This article was originally created for Hayes Knight (now Nexia Auckland).
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Bruce Munro is a man of business. He sits on a number of boards of directors and manages a variety of investments across a range of different industries. Spotting an opportunity in the horizontal drilling sector more than 20 years ago, he founded FlexiDRILL as an addition to that portfolio. Since then, his mantra has been: If at first you don’t succeed, go back to the drawing board; innovate, innovate, innovate; then try again.
The inventive drive behind each new FlexiDRILL product, as a result of this philosophy, is Bruce’s business partner and operations manager, as well as the research and development mastermind, Greg West.
“I have placed enormous faith in Greg over the years and have never been disappointed,” says Bruce. “He’s not an engineer, so he has never known what can’t be done – he just keeps challenging his innovative engineering team to find novel solutions. He’s put a huge amount of sweat equity into the company and has never stopped believing we can find solutions to every challenge.”
In the beginning, it was actually the country’s telecommunication companies that attracted Bruce’s attention, as they looked to roll out their new underground fibre networks.
“Trouble was, the telco’s rollout fell over. Instead of the big national projects, the work narrowed down to small household connections contracts that weren’t suited to our drills,” says Bruce. “So we changed direction, looking to design a drill that could do this work efficiently Greg came up with the idea of making a drill as an attachment to an excavator and this worked so well we decided to change direction and become an equipment supplier.”
Greg packed a demonstration bag and put on his travelling shoes. He took the new attachment drill to Japan, Australia, USA and Europe where drilling work commonly has to take place in tight places. Some 70 drills were sold across these markets. Then followed talks with John Deere, which would have resulted in a huge deal, had the final signing not been derailed by 9/11.
So once again FlexiDRILL returned to innovation, believing that the next biggest problem to solve was drilling, not only through rock but doing so at considerably increased rates of production.
Greg and his team’s first creation was a four-tonne head like an oscillating hammer, that sat on the drill rig. The idea worked, but the tool was too big and there was no way to send the vibrations any distance down the drill spring. Would a magnet provide the solution? After trial and error, his team managed to repackage the technology into a down hole Magnetic Hammer which in theory would have no limit to how far it could drill, and it became rapidly apparent there might be an international market for the new product.
This resulted in development and distribution agreements with Vermeer and with the biggest oil and gas exploration company in the world, Schlumberger, which allowed Greg to fine-tune his concept further. Schlumberger was even poised to take a shareholding in FlexiDRILL, but changing market forces got in the way.
“That’s life, though,” says Bruce. “We continued to experiment, and even now, we’re still the only player in the world to use magnets to create vibration in a drill head to speed up the drilling process. Since we started, we’ve lodged 90-odd patent applications and 70 have been granted. Our biggest problem getting new patents is our own prior art.”
In fact, one key to the company’s success, he says, is that it has developed its own system to control that intellectual property.
“We use our own internal patent attorney (Natalee Taylor), the engineering team, and our own management flow This forces the whole team to look at the patent process which becomes creative in its own right. It’s a holistic team approach that incorporates all the steps of the process: design, IP, funding, and governance.”
Bruce turned to Hayes Knight, which had been delivering FlexiDRILL’s financial statements and tax returns, to help brainstorm how to separate the company’s IP from its day-to-day operations to create agility in its licensing opportunities. Together, Business Advisory Director, Scott Travis and Business Advisory Senior Manager, Nicola Pollard came up with a solution that led to the company being split into two. Today, FlexiDRILL Limited owns the firm’s intellectual property portfolio; while FlexiDRILL Construction Limited has exclusive use of that intellectual property to design, develop and market its technologies. And Tax Director, Phil Barlow, took care of the licensing arrangements.
Hayes Knight has also helped draft up licensing agreements and funding applications to Callaghan Innovation to ensure cashflow as well as preparing the business overall for sale. Scott says it’s been stimulating to be involved in such robust and interesting projects for FlexiDRILL.
The result has been an approach by Australian company IMDEX, which specialises in renting mining equipment and could see the huge potential in productivity gains offered by FlexiDRILL’s technology. Again a development agreement with an option to buy FlexiDRILL has since been lodged by the firm which will see Bruce on his way to new opportunities in December, while Greg will stay with the company through the transition.
“Not surprising Schlumberger has come back to us about finetuning the technology we showed them too, so FlexiDRILL is at long last becoming well placed to make it on its own,” says Bruce. “But under IMDEX, our products will continue to be highly disruptive in the minerals exploration industry, and the sale is the best way to see our investment over the years materialised in the market.”
So, how does Bruce sum up the FlexiDRILL journey?
“When you’ve got good partners and a team that’s hungry to grow, there’s an energy in business that’s unstoppable.”