being rejected on the grounds it could contribute to regional conflict, although NZ officials had previously cleared 30 other such contracts. The rejection came during a diplomatic row over the New Zealand arrest of two suspected Mossad spies.

BusinessDesk.co.nz

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