Home' NZ Dairy Farmer : July 2014 Contents 42 The Dairyman July 2014
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Ph Jim 07-850 5971 Mob. 0274 936 693
Ph Chris 07-849 3630 Mob. 0274 936 692 P.O. Box 10 188, Te Rapa, Hamilton
used by Southern
Lights Bio in
Marton to turn
A chartered accountant by trade with
experience of managing a Canadian
medical imaging technology firm, he
jokes that he had to become the boring
guy of the business, tightening the
company s processes so it could comply
with their customers own quality
We hired a quality manager well
ahead of when we could afford one so
that everything we do in our facility and
with the abattoirs we work with is
under quality accreditation, he says.
It wasn t cheap -- the quality system
cost $400,000, compared with the $1
million cost of setting up the firm s
processing facility at Marton in the
lower North Island.
After three years of selling raw
tissue, Bennett started looking for
additional ways to create revenue due
to risk of incoming competition.
After talking to its customers about
how to save them a step in the process,
Southern Lights discovered some
biomedical companies were willing to
pay extra for it to crosslink its
pericardium -- a process in which the
tissue is stabilised for implantation by
removing DNA markers to avoid bad
From there the company began
investigating using cross-linked tissue
to produce polymeric collagen.
Collagen is tricky and expensive to
make. We thought there might be
customers who didn t want to go to the
trouble of creating it themselves,
It was very difficult to get market
data, so we just went on intuition that
there was an opportunity, and there
Southern Lights teamed up with
biochemical engineer John Higgins and
Massey University s Riddit Institute in
2009 to develop the technology, and
exported its first batch of collagen in
2011. The original patents for making
collagen expired long ago, but producing
collagen is a black art, Bennett says.
They don t put in the patent the real
tricks to making it.
When it got its product to market
Southern Lights discovered it needed to
vary its production based on each
individual customer s requirements. It
now enters into R&D partnership with
each client and requires them to fund
some of the research costs.
One of the lessons we learned early
on was we undervalued our own
contribution to R&D and we didn t
screen our customers properly.
We spent a lot of money developing
something, but when it came time for
them to pony up (with) the money, their
funding had fallen through. We changed
our process to make sure they put skin
in the game early on.
Along with its raw and processed
tissue exports Southern Lights has the
capacity to make 200 kilos of collagen a
year, charging up to $70,000 per kg
depending on the processing involved
and quantity ordered.
In the early days, Southern Lights
had difficulty finding abattoirs willing
to change their production practices to
work within their strict auditing
processes, but now some meatworks
were also trying to enter the lucrative
I don t worry about the collagen side
of the business, they will never figure
that out, Bennett says. We have a $5
million head start on what they could
Southern Lights employs 11 staff and
works with more than 20 biomedical
companies in North America, Asia and
Bennett estimates that in the next
three to five years the company will
triple in size. It is also exploring
exporting to halal markets.
It s all pretty impressive, especially
for Bennett, who admits he still gets a
little queasy every time he visits a
The first time I went into a meat
plant I had never seen anything like it.
There was nowhere I could look that
wasn t grossing me out, but my business
partner used to remind me to think of
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