Way back in 1982, you could buy a nice 3 bedroom house in Hillcrest for under $50,000 and a used Massey Ferguson 28 in excellent condition for only $1100. In the days before GST, and EFTPOS cards, you could buy a 170 acre farm in South Waikato for only $350,000, and our agricultural minister, Duncan McIntyre was telling us that the anticipated “record season” ended up an average season after all, due to drought conditions in the Bay of Plenty and Northland.
Mind you, dairy farmer’s income was expected to be up by 11% for the year as a result of better prices on milk fat and so a strong development focus was brewing with many farmers investing their profits on new cowsheds, drainage and new machinery.
At the 1982 Agricultural Fieldays, Bob Potts, Sales Manager at Power Farming Wholesale Ltd, mentioned to Keith Stewart, who at that time was selling another brand of tractors, that they were looking for a new ISEKI agent in Hamilton. The decision was made to start a new business operating as a division of Cook & Galloway Engineers. By July 1982, Keith was employed to set up and run the new venture with the option of forming a separate company and taking a shareholding if the level of business warranted this. By early 1983, the signs were positive and Waikato Tractors Limited was formed on the 1st May, trading as Hamilton Iseki.
Waikato Tractors had commenced trading on the front section of Cook & Galloway’s engineering premises in Killarney road selling Iseki Tractors, a small range of implements and what might be termed by today’s standards, a handful of Parts. During the first twelve months, they contracted out all of the mechanical work, but handled parts, and machinery sales themselves.
In April 1985 Waikato Tractors relocated to Kahikatea Drive, employing a full time mechanic and part time office assistant. The business was growing steadily, with 1984-85 set to be record year nationwide for tractor sales, due to the government’s decision to abolish investment allowances for farmers at the end of March ‘85.
Up until this time, farmers were encouraged to spend their money on new equipment by being able to claim 40% tax deductions in the first year. This boom was great for Waikato Tractors as they settled into their new premises and expanded to accommodate the buoyant economy. However, by 1987, national tractor sales had gone from 5000 the previous year down to 1200, and spending all but stopped for a while on new equipment.
Gradually, farmers began to spend on capital equipment again, as they started to recognise the need to have better structure to their purchasing and replacement plans, rather than being motivated more by tax incentives. Farming has changed, along with the increase in average size of farms in the Waikato, and most farmers now operate with a fair amount of business savvy – recognising the need to firmly manage their farming businesses. One of the big shifts in thinking in the 1990’s was to see the value in changing to more supplement feeding in order to push production levels up. This increased the need for a wider range of implements, requiring bigger equipment and in many cases this has also led to contractors being utilized more often. While the spending frenzy of 1984/85 has not been repeated, their customers larger and more diverse equipment needs has seen Waikato Tractors Ltd continue to grow steadily.
In the early days of Waikato Tractors Ltd, the regular requirements of most farmers, was for a 55 horsepower tractor with a front end loader. There was a big push in the mid 1980’s for 4 wheel drive tractors which was a relatively new idea when Waikato Tractors first opened its doors. Now, 4wd is fairly standard, as is 90 – 100 horsepower, with lots of added safety features that were luxury options back then.
The addition of top international brands such as Massey Ferguson, Fendt and Valtra have added significantly to Waikato Tractors ability to serve a wider range of customer’s needs over the years. They now operate the Massey Ferguson and Fendt Tractors assembly plant for the North Island, and have been recognised as one of the top performing dealerships in New Zealand by AGCO International every year since 2002.
Their success has largely been due to the early decision to allow their growth to be determined by their customers needs, and also to serve their customers based on their needs. “Farming has never been a nine to five job”, say’s Keith, “so we make sure our farmers can reach us 24/7 if they need to. We are open for 5 ½ – 6 days, and have a 24 hour call out service right throughout the Waikato”.
“Staff also make a huge difference and ours have been a major part of our success”, he says. “Most employees at Waikato Tractors are long termers – some have been with us for more than 30 years… and we can boast that many of our customers have been with us from the days when we were still Hamilton Iseki”.
That is quite an achievement for a company that started out with one main product and one person running the show. Today, Waikato Tractors Ltd has an annual turnover in excess of $20 million ????? and around 50 full time staff. They are based on a purpose-built, one-hectare site in on the corner of Kahikatea Drive and Gallagher Street, moving in 1994 to be part of a proposed Gallagher Agricultural Business Park.
When asked about the biggest challenge in today’s business environment, Keith replied that growth is great, but at some point you have to put a fence on the boundary and learn to operate at much more efficient levels inside the space you have, instead of continually expanding outwards. Keith sees the future in farming as being very bright. Farming is much stronger in a business sense too, and technology will only increase the potential there.