A man of two careers

Eight years ago John Illingsworth left his successful corporate career with the Fletcher Group and unleashed his entrepreneurial streak, and he hasn’t looked back. Q&M talks to him about stone, sand, and abalone.   By ALAN TITCHALL.

John Illingsworth’s first taste of private enterprise was with a share of a company called Earthmovers Waikato, which he sold in 1987 to Fletcher Challenge, a company he consequently joined and worked his way to the top as the chief executive of the Concrete Industries Group, one of four divisions at Fletcher Building.

After a restructure at Fletcher Building, that saw the Construction and Concrete groups combined, Illingsworth had the opportunity to strike out on his own again. 

“When I left Fletcher Building in June 2001 I made myself two promises – one was to leave gracefully and the other was never to work for a corporate again. The 12 years I spent at Fletchers was an exciting and rewarding time, however, I get the most satisfaction out of creating my own businesses in a non-corporate environment.”

Illingsworth was now 48. “I did a couple of years consulting and did really well, but didn’t really enjoy it much as I don’t really like waiting for others to make the decisions.”

During this time he hooked up with his old mate Graeme Lee from the days when the pair worked as engineers with Brian Perry Civil. It was Lee who found the deposit of sand just north of Hamilton at Horotiu that became the foundation of the pair’s first business.

“Riverlea Sands was a ‘greenfields’ opportunity with the plant designed and built from scratch by himself, Gary Tetzlaff and Ken Williamson.”

It was also a perfect opportunity for Illingsworth to get back to his hand-on experiences with quarries that goes back to the 1980s when he ran the troubled Earthmovers company with its sand and quarry operations at Whitehall, Matangi, Sanson (near Palmerston North), and Pio Pio (towards Taranaki). It was during this time that he first met Harry Toa who now runs Hinuera Natural Stone. When he joined Fletcher he ran the southern region quarries for Winstone and, in 1992, ran Winstone Aggregates as its general manager for four years.

The Riverlea Sands operation was quickly followed by the OceaNZ Blue abalone aquaculture farm in Ruakaka (another new set up), the acquisition of Hinuera Stone quarry in the Waikato, and the formation of Spartan Construction.

The paua farm has been a six-year journey. “One of the big things for me is that I really enjoy the engineering side of it. We now have a 100 tonne a year abalone farm and we are in the top 10 such abalone aquaculture farms in the world.”

Hinuera has become a bit of a Holy Grail and his attachment to the stone quarry goes back to his Fletcher days. “At one time the quarry made good money, but it lost its way and that’s no reflection on Fletchers.”

It has taken two years to fix it up, he concedes, and a harder journey than originally anticipated. “When we bought it, there were 28 staff and now there are 12, counting management. It has been a rough ride because of the timing with the building market downturn and we still have a long way to go.”

“As engineers, Graeme and I are very passionate about quarrying and Hinuera is a neat and unique product. We think we haven’t even begun to reach the quarry’s real potential. We can a see a good future with New Zealand coming right and our market share growing. And with our cost base now down, we should do very well out of it – we are very positive about it.”

The pair were on a trout fishing trip with their mate Clive Tilby (the three of them worked together as engineers at Perry’s in the 1970s) when the trio came up with the idea of forming a small construction company they called Spartan Construction.

“We always thought the Brian Perry model we worked on in the 1970s was a great one. They were risk takers, entrepreneurial, and we did some great work and make a lot of money.”

The company got an instant leg-up beginning work on the Grasshopper Group’s sub division in Tauranga (The Lakes) and has now been going four years and heading towards a turnover of $20 million. The company is run by ex Downer engineers and the general manager is Greg Dodd.  “It’s very good business with good people and makes a sound profit.”

Big jobs include the $6 million Hamilton city waste treatment plant and, in a joint venture with Hicks, the construction of the tower bases in the new Meridian Energy’s 64 megawatt Te Uku wind farm, near Raglan.

“We stick to a couple of philosophies that keep us successful. We don’t go a long way from home – keeping within a golden triangle. We’ve never had to go to Auckland, and we keep small and stick to our core concrete work.

“We have all spent a lot of time in this business; especially in bidding which is the first place a contractor loses their money. It’s a good business and for us it is a passion – we just love construction.”

Illingsworth is also the first to admit that the company is run by its managers, Greg Dodd, Mark Gerrand and Tony Robertson. “They are the people who make the business – we are more like coaches than doers.”

Riverlea Sands has been sold into Spartan to grow the operation. “Sand has been doing OK as it is involved in both infrastructure and residential industries. We are producing around 150,000 tonne of a year with a turnover of $2.5 million with a staff of three. It’s a good little business that we think we can grow.”

Hinuera and OceaNZ Blue have struggled this year, Illingsworth admits.

“The challenge at Hinuera is driving the cost down and bringing in innovation. We have been lifting brand through TV advertising and marketing, and we have excellent people at the operation.”

The product is misunderstood, he says. “It is not an expensive option. While it will never beat brick as the cheapest cladding, it is cheaper than cedar and only marginally more expensive than a lot of weather boards, and it adds a lot of value to the construction of a house.”

It has also been tough times for the high-end food market in which abalone fits. After the international frozen market went soft, OceaNZ Blue turned to the old art of canning.

“Asians like canned over fresh Abalone, believe it or not, and it took us two years to realise that.”

He holds up a can of abalone with a pink label, a colour popular in Asia. It has been designed by his daughter in her business called Digizign. The entrepreneurial streak runs in the family.

I get him to smile for the camera; one of the few practices he confesses to being a little shy about.

“It has been an exciting six years,” he says holding aloft the can of abalone. “No regrets.”