From Overalls to Lab Coats:
Kinetics Engineering was founded in South Australia back in 1998 by Managing Director , David McDonough, who left his job as a Mechanical Engineer with well known bathroom products manufacturer , Caroma Industries, to form his own small venture . Originally the company designed an Automotive Handwash unit providing hot and cold water in trade vehicles . Telstra was the first customer and the business grew from there.
David met up with Greg West who was instrumental in the initial success of the project and when Greg himself ventured out into his own blow moulding business, it was a simple decision that they should continue to support each other. Today Greg and David are owners of Vector Technologies Australia (VTA) formerly known as Blown Plastic Products ( BPP) which has undergone a massive transformation over the past three years from a Tier one Automotive supplier to all of the major Australian car manufacturers, to a hi tech medical devices manufacturer and supplier to the Fast Moving Consumer Goods (FMCG )markets . Anticipating the decline in the automotive industries, the commitment was made to invest heavily in advanced automated manufacturing technology.
Today, the impressive factories are far removed from the spare bedroom where Managing Director David McDonough started the Kinetics business in 1988. “ A few people had a laugh when the first product was conceived, but today the product has realized sales of over $50 M, is exported globally and helped generate funds which aided in establishing the rest of the group.”
The plan was to truly vertically integrate so I bought into our suppliers and grew each business autonomously. First it was a JV with Greg making spring water bottles through our company Aquatek .Then came my interest in Vector Technologies which Greg started.
I then bought into our tooling supplier , Toolcraft ,which today is a valued supplier to the Defence industries. The last Australian based venture was a company called Metalcraft which specializes today in vehicle equipment solutions including emergency service vehicles.
The group also expanded overseas, with engineering businesses in United Kingdom and again ,with Greg West ,the latest venture being Vector Technologies in Thailand.
“My model with business acquisitions has always been to have a business partner with significant equity in the business” he said . “It has worked well.”
While David has natural talent for business, his main passion is being involved in creating clever products. “I really just like to be part of making things – I enjoy seeing our products out there. It’s a genuine entrepreneurial desire.”
It hasn’t all been plain sailing and there were many hurdles to jump along the way as you would expect with manufacturing, including legal issues.
Angela Robins, a director at MGI Adelaide, was a key supporter during this time. “We were dealing with these big global companies and we had an issue where we were plainly in the right , however there was a significant and real threat to our existence. It highlighted the fact that whether you were right or wrong didn’t always factor in the outcome. Fortunately we emerged from the challenge in good shape , but it highlighted the potential of what could have been. MGI then set up a legal structure for us whereby the businesses and their assets were protected.”
Angela has been working with David and Greg since 2002.
“I maintain the business structures – as businesses grow we look at reducing risk, as well as tax considerations, particularly with the international business interests. It’s all about asset protection and funneling wealth into the right areas,” Angela said. “At MGI, we know this business intimately – we need to understand every aspect of the businesses to get the best results.”
That has included supporting David and Greg to transition the businesses from being suppliers to the automotive industry to creating products for industries such as medical and FMCG.
Greg’s sums it up as follows .
“We’ve gone from a traditional industry to a high tech, advanced automation business, In dealing with various aspects over the transition of the business, Angela and her team at MGI have been invaluable. They’ve helped us with planning and securing important grants to transition our business from workers in overalls to a clinical manufacturing based business. Angela is an integral part of our business. It’s far beyond a straight supplier relationship and one which we hope will continue for some time.”