While travelling through New Zealand last month, I paid a visit to Tom O’Keeffe, who was disc-injecting slurry on a dairy farm just outside the town of Hinds in the southern Canterbury region. After originally coming to New Zealand 17 years ago, the Fedamore man has spent his time working on large arable farms and with agricultural contractors.

“I first came to New Zealand in September 2003 with €500 in my back pocket. I came over to over to sow maize for a small contractor. I had planned to head for Australia after that season, but the contractor set me up with a working visa and I quickly settled in around the Canterbury region before meeting my partner.”

The penny dropped

“One day early last year I was helping out a friend of mine on his dairy farm. He was giving out about his effluent pond, that it needed to be emptied badly, that he’d been waiting for over six months for a contractor to come and spread it. It was at this stage that the penny dropped and I thought I could do that. Shortly after this I began looking into effluent handling as being a possible niche where I could set up my own specialised business.”

Tom injecting slurry with his Veenhuis system at 10mm on a 3,000-cow dairy farm in South Canterbury.

From here, Tom visited a number of local contractors that he had a relationship with over the years to speak to them about the feasibility of setting up his business. He said: “As I spoke to each contractor, the same message was being portrayed over and over. They said they had no interest in handling effluent as neither their overseas drivers nor the kiwi drivers wanted to do it. Everyone wanted to be at silage work – it was cleaner and flashier.”

Tom said that each of these four local contractors were willing to send work his way if he was to push ahead and set up his own business. This was because they saw him as a friend and not a threat to their business as he was willing to stay specialised. From here, he began visiting farmers to see if they were willing to give him a shot. He said: “Everyone I met was very positive and more than willing to give me a shot. Not one person told me I was mad.”

Machinery

After spending a few days on the road speaking to farmers and contractors, Tom knew this was a potential runner. His next step was to price the required machinery. He travelled to the Field Days (equivalent of the National Ploughing Championships in Ireland) and began looking at and pricing equipment. After pricing a number of brands, most of which were German, Tom said that Hi Spec really stood out for him. He said: “Before I came to New Zealand I worked with dairy farmers and contractors and spent a lot of time spreading slurry and dung with Hi Spec machines so I knew they had a top-notch build quality. They were also the most competitively priced machines.

“That day I did a deal with my local dealer for a new Xcel 1250 dung spreader and a 3,000 gallon tanker. Shortly after, I bought a used John Deere 7250R, a Storth mega mix stirrer, some tools and a diesel bowser. I also hired a Case tractor.”

In April of this year, Tom officially registered his new company, Central Injection Agri Ltd. This kit got things up and running for Tom. However, he noted for the first few months that things were a little on the quieter side. During this time Tom continued to work full-time outside of his own business and spend his evenings and weekends at slurry, taking the occasional days off when things were a little busier.

Bought a nearby business

A few months after Tom had set up, he noticed that a large well-known contracting business in the Canterbury region had advertised its slurry and dung equipment in a local magazine. This included an umbilical disc injection system which Tom felt could really add to his business. After going to look at the machine twice, the manager of the company gave Tom a call and asked would he be interested in buying the full effluent side of their company. This included both the machinery and the client list.

After agreeing to meet with the company management, Tom, his accountant and his business manager signed a confidentiality agreement not to disclose any of the figures including turnover etc.

After analysing the figures, Tom decided to dot the i’s and cross the t’s. Since doing the deal, he has worked closely with the other firm to service the requirements of between 200 and 300 farmers. The agreement suited the contracting firm as Tom was specialised, and wouldn’t be a threat to its business which specialised in silage and cultivation. Through this deal, he acquired a 12m Veenhuis disc injection umbilical system and pump with 2,600m of piping, an 18,000 litre Garant tanker with a 9m dribble bar, three more agitators and a Bunning dung spreader.

Tom O'Keeffe is from Fedamore in Co Limerick.

This signalled the beginning of a hugely busy period for Tom, who went on to leave his full-time job and employ one other full-time labour unit. He noted: “The past five months has been crazy busy. I’ve only taken five days off and I’ve just bought another new tractor. If things stay going like this I’m going to have to buy a second umbilical injection outfit. My biggest issue then will be sourcing good staff.

“On our best day to date we’ve injected 2.1m litres of slurry in a 10.5-hour day with the Veenhuis system. There’s a flow meter on the injector system and when it’s set up we can inject 1,000l every 10 seconds. It’s a super system but it’s a machine you’d want the same guy driving day in day out.”

Billing and payment

Tom’s accountant informed him of an app to make billing and keeping a track of his finances simple. Through this app on his smartphone, he inputs the work done for that farmer as soon as the job is finished and sends the invoice to the farmer’s email before he even leaves the yard. Like the vast majority of businesses across New Zealand, once an invoice is issued, it is due for payment on the 20th of the following month. This is standard practice across all industries and sectors in New Zealand.

Tom said: “When I had just completed one of my first jobs I sent the farmer the invoice before I left the yard. He rang me shortly after and said that he never got billed for a job so quick, that the dust hadn’t even settled on the track.

“There’s very few invoices posted out or payments made by cheque out here in New Zealand anymore. It’s all email and bank transfer. A lot of contractors will also charge anywhere from 2-7% interest on an outstanding bill once it passes month one, but 95% of guys will pay on time.”

Contracting in New Zealand

“In my experience, the kiwis are very good to the Irish. They have a lot of history with us going back through the years. When they see you’re genuine they will try and help you out. Two different guys have recently approached me about investing in my business if I was interested.

“The scale of farming and the weather is the biggest differences between contracting at home in Ireland v here in New Zealand. The farm I’m working on here today is milking over 3,000 cows. The sheer scale means that every day I go out with my outfit I can make money. Although it doesn’t largely affect my business, the general periods of settled weather here mean everyone is a bit more laid back. To date, we have travelled some huge distances for work. We did a job last week and it took me over four hours to get there doing 52km/h in a tractor without stopping along the way.

“There’s very little regulation here on spreading slurry. A lot of the dairy washings go out through irrigation systems, some of which are upward splash plates. The majority of the cattle are also outwintered but I can see this and the slurry application methods changing in the next few years. Environmental issues will drive change. There’s also only type of diesel here. Diesel costs is currently costing around $1.45/l on the pump, or around $1.05/l (0.62c/l) for large quantities. Finance rates are very good here too. I’m currently looking at a used John Deere on a 1.99% rate over a five year period”.

For his hire work, Tom charges $300/hr for agitating, $350/hr for the Xcel 1250 dung spreader, $280/hr for the 3,000 gallon tanker, $300/hr for the 4,000 litre tanker with a dribble bar and $6/m3 to disc inject slurry. If he’s to hire his tractors outside the business, the Case IH Puma 165 with a driver is priced at $200/he, while the John Deere 7250R with full RTK GPS and auto steer is priced at $300/hr.