Sleepyhead plans to build a town in North Waikato to house workers and replace its Auckland factories and warehouses, and says intrigued manufacturers are calling constantly.
Photo: An artists’ impression of the $1 Billion development planned for Ohinewai
Frustrated by Auckland's infrastructure and the inability to secure land for expansion Sleepyhead has secured 71.2 hectares of beef farm in Ōhinewai, North Waikato.
Priced out of Auckland, the company is spending $1 billion to take advantage of an easier commute and affordable housing for workers, rail connections to Auckland, Tauranga and Wellington, and tap into an underused workforce.
Co-owner Graeme Turner said the plan was to build a brand new state-of-the-art bedding factory on what's now a beef farm, to replace its two factories and three warehouses in Auckland.
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"We've got machinery that - some of our machinery is over 250 metres long, so we need a really large piece of land.
"The space round Auckland has just become so prohibitive."
They were planning to build homes homes for workers on the land overlooking the plant, and Mr Turner expected house prices to be about $500,000.
"It's going to take a few years to get the correct procedures and get the infrastructure in to actually start building the houses, and costs go up, but I can't see why it wouldn't be in that category. They're building houses in that area now, around that area, to that ticket."
He said it would probably be a joint venture with a developer, and they had to get resource consent to change the land usage, but they hoped to be up and running by the end of 2021.
The workers saw a lot of advantages to moving south, he said, and some living in Auckland had already offered to move to escape the high price of housing in Auckland.
"Most of our staff are Pacific Islanders and that is their single biggest worry is the cost [of housing].
"Places like Huntly will grow - we've got staff living in these areas now ... it's quite surprising how many people have said to us they'll move that live in Auckland now.
"The other thing too is that there is a lot of labour in that area. It's a high unemployment area."
It would make workers' commute a lot easier too. Mr Turner said most staff had begun starting earlier - at 6.30am - so they could beat the rush into and out of Auckland.
"The on-ramp in Auckland is a nightmare ... worst on-ramp in New Zealand and of course they were going to build a motorway link there to fix it but the government canned it when they came into power so it's going to take 45 minutes to travel 5km. It's a horror show."
The benefits to the company of moving the factory away from that same on-ramp were also substantial.
"All the logistic companies are round there, it's where all the freight companies are and of course the only way they can get on the freeway or the motorway is either at Mt Wellington or Ōtāhūhū.
Heavy traffic on the Southern Motorway is a common occurrence. Photo: NZTA
"A huge percentage of New Zealand's population ... live, south of the Bombay Hills, and so .... we've got a long journey down that southern motorway which is actually congested day and night."
The new site would be right next to the rail lines, he said, and the company had been offered full support from KiwiRail to add signalling so they could use the old station and sidings that are still there.
"They use [the rail lines] now. They have to put some signalling in but it's not a huge rail project.
"The rail link's there, the sidings are there ... it's the main rail link between Auckland and Wellington really, the whole of the North Island."
He said the company's only use of rail at the moment was between Port of Tauranga and the Ōtāhūhū switching station, so the plan was to go from almost fully truck operated to mostly rail.
"I'm not exactly sure of the start date but I know it's some time early '20 where they're actually gonna start running trains from Hamilton to Auckland.
"A lot of our raw materials come in from overseas and they come in from Ports of Tauranga, so having a rail siding so close to the factory sure takes a lot of trucks off the road."
The rail link to Tauranga would help with exports, too.
"A mattress is a very big product and they take a lot of trucking. If you took a 40ft container which I think most people could get their head around, we only get 60 pieces into something like that.
"We're into 60-70 containers a month - 40 footers ... we're the largest exporter in the world of beds to China ... New Zealand's the only country in the world that's got a free trade agreement to ship beds in."
He said the idea had attracted a lot of interest from other manufacturers who may be considering doing something similar.
"Quite a bit of interest from other manufacturers already because there's a problem in Auckland and it's the logistics of getting around Auckland.
"The cost of moving freight is only gonna go up.
"It's only come out in the media in the last few days, I mean my phone won't stop ringing.
"Certainly there's been two transport companies that have been interested."
Auckland Chamber of Commerce chief executive Michael Barnett said he did not think Sleepyhead would be the only manufacturer building houses in the area, either.
"To me it takes somebody to make the move and as soon as the move is mad ethe logic of it and then the ability to be a part of that is going to be taken up by others," he said.
Simply building the plant there would encourage more growth in the region too, Mr Barnett said.
"The supporting industries, the transport hub, I think as soon as you do that then you're going to get other retail supporting the accommodation and so on.
"I look straightaway to Pokeno where, you know, the giant dairy company from China has built a huge manufacturing place down there but immediately there's thousands of houses that are being built down there.
"Drury, we look at Drury now and we're saying that's an ideal place for us to recentre Auckland and recentre some of our manufacturing.
"As soon as you've got manufacturing and jobs you're going to have accommodation so this to me ... is a logical step."