Kernohan Engineering’s bioreactors to assist NZs productive export capacity

"Kernohan Engineering wants to address the growing and potentially very large precision fermentation market through its domestic supply chain of bioreactors."

Nelson-based Kernohan Engineering is about to produce bioreactors that will increase New Zealand’s productive export capacity by enabling large scale fermentation of proteins and novel ingredients.

The company plans to have a purpose-built manufacturing plant employing 600 people to manufacture bioreactors at scale, with the goal of creating a $50m export business by 2030. Currently, it has a staff of 60.

Precision fermentation is the process of using a microorganism to turn a commodity ingredient into a higher value product. It is already used in processes we are familiar with, such as turning starch and sugars into alcohol, and milk into higher value cheese. This technology, implemented at scale, can produce a wide range of products and materials.

This conversion and fermentation process typically occurs inside a tank, called a bioreactor, which is what Kernohan Engineering is building for its customers. “The customers we are targeting are those who try to grow or use the micro-organisms to produce their product,” chief executive Paul Miller says.

Miller wants Kernohan Engineering to increase its technological base and manufacturing capacity within New Zealand and address the growing and potentially very large precision fermentation market through its domestic supply chain of bioreactors.

“The problem we can solve as engineers is providing the infrastructure and equipment to allow customers to scale their operations,” Miller says. “It’s really focusing on precision fermentation technology – everyone is getting excited by the science, but we need people who are going to build this, and that’s what we are doing differently.

“We are seeing this challenge emerging; we have an engineering shortage that’s going to get worse and suddenly we have a whole new emerging industry that is going to require a lot of engineering expertise and capacity. We don’t see a lot of that, so we want to lead in that field.”

Miller says he is driven by solving problems that matter. “The future of food is a significant issue for all of us. By 2050 we will have another few billion more people, and we must be able to feed them. But we are already farming most of the land on the planet, so we must come up with a more efficient way of producing food to feed our population without destroying the planet.”

While biotech is a multi-billion-dollar industry, not a lot of money is put into infrastructure to allow startups and companies to scale. So, they need the equipment in which to do so.

“New Zealand’s economy is significantly at risk of disruption if other countries are deploying this technology at scale, and New Zealand is not in a position to respond,” Miller says.

“In the past few years, we’ve invested significantly in the company’s stainless steel and fabrication capabilities, and those are skills that we will need to be able to manufacture these products at scale.”

One potential application that has sparked significant interest, is the ability to produce dairy proteins via precision fermentation. This is already being used by several startups globally, including New Zealand’s own Daisylab. While the potential benefits are obvious, low-cost proteins with a fraction of the environmental impact, the risk to New Zealand’s $20bn dairy industry is significant, Miller says.

“If other countries can gain a competitive production advantage by deployment of this new technology at scale, then we risk losing a substantial portion of our global export market. It is therefore in our own best interests to develop strong knowhow and capability in this space.”

The best thing about precision fermentation, Miller says, is that it bridges the gap between science and engineering, while assisting to future-proof the New Zealand economy with the capability to capture new and emerging markets.

Being a leader in their chosen field is what a successful entrepreneur excels at. One of the key skills in entrepreneurship, Miller says, is listening to customers, having a clear vision for the future, and a passion for what you’re doing. “It’s not always going to be easy, so you have to care about what you want to achieve.”

Miller believes that to be a successful business entrepreneur, work must be a passion. “If what you are interested in is outside of that, you`ll never prioritise it in the way that it needs to be prioritised. You must be prepared and accept that you may at times be wrong; and to then make the best new decision based on the information you have available to you – and not letting ego get in the way of progress.”

Miller says Kernohan Engineering is closely connected to the science sector and has a good working relationship with the Nelson-based Cawthron Institute, New Zealand’s largest independent scientific research institute.

“We are close to the furnace of where these innovative ideas are being created and trialled, so that gives us insight into the opportunities here.”

“I want other organisations and startups to become aware of Kernohan’s goals and capabilities, so they can partner with us to provide the best chance of succeeding – and in doing so, Kernohan will succeed with them.”

Story by Dave Crampton in partnership with Nelson Regional Development Agency (NRDA)