BRUCE BILLSON: Chris Procter, CEO of Sealite. Thank you for joining us today. Your business is fascinating. You’re a navigational expert providing assistance in maritime and in aviation sense. Tell us a bit about Sealite.
CHRIS PROCTER: Yeah. So we manufacture all sorts of marine and airport lighting products. On the marine side, think ocean buoys channel markers, telemetry equipment, anything that safely guides a vessel into port. On the aviation side, similar type of thing for aircraft. So we do helipad lighting, heli-deck lighting, obstruction lighting which marks aerial obstructions for bridges and towers, as well as airfield lighting systems for commercial airports and defence.
BRUCE BILLSON: So literally illuminating the way for commerce.
BRUCE BILLSON: Fantastic. But an interesting blend of domestic and international markets in your business. Can you share with us a bit about that?
CHRIS PROCTER: Well, 86% of what we do is export. I know that because we just submitted our export awards. And that was the number that fell out. Largest markets would be the United States, the United Kingdom. Middle East, we do a lot. Asia, we do a lot because of our location. And Africa is an emerging market for us.
BRUCE BILLSON: So here we are are your manufacturing facility in the southeast of Melbourne. The launch pad for servicing a global market. How have you nurtured such an international presence through the business?
CHRIS PROCTER: The business was set up by my old man. So it was his hobby for years and years.
BRUCE BILLSON: So for our international participants, old man is an Australian colloquialism for my father.
BRUCE BILLSON: Yeah. [LAUGHTER]
CHRIS PROCTER: That’s right. And we were in the garage for about 2003. And in the early, early days, we would just sell to anybody. And for an Australian business, sometimes it’s easier to build a stunning website and export before you really took care of the home market. So some of our earliest markets were export. The first export market for us was New Zealand. And it was an introduction by Oz Trade. And then behind that, the UK and the US whilst the domestic market grew.
BRUCE BILLSON: So always an international disposition.
BRUCE BILLSON: But technology has really opened the door to those markets for you?
CHRIS PROCTER: Yeah. It has. So one thing for us is, without a doubt, we would build the best quality product on the marketplace today. So it’s the technology, and it’s the product differentiated by technology that’s driven our export markets by far. We still face competition in the United States. We’ve got a domestic manufacturer. We have a manufacturer in Canada. One in Finland. A number in Asia. But it’s certainly the technology that being the best at that has paved the way to get the market share overseas.
BRUCE BILLSON: In fact, some of your work as a supplier is part of a bigger solution that your customers might be driving.
BRUCE BILLSON: Whether it’s a Port Authority or something like that. With your niche expertise, how important are those relationships?
CHRIS PROCTER: Oh, they’re critical. And when you talk about a customer for us, they’ve got many, many different faces. So if you’re looking at, whether it’s our own office or a distributor, they’re the customer, but they may not be the end user.
CHRIS PROCTER: And often the end user is not even the one that is making their decision. And the guy making the decision might not be the advocate. So there’s many, many different influences, advocates, end users that we’ve got to maintain a relationship with in that supply chain. If you look at– we’re doing projects in the Middle East at the moment. If you look at some of our partners in the Middle East, we supply directly to Chinese dredging companies. But they’re working off specifications that have been supplied by the end user. And that end user might be Saudi Aramco, or some other big client, or operator of that port that then specifies what equipment the dredger has to instal.
So there’s many different relationships that we’ve got to nurture, and maintain, and influence.
BRUCE BILLSON: And it’s interesting, you’re in the supply chain both as a provider of capability, but also a receiver of other people’s contributions in the supply chain. A real opportunity for a SMEs, given the horrible economy and digitization that’s happening.
BRUCE BILLSON: Talk to me about what does a successful participant in a supply chain look like?
BRUCE BILLSON: And what do you look for, as well?
CHRIS PROCTER: Yeah. So we– our supply base is really broad. So we global source. So we source Asia, United States. A lot of materials come from Europe and the UK. But also a lot out of the Victorian area, in particular. And, in particular, like in Dandenong and Carrum Downs. We’ve got some great suppliers in Dandenong and Carrum Downs. What we look for is– cost is one thing. You know, it’s the start, but it’s not the end. It’s not all things. We look for response time, ability to provide a product that meets spec. We do a lot of sort of inwards goods inspection and quality assurance of our supply chain. So–
BRUCE BILLSON: So before you put what you’ve got from them into something you’ll produce yourselves–
BRUCE BILLSON: –there’s a QA process to make sure those–
BRUCE BILLSON: –inputs are exactly what you need.
CHRIS PROCTER: Yeah. And it might be just the material selection of what they’ve specified for a plastic part of ours. Or it might even be conformance to our drawings on a fabricated part. They’re the types of things we look for.
BRUCE BILLSON: So, accuracy. Am I hearing that good suppliers are the ones you can really count on?
CHRIS PROCTER: Yeah. Absolutely. You can count on people in a number of ways. So one is just the transactional relationship. You know, you pay them on time. You don’t shop around too much without reason. A supplier, small or a medium-sized supplier, gets really, really annoyed if you’re often sending RFQs to them and then just bidding it to the lowest operator. So we’re really conscious about how many times we ask a particular supplier to quote for something and that the conversion rate is medium so that they don’t just tell us to get stuffed after a while. And then the other is that I can deliver on time.
We’ve got some projects that have real critical parts that we might be supplying into large, say, dredging contracts, which would be an example. So if their supply is critical to our overall project schedule, that means that we be able to rely on that supplier to meet their commitments. So it’s not only price, but it is price. It’s not only quality, but it is quality. But it’s also the reliability that they can deliver on time.
BRUCE BILLSON: So dependable–
BRUCE BILLSON: –partners in your business, essentially.
CHRIS PROCTER: Yeah. And then working closely enough, and giving them enough work, and paying them on time that when something really urgent comes up, they can drop other customers and work for us. And that’s sort of evidence of a really good relationship, that they’re willing to stop work and do something immediately for you.
BRUCE BILLSON: Well, let’s flip it a bit.
BRUCE BILLSON: You’re also in the supply chain in your marketplace.
BRUCE BILLSON: What do you do to make sure that the partners that turn to you for your capability keep coming back and want to be a part of your story and have you a part of theirs?
CHRIS PROCTER: Yeah. Well, the first is, it’s just simply got to work. So when you look at our products, when you look at, for example, our marine products. A marine and ocean buoy with a navigation light on it might be a $40,000, $50,000 system. But that could be deployed four or five days steaming in the North Sea. Or it could be way off past the Barrier Reef. So the actual cost to repair something if it fails far exceeds the purchase price of the equipment itself. So for one, it’s got to be absolutely reliable, otherwise they won’t touch it. The next is that our own supply chain needs to fit into our project schedule.
We need to fit into our customer’s project schedules. So we need to put up really robust delivery times and meet them. And I’m not saying that we do every time. But it’s really important that when we quote something with a lead time and we’ve got contractors or end users mobilising works, mobilising vessels, we’ve got to make those delivery days.
BRUCE BILLSON: So you’ve been on a journey with the old man–
BRUCE BILLSON: –and yourself really doing world class stuff. What’s the three big tips you’d give a current SME business owner or an aspiring SME business owner with specialist know how or a particular expertise to support their prospects of success?
CHRIS PROCTER: We’ve been fortunate in the old man, or my father, was very much focused on engineering, and production, and operations in the early days. I’ve come from a sales and marketing background. So whilst he was at the back of the garage making it, I was at the front of the garage, building websites, building literature, building our distribution network. So I guess the one, two, or the one, two, three–
BRUCE BILLSON: Complementary capabilities.
CHRIS PROCTER: –complementary capabilities. Yes. It’s the operational capabilities to be able to make the equipment cost effectively. It’s the engineering capabilities to make sure that you can lead the marketplace and give technology that really adds value and is world class. But then it’s the sales and marketing. And to make sure that you can sell it and market it profitably.
BRUCE BILLSON: Chris Procter, thank you for your time with us today. Thank your old man, too–
BRUCE BILLSON: –for the Sealite journey, and sharing your insights with our audience.
CHRIS PROCTER: Thanks, Bruce.