Who would have thought that in this small region of the Manning Valley we would have our very own Olympic success story! Sharon meets with Darren Croker of Croker Oars and discovers that it can take more than a winning solution to be successful in business.
How did it all begin?
This is a family run business that was started by my father, Howard Croker, in 1962 in Sydney. We are proud to be celebrating our 50th anniversary this month. He was a boat builder by trade and loved rowing and still rows 3 mornings per week. We now have 19 employees, whom we value very much and consider the best in the industry. Some of our employees have been with us for 35 years. We have 5 family members involved in everything from administration and customer service to product production and distribution, and they are a key component to our success.
My mother, Kaye, and father are still involved in the business and come with us to Olympic events. They help service all the different nations and ensure that our customers are satisfied with the end product and confident to race. The company has been in the export business since the start, when my dad was working to provide the NZ team in 1964. He was also exporting to Harvard University in the US.
Other changes since include moving from timber to carbon and glass (composite moulding) materials to produce our product.
How does a business in this part of the world manage to compete on the international market?
We ensure our success by winning Olympic gold medals. Our focus as a company is to service our customers with the best product available. We have hundreds of loyal, satisfied customers worldwide who know we pride ourselves on quality. Our product must be 100% correct, or it won’t leave our premises. Customer relationships are crucial.
There is a lot of product coming from China and cheaper European nations. Overseas companies have a cheaper cost base, but we know we can still win on quality and service.
How did you fare at the London Olympics, and how did you get the opportunity to be involved?
There were 16 gold medal positions available, and we won 7. We only have 20% of the market share, so our conversion ratio for wins is about 40 – 50%. Many of the Olympians have been using our oars since they were kids. That’s how we effectively promoted our product in the initial stages. We put the oars in their hands and worked directly with them to demonstrate the effectiveness of our product.
Dad supported the Swindell twins from New Zealand, who won the gold in Beijing. Dad’s known them since they were 14 years of age. He supported them by rigging their boat and helping them get the best out of the product. That’s a relationship which extends over 15 years.
Our business is all about having relationships, otherwise it just wouldn’t work. We can’t compete on price. We wish we could, and it is becoming an issue.
How do you overcome issues with cost?
We may have no choice but to consider moving the business overseas to address costing issues. There is potential for our business to close if things get harder. To ensure we have the same quality and service, we would have to consider moving the whole operation, but we don’t want to do that; we want to stay here on Oxley Island. We have to look at ways to reduce our costs if we are to continue to compete internationally.
Electricity is so expensive here; we’ve had 30kWh solar panels since June and have seen no reduction in the cost of electricity. We had a representative come and provide us with an energy audit, and there was nothing they could tell us that we weren’t already doing.
Other issues include the global crisis. Europe was one of our biggest customer bases, but there is no money there currently. The coaches in Greece haven’t been paid for a while and are not sure when or if they will be paid.
In our business we work on a 4 year cycle – the Olympic cycle. The product we developed last year is the product that will be used for the Rio Olympics in 2016. It’s already being tested on the water. We have to keep producing the best, regardless of the global crisis and the increasing costs. It’s an external factor which we can’t control.
In the ‘90s we went from producing 300 oars a year to 10,000 a year. The last 3 years has seen no growth, because of the high Australian dollar. We have reinvested to further streamline our processes and provide a more efficient production line. We aim to get more done with less people.
One of the machines we purchased enables us to get 80 minutes of extra man hours per week, so I can have my man focus on other work to potentially generate more revenue in other areas. Also, the additional technology can improve quality and overall reduce production costs. We have positioned our work areas in a manner that enables us to optimise workers’ time, thus reducing any time wastage.
There is no opportunity for us to increase our costs to cover the investment we put into our company. The market won’t bear the extra costs; if anything, we need to decrease the price.
What about local business for Croker Oars?
Australia is too small for our product. There are very few customers here for our business. It’s a population sport. There are a number of businesses up and down the Australian coast that we service, but we are exporting 70 – 72% of product. Even though we have a high Australian dollar, we still have to export. If we don’t export, we don’t have a business.
Is Olympics revenue the core of your business?
Definitely not. The Olympics are only 1%. That’s basically our method of advertising for 4 years. Our customers are colleges, schools, clubs, universities and master rowers. The Olympics just help prove that our product is not going to slow them down.
What is your biggest expense?
Freight is an issue. Logistics are difficult. We spend a lot of time and effort ensuring we have the right packaging, because things do get broken. It’s a light product, but awkward. Our cartons are especially designed. We have a local carrier who comes in twice a week and brings them to the airport in Sydney. They are then shipped internationally to 30 distributors around the world. We don’t spend much on advertising. There is no better advertising than having people winning gold medals with our product.
What does the future hold for Croker Oars?
We are optimistic about the future, otherwise we wouldn’t be spending the money. We have 3 guys working on new projects to make the business sustainable. The core business will always be making oars, but we are diversifying, which we hope will take care of our overheads. We are currently developing the world’s lightest seat and improving centreboards for sailboats. We have successfully attained a government grant. This is a growing industry; our objective is to be in business indefinitely and having continued joy in doing what we love.
This interview was found in issue 70 of Manning Great Lakes Focus