Scottish bus builder sees New Zealand deal as 'springboard'

ALEXANDER Dennis yesterday announced a breakthrough deal to supply buses to New Zealand, which could open up a major new market for the Falkirk-based company.

The bus builder - which employs almost 1,000 in Scotland where most of the work will be carried out - said it had won the 25 million order for 120 single-decker vehicles from NZ Bus in Auckland against competition from almost 30 manufacturers from New Zealand, Australia, China, Brazil and across Europe.

While the deal in itself is significant - particularly given the depressed state of the UK bus market - bosses at Alexander Dennis are confident it could lead to a much larger order for a further 200-300 buses over the next three years and also pave the way for an assault on the larger Australian market.

Chief executive Colin Robertson described the news as a "major breakthrough" that will take the company to a new level and also build on its global reputation following major export wins in North America and Asia.

"In truth, this is much more than just an important contract," said Robertson. "It is the start of a significant business relationship that has the potential to see us use the location as a springboard into other territories, notably Australia.

"Our aim is not simply to supply buses to New Zealand but to become an active player in the country's manufacturing sector.

"Just as we have done in North America and Hong Kong, we intend to form local alliances that will create jobs and stimulate the economy."

Under the New Zealand deal, Alexander Dennis is partnering with Kiwi Bus Builders on the west coast of the North Island, which is working on a new facility that will build the buses from kits supplied by the Falkirk plant.

Robertson added: "All round this is a win-win situation. We consolidate jobs in the UK thanks to the outstanding reputation of our tried and proven product range, we create new business in a virgin territory and we create the gateway to further markets."

The first of the vehicles, the company's single-deck lower-emission Enviro200 midi buses, will be delivered in time for the rugby world cup next summer, with the rest introduced over the following 12 months.

NZ Bus was created in 2005 after Infratil acquired the New Zealand public transport interests of Perth-based Stagecoach, which is headed by Brian Souter, who is also a significant shareholder in Alexander Dennis.

Bruce Emson, chief executive of NZ Bus, said: "This is the single biggest investment made by our business.

"We need modern, technology-leading, low emission vehicles and in every respect the Enviro200 meets that criteria."

Alexander Dennis is now Britain's biggest bus and coach manufacturer. It currently exports around 20 per cent of its output to markets including Hong Kong, the USA and Canada with the latest order taking that figure to nearer 30 per cent.It employs around 2,000 people and - as well as its premises in Falkirk - it operates manufacturing centres at Scarborough and Guildford, with a substantial parts and aftermarket operation based in Skelmersdale, Lancashire. The company is Europe's leading provider of hybrid-electric buses.