Bremworth chief executive Greg Smith said damage from Cyclone Gabrielle had forced the company to outsource part of its production process to domestic and international suppliers. Photo: Bremworth
Carpet company Bremworth is switching to a hybrid supply chain model to outsource some of its production processes after Cyclone Gabrielle damaged the company's Napier plant.
The company said its Napier yarn-spinning plant was expected to be offline for a significant, though yet undetermined, amount of time, while Bremworth's Whanganui yarn-spinning and Auckland carpet plants had halted operation over the supply of dyed fibre and yarns.
Chief executive Greg Smith said damage from Cyclone Gabrielle had forced the company to outsource part of its production process to domestic and international suppliers, with New Zealand wool fibre to be shipped offshore, dyed and processed to yarn, before being returning to the company to be made into carpet.
A deal was also underway with a Canterbury textile firm that specialised in processing natural fibres, which would enable Bremworth to process and dye wool fibre for the company's Whanganui yarn-spinning facility.
Smith said the hybrid supply model would help to future-proof the company's supply chain as it expanded into the Australian market.
"In Australia, where wool carpet demand is much higher than in New Zealand, we believe that securing large-scale contracts could see us increase our revenue by tens of millions of dollars annually."
Diversifying and moving parts of the business overseas would protect it from total disruption in future disasters, Smith said.
"It's new for us," he said. "We're proudly a New Zealand brand, and we've worked hard to establish that reputation, but from a resilience perspective we probably had most of our eggs in one basket with Napier."
The company had more than $16m of finished carpet inventory on hand to meet demand, he said.
"The first trial of one of our most popular products produced by one of our international suppliers has been a success, which is comforting.
"Based on what we know now, we expect to be well-positioned to meet the forecast increase in demand as flood-impacted homeowners look to replace their carpet over the coming year."
Smith said the company had full replacement insurance cover and had already received a partial settlement of $20 million, with further insurance payments expected.
Hawke's Bay Chamber of Commerce chief executive Karla Lee said there would be some businesses deciding to leave the region, but she did not think it would be many.
"For the majority of businesses that we have been talking to, the general feeling is that they will remain, and they will fight to re-open their businesses and come back better because of it."
The region would emerge a better place to live and work, with infrastructure like roads and bridges, as well as water and power networks, being rebuilt to a higher standard, Lee said.
Help was on offer for struggling businesses. Grants from the Cyclone Recovery Fund were being wound up, and the response had shown the need for immediate financial help for people and businesses to get back on their feet and back to work.