European deal edges Fisher & Paykel closer to dream of taking on the world

By Duncan Bridgeman

Friday 3rd May 2002

SMART DRIVER: Malcolm Harris with a DishDrawer

Fisher & Paykel Appliances is a step closer to its ultimate goal of creating a complete kitchenware brand overseas following a recent distribution deal.

The company last week announced it had signed a three-year agreement with home appliance giant Whirlpool Corporation to market and distribute its DishDrawer dishwasher in Europe.

The agreement, known as an original equipment manufacturer (OEM) partnership, allows F&P Appliances to bypass market entry costs and capitalise on Whirlpool's established distribution network.

Under the agreement, the DishDrawers would be marketed under the Whirlpool and Bauknecht brands in Europe. Whirlpool is the world's largest home appliance manufacturer.

The deal would also help F&P Appliances diversify from the mature Australasian market, where it generated 75% of revenues.

General manager of sales and marketing Malcolm Harris said the company was in negotiation with other potential partners for similar OEM deals as it looked to create an F&P kitchen brand.

While F&P Appliances already had long-standing distributions in Mediterranean countries such as Greece, Cyprus and Malta, they were mainly in refrigeration products, he said.

But strong growth in the UK and new innovations in the dishwasher segment had opened the door to central Europe.

"We've got a good foot in the door in Britain with national retail chains as well as Harrods and as we increase our product line, the focus will be more on the kitchen," Mr Harris said.

A key breakthrough to selling DishDrawer in Europe was the development of a water softener to remove the continent's notorious calcium stains.

The company had come up with a different concept from that used in European washers so the softener could fit inside the DishDrawer's slim design. The process took three years.

The company would initially target the high end of the European market using Italy as a launching pad. Scandinavia and Germany were also seen as valuable market opportunities.

F&P Appliances managing director John Bongard last week said the company's March-year profit would exceed market expectations.

Multex Global puts the average of analysts' forecasts for net profit at $32.5 million.

Mr Bongard said the company would look to double its DishDrawer capacity by spending up to $6 million, which was a relatively small investment.

"The key for us is to introduce the F&P brand across a wider range of products. We see an opportunity for frost-free freezer cabinets in Europe and we will be releasing bigger quantities [of Ddshwashers] into the UK as well."

The company continued to focus heavily on the US with its new Titan ovens creating an impact. New features, including a secret "stainless steel finish," would be released in New Zealand models later in the year.

Following the success of its two-compartment ddshwashers, which enable American Jews to observe kosher dietary requirements, the company has developed a "Sabbath mode" for its ovens.

By programming the oven in Sabbath mode, Jews can cook on Saturdays without touching the controls and no lights or signals appear on the oven.

Mr Harris said there had been "tremendous growth" in the US over the last 12 months and the company was in a position to expand the range with single and double ovens.

"We are getting the level of business now where word of mouth starts to take over."

Comments from our readers

No comments yet