Warning on R and D spending

Press, 11 December 1989, Page 15

Warning on R and D spending

Wellington reporter Eroding Government support for research and development represented the biggest barrier to future growth for the Christchurch-based high-tech instrument maker, Streat Instruments, its managing director, Mr Garth Streat, said when the company was one of 10 recipients of the KPMG Peat Marwick Business Enterprise Awards at Parliament last week. The much-decorated company won on the strength of a business plan for expansion and job creation against 300 other entrants. It produces a range of instruments for

measuring the water content of various raw materials. Initial development was for wool measurement, but other textiles and foods were now also measured. While 85 per cent of its product was exported, the company’s New Zealand market was also expanding as it began producing for local processing industries, Mr Streat said. However, the company was still at a venture capital stage, and was only able to survive on the strong cashflows from the Streat group’s general engineering arm. Streat Instruments had been nurtured in its early stages by Governmentbacked research and development assist-

ance, he said. But this had been dwindling as userpays policies began to bite. Mr Streat was critical of unnecessary bureaucracy involved in recent schemes to assist small business, and called for more face-to-face contact in the evaluation of grant applications. While a lower exchange rate would make the company more profitable, its products were for niche markets and not much affected by a high exchange rate. The high value-added nature of the products meant the company got little help from lower imported input costs, due to a strong exchange rate, he said.