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Regional Victorian company Modra Technology has been backed by the Australian Business Growth Fund (ABGF) to the tune of $15 million in a move that is expected to double its workforce and cement its position as a global leader in advanced manufacturing solutions for carpet production.
The Warragul-based company, which was founded in 1993 by Tim Modra, currently services more than 200 customers in 35 countries, advancing the carpet manufacturing industry through innovations stemming from a program of focused research and development.
ABGF, which is Australia’s only purpose-built growth capital fund for the SME sector, says its investment in Modra is aimed at helping the family-owned company invest in new and innovative solutions, expand output and almost double its workforce to about 50 people.
Modra founded Modra Technology after seeing the need to streamline the carpet manufacturing process, using his engineering background to develop new technological solutions which are now sold globally.
“Our success to date has been driven by our relentless focus on innovation and solving the real challenges our customers face, and now with ABGF’s support, we are well-positioned to take that innovation to the next level and unlock even greater potential in the years ahead,” says Modra, the CEO of Modra Technology.
“ABGF stood out as the ideal partner for us, not just because of their investment, but because of the strategic expertise and networks they bring. Their support will empower us to build on our leadership in the soft flooring industry and drive sustainable growth for the future.”
Modra Technology has revealed sustained revenue growth over the past three years, averaging more than 50 per cent per annum, with “no sign of slowing down” as global demand for its products outstrips its ability to supply the market.
ABGF notes that the company’s growth and its commitment to Australian jobs had driven its decision to invest in Modra – the capital fund’s 12th investment in an Australian-grown business that takes total funds outlaid to $180 million.
Other investments range from Derwent Industries, an industrial product manufacturer and key supplier to some of Australia’s critical infrastructure projects, to Inskin Cosmetics, a pioneer in the “cosmedical” skincare category.
Modra Technology struck the deal with ABGF after seeking a strategic partner to help scale its operations in regional Victoria and lift output to meet demand.
Under the terms of the deal, ABGF has taken a minority stake of between $5 million and $15 million in the company with Modra aiming to leverage the investment group’s capability and connections to promote further growth.
Modra Technology’s strengths lie in the improved efficiencies and environmental standards its products are driving in the carpet manufacturing industry.
Among these products is CreelMT, which is helping global carpet manufacturers dramatically cut down on waste, with up to 80 per cent of yarn wastage being saved when compared to traditional methods. Modra also reveals that businesses are recouping the cost of CreelMT in less than two years.
Modra also produces cutting-edge carpet sampling products known as Kibby and Mtuft which allow carpet manufacturers to easily and efficiently produce small quantities of sample carpet to test new designs.
Collectively, Modra describes its offerings as one of a kind, which has been critical to the significant interest they have garnered among international customers.
The company reveals that 95 per cent of its products are sold internationally, protected by Modra’s patents and patent applications in key markets across the globe.
“Modra represents an ideal investment for ABGF,” says ABGF investment manager Alexandros Collivas.
“The company has solidified its position as the global leader in carpet manufacturing technology, backed by strong intellectual property and a loyal customer base.
“We see tremendous growth potential as Modra continues to enable manufacturers worldwide to embrace automation and drive sustainability.”
ABGF joins National Australia Bank (ASX: NAB) as a shareholder of Modra. The bank is a founding shareholder of the company which is also an NAB business customer.
Khan Horne, the NAB executive for regional and agribusiness, says the backing of ABGF provides Modra with access to long-term growth capital.
“ABGF provides businesses with the funds and expertise to help them grow in an accelerated and sustainable way,” says Horne.
“We’re thrilled to be able to support a family-owned business such as Modra, which has demonstrated impressive and sustained revenue growth and is supporting the local job market in regional Victoria.”
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