Contents REGULARS 5 6 9
Publisher’s Note Letters to the Publisher News in Review
COLUMNS 11
Canberra Quarterly Michael Keating, Editor-In-Chief, Inside Canberra
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Accessing the Benefits of ASX’s Centre Point Melissa Cooper, Trade Execution & Business Development, ASX
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Shifting Away from the Boom-Bust Cycles 4th annual International Mining and Resources Conference (IMARC)
FEATURES 17
COVER: TRILITY MD Francois Gouws on being a major player in delivering quality Australian water
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Bisalloy Steel CEO Greg Albert on re-engaging Australia and Asian expansion
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RMS Software and Aphrodite Gold Founder & CEO Peter Buttigieg on taking SaaS to the cloud and to the world
SNC-Lavalin 34 Regional Director Infrastructure Mark Hughes on using cooperation and collaboration to achieve growth
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41
Norco Co-operative CEO Brett Kelly on how increased revenues are benefitting farmers and consumers
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City of Albany, WA Mayor Dennis Wellington on delivering economic development through tourism and infrastructure
The Australian Business Executive - Q2 2017
Publisher’s Note
The Australian Business Executive A division of Romulus Rising Pty Ltd ABN: 77 601 723 111 w: www.TheABE.tv t: (02) 8091 1410 e: communications@theabe.tv Publisher Jesse Landry Writers Nicholas Paul Griffin Raul Betancourt
Jesse Landry speaks regularly with industry leaders. He has career experience in the North American, UK, and Australian markets and is both a board director and committee member.
Editorial Contributors Paul Amatril Arnie Taghoy Michael Hebron Design & layout Bien Swinton Jr. Rebecca Hamerton
If you’re a regular reader you’ll notice new content across our publication and website. This includes our podcast series speaking directly with executives and our Letters to the Publisher section providing leaders the opportunity to share their personal thoughts on business and industry issues. We’re also introducing the Canberra Quarterly brought to you by Inside Canberra’s Editor-In- Chief Michael Keating. He’ll be reporting on the current affairs taking place from the nation’s capital.
Web & Digital Raizwan Butt
In our cover story, Trility MD Francois Gouws discusses the valuable service they provide to deliver quality and reliable water services to Australians. Francois also shares his thoughts on the value his employees bring to make the business a success. In fact, many of our interviewees in this edition discuss the difference their employees make in creating value for their organisation.
Podcast Stuart Anderson
Q2 2017
A
s we head into the Autumn months The Australian Business Executive is making some changes.
www.TheABE.tv
BISALLOY STEEL
Re-engaging Australia and Asian expansion
RMS SOFTWARE
Taking SaaS to the cloud and to the world
SNC-LAVALIN
Hope you enjoy,
Cooperation and collaboration to achieve growth
NORCO CO-OPERATIVE
How increased revenues are benefitting farmers and consumers
CITY OF ALBANY
Delivering economic development through tourism and infrastructure
TRILITY MD Francois Gouws on the responsibility of supplying clean and reliable water for the nation
J. Landry Publisher
Published quarterly, The Australian Business Executive (The ABE) provides an in depth view of business and economic development issues taking place across the country. Featuring interviews with top executives, government policy makers and prominent industry bodies The ABE examines the news beyond the headlines to uncover the drivers of local, state, and national affairs. All copy appearing in The Australian Business Executive is copyrighted. Reproduction in whole or part is not permitted without written permission. Any financial advice published in The Australian Business Executive or on www.TheABE.tv has been prepared without taking in to account the objectives, financial situation or needs of any reader. Neither The Australian Business Executive nor the publisher nor any of its employees hold any responsibility for any losses and or injury incurred (if any) by acting on information provided in this magazine. All opinions expressed are held solely by the contributors and are not endorsed by The Australian Business Executive or www.TheABE.tv. All reasonable care is taken to ensure truth and accuracy, but neither the editor nor the publisher can be held responsible for errors or omissions in articles, advertising, photographs or illustrations. Unsolicited manuscripts are welcome but cannot be returned without a stamped, self-addressed envelope. The publisher is not responsible for material submitted for consideration. The ABE is published by Romulus Rising Pty Ltd, ABN: 77 601 723 111.
The Australian Business Executive - Q2 2017
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Letters to the Publisher Australia’s leading business personalities write in to our publisher Jesse Landry, discussing the industry issues that matter to them most.
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veryone associated with the Geelong Cats is excited about the season ahead. We always strive to finish in the top four, and feel that we have a team to again compete into the finals. The AFL has never been tighter, with around 15 teams feeling they can get to September, so we will need to hit the ground running from week one of the season. The 2017 season will be significant for a number of reasons. The fourth stage of the Simonds Stadium redevelopment will be completed in May, with the opening of the Brownlow stand. This facility will be among the best in the country, with great viewing spaces for spectators, fabulous dining and a new media centre. Our football department will triple in size, giving our players and coaches an elite area to work and train. For the first time we will be fielding a women’s team in the VFL. This is a significant milestone for our club, and we are proud of the commitment shown by the players and staff to launch this team. We believe we are well placed to move into the AFL women’s league in the very near future, and we see the new Cats women’s team as a great way to inspire young girls to take up the game of footy. Our supporters have always been loyal to the club and we foresee a new record membership on the horizon. Go Cats.
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magine a demagogue playing a game where he needs to become generous with other people’s money. It’s easy – they earn it, and he decides how to spend it. And when they don’t earn enough for all the spending ideas he comes up with, he can borrow on their behalf, and mortgage their children’s future. Labor governments in Australia have played this game well. Liberal governments have talked about its dangers, but have also played it well. Former Treasurer Peter Costello ran years of budget surpluses in the nineties but was blessed by the mining boom; spending was still going up. The period was described by economist Chris Richardson as “temporary boom, permanent promises”. When he became Prime Minister, Malcolm Turnbull assured us he would fix this problem. But now his government is exacerbating it. Underlying the problem is that the beneficiaries of more government spending are many, the payers few, and everyone has one vote. More than half of all Australian households receive government cash handouts. More than eighty percent of the population pays less in tax than they receive from the government, after allowing for ‘in-kind’ benefits such as public schools and hospitals. That means less than twenty percent of the population pays for the collective goods we all benefit from, like defence, police, footpaths and street lighting. We are electing our way to a problem by not insisting that governments reduce spending.
Brian Cook
CEO Geelong Football Club
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The Australian Business Executive - Q2 2017
Senator David Leyonhjelm Senator for the Liberal Democrats
Letters to the Publisher
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n the past 12 months we’ve seen rising electricity prices, a state-wide blackout in South Australia, l o a d - s h e d d i n g i n S A a n d N S W, l a r g e g e n e r a ti o n capacity leaving the market on short notice, wholesale market volatility and large businesses facing real challenges securing supplies of gas. You’d be forgiven for thinking there’s an energy shortage in Australia; the real problem is confidence – the confidence to invest in energy. And right now customers are wearing the cost. Any approach to addressing energy issues must start and end by considering impacts on the customer. Success means delivering reliable, affordable and cleaner energy for all Australians. Solutions that don’t consider all three elements aren’t solutions, instead they lead to volatile markets, problems with the security of supply and rising prices. No one pretends it’s an easy fix, but the answer isn’t rocket science. It’s about enabling confidence in contracting and investment. Three key things will encourage confidence: 1. Policy stability – a national and durable policy framework. 2. Market transparency – adequate planning information around retirements and other significant market variables informs when and where to contract and invest. 3. A firm, durable emissions trajectory – we need clear signals to investors about our emissions trajectory. The National Electricity Market has delivered over 15,000 MW of capacity since inception (about 30% of total capacity today). The NEM has shown it can deliver stable prices with system stability. Enhancing the NEM to incorporate a future balancing reliability, affordability and emissions reductions will deliver the right outcomes for our customers.
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e hear a lot of where the future of technology is headed, but what does this mean for businesses right now? What role can organisational culture p l ay to ensure flexibility and adaptation in a rapidly changing space. In my opinion, culture a n d p e o p l e a r e t h e m o s t i m p o r t a n t a s s e t s a b u s i n e s s h a s , a n d p l ay a c r u c i a l ro l e i n e n s u r i n g co n ti n u e d success and profit. The key challenge for business in the age of disruption is to cultivate and maintain a wo r k p l a c e c u l t u r e that embraces c h a n g e , l e d by f e a r l e s s i n n ova to r s who a r e o p e n t o new ideas , new ways of doing things and breaking new ground . This t ype of for ward-thinking c a n o n l y b e a c h i e v e d w i t h i n a n o r g a n i s a t i o n w h e n th e re i s a n e s t a b l i s h e d wo r k p l a c e c u l t u r e where e v e r y o n e is valued fo r th e i r co n tr i b u ti o n s , autonomy is the accepted norm, performance i s r e w a r d e d a n d wo r k- l i f e b a l a n c e i s visible. A strong and healthy workplace culture e n a b l e s ideas to be shared, heard, evaluated and implemented into the business. Employees are empowered to make decisions and progress new initiatives without red tape, giving u s th e l e a d i n g e d g e i n a c rowd e d m a r ke t . T h i s h a p p e n s eve r y d ay a t Wo o d & G r i e v e Engineers ( WG E ) where our engineers a r e l e a d i n g t h e w a y. A s C EO, I have a huge responsibilit y t o u p h o l d the unique culture we have at WGE as we head into the brave but uncer tain new world. I certainly didn’t create this culture, but it is my job to maintain it and fight to keep it as we travel through this age of innovation. It needs to be in our DNA .
Mark Collette
Executive – Energy EnergyAustralia
The Australian Business Executive - Q2 2017
Jose Granado
CEO Wood & Grieve Engineers
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Letters to the Publisher
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ustralia must have no place for modern slavery. Australia must develop a comprehensive approach, including legislation, to combat modern slavery in all its forms. Increased global trade has delivered great benefits for Australians, but it has also increased the risk that products and services have been tainted by the use of forced labour. A 21st-century global economy must have no place for this fundamentally immoral practice. Businesses must not tolerate modern slavery anywhere in their supply chains, in Australia or overseas. The Business Council’s Annual Forum in Canberra was last month briefed on the scale of the problem by Andrew Forrest, the chairman of Fortescue Metals Group and a prominent advocate for eradicating modern slavery. According to the 2016 Global Slavery Index, an estimated 45.8 million people around the world are in some form of modern slavery, which describes a range of exploitative practices including human trafficking and forced labour.
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It is pleasing to see the Joint Standing Committee on Foreign Affairs, Defence and Trade commence an inquiry into possible legislation similar to the United Kingdom’s Modern Slavery Act. The Business Council’s members are eager to consult with parliament about the most effective ways to combat modern slavery. One option is for companies to state publicly that they are monitoring their supply chains for modern slavery and will report any cases to the Australian people. Depending on the approach that parliament decides, the Business Council would pursue this approach as a unified, voluntary commitment for all its members.
The Australian Business Executive - Q2 2017
Jennifer Westacott
CEO Business Council of Australia
News in Review
An overview of the business news taking place in Australia
RIO TINTO PUBLISHES DETAILS OF ITS $4 BILLION IN TAXES PAID IN 2016
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io Tinto has unveiled details of the $4 billion paid in taxes and royalties and the more than $35 billion direct economic contribution delivered to host communities in 2016. Rio Tinto chief financial officer Chris Lynch said “Rio Tinto is a major contributor to society and we are proud of the economic activity and wealth we generate through taxes, royalties, employee wages, payments to suppliers and investment in communities. From both a global and local perspective, our Taxes paid report helps inform our stakeholders about the role we play and the impact we have in the community. While many people know we produce materials that are essential to products they use every day – from telecommunications to transport – this report also helps the public better understand our total contribution to society.” Rio Tinto has pioneered the practice of corporate tax transparency, publishing its first Taxes paid report in 2010. The report has consistently been recognised as best-practice in tax reporting among multinational companies and the 2016 report, the seventh edition, underlines Rio Tinto’s commitment to transparency. The $4 billion paid to governments in taxes and royalties last year takes our total direct tax contributions past $50 billion since we first started publishing the report in 2010. Rio Tinto continues to be a major contributor to the economies of its host nations, with a direct economic contribution of more than $35 billion in 2016 through wages, tax, royalties, dividends and payments to suppliers and contractors. The majority of Rio Tinto’s taxes were paid in Australia ($2.9b), Canada ($249m), Mongolia ($215m), Chile ($205m), the United States ($102m) and South Africa ($100m). Corporate income tax remained the largest component of Rio Tinto’s tax payments around the world in 2016, followed by government royalties, employer payroll taxes and other taxes.
AGL WINS ASIA-OCEANIA FINANCIAL INDEX AWARD
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GL Energy Limited (AGL) has won the Mid-Capitalisation category of the Platinum Edison Electric Institute (EEI) Asia-Oceania Index Award. The EEI Asia-Oceania Index Awards are presented to Asian and Oceanian utilities that have achieved the highest total shareholder return in the Large-, Mid-, and Small-Capitalisation categories with the highest three-year returns through 30 June 2016. The award reflects superior and sustained financial performance as determined by rigorous financial indicators for 44 companies in the region over a three-year period. AGL Managing Director & CEO Andy Vesey said: “We’re honoured to be recognised by EEI for the award. AGL’s financial performance in recent years through to the 2016 results reflected AGL’s strong performance amid an evolving industry. “AGL delivered a Total Shareholder Return (TSR) in FY16 of 22 percent, compared with negative two percent for the S&P/ASX100 Index. Return on Equity (RoE) increased to 8.3 percent from 7.6 percent. AGL’s five-year TSR has been 77 percent compared with 48 percent for the ASX100.” “This award is acknowledgement of our strong financial position and delivery on strategy. “Also integral to our strategy is building customer advocacy. The energy market is evolving as we transition to a low emission economy and consumer ’s preferences and expectations are also changing in respect of how and when they choose to consume, and now produce, energy. “To enhance our customer’s experiences, we have committed to a $300 million customer experience transformation program which has a digital first approach. It will support the launch of innovative offerings and enable customers to engage with us how, where and when suits them best,” said Mr Vesey.
The Australian Business Executive - Q2 2017
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News In Review
MIKE SPENCER TO TAKE CHARGE OF PARADISE BEVERAGES
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ike Spencer has been formally appointed as the new General Manager of Paradise Beverages, the South Pacific region’s leading beverages company. Formerly the Head of Operations for Paradise Beverages, he was appointed Acting General Manager last October following the departure of Tony Scanlan and has today been appointed as the business’ new leader on a permanent basis. Said Mr Spencer, “I’m absolutely thrilled and humbled to be given the opportunity to lead this great business. I was with the business in Fiji between 1993 and 1996 and have never forgotten that experience. My mission is to make Paradise the premier place to work in the region, continue the focus on creating world class beverages that we can enjoy locally and also take globally, and lastly to ensure we make a positive contribution to Fiji and Samoa.” Having worked with the business since 1986 under CUB-ownership, Mr Spencer moved to the newly-named Paradise Beverages when it was purchased by Coca-Cola Amatil in 2012. During the past few years, Mr Spencer has successfully led the business through a transformational agenda, including a full redevelopment of the Suva Brewery to deliver world-class standards in brewing, and supporting the production and creation of an export strategy for the business’ award-winning rum portfolio. As well as increasing product quality to export standards and increasing rum capacity to meet export sales requirements, Mr Spencer has demonstrated a commitment to developing and mentoring local people to manage the company’s breweries and distillery, and ensure a continued core focus of health, safety and wellbeing. He has also been responsible for developing and managing the business’ extensive capital expenditure program, with an investment of F$40 million to date. With over 35 years’ of brewing and hospitality experience, Mr Spencer started with Carlton and United Breweries (CUB) in 1986 as a senior member of the brewing and production team in New South Wales. During his 17 years with CUB, he managed all aspects of operations, including three years spent managing CUB’s brewing operations in Fiji in the mid-1990s and a two-year tenure as Head Brewer at CUB’s largest brewery in Abbotsford, Victoria.
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NSWWIA WELCOMES ANGUS BARNES AS ACTING EXECUTIVE OFFICER
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tuart McGrath-Kerr will retire from his role as NSW Wine Industry Association Executive Officer. Stuart started in this role in 1997, just a few years after the NSWWIA was formed, and has seen great change and growth in the wine industry in NSW. Stuart regards some of the highlights of his time in the role as the creation of the NSW Wine brand and “the work done through the NSW Wine Awards, along with Sydney Cellar Door, to raise the profile of NSW Wine - a task far from complete,” says Stuart. “I would like to acknowledge the great contribution made to the Association by many who served on the Committee including past presidents Chris Barnes AM, David Lowe and more recently Tom Ward, and I thank them all for their support. I wish the Association every success in its future endeavours.” Tom Ward, President of the NSWWIA thanks Stuart for his many years of service to the NSW wine industry. “Stuart has been a focal point for NSW wine and has played a vastly important role in making sure that the interests of NSW wine are fostered both locally and nationally,” suggests Tom. “I would particularly like to thank Stuart, and his wife Noni, for the role they have played in making the NSW Wine Awards an important and successful part of the NSW wine calendar. I wish Stuart and Noni all the best for the future and hope that they continue to drink the great wines of NSW once they move to Tasmania.” Tom goes on to say that he is delighted to announce that Angus Barnes has accepted the role of Acting EO of the NSWWIA, effective 1st of April. This role is a temporary role and will assist in the transition of the NSWWIA. Angus Barnes has a long and distinguished wine career starting from his childhood in the vineyards in the Hunter Valley. He has most recently held senior global roles with Pernod Ricard Winemakers. Angus is well known to the NSWWIA as he is currently the Vice President in charge of Government Relations (a role that he will step down from in order to take up the Acting EO position). Angus is also the current national chair of the Wine Communicators of Australia as well as a past graduate of the wine industry future leaders program.
The Australian Business Executive - Q2 2017
The Canberra Quarterly Presented by Inside Canberra’s Michael Keating
Inside Canberra’s Editor-In-Chief Michael Keating provides a summation of Canberra’s political landscape for the first quarter of 2017.
New Ministerial Arrangements
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he Parliamentary Year started off early on Thursday the 19th of January when the Prime Minister decided to reshuffle the Ministry. The changes were due to the resignation of then Health Minister Sussan Ley MP on Friday the 13th of January due to using time paid for by her entitlements to buy a private property. New arrangements saw the elevations of Greg Hunt to Minister for Health, Arthur Sinodinos as Minister for Industry, Innovation and Science and Ken Wyatt as Minister for Aged Care and Indigenous Health. The new Ministry was sworn in on Tuesday the 24th of January. Parliament commenced at the start of February with politics dominated by the new President of the United States, Donald Trump. Both Party leaders delivered headland speeches which sank without trace in the hot media of talk-back radio and twitter. There was some interest among the gallery in the proposal to subsidise coal red power and a passing interest in Malcolm Turnbull’s electoral donation of $1.75 million, but it was all overshadowed by President Trump. The key to it all was the Prime Minister’s conversation with the President over the weekend confirming the US would proceed with a deal to take 1,250 refugees from Manus Island and Nauru. Mr Turnbull’s understanding was that it was a done deal, but then the White House press corps told the media that the deal was still under consideration.
Only after this had generated a considerable amount of confusion did State Department officials confirm that the deal would proceed. The Prime Minster also had a first call with the new President of the United States. “It should have been one of the most congenial calls for the new commander in chief – a conversation with the leader of Australia, one of America’s staunchest allies, at the end of a triumphant week.” At a press conference the Prime Minister refused to comment on the phone call. The depictions of Trump’s calls are also at odds with sanitised White House accounts. The official read-out of his conversation with Turnbull, for example, said that the two had “emphasised the enduring strength and closeness of the US – Australia relationship that is critical for peace, stability, and prosperity in the Asia – Pacific region and globally”.
Corporate Tax
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he big issue in Parliament in March was the government’s centrepiece policy of corporate tax reductions. The plan proposed to gradually cut the corporate tax for all companies from 30% to 25% over ten years. The first stage is a cut from 30% to 27.5% for businesses with a turnover of less than $10 million. The cuts for larger companies take place in the ensuing years. At that time the Senate was prepared to accept the cuts for companies with turnovers of less than $10 million but reject the rest of the plan. That meant that the government will have to come back year after year to seek further cuts, the implementation of which will depend on the circumstances at the time. Labor has waged a torrid campaign against the government’s tax plan characterising it as “tax cuts for billionaires” and “$50 billion tax cuts for the big end of town” and contrasted this with spending cuts that affect low and middle income earners. Defeat of the tax cuts is critical for the opposition because it has used the
The Australian Business Executive - Q2 2017
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Canberra Quarterly
$50 billion worth of cuts, which are currently contained in the budget, to fund many of the policies it intends to take to the next election, including increased spending on schools and hospitals.
would suffer reputational damage. Mind you when business took up the popular issue of marriage equality in an attempt to show that it has a social conscience the government stuck the boot in.
Bob Day
Who Will Replace Tony Nutt?
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he make-up of the Senate changed when the High Court, sitting as the Court of Disputed Returns, decided that Bob Day was ineligible to stand for election at the last ballot. The basis of the decision was that he was in a position to directly or indirectly secure a benefit from the crown because he owned a building which he transferred to a friend who then sought to negotiate a lease with the Department of Finance, the proceeds of which were to be paid to the Day family trust. Apart from Day’s electoral office the building housed the conservative Samuel Griffiths Society, the Australian Taxpayers Alliance and the Family First headquarters all of whom support low taxes and minimal government finances. Media commentators have made much of Bob Day’s hypocrisy in trying to rip off the government: the irony is that he paid the rent for the whole time he was in the building and the Commonwealth didn’t hand over a cent. Nevertheless the High Court adopts a Caesar’s wife approach and so found Day ineligible and ordered a recount. Labor argued the Australian Electoral Commission should discount the effect of Bob Day’s party following but the Court rejected this which means that the number two on the Family First ticket will probably be elected. She is Lucy Gichuhi, a lawyer and accountant who was born in Kenya but immigrated to Australia in 1999. Unlike Bob Day whose main interest was urban development, Ms Gichuhi’s areas of concern are immigration and women’s legal services. At this stage there is no indication that she will support the government as emphatically as former Senator Day did. Treasurer Scott Morrison has had a go at big business for not being sufficiently enthusiastic about tax cuts. He said that the community did not trust the top end of town and so the government was having a hard time selling the cuts. He added that if business continued to sit on the fence it
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he announcement that Alexander Downer would remain in London until the end of the year put an end to the rumours that he would return to take over the leadership of the South Australian Liberals and subsequently become Premier after the March election. However another Liberal luminary, Nick Minchin who’s cu rre ntly C o n sul General in New York, will retu rn to Australia shortly. Since Tony Nutt announced his resignation and with the likely prospect of a damning report from Andrew Robb on the way the last federal election campaign was run, thoughts have turned to who will succeed Nutt. The party could do worse than give Nick Minchin the job, at least until after the next federal election. Former Senator Minchin has been a successful secretary of the South Australian branch of the Liberal Party and has had the ear of a number of Lib e ra l l e a d e r s . H e h a s ve r y g o o d p o l i t i c a l instincts which the Turnbull government desperately needs at the moment. He’s from the conservative win g of th e Lib e ra l P a r t y b u t i s n o t a s o c i a l c o n s e r v a t i ve . Most importantly he would probably be able to work with Tony Abbott to convert him into a team player. Of course, he won’t get the job. Malcolm Turnbull won’t have forgotten that Nick Minchin masterminded the coup against him when he was leader of the opposition. Turnbull will want a rusted-on supporter from the moderate win g of th e p a r t y to r u n th e o r g a n i z a t i o n , b u t s u c c e s s f u l b a ck ro o m o p e rato r s from the moderate wing who have run successful campaigns are thin on the g r o u n d . O n e o f t h o s e i s S e n a to r J a m e s M c G r a t h wh o’s r u n su cce s s f ul c a m p a ig n s in London for Boris Johnson and in Queensland for Campbell Newman.
The Australian Business Executive - Q2 2017
Canberra Quarterly
The Here and Now
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t’s been another bad run for the government. Any message it was trying to get out on economic management prior to the budget has been swamped by a nebulous debate over housing affordability and the proposal that young first home buyers should be able to access their superannuation accounts to fund the deposit. This proposition was never likely to pass the Senate and, given the public’s ambivalent response, it was a mistake to raise it. The way the government ’s handled the issue has highlighted the matters raised in the Robb report on the government’s dismal electoral performance. In that report there was a specific reference to the absence of polling during the run up to the election. On the issue of housing af fo rd a bilit y, it d ef ie s co m m o n se n se th at p r o p o s a l s w e r e n ’ t r o a d te s te d b e f o r e t h ey
were put into the public arena. Even worse, the policy has generated a rift in cabinet and the government at large. We also had the unseemly argument over ‘work for the dole’ with the Minister for Employment Michaelia Cash having to assert that the programme will not be changed in the face of comments made by members of the government that the policy is a “heap of shit”. Moreover the Prime Minister’s visit to India has turned out to be difficult. He’s canned the Abbott initiative for a free trade agreement as being too hard and has nothing else to show for a head of government mission. The discussion of opportunities in the vocational training area was no more than aspirational. The government’s thrashing around confirms the opposition’s claims that it’s in trouble and lacks a plan for the country. It needs to take control of the agenda and to do it quickly but at the moment it seems bereft of ideas. Stay up-to-date with what’s happening in Canberra by subscribing to Inside Canberra: www.insidecanberra.com
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The Australian Business Executive - Q2 2017
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Accessing the benefits of ASX’s centre point
ASX’s Melissa Cooper
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hare trading in Australia has evolved dramatically over the past 160 years, from chalk boards and share scripts to dark pools and algorithms. While its origins date back to the gold rush of the 1850s, it wasn’t until 1 April 1987, when the six state-based stock exchanges amalgamated, that a single national exchange, now known as the Australian Securities Exchange (ASX), was created. 14
In 1860, there were no less than 10 specialist brokerage firms in Melbourne that joined together to publish The Stock and Share Journal. In April 1861 they formed the Brokers’ Association and went on to publish 63 rules outlining the procedures for admission to the Stock Exchange of Melbourne. In May 1871, the Sydney Stock Exchange was formed. Over the course of the following 30 years more exchanges were established in Adelaide, Brisbane, Hobart and Perth. These exchanges operated independently until the amalgamation in 1987. While the method of share trading has changed significantly over this time, the fundamental role of the ASX has remained constant: to provide an avenue for companies to raise capital to fund their growth and opportunities for investors, both retail and institutional, to invest and build long-term wealth. In the early days, share trading was conducted on a trading floor, where buyers and sellers gathered and transacted with one another. The earliest method of trading was the auction-based call system, which saw a stock exchange employee (the Caller) call the name of each listed stock in turn while Members bid, offered, sold or bought the stock at each call. This system proved inadequate to handle the increased volume of trading during the mining booms. It was replaced by the ‘post’ system in the early 1960s, which involved stocks being quoted on ‘posts’ or ‘boards’. ‘Chalkies’ were employed by exchanges and it was their function to record in chalk the bids and offers of the operators (employees of stockbrokers) and the sales made. In 1967, the first computer arrived at the Sydney Stock Exchange. Soon after, an electronic price dissemination system – the Stockmaster - was introduced so stockbrokers could receive bid, offer and last stock prices at their desk. Automated stock trading was introduced in 1987, with the launch of the Stock Exchange Automated Trading System (SEATS). Three years later the ASX trading floor was closed completely and all stocks were converted to SEATS, with ‘SEATS operators’ ending the reign of the `chalkies’. The SEATS operators would enter the bids and offers manually into the new system. From 2000 onwards, it was all about the rise of the machines. Rapid advancements in technology and information dissemination fuelled the rise of algorithmic-based trading. Algorithms (algo’s) would trade orders electronically and partly replace the manual input of trades in the market. Initially, algo’s were vanilla in nature and would trade an
Accessing the Benefits of ASX’s Centre Point
Chalk boards updated after Australia adopts decimal currency
order `in line’ with volume or over-the-day `VWAP’ (volume weighted average price). They quickly became more sophisticated, being either more `aggressive’ or `passive’ in trading nature, adopting exotic names like `sniper’, `dagger’ and `viper’. Around this time stock brokers were developing `crossing systems’. This algo would detect when a broker had a buyer and seller in the same stock, at the same price and would `cross’ the stock between the two counter parties before trading with other buyers and sellers in the market. This ability to internalise executions without any pre -trade transparency to the wider market contributed to the growth in non-exchange trading and so-called dark pools. Dark pools are execution venues that are not transparent (ie `in the dark’) until a trade occurs. Unlike the `lit’ market where you can see the bids and offers of a stock before you trade, dark pools publish no information ahead of a trade. Dark pools are venues that typically sit at the mid-point of a stock’s bid and offer. For example, if Telstra is $4.52 bid and $4.53 offered, the mid-point is $4.525. ASX launched its very own dark pool – or anonymous mid-point matching service - in 2010, called Centre Point. ASX developed Centre Point
to give investors greater choice of, and control over, their trading orders in a fragmented market, where multiple execution venues exist. Trading in Centre Point has grown steadily since its launch, trading $9.3 billion in value in February 2017, which represents 9.6% of ASX on-market, share trading. Centre Point currently trades between $400 million to $500 million in value every day across over 800 stocks. As at February 2017, it had delivered $869 million of price improvement to buyers and sellers since inception. There are a number of reasons trading in Centre Point has become so popular. Firstly, and most importantly, Centre Point offers price improvement. Buyers of Telstra, in our earlier example, would generally prefer the better price of $4.525 at the mid-point rather than pay the offer price of $4.53. There are no guarantees of an execution at $4.525 but by checking Centre Point there is the potential to get a better fill on your order at $4.525, before you pay $4.53. Secondly, for larger institutional orders, Centre Point protects the value of the information in the order. When executing large orders, minimising information leakage and price impact produce the optimal outcome. Putting a large order into the `lit’ market signals your intention to buy or sell. By executing in Centre Point, no information or signals are sent to the market until after the trade is executed. All trades are reported real-time. ASX is a licensed market operator, with the rules and procedures for transacting in Centre Point publicly available. Moreover, unlike many other operators of dark pools, ASX does not participate in the trading so there’s no conflict between the exchange and investors. ASX is committed to providing an exchange for companies to list and for retail and institutional investors to invest. When buying and selling shares, investors should be aware of all the options available, particularly when it comes to saving a bit of money. Next time you’re investing in shares, ask your broker about accessing a better price in ASX’s Centre Point. Melissa Cooper is responsible for Business Development for ASX’s equity market including trade execution and sales. She joined the ASX in 2013 after 12 years as a Portfolio Trader at Citigroup where she was responsible for trading equity portfolios for domestic and offshore funds.
The Australian Business Executive - Q2 2017
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Global Mining Leaders to Connect With Technology, Finance and the Future at IMARC
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n the steady upswing following from a 5 year downturn, the global mining sector and supportive industries are in a phase of strategic consolidation, with a focus on increasing value through slow and sustainable growth, driving a shift away from the boom-bust cycles that have dominated the marketplace. Technological advances such as data analytics supported decision making, cloud based remote operation, internet of things and advanced automated mining processes are changing the face of operations. Innovative financing agreements are being brokered to reduce risk and raise the confidence of institutional investors, rebuilding financial trust in the sector. Future exploration and production demand is being driven largely by the changes in the energy sector with the growing emergence of renewables and battery storage. Underpinning these shifts is a move towards greater collaboration both within and between organisations, breaking down silos and fostering team based approaches to doing business both internally and across the mining and METS value chain. In tune with these developments, the 4th annual International Mining and Resources Conference (IMARC) will centre on the theme Creating Value Through Collaboration. The programme will explore global commodity market trends and implications; the latest exploration, production and technological advancements seeking investment; optimising mineral processing and production; the latest infrastructure developments for the resources sector from pit to port; as well as forecasting the changing mineral resource demands of the future energy sector. 16
Latest local and international developments in capital markets will come to the forefront, addressing key trends in financing exploration, production, operational expansion and METS innovation. Top line strategy and policy considerations such as sovereign and security risk, exploration and discovery opportunities, ensuring strong mine site productivity, community engagement and environmental management will take an important place in the discussion agenda this year with over 20 international mining ministers in attendance. A host of keynote speakers from leading mining companies have already been confirmed for the 2017 programme including Yukio Takebe, CEO of Mitsui & Co’s Australian division; Michael Nossal, Chief Development Officer from Newcrest Mining Limited and Michelle Ash, Chief Innovation Officer at Barrick Gold. As Australia’s largest mining conference, over 2500 decision makers, mining leaders, ministers, financiers, technical experts, innovators and educators will congregate at the Melbourne Convention and Exhibition Centre for four days of learning, deal-making and unparalleled networking, from 30 October to 2 November 2017. As a truly international event with attendance from over 60 countries, this year’s exhibition will not only represent what Australia has on offer to the industry but will also showcase a host of other continents and countries including India, China, F i n l a n d , C a n a d a a n d t h e U K . T h e f r e e to a t te n d exhibition that will run from 31 October – 2 November. For more information please visit w w w. i m a r c m e l b o u r n e . c o m
The Australian Business Executive - Q2 2017
Trility MD Francois Gouws A major player in delivering quality Australian water
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rancois Gouws knows just about everything there is to know about treating and delivering water on a large scale. The corporate executive has decades of experience in the global water industry; working in locations in the United States, Africa and Australia, where today he is Managing Director of TRILITY, a major Australian water utility services provider. For more than 25 years, he has been working with the communities he serves, to deliver water to their residents and businesses alike. “I’ve worked with every water technology that
is available in the market through my career,” he says. In addition to managing TRILITY, Gouws is a leader in many industry groups and also serves on the Australian board of WaterAid, a charity that focuses on providing clean water and sanitation to some of the world’s poorest communities. “I personally believe in giving back to the sector in which we serve,” he says about an ongoing involvement with many organisations in the utilities sector, including as president-elect of the Australian Water Association, the country’s premier industry association serving hundreds of corporate members.
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Trility
“I’m tremendously proud to be able to contribute back to the sector and where I can, help move the sector forward,” Gouws says. “I’m very happy to be working in, not just the water sector, but also the infrastructure sector.” TRILITY delivers an important contribution to the water infrastructure sector, he adds. “It’s the most dynamic and most incredible company I’ve had the privilege to work with,” he says. TRILITY operates throughout Australia and New Zealand, working with local government and utilities to build or manage water treatment, desalination and wastewater treatment plants, wastewater and bio solids management schemes and even irrigation networks. TRILITY began operations in 1991 and started out as United Utilities Australia, which was a subsidiary of United Utilities UK, the largest listed water company in the United Kingdom. The company grew throughout Australia for many years and then experienced an ownership change in 2010, taking on primarily Japanese shareholders. “That was a fundamental change,” Gouws says. “Before then we were a subsidiary of this massive international organisation. Then we became a standalone Australian company. That saw us go through a total restructure in order to be self-sustaining.” From there, the company re-branded itself and began to plan toward a future of sustainable growth in the water sector. After 12 years working with leading international water companies on major projects across the globe, Gouws decided to move to Australia where he first worked in Sydney prior to joining United Utilities Australia. His international experience, which included ownership changes, saw Gouws promoted to Managing Director at TRILITY during transition to a new parent company. Today, he is the only Australian on TRILITY Group’s Board of Directors. “We’ve got a diverse business and we’ve structured the TRILITY Group into business units,” he says. “Every business unit and the group as a whole has a number of clients.” These consist of large, publicly-owned utility companies such as Melbourne Water and Sydney Water, as well as local government entities. “Pretty much every large water utility or council-owned utility is a client in some form,” he adds. Operating across Australia, TRILITY is a truly national company with the majority of its contracts involving rural clients. “That’s one of our strengths that we excel in—remote and rural operations,” Gouws 18
explains. “It sees us get contracts from government, either through councils or state utilities, and these contracts range from 5 to 35 years. We then get the right [to] set up the finance for the infrastructure, construct the infrastructure and then operate it for the term.” Though Australia has a federal government, water management is a local concern and therefore the responsibility of the state governments. Because of this, TRILITY has been strategically positioned as a diversified company with operations spread throughout the Australian states and New Zealand. It has over 300 staff in four main offices, five secondary offices, and over 40 facilities to operate and maintain and another 800 service sites. Gouws says the TRILITY team is also very agile. “Wherever the need is, we can move people around,” he says. “We have people in every state. We deliberately run a dispersed management team—a dispersed business—in order to have relationships and to position ourselves in every state.” This allows staff to analyse the local situation carefully and to decide which opportunities are worth pursuing. After that, a unit will typically begin gathering resources for a project. “We line up the correct technology to provide the optimum solution for what’s required,” he says. “[It’s] important to note that it’s not just a technical solution that we offer; we offer the entire whole-of-life solution. Over a 35-year period, requirements can change, supply agreements can change, industrial relations can change and the right culture is required to manage these changes seamlessly.” Gouws says one of TRILITY’s key strengths is its ability to provide long-term solutions over the decades-long projects, not just the initial installation of the infrastructure. The company’s focus is on the science of water management and looking ahead to when equipment will need to be upgraded and replaced. “That’s how we manage to deliver optimum service over a long period in a cost-effective manner. Obviously, we do carry public and environmental health in the services we do, so [they’re] responsibilities [that] we take extremely seriously.” Thanks to this efficient a p p ro a c h , the company generates annual revenues of approximately $AUD150 million. TRILITY’s workforce is broken down into four main business units, each with its own unique function that contributes to the overall Group.
The Australian Business Executive - Q2 2017
Trility
TRILITY operates throughout Australia and New Zealand, working with local government and utilities to build or manage water services
First, there is Operations and Maintenance, which comprises employees operating and maintaining plants. “[We have a] dedicated and very capable team, operating our plants 24/7,” Gouws says of this business unit. The next group is the Asset Ownership, which is responsible for the financial and administrative aspects of the business. “Wherever we have ownership of assets, we administrate that separately,” he adds. Then there’s Design and Construction, comprising of a team of highly skilled engineers, construction and project managers that handle upgrading and construction of infrastructure at all of TRILITY’s facilities. Finally, there is Hydramet which falls under Services. “Hydramet was one of our first strategic acquisitions after we identified a gap in the Group; so we brought in a company that specialises in disinfection solutions.” Hydramet maintains 800 of these disinfection facilities across Australia and many of them in very remote locations. The four business units together with the crucial support of TRILITY’s corporate and administrative services operate as one, making for a well-balanced and integrated approach in servicing the sector. The most important thing about the businesses TRILITY runs is that they are complimentary and work 20
well with each other to help TRILITY’s steady expansion. “We’re at our best when we can combine our business units,” Gouws says. This is TRILITY’s winning strategy in a very complex sector. Every state has a different way of managing its own water resources, so the company must be diverse, agile and adaptable to accommodate a variety of different scenarios. “It’s also a long-term sector,” Gouws says. “Aging assets; many of the networks, especially the underground systems, were constructed in the 1950s and 1960s.” He adds that this makes the water sector a rewarding yet challenging sector to work in. In addition, “it requires massive capital investment, that then […] doesn’t see an immediate payback, and that’s a challenge that the sector constantly faces.” The water sector is further cyclical and largely influenced by drought patterns. “When there’s a crisis you try to catch up with infrastructure, then by the time construction is finished, the drought in some cases may have passed.” Gouws goes on to explain that this cyclical nature of the sector also plays out heavily when it comes to its skilled manpower. The sector like so many others routinely expands and contracts, and during a period of contraction, it’s difficult to maintain the resources of highly seasoned professionals. We are always seeking new ways to better
The Australian Business Executive - Q2 2017
Trility
TRILITY is a truly national company with the majority of its contracts involving rural clients
manage this transition so as to ensure sector knowledge is retained. However, looking towards the future, there is still much work to be done. Two of TRILITY’s target projects include refurbishing and upgrading old equipment, as well as finding new strategies for the reuse of water for agricultural and other purposes. Australia is in fact a growing market for recycled water. “We supply several intensive farming operations across both Australia and New Zealand with specifically reused water, and we see that together with the upgrading of aging facilities as a major driver going forward,” Gouws says. This devotion to long-term operation and maintenance isn’t the only thing that makes TRILITY a trusted company. The business has many “unique selling points.” Chief among them is their strong focus on developing staff. “We invest heavily in our people and in developing our people,” Gouws says. “When it comes to delivering services to customers, it’s the people that matter.” Because TRILITY operates in a sector where so many technical problems can arise at inopportune times, having a team of dedicated employees who are very passionate about what they do is an invaluable asset according to Francois. It’s that positive culture and environment that truly fuels the company. Another unique selling point is TRILITY’s commitment to technical excellence. “[We have] a culture
of continuous improvement,” he says. It’s a company that is quick to analyse new ideas brought forward by its employees and implement them as soon as possible. Further, this idea of constant, never-ending improvement permeates across the entire business. TRILITY is a diverse company, which greatly benefits clients because the organisation as a whole can handle nearly every aspect of a given project and maintain what they have built over the long-term using innovative methods. As a large company, TRILITY has been involved in many such projects, but a few of them are notable in that they illustrate the company’s ability to innovate in diverse situations. For instance, TRILITY is responsible for the “impressive treatment plant” outside of Perth that services the scheme delivering water to Kalgoorlie. It is the first privately-owned water treatment plant in Western Australia. TRILITY and its partners received numerous awards for an innovative approach. The project required over $300 million in initial investment with a contract to manage the operation for 35 years. Another example, at the very northern tip of Australia, is a facility in Bamaga. Though TRILITY did not build the facility, the company staffed it with local and committed people to run the plant. “They are extremely dedicated employees and incredibly skilled at operating a plant in such a remote location.” The area
The Australian Business Executive - Q2 2017
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is so remote that during the rainy season it can take days for trucks to get to the plant. However, as Gouws proudly asserts, rural areas are TRILITY’s bread and butter, and they excel at serving these kinds of locations. TRILITY also has a large contract in the Macarthur region with Sydney Water. Also a privately owned plant on a 35-year management contract, the facility handles very large volumes of water before it is distributed by Sydney Water to its customers. Over in Victoria, TRILITY has a bio solids facility that serves as a prime example of sustainability within the water sector. It turns waste into bio solids that then are reused as fertiliser. “We truly believe that’s the way of the future,” Gouws says. Aside from the examples above, TRILITY runs dozens of plants in rural and remote areas. “Once we install those plants, the communities have immediate benefit—from drinking river water, to drinking world-class water,” he adds. “We consider ourselves part of the community, because we are there for the long term -- we avidly believe in supporting the communities in which we serve by way of employing locally and giving back by supporting various local community activities and events”.
Getting to this point is not easy. There are many challenges that the utilities sector faces, which is why there is such a high barrier to entry and thus requires a solid and proven track record “You can imagine [that] to come up with a solution of what it’s going to cost to treat water over 35 years means you have got to completely design and completely negotiate a contract in order to get to the final dollar treatment cost,” he says. Even just the planning aspect can be costly, especially since it must be projected well into the future and take in to account inflation and other factors. Attempting to predict when equipment will eventually fail and need to be replaced is also a huge challenge. Anticipating how the sector might change requires a lot of experience and expertise. However, when it comes to change TRILITY is no stranger to constant evolution, according to Gouws. “[TRILITY Group’s] shareholders will change within the next year, and that is something [that is] a big focus for us as a management team, to ensure the same level of service continues to be delivered. We have long-term obligations to clients, and [there will be] no interruption to that during ownership change.” Written by Raul Betancourt.
TRILITY has over 300 staff with more than 40 facilities they operate and maintain
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The Australian Business Executive - Q2 2017
Bisalloy Steel Group CEO Greg Albert Re-engaging Australia and Asian expansion
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EO of Bisalloy Steel (ASX:BIS), Greg Albert, had his start in mechanical engineering, with extensive international experience that proved valuable to Bisalloy. “I’ve worked with three very market-leading companies: one American, one Finnish and one Swedish.” Originally working as a heavy equipment design engineer for an American company, he moved on to various metal firms overseas, before partnering with an entrepreneur and starting an Australian-based mining equipment manufacturing company. After the sale of this enterprise, he was offered several roles by the Finnish company that acquired it, including positions in Australia and Singapore. In total, he spent roughly 10 years working in Asia before coming back to Australia and building a consulting and executive coaching firm of his own. “I did executive
coaching with quite a number of iconic companies,” he remarks. He was once again recruited by the Finnish company that he had worked with in the past and asked to run their global operations out of America, and eventually out of China and Finland. After being offered a position by a Swedish heavy equipment manufacturing company and taking on the role of global president for several years, Albert was eventually recruited by Bisalloy Steel in January 2016 to replace their retiring CEO. When it comes to being in a leadership position, Albert’s wide experience in global roles where he managed operations in dozens of countries led him to one conclusion: Talent is primary. To be able to run the businesses as efficiently as possible, a leader must seek people who can eventually take his role. He remarks that this is true regardless of the culture one
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is working in, and in his experience: “Even though the countries were different, and the businesses were different, and the market was different, and the way you service customers may be different, the way you run the business was actually very, very similar.” According to Albert, his approach is to never “hold on to power,” and to instead nurture and train those under him until they can effectively replace him. “I learned very early on that to get to where I wanted to go—which was to eventually be a global president—I had to make myself redundant in a way.” In addition, he found that no matter which region he worked in, the staff universally needed a sense of purpose and a global perspective that could be adapted to the local mindset. The needs of a company in South Carolina, he explains, are very different from those of a company in India, and so both global and local perspectives are a necessity. Ultimately, though, “the glue that [holds] everything together [is] always the company’s values, the company’s culture.” The values that transcended all cultures were the higher, ethical ones, and Albert believes in never compromising on these. He also stresses that running a company requires a certain degree of cultural sensitivity, and even humility. “You have to have empathy and you have to have respect,” he says. “I always tried to speak the language as much as I could. I would always try to learn as much as I could.” Emphasizing the importance to trust, Albert says that he comes from a mindset of assuming that people are interested in genuinely helping the company. “Everybody wants to go to work and do a good job; they don’t want to go to work to do a bad job.” This goodwill and trust is key according to Albert. That, along with being sensitive to the local customs and marketplace, while still being true to the universal values of the company as a whole, was one of the most important lessons that he learned working in his global positions. These insights were partly why he went into executive coaching at one point in his career, as many people saw value in his international leadership experience. In spite of all his work around the world, he was eventually attracted back to Australia because he wanted to “re-engage with the Australian industries and key people [in Australia].” He remarks that having the chance to spend time in his native country and “be Australian again” has left him feeling refreshed and reinvigorated. While he says that working 24
in Australia is very different from working abroad, it has been an overall good experience for him, even when having to handle challenges like stalled deals with local unions. “It’s good to be able to communicate and to work with Australians again.” Indeed, Bisalloy is a very Australian company with a rich history. It has been in business for 37 ye a r s a n d wa s fo u n d e d by a S o u th Af ri c a n i m m ig ra nt . Originally called Bunge Industrial Steels (the BIS in Bisalloy), it was one of the first companies in Australia to work with high-strength steel. They manufacture steel plates and at one time manufactured long products such as pipes and tubes. Eventually, they changed their name to Bisalloy and listed themselves on the ASX. Three major investors own the bulk of this stock, including Anchorage Capital. Nowadays, Bisalloy is the only Australian company that offers these specialised grades of steel. “There isn’t anybody else in Australia that does what we do now. We’re the only manufacturer.” They are a standalone high-strength steel company, and they work with a “quench and tempered” (Q and T) method of manufacturing, which essentially means that the steel is heated, then quenched with water, and then finally tempered in a furnace to make it change its properties. Unlike integrated operations—where the steel mill and the Q and T plant are coupled together— Bisalloy is not attached to any particular steel mill, so they can choose which supplier they need at a given time. This flexibility has allowed Bisalloy to remain efficient. “Being a standalone operation, we’re small. We’re not ‘steel mill big.’’ Thanks to their small size and extreme specialisation in the niche of high-strength steel, Bisalloy has the luxury of not needing the huge amounts of staff or capital investment that larger companies require. Operations only require roughly 140 full-time employees, 80 of whom reside in Australia. “We’re totally focused on what we do, we have a small dedicated team, [and] we’re flexible, which means that we can meet with customers, they can say, ‘we’re looking for steel with these properties,’ and we can design a new recipe, and we can test it. We don’t have to go through and ask whether the steel mill can do it, whether we need to go to a big corporate structure to ask for approval, so we’re quite agile.”
The Australian Business Executive - Q2 2017
Bisalloy Steel Group
Bisalloy is looking to engage with the federal and local governments in order to possibly supply for future infrastructure projects
Unlike every one if its competitors, Bisalloy processes all of its specialty steel products in Australia, which is attractive to those customers wanting to use Australian made products, “For the big mining companies to buy imported steel— wear-grade steel—to keep their mines running, they would have to order that 12 months minimum in advance from overseas steel mills.” By contrast, Bisalloy has the flexibility to fulfill custom orders and to fulfill them quickly. “We can partner with the customers right here in Australia.” In spite of their lean operations, Bisalloy makes use of an extensive network of over 100 distributor locations, and their major distributors include OneSteel Metalcentre, BlueScope Distribution, and Southern Steel Group. They also have formed joint ventures overseas: one in Indonesia, one in Thailand, and another in China. Bisalloy is the only Quench and Temper steel company in the world to have a joint venture with a Chinese steel mill. Much of the joint venture consisted of Bisalloy’s allowing Shandong Steel to manufacture under the Bisalloy brand name, and to employ other kinds of intellectual property. Bisalloy also trained the employees on the process and the chemistry involved in their techniques. Shandong Steel, for their part, provided the labor, the steel mill, and the Q and T plant. 26
The joint venture with Shandong allowed Bisalloy to expand their market to this region, as well as use China as a springboard for bringing their product to other nations in Asia. This was a forward-thinking strategy in light of the number of Australian OEMs who have moved their operations to Southeast Asia. Unlike the Chinese partnership, the Indonesian and Thai joint ventures are strictly sales and distribution as the market grows in these areas. “Bisalloy has a very, very good reputation all the way up through Asia and all the way through China for a number of reasons,” Albert explains. “One is [that] we’ve been around for a long time. The other is that our JVs in those regions have been quite successful at penetrating the marketplace and getting the brand out there.” Including these joint ventures, the company turnover is around 60 million dollars per year. There are a number of reasons why Bisalloy’s Quench and Temper steel processes are unique, but the main advantage is that they can produce some of the strongest steel in Australia. Using their methods, they can produce steel of three different kinds: wear-resistant, structural, and armour. The wear-grade type of steel that Bisalloy manufactures mainly goes into industrial use, especially in the mining industry. For instance, many dump truck bodies use this kind of steel.
The Australian Business Executive - Q2 2017
Bisalloy Steel Group
“All the wear and tear components of a mining or quarrying operation would use our steel,” Albert says. Customers are mainly seeking longevity with wear-grade steel. With structural-grade steel, on the other hand, customers are looking for lighter and stronger steel. This grade of steel is commonly used in the transport sector, for example in truck chassis. This allows the vehicle to hold its payload, while still being light enough for efficient travel and use. For similar reasons, structural-grade steel tends to be used in tall buildings, windmills, and other structures that require high structural integrity. Strong, light steel promotes the use of innovative designs that may have been impractical otherwise. Finally, there is the defence-grade or armour-grade steel. This is used largely for military applications, including bullet resistant ballistic-grades, explosion resistant blast grades, and specilised high strength steel grades used in applications such as submarines and naval crafts. Bisalloy is the only defence-grade steel manufacturer in Australia. “We obviously work with […] the defence contractors and defence industries in Australia, so […] we’re accredited with all of those companies. One of them is BAE Systems in Australia. We’re now also engaged with BAE Global Access Program, which is the USA BAE
Systems, and we’re well advanced going through the process of being accredited to be able to supply to the USA market.” The company’s steel also plays an important role in protecting Australian Defence Forces servicemen and women, where Bisalloy’s steels have been used for Australia’s protected Infantry Mobility Vehicle (IMF), the Bushmaster. Since 1993 Bisalloy has produced over 3500 tonnes of steel for the Bushmaster program adding to Bisalloy’s internationally recognised armour capability which began in 1988 with an order for hull plates for the local construction of two FFG 7 guided missile frigates. Bisalloy went on to help develop HY80 steel plates in cooperation with (then) BHP Port Kembla and the Defence Science and Technology O r g a n i s a t i o n (DSTO) to a US specification that significantly outperformed the equivalent US-manufactured steel plate. Australia’s four US-built FFG 7 frigates were subsequently retrofitted with the HY 80 plate. Bisalloy produced a total of approximately 1000 tonnes of steel for the FFG program. Bisalloy then went on to supply the Collins Class submarine program with more than 8000 tonnes of hardened steel of excellent low-temperature impact properties — also developed with BHP and the DSTO.
Bisalloy produces some of the strongest steel in Australia including wear-resistant, structural, and armour
The Australian Business Executive - Q2 2017
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Bisalloy Steel Group
Governments in the US, India, the Middle East, and Asia have since qualified Bisalloy’s armour plate for use by their militaries and the company’s (military) exports now far exceed domestic orders. Bisalloy supplies to several sovereign militaries including Israel, Turkey, Thailand, Indonesia, and to various civilian and private groups in a range of countries including countries in the Middle East, such as the UAE. They have also been recently selected as the armour supplier for the Hawkei Protected Mobility Vehicle, which is a light armour patrol car built for the Australian military. “[There’s] quite a lot going on in the defence side of the business,” Albert says. Keeping with their philosophy of niche simplicity, Bisalloy produces only flat steel. “Flat steel in steel terms is a plate,” Albert says. “It’s a certain width, a certain thickness, and a certain length. […] Like a table.” Bisalloy then passes these steel panels onto their distributors, and these distributors either have processing capabilities themselves, or they have partnerships with external companies that can work the steel into its final product. “So we just make the plate; that’s all we do,” he explains. “Our product is actually very technical,” Albert says of the various grades of Bisalloy’s steel. “The different type of customer requires a different level of technical expertise. So if you look at defence grade, it’s about the highest level of technical expertise.” Bisalloy even manufactures steel that is used on submarines, which Albert says is about “the highest” grade of steel that can be made. “We have some really strong technical people that have been with the company—some of them have been here for 30+ years. They’re all PhD’s— metallurgy and specialty PhD’s such as welding and high-strength steel.” Because of Bisalloy’s dedication to a single niche, they were able to assemble a dedicated and highly-motivated team of specialists that can engage intimately with the customer to identify their needs. Technical support is one of Bisalloy’s biggest strengths, and it gives them a significant advantage over their competition. “The people buying imported steel get no technical help, no technical support,” he says. Thanks to this high employee engagement, not only are customers served and given technical support, but employees tend to be long-term and ver y serious about their jobs, 28
resulting in an industry-leading safety record and over 3 years with no LTI’s. “They live and breathe Bisalloy, and I think that permeates out into results such as the LTI records.” Looking towards the future, Bisalloy is training its focus on improving their sales and marketing strategy. “Our way to market is good and bad. Our way to market obviously is mainly through distributors, and if our distributors are not representing our product, then there’s a challenge for us,” Albert says. Bisalloy’s new strategy will involve engaging not just the distributors, but the end user as well, and focusing on their needs and their specifications first. “We need to go back out, we need to engage with the marketplace, we need to get our product re-specified—and if that means we need to grab some of these customers, bring them back down to our plant, let them see our people, let them see the product, then that’s what we’re doing.” Bisalloy is also looking to launch a training center for fabricators, distributors, and engineers. With proper training, those in the industry should learn how to apply the product better and this will lead to more satisfied end users. In addition, Bisalloy is looking to engage with the federal and local governments in order to possibly supply for future infrastructure p ro j e c t s . “This year, it’s all about looking for opportunities,” Albert says. After some time of “strengthening [their] operations,” the company is ready to engage with the market and reinvigorate it. “We need to regain the Australian marketplace. We should own this marketplace.” Another area of focus for the company is on losing its dependence on the resource markets, which can be volatile. This will require Bisalloy to start looking beyond the mining industries for much of its customer-base. Finally, Bisalloy has embraced international development. “There’s a big opportunity for us globally,” Albert says. “We can’t do everything. We’re a small company, so we’ve identified that we need to partner with companies.” This means solidifying their operations in Indonesia and Thailand, as well as growing their joint venture in China and forming new partnerships all over the world. Written by Raul Betancourt.
The Australian Business Executive - Q2 2017
RMS Software & Aphrodite Gold Peter Buttigieg on taking SaaS to the cloud and to the world
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arly in his career, Peter Buttigieg, now the managing director of RMS Hospitality and the acting CEO of Aphrodite Gold, helped bring trading into the information age by introducing computer systems to the Melbourne and Sydney stock exchange as an IT contractor. “You remember the old chalkboards where they used to record stock prices? That was first computerized when the team I worked with replaced chalkboards with computer screens. That was really the first project I worked on.” From there, Buttigieg and his company RMS Hospitality began writing software for insurance brokers, then for caravan parks, “and that’s what really got us into the hospitality market for property management software.” Nowadays, Buttigieg is head of a successful software company and CEO of an emerging mining project for which he was an early investor. His successes were not won overnight, however. In the early days of the computer revolution, the hospitality industry was only beginning to leverage software to streamline their processes. Buttigieg’s team first began computerizing the booking charts for caravan parks and hotels, then the receipting information for accounting purposes, and later all aspects of property management software as well. “Back then, computers weren’t even on the radar, so we spent the first ten years just trying to convince people that computers could do the job.” Because the hardware was still rather slow in the early 80’s, he found himself having to prove to prospective clients that using computer terminals would save them time in the long run. 29
RMS Software & Aphrodite Gold
Though Buttigieg experienced early success working with caravan parks, it proved to be too small of a market for sustainable business, and his company quickly moved on to include hotels and motels in their client base, as well as student accommodation for universities, shopping center space management for malls, and accommodations for defence bases. “From a software point of view, all these vertical markets, all pretty much did the same thing. […] They all had something to do with reserving something,” he says. Branching out into the different vertical markets was extremely important in the early days of RMS Hospitality because the Australian market for each of the individual niches was too small at the time. Expanding a business in the 1980’s was not as simple as sending e-mails to prospective clients, and required a lot of legwork out in the field. Nearly everything had to be done in person. “Back in the early days, computers were the size of a washing machine, so setting up one onsite demonstration could take you a day and a half,” Buttigieg says. “It was a lot of hard work.” This was especially difficult due to RMS Hospitality’s target market, which included clients from all over the country, so the work required constant travel. “[Our sales team was] on the road all day, every day, knocking on doors, lugging these big boxes out of the boot, setting it all up, and showing people. That’s how we did it.” RMS used to provide the software to their clients on physical floppy disk media. The applications had to be copied and sent through the mail, but since floppy disks were often unreliable, this created further logistical complications. Because of these myriad physical limitations, international expansion at the time would have been difficult and RMS had to heavily rely on these vertical markets in Australia. “Really, until the Internet came around, it would have been impossible.” It was not until roughly 2005 that RMS began to expand into overseas markets. “Fast-forward into where we are today, we are now running out of the UK, the US, India, and the UAE, but primarily only in parks and hotels and motels. With these other verticals, we’re pretty much only working in Australia so far.” RMS interfaces only with businesses and does not sell any kind of software to the public. Their competition , as a result, is not ver y extensive.
“Our whole focus is dealing with the actual properties that provide the accommodation, so in our space competition-wise, there’s probably maybe ten to fifteen property management systems now worldwide that we’re competing with.” A huge shift in technology that has taken place of late involves clients switching from using on-premise dedicated Windows servers to running cloud-based software. RMS is one of the few “traditional” companies that was able to port their Windows-based software into HTML5 cloud applications, rewriting their code for a completely different environment. Whereas before, RMS sold and supported the software, but the clients were responsible for the hardware that ran their servers, RMS now runs a full SaaS model, collecting a monthly fee to maintain both the software and the servers. This allows the clients to remotely access their information through a “dumb terminal” and outsource the IT aspect of their business. Some customers, however, still use the old Windows-based system and have yet to upgrade to a cloud-based solution, so RMS finds itself supporting both systems simultaneously. Part of the challenge of upgrading has been adapting to a constantly-changing technological landscape. RMS started their migration to the cloud six years ago, implementing Microsoft Silverlight, only to realize years into development that the industry standard had trended towards HTML5. This required a complete rewrite of their front-end interface. “We have a full working version in Silverlight that we’ve had to also put in the bin to go to HTML5.” Fortunately, because RMS still had a full working version of their software on Windows, the challenges of upgrading did not affect their profits. “Customers were still paying for a service. Whether we were delivering it via Windows or Silverlight or HTML5, thankfully we still had income coming in that was able to fund the development that we needed to do.” This is not the only way that the changing tides of technology have affected the business. “Along with the whole cloud-based change, the whole revolution with online bookings has been the biggest game-changer,” Buttigieg explains. In recent times, online booking has come to completely dominate the market, and 85 to 90% of people now book their rooms online. “Because we’re having to manage all of these online bookings,
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RMS Software & Aphrodite Gold
we have a whole separate stream of servers running, just collecting these online bookings 24/7.” So in addition to property management, RMS must also handle the back end where clients make their bookings, relay availability to online travel agents, and update all of this information in real time to avoid double-bookings. “We’re one of the few property management systems that do both,” he says of RMS’s ability to handle both the traditional booking aspects and the “channel management” aspects of a property. This allows RMS to handle bookings truly in real time, and prevents their clients from having to deal with the added complication of having a third-party channel manager. “They are 100% reliant on us,” Buttigieg says. Properties use RMS’s services in order to know who is coming and going, what rooms are available, who they need to bill, and what rooms should be cleaned. Without these services, the 5,000 properties that use RMS would come to a standstill. Thankfully, outages at RMS are vanishingly infrequent, and are very brief even when they do happen. Being ahead of the curve and highly stable has given RMS many opportunities over its competitors. It has allowed them to capture large clients like Quest Apartments and Discovery Parks because of the market trend towards cloud-based systems. “That opportunity wouldn’t have arisen if we weren’t fully cloud.” The early migration of RMS to new systems has allowed them to not only keep up, but to speed ahead of even well-established tech companies like Oracle when it comes to hospitality software.
Aphrodite Gold (ASX:AQQ)
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onsidering this vast background in tech, Buttigieg’s other major venture, Aphrodite Gold (ASX:AQQ), seems highly unusual from an outsider’s perspective. “This [Aphrodite Gold] is really an accident,” he admits. “I was a passive investor.” Just before Aphrodite Gold’s IPO, he put up roughly $100,000 of investment. “That’s all I really wanted to do with it,” he says. A few years later, however, Aphrodite Gold had spent the money that they had raised, and the company found itself having to begin fund-raising
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Peter Buttigieg has had a successful career founding software company RMS and now as Executive Chairman for Aphrodite Gold
once again, so they asked Buttigieg if he would like to invest more. In addition, they approached him to be on the board of directors. Buttigieg agreed, interested in learning more about how a public company was run because of the possibility of RMS Hospitality itself going public at some point. From Aphrodite Gold’s end, they hoped that Buttigieg could offer the board a much -needed alternative perspective. “They sort of wanted me to come on as a mediator, I suppose, to try and work out this deadlock between the CEO and the chairman. So that’s sort of how I got involved, because it was starting to get into a bit of a mess.” Eventually, the chairman was removed, and Buttigieg was abruptly voted into his position during the first board meeting.
The Australian Business Executive - Q2 2017
RMS Software & Aphrodite Gold
Aphrodite Gold Limited (ASX:AQQ) originally bought the Aphrodite mine from Apex, aiming to develop the site and get it into production. While, according to Buttigieg, the mine indeed had—and still has—a lot of potential, the project was initially mired in technical problems. “There were some metallurgical issues that needed to be resolved,” he says. Because the gold was buried so deeply, the company’s strategy was to first focus on removing the top layer of overburden that covered the deposits. While this expensive process would have been profitable when gold prices were high, once the prices took a hard dive, the mine was suddenly no longer profitable. In order to solve this problem, the company initiated massive changes in management. “We had to remove the management and put a whole new structure in place, and effectively shut the whole project down to start from scratch.” The strategy that the company then took was to cut their overhead dramatically, and sit and wait until they could decide what the best plan moving forward would be. “The operating expenses that we had for the size of the company and what we were doing were just ridiculous, and not sustainable,” he says, so the board felt compelled to cut costs above all else. Since gold is not particularly perishable, Buttigieg felt that it was a sound approach. “It’s not going to go bad,” he says, “so we could afford to shut everything down.” It wasn’t great for the share price initially—which dipped to $0.007 at one point—but it kept the company alive and out of massive debt. After providing the cash injection, Buttigieg and his colleagues decided to look towards the expertise of a geologist to help them better understand how to extract the gold. Because the gold is refractory gold, several processes are required to extract it, including processes that create toxic by p r o d u c t s that must be managed. In general, extracting refractory gold is therefore more expensive than oxide gold. The market was therefore skeptical of the mine, and stock prices remained low. However, he says, extraction “can be done at an economical price” using modern technology, and several examples of this type of extraction exist around the world. Fortunately, the geologist helped the team to discover that there was easy-to-extract oxide gold in
the top layer of soil that they had been removing. This meant that not only was the overburden removal going to pay for itself, but it was also going to be profitable enough to provide the capital for extracting the deeper refractory gold. “It’s effectively turned the whole project around,” he explains. Now that the situation is much more profitable than previously expected, Aphrodite Gold is in the midst of interviewing for a CEO who has a mining background, to replace Buttigieg as the acting CEO and help the project move forward into production. Though Buttigieg has always been interested in gold because he sees it as a “good hedge,” he lacks in the knowledge in the technical aspects of the project. “There’s been no interest getting into the mining sector at all. Like I said, it was really an accident that I got involved, and I had to stay involved otherwise both myself and a lot of friends and family and staff would have lost their investment completely, because [the company] would have gone broke.” The pre-feasibility study concerning the site has just been finished and is due shortly. The mine is particularly promising because of the infrastructure that surrounds it. Just North of Kalgoorlie, it is close to transport and has adequate access to water and electricity. Unlike other mines near the area, which have small pockets of gold peppered throughout their sites, the Aphrodite Gold site has all of its gold concentrated in one area. In fact, he says, “we’ve got 1.4 million ounces in the ground of refractory gold. We know for sure that that gold is down there.” “We’ve proven that the project is now viable,” Buttigieg says, so the next step before the transition from exploring to production will be finding a suitable CEO. This will factor into the company’s execution plan, which is now critically important. According to Buttigieg, since the company doesn’t have the “luxury” of shutting down operations once production begins, this step must be planned carefully. Moving forward, the company will soon begin extraction of the gold at the top layer, which will fund the extraction of the refractory gold beneath. Considering Buttigieg’s success and the profitability of his two major ventures, one would think that he would be tempted to relax into some sort of retirement. This is not the case, however. “I definitely like to see things through to where they’re finished,” he says. “Rain, hail, or shine, I do like to see things through.” Written by Raul Betancourt.
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SNC-Lavalin’s Mark Hughes Using cooperation and collaboration to achieve growth
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ark Hughes firmly believes that the foundation of any successful company is focusing on developing excellent relationships that embrace clients, competitor-collaborators and employees. “Only an organization that is truly aware and focused on the importance of those personal relationships and has a plan to continuously improve them can really hope to succeed,” Mr Hughes says. Over the last few years Mark has tried to e n sure that the company ’s recruitment and d eve l opment of staff positively promotes the importance of the soft skills, as well as ensuring it continues to deliver high quality service and advice on a technical nature. Even in the midst of the highly technical and pressurized project environments, the human element cannot be ignored. “At SNC-Lavalin,” Mr Hughes adds, “whilst we are a world leading engineering and construction company, we are ever-more so a relationship-oriented business, not a transactional one, and we want clients to want to do business with us, and people to choose to work for us rather than competitors. As such we’ve been spending time investing in both.” In Australia, the company is building on its ethos of a One-Company approach. For an organization globally of 40,000 people, and several thousand people in Australia working across all four of its key
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sectors, Oil and Gas, Infrastructure, Mining and Metals and Power, Mark is very clear that SNC-Lavalin’s business model across all sectors is firmly to deliver excellence in engineering and construction, safely and through the power of relationships. “We are in a highly competitive market place,” he says. “It requires us to focus on our clients, collaborators, staff, and our future staff – we want to be the obvious choice for people at all stages of their careers and across all our market sectors.”
Leadership Capability
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riginally from the UK and a graduate of British Railways, where he held a variety of posts within both the passenger and freight sectors, Hughes found himself in the consultancy environment for over a decade with Interfleet Technology. It was during this time in 2011 that SNC-Lavalin acquired Interfleet. As well as leading the London business for 6 years, Mr Hughes’ consulting experience involved significant periods working for the major transport groups during intense periods of franchise bidding, latterly and most interestingly as MTR Corporation’s Bid Director for the Crossrail Franchise.
The Australian Business Executive - Q2 2017
SNC-Lavalin
The combination of a strong rail operations, commercial understanding and leadership capability proved to be the right blend of skills for SNC-Lavalin to move Hughes to the Australian arm of SNC-Lavalin, where he is currently the Regional Director of their Infrastructure sector, heading up their Rail & Transit and Environment and Geoscience teams. A real testament to SNC-Lavalin’s approach to relationships and collaboration is its recently awarded contract on behalf of the Commonwealth Government as the consortium lead for the rail design element of the Western Sydney Airport. M r H u g h e s s ays : “ W h i l s t we we re s h o r tlisted for tender by the Department of Infrastructure & Regional Development (DIRD), we realized that we could offer a much stronger offering through collaboration with our industry peers, so we set about bringing a consortium together very quickly, developing our bid as a team, presenting as a team and ultimately succeeding as a team. “Having the relationships already developed to be able to bring such a consortium together was in itself a fantastic achievement. Having won, SNC-Lavalin’s strength in programme and stakeholder management, systems engineering and future operations understanding made our role at the core of the project team an excellent fit as the overall integrator.” Elsewhere under Mr Hughes, another Joint Venture is nearing its completion in Malaysia, where SNC-Lavalin have a team of 15 personnel performing the role of rail systems Independent Checking Engineers on the recently opened (Phase 1) Klang Valley line, with Phase 2 due for completion in July this year. The Klang Valley project started in 2011, and in pursuing the company strategy for this role it had to understand the market and the need to identif y and be able to work with a local partner that brought the civil capability as a complement to its systems capability. Mr Hughes emphasizes the need to understand the culture of the environment where the company is working. “You need to be local, [but should also recognize] the strengths that you bring; in our case, [we bring] systems and integration strengths, and our partner [brings] civil design and construction strengths.” 36
On many occasions the partnerships are not so much about technical problems themselves, but about having a local resource and good relationships that can help to really interpret the client’s concerns. However, Hughes also recognizes the volatility of these markets, and stresses that responding to changes in the industry and moving the focus to the expanding sectors is of paramount importance. “Right now, Infrastructure in the transport domain is described by many as in a boom time. Certainly in certain states in Australia they have a number of significant and exciting projects to point to, whether new metros, tunnels, level crossing removal, light rail schemes or freight enhancement schemes. “SNC-Lavalin is delighted to have been involved or still involved across all these important schemes. However, it will at some point not be quite so buoyant in terms of growth and investment, and it’s my job and the job of others in my team to identify other aspects of the infrastructure marketplace that we could respond to, or indeed other sectors that SNC-Lavalin operates in where our skills can be deployed.”
The Australian Business Executive - Q2 2017
SNC-Lavalin
Through collaboration with peers and JV opportunities, SNC-Lavalin is engaged in a number of projects including Malaysia and domestically as the consortium lead for the rail design element of the Western Sydney Airport
B e in g re sp o n sib l e fo r a ro u n d 1 0 0 s t af f in the Infrastructure business, and a further th o u s a n d o r so in dire c tly a cros s th e oth e r b u s i n e s s s e c t o r s , M r H u g h e s t a ke s t h e re sp o n sibilit y of keeping SNC-Lavalin running a sustainable business model very seriously, even personally. “You have to be looking to the future and how you can sustain the employment of those people as well as grow the business,” he says. “You have to look to the future, and I mean years not just 12 months, and navigate a path that you can describe to your staff and your business about where you will be in that future. If you can’t do that with a level of confidence, then you can’t expect your team to believe in you or your company.” Of course that is easier said than done. Complic ations arise through the booms and
busts of both state and the national economy that impact the industry, and especially the government politics involved. Part of Mr Hughes’ job is to try and predict these cycles and brace the business for them, but in the long run, change is the only answer. “You have to be able to accept that eventually, either what you provide to the market will need to change, or the spending in that sec tor of the market will change and you have to adapt.” In practical terms, this means that SNC-Lavalin will always have to be looking throughout their businesses for re-deployable skills that they can apply across the sectors as the landscape of the market changes. It is SNC-Lavalin’s diverse business model that allows this “recycling” of talent and expertise.
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SNC-Lavalin
SNC-Lavalin’s recent acquisition of Kentz demonstrates the continued growth of the business through their key sectors of Oil & Gas, Infrastructure, Mining & Metals, and Power
“In power, for example, we have the diversity and capability to move from nuclear on one end of the spectrum, to renewable on the other,” Mr Hughes says. Recycling competences such as electrical or systems engineering, telecommunications, asset management and programme management between different sectors are also part and parcel of the business strategy. This resourcefulness allows the company to run a robust and stable business even as the winds change in multiple industries. “Here in Australia, we are lucky to have all four sectors in operation, with each at varying stages of maturity and economic optimism.” Roughly 10% of SNC’s operations are in Australia, including major oil and gas operations such as the Ichthys LNG project and Gorgon project in Western Australia, one of the world’s largest natural gas operations. Whilst the company’s Oil and Gas team is still very significant in terms of financial and operational scale, there is no denying that future work will be less about 38
construction and more about operations and maintenance as the industry moves from a CAPEX phase into an OPEX phase. H oweve r, th e s k i l l s h e l d w ith i n th e O i l a n d G a s te a m a re i m m e n s e , th e ex te n s i ve co n struc tion ex p e r ti s e w ith i n th i s te a m c a n b e d e p l oye d a c ro s s a ny of o u r o th e r th re e s e c to r s . L i kew i s e , th e co m p a ny ’s te l e c o m m u nications and security team can service across all four sectors ensuring clients receive the best solutions. This ability for one or more sectors of the company to work synergistically to better serve the customer and make operations more efficient, e s p e c i a l l y i n t h e f a s t- c h a n g i n g p o w e r a n d i n f r a s t r u c t u r e industries, adds to SNC’s strength and service offering. Currently, a large focus of the company’s efforts is on winning renewable energy projects and bringing both its exper tise and capital i n v e s t m e n t i n t o t h a t s e c t o r. “ P o w e r a n d I n f r a s t r u c t u r e are growing markets for us,” Mr Hughes says.
The Australian Business Executive - Q2 2017
SNC-Lavalin
Client-centric Approach
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ollaboration and the recognition that SNC-Lavalin can use the talents of a diverse range of companies comes in the form of new acquisitions as well. Four years ago the company acquired Kentz, a construction and engineering company that operates mostly in the oil and gas sector. “[Kentz] is extraordinarily dynamic in the way that it’s done business and innovated, and [it] has very strong leadership.” This acquisition served to reaffirm SNC-Lavalin’s commitment to oil and gas, in spite of a currently difficult market and low oil prices. Besides this spirit of cooperation, one of the things that SNC-Lavalin strives for is to be, in Mr Hughes’ words, “client-centric.” According to Mr Hughes: “We absolutely understand that you only get repeat business by doing a fantastic job and not just a good job.” This means that SNC-Lavalin spends a lot of time and effort drawing feedback from its customers and constantly improving based on their suggestions. “We ask for regular feedback from our clients on how we did, and we don’t just take it and say, ‘thank you very much.’ The company looks at the data and analyzes it deeply in order to incorporate what they learned into future projects.” Hughes maintains that this is integral to acquiring repeat business, and that repeat business is integral to a company’s livelihood in its industry. “Repeat business is a lot easier to win than competing through a bidding competition all the time.” He accepts, however, that constantly bidding for projects is a normal feature of acquiring clients in the public sector, which is why the business has invested significantly in professionalizing its bid team capability in the region. Another one of SNC-Lavalin’s primary concerns, especially in Australia, within Infrastructure due to the nature of the business, is having a highly engaged workforce in order to ensure it retains its large and talented team. Recruiting and keeping staff is a major part of the business’ focus, because attrition can not only have direct costs but can also negatively affect the staff that are left, as well as lead to inefficiency.
“Losing staff to clients is often more of a challenge than to competitors”, Mr Hughes says. “In the consulting world, as any other, this is a well-known, well-trodden problem. You put staff amongst your clients, and you want to put your best staff prominently, and every now and again either the client sees something which they want to keep for themselves, or the individual sees that that’s an organization they want to work with.” Often, these consultants will leave for a time, only to return to SNC-Lavalin eventually. “We’re a good place to work—we want to be an excellent place to work—and we invest in our staff feedback to understand that. It is a constant battle of being able to offer the right level of reward and the right environment and interesting work.” One of SNC-Lavalin’s greatest development benefits to its employees is allowing them the ability to work internationally, since the company has a presence in many countries. This benefits both parties, as it allows the company to send talent to where it is needed most, anywhere in the world, where it cannot find the required skills and experience available in the local market.
Infrastructure
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hough SNC-Lavalin’s Infrastructure Australian market is still relatively small in comparison to the size of its North American business, it is a growing presence, and also an important one. In spite of its size, Mr Hughes describes the market here as “mature.” He remarks that in terms of landscape, population density, and other concerns, Australia and Canada have a lot in common, but that SNC-Lavalin has simply not had a very long presence in Australia compared to its century-old business in Canada. “We don’t want to wait a hundred years to reach the same size and scale of course” he says. One of the factors that affects growth in the rail Infrastructure sector in Australia is the different engineering and safety standards in railways across the different states. Rail gauges differ as well as local safety and regulation requirements, not to mention the political environment and available funding. “All states will vary, and as a result of that, it makes [planning and business forecasting] complex.
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SNC-Lavalin
“we want to be the obvious choice for people at all stages of their careers and across all our market sectors.” - Mark Hughes
It makes it complex not just for running trains, but it makes it complex for procurement of trains.” Mr Hughes suspects that these differences will continue to produce challenges well after his lifetime. “It makes Australia a smaller market than it could be,” he says, “because many of these individual issues effectively fragment the market. That’s just not great when you are trying to attract international commitment and investment.” SNC-Lavalin does not shy away from these challenges, however, as Mr Hughes maintains that engineering and strategic infrastructure solutions is what his company does best. “Increasingly, the recognition in our company is that complex environments as well as complex engineering and systems engineering is where we bring a lot of expertise. That’s the difficult stuff.” One of SNC-Lavalin’s recent concerns has been integrating this infrastructure sector of their business into the other units, to help serve as part of the backbone. “The Presidents of each of the four sectors are targeting working together in a more holistic and joined up way. Cross-selling is one thing, but Cross-delivery is the real focus – back again to sharing skills and competencies in a planned and strategic way.” 40
This integration may be important as the company turns towards new market demands for “big data.” As technology improves, the raw amounts of information that must be understood are overwhelming clients, and this has become an important service that consulting companies could provide. “Our ability to work with clients to enhance their businesses is very much driven by a race to[wards] who can understand and provide more insight into the information that our clients perhaps don’t necessarily have time to sift and understand themselves.” While there’s a “backdrop” of engineering, being able to improve system performance through data collection and understanding is a major factor. Many organizations, especially those in transport, are only starting to grapple with these challenges—and SNC-Lavalin, Mr Hughes says, is making progress, but needs to do better. With this work on Infrastructure being aligned with the company’s client-centric approach , its service continues to grow and develop in line with the industry. “[It’s] a partnership of mindset, rather than a partnership of contract,” Mr Hughes emphasizes. The relationship-building aspect of their business will always be primary at SNC-Lavalin.
The Australian Business Executive - Q2 2017
Norco Co-operative CEO Brett Kelly
How increased revenues are benefitting farmers and consumers
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orco is a 121-year-old farmer-owned co-operative, with strong ties to the most popular supermarket chains in Australia. “It’s basically the last of its kind in terms of being a dairy farmer-owned co-operative,” CEO Brett Kelly remarks. Norco and its subsidiary Norco Foods is made up of 230 members, most of whom are based in Northern New South Wales, though the company trades and sells their dairy products throughout Australia and internationally. While specialising mostly in milk and ice cream, Norco Foods also runs store locations geared towards the agricultural sector, where they sell animal feed and similar products to rural customers. During Brett Kelly’s tenure for the last 8 years, the company has seen huge changes. “When I started, we were around a 300 million dollar business; we’re now about a 600 million dollar business.” Kelly has guided the company through several successful projects, including buying back the Norco licensed marketing rights for 5 million dollars after the company had previously sold them for 63 million dollars.
“That particular license was for the Norco brand, and under the previous owners, it was actually losing about 7-and-a-half million dollars a year. We were able to turn that around into a profitable situation within about 18 months,” Kelly says. “It enabled us to have control of our own license and brands, and what that means in a nutshell is that we can go direct to retailers and sell our own brand.” While in theory selling the licensing rights to a multi-national company was meant to grow and enhance the brand, over time the strategy stagnated and introduced many complications in Norco’s dealings with retailers. Kelly even found himself having to ask permission from the license owner to negotiate contracts with other companies. Having control over their brand again has allowed Norco to run more efficiently and approach potential partnerships directly. From there, Norco was able to create a strong marketing strategy, one that highlighted their presence as a co-op that directs profits back to the farmers. Unlike other companies that are influenced by shareholders and the need to create profits for them,
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Norco
Norco has no reason to drive the price of milk down to increase their margins. Most of Norco’s profitability instead goes back to the farmers, who receive roughly 58 cents per litre of milk. On average, Norco pays the highest farmgate in Australia to its members. Though the farmgate is most important, Norco also pays dividends to the farmers every year, roughly 6% of their net profits. Kelly sees this as an important point of difference for the company. “We’re farmer-owned. Whatever we achieve goes back to our farmers, and the consumer really resonates with that.” Another major success that Norco has experienced under Kelly’s leadership is its relationship with the largest food retailers in Australia. “We negotiated with Coles for two years, and we were able to successfully gain the Queensland Coles generic contract. What that means is that we can’t control the retail price, but we can control what we sell for.” Because of this relationship, Norco has been able to put 3 cents per litre back into their farmgate milk price. However, Coles is not the only company that Norco works with. “We do Aldi, Woolworths, and Coles, and a few other organizations as well, but [Coles] is the majority,” Kelly says. Norco also exports ice cream into the United States and into Japan, though much of their international effort lately has been concentrated in China. Two years ago, Norco became the first Australian company to begin exporting fresh milk to China. “The challenge was that to export fresh milk there was a testing requirement from China. In that it requires about 8 days testing in Australia, and probably another 7 days when it got to China. So if you added that together, plus the air freight, you sort of would nearly run out of time for the life of the milk.” To solve this problem, Norco developed a system called “parallel testing,” where they send the milk to China, then simultaneously test samples in Australia and China. This cut down the time it took to export the milk to 6 or 7 days, from the farm to the retail shelf. “Our objective and strategy is to slowly, carefully build a footprint in China and in Asia for the future,” Kelly explains. This is part of a greater diversification strategy. Thanks to all of this recent success, Kelly believes that the company is in a very strong position financially. “We’re very strong in terms of our profitability, [and] our farmgate. We have low debt. We have a very strong market position,” he says. According to Kelly, the key asset for Norco in the marketplace is that they do not have to compete on price, and that their unique selling points center around the quality of their product and the fact that they are a farmer-owned co-op. “It’s really put us into a position where no one else is.”
Currently, the major project that Norco has been pushing for is entry into the café market in Australia. Kelly considers this a huge market for dairy. “When you buy your coffee, 25% of the cup is coffee, 75% is milk,” he says. “You’ll find that the coffee is marketed in terms of its history, credibility, quality, [and] background, but there’s nothing about the milk, so what we’re doing is joining forces with the major coffee houses and uniting to put a story out there about the Norco farmer-owned co-op.” Kelly predicts that Norco’s unique structure as a co-op and its focus on high quality dairy will resonate well with coffee enthusiasts. Norco has already made good progress in this market, even in just the past several months. Social media has played a huge part in Norco’s ability to spread the message of how the co-op works, and how it is different from other dairy producers. Kelly finds that recently consumers have been more conscious of brand names, and that they are eager to support companies that distribute profits back to the farmers. “When you go onto the Norco Facebook or you look into Norco, you can see that there’s no external shareholders; you know that whatever dollars you spend, you know exactly where it’s going,” Kelly says. “I think it’s all about the educational process of understanding who Norco is, whether it be up front with our branded milk, or as a contract packer in ice cream.” Though its primary focus is on dairy, Norco has two different business divisions, one of which is in the agricultural sector. “We have two feed mills, one is in Lismore, one is in mid-Queensland,” Kelly says. In addition, Norco runs about thirty retail stores, which sell farming products of all kinds, and deal with both the public and Norco’s own members. “Right from the hobby farmer through to the serious, full-time, full-on farmer.” At the moment, Norco’s footprint is largely from Cairns to Melbourne, with a strong presence in Brisbane, but they plan to expand and eventually have a national footprint. According to Kelly, the biggest obstacle to expansion is not so much a matter of logistics or competition, but a matter of profitability. “It’s really important to have a strategy that will enable you to achieve the profitability [that] you need. A lot of the time, when business is tough, people go down the price channel and as you know, anybody can sell two-dollar coins for a dollar, but at the end of the day you go broke,” Kelly explains, “so you’ve really got to come up with a strategy—a point of difference, a competitive edge—that can take you upstream, and that’s what we’re doing.”
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Norco
“We’re farmer-owned. Whatever we achieve goes back to our farmers, and the consumer really resonates with that.” – Norco Co-operative CEO Brett Kelly
This kind of strategy is something that makes Norco very different from other companies, Kelly says. As a co-op, they must be very conservative with their risks and take things “one step at a time,” otherwise they could be compromising the returns for their farmers. They focus instead on building solid long-term contracts with partners. “We’re quite transparent because we are a farmer-owned co-op, and most of our customers really appreciate that because they know exactly what they’re dealing with, and they know that we obviously need to make a certain amount of profit, but our main objective is our farmer-shareholders.” Their strong presence in the market has won Norco a lot of attention among farmers, and according to Kelly there is a “long list” of farms waiting to join. Norco is careful about adding to their roster, though, as their first priority is always financial sustainability. “We lead from the front,” he says, “and what that means is that we always secure a contract or growth first before we take on new members.” The reason for this is that one of Norco’s rules is that they provide pickup and payment for milk to their farmers no matter what. This means that to be able to pay a fair price to every single one of its farmers, they must first secure lucrative contracts and ensure that a larger volume of milk will be in demand before they take on new members. 44
“What tends to happen traditionally with co-operatives is that they’re pretty famous for going broke,” Kelly says. Though Norco has faced challenges throughout the years, its commitment to a solid business strategy and good profitability has facilitated its continued existence since 1895. Kelly also credits Norco’s commitment to high standards as an important factor to its long-term success. “The one thing that’s been quite outstanding is the quality, reputation, and credibility of the Norco brand,” he says. In addition, he believes that four key points have played a large part in the growth of Norco: 1. having the right people in the business, 2. keeping costs low, 3. staying focused on the customer’s needs and the company’s specific niche, 4. and having a winning strategy that will support the company’s niche position in the market place. Following these guidelines, Norco has been able to avoid the trap of competing on price in the retail market. Kelly is no stranger to the realities of these pitfalls. He has a background in retail, having been CEO of several groups in sectors as diverse as international brand apparel, pharmaceuticals, and discount goods. He has worked with Symbion Health, Canterbury International, and Mountain Designs.
The Australian Business Executive - Q2 2017
Norco
Under CEO Brett Kelly, Norco has transformed from a 300 million dollar business to a 600 million dollar business
It was 8 years ago when he was approached to take on the CEO position at Norco. At the time, Norco was going through some financial difficulties. “It was what I consider a bit of a challenge—which I really enjoy—and a matter of refocusing the business,” he says. “I always saw Norco as a potentially sleeping giant, when you look at the brand, when you look [at the fact] that it’s farmer-owned, when you look at its heritage and history.” He sees his background in retail as the asset he brought to the company, since it taught him to focus primarily on what the customer wants. “At the end of the day, the key outcome is what the consumer wants and you have to understand the consumer’s needs, and analyze that and make sure that you’re producing a product that is within that requirement.” “I think the co-operative model can work. In our case, we’ve proven it to work, but I think that, again, requires discipline from a business point of view, and a focus on profitability.” Kelly stresses that a huge asset of the co-op is support from the Australian public, and their desire to see farmers have financially sustainable businesses. Another factor that has been key to Norco’s success is the quality of its staff. “I’ve got an exceptional team, [an] exceptional Chief Financial Officer, and general managers for each of the divisions,” Kelly says. “They’re all very focused high achievers.” Through this focus and teamwork, Norco continues to be an award-winning company. They recently won The Grand Dairy Award in the flavoured dairy category for their Ultimate Chocolate Milk; for the second year in a row. Industry recognition is a regular occurrence for Norco.
“We win a lot of awards for the ice cream we produce for retailers,” Kelly remarks. “We’re pretty consistent with the quality, and that forms a very strong part of what the Norco brand is all about.” Norco’s commitment to both quality products for the end user and fair prices for farmers puts them in a unique position where they are already in compliance with many currently developing reforms and new regulations. Kelly says that the government has been focusing on making sure that farmers receive fair treatment from the corporations that buy from them, but that education is still by far the most important factor. “The more education, understanding, communication, [and] knowledge that we can give back to the farmers, so that they can make better decisions, and understand the end strategy [and] result with the consumer, the better they’re going to be.” He stresses that no business can be sustainable just focusing on production and ignoring what the consumer ultimately wants. In this sense, Norco is helping to bridge the gap between farmers and customers. Kelly is very optimistic about where Norco is headed in spite of the challenges of their sector. “The market is quite volatile. For Norco, though, [...] we’re ahead on our year-to-date net profits. We’ve been able to pay an extra—what we call a ‘step up’ payment—for our farmgate this year, which is exceptional. It means that in our first quarter we performed a lot better over our budgeted profits, so we then pay part of that back to our farmers.” This, combined with low debt, a high market share, and promising development in the café market, has allowed Norco to continue thriving. Written by Raul Betancourt.
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City of Albany:
delivering economic development through tourism and infrastructure
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hile most of Western Australia has been riding the boom-and-bust roller coaster of the mining industry, Albany continues to show remarkable stability with consistent growth in infrastructure. “It’s a very comfortable place to live,” Mayor Dennis Wellington remarks. Having lived in Albany since childhood, the Mayor has seen the city go through an extreme transformation. “It has been an interesting ride. We’ve gone from being a somewhat sedate place, to now somewhere that we think [has] enormous potential. I just love the change.”
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With a population of more than 37,000, Albany has a small town charm and an abundance of historical landmarks. At the same time, it has managed to evolve into an increasingly cosmopolitan area that supports both a growing tourism sector as well as a local bar, café, and entertainment scene. It is a city that is ripe for investment and is ready to build new infrastructure as well as take on new residents. Thanks to its pleasantly cool weather and its access to picturesque countryside and coastline, Albany has seen an influx of retirees in particular.
City of Albany
Mayor Dennis Wellington
With a new $160 million hospital, one of the quickly expanding sectors of its economy has been medical care for these older residents. “We’ve had an increase in the health areas of our business down here—30% in the last five years,” Mayor Wellington says. “Two new aged-care homes have also been a p p rove d re ce ntly, a b o u t $ 6 0 m illi o n i n d eve l o p m e nt which will be completed within the next year and a half.” Health is not the only growing sector, however, and retirees are not the only people eager to take advantage of Albany’s beautiful beaches and expanding resources. The city has experienced a 6% increase in tourism per year, with 900,000 tourists visiting Albany in 2016. A new hotel development to accommodate this growth is in the works. The 12-story hotel will be the largest in the area, as well as the closest to the water in all of Western Australia, as it sits only 50 meters from the shore of Middleton Beach, which is set to be transformed with a number of residential and commercial developments also in the immediate surroundings. “It is a place which is absolutely pristine in terms of its environment and its location.
It’s well-protected, and we’d like to see a major infrastructure there where we can cater for larger groups of tourists and have a major focus of the town.” It is one of the city’s two hotel development sites, the other sitting just south of the main street on the marina waterfront alongside a $70 million entertainment centre built in 2010. Once developed, both hotels will provide for significant growth in the tourism and business sectors. Mayor Wellington hopes that by attracting larger and larger numbers of visitors, new capital will find its way to Albany as investors seek to develop the areas around the hotels. Albany is in the midst of building up its walkway and bike path infrastructure, in an effort to make the city more walkable—and in turn, healthier and more convenient—for both tourists and residents. “We’ve started a program where we’re using a lot of e-bikes around the place; we’re getting people back into cycling,” says Mayor Wellington. Even the older business sectors of Albany have been seeing growth. Albany has a rich agricultural business that has always served as a major portion of
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City of Albany
the local economy. “100% of the free-range pork for Coles supermarket comes out of this region,” Mayor Wellington explains, “because it’s the best place in Australia to grow free range pork.” Wheat, sheep, canola and woodchips are also major exports of the area. After the wild success of the Anzac Centenary Commemoration in 2014, which brought 40,000 visitors, Albany saw a dramatic increase in interest from surrounding areas and the creation of new business precincts in the city. According to the Mayor, this was the “catalyst” that pushed Albany into its current state of growth. “The [business] areas that were created were the old areas of town that had sort of been let go a little bit, and the streets and the buildings were redone; it created an environment down there where people could go to and relax and enjoy the surrounds.” The city has encouraged local restaurants and cafés to set their tables outside, and to create a more attractive outdoors atmosphere for customers so that they could admire Albany’s natural beauty.
The Anzac Centenary also provided Albany with a lot of national exposure, and led to the building of the National Anzac Centre, a monument to our Anzacs that has seen over 200,000 visitors since its opening. “It’s a display which is second to none,” Mayor Wellington remarks. “Thousands of visitors flock to the center every month, many of whom had ancestors who were part of Anzac and departed Australia through Albany’s harbour. During World War I, Albany saw 41,000 soldiers leave its shores, a third of which did not come back.” With the rapid increase in tourism due to these developments, the Albany City Council sought to form an alliance with the nearby shires of Denmark and Plantagenet. “The fact is, as things change—I mean, things are changing all over the world—nobody, in terms of tourism, recognises [geographic] boundaries,” Said Mayor Wellington. Many tourist destinations exist across these three neighboring areas, from the vineyards of Mount Barker to the Valley of the Giants tree-top walk of
Albany hopes to grow its population to 50,000 by the year 2025
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The Australian Business Executive - Q2 2017
City of Albany
Denmark to the adventure trails and whale-watching in Albany. The three towns have begun to market themselves as The Amazing South Coast after realising that their core customer base had little recognition of the area under its former name, the “Great Southern” region. With this re-branding and more aggressive marketing, Albany hopes to raise its influx of tourists from 900,000 per year—or roughly 2.5 million visitor nights—to 3 million visitor nights by 2021. With roughly 85% of the tourist market made up of residents from other towns and cities in Western Australia, Albany also hopes to expand to overseas markets once its hotel project is up and running. The state, for its part, has guaranteed $135 million in funding to Albany for various infrastructure projects, which the Mayor says will help catalyse the flow of even more private investment into the city. In particular, the most important infrastructure changes that will occur in Albany and its neighboring towns are road improvements. “Roads are what we live and die on around here,” he says. Perth is one of the most isolated capital cities in the world. It and the other smaller towns in Western Australia are connected by a vital network of roads and little else, and so roads are of particular economic i m p o r t a n ce . “95% of the people that come [to Albany] come here by road.” The funding is also expected to go into s p o r ti n g fields , tourism , and, impor tantly, industry develo pment and investment attraction.
For instance, with fairly minor improvements to their airport, Albany could begin exporting some of its crops to Asia. This is a major area of growth that the city is looking to exploit in the near future because of the relative vicinity of Asian countries and the convenience of shared time zones. Ironically, this plan to expand overseas export is within closer reach than exporting these same goods nationally because of Western Australia’s isolation. “If you had to put it on a truck and take it to the rest of Australia, we’re a long, long way from anything, but in terms of Asia, we’re not,” Mayor Wellington says. “The location of Albany makes it an ideal exit point to Asia, even more so than Queensland.” With this growing economy also comes a need for an education work force. As jobs become more available in Albany, the city has been establishing better education facilities. They have a regional university—University of Western Australia—with 500 students, and they hope to raise the number to 2,000 by 2025. Wanting to attract overseas students as well, Albany has been erecting student housing close to the university and shopping centers. According to Mayor Wellington, growth in the education sector will impact the city economically in several ways: For one, it will attract visiting f a m i l y m e m b e r s o f s t u d e n t s , which will continue to fuel the tourism sector; secondly, it will help create new jobs.
Albany is in the midst of a $27 million dollar upgrade of its sports complex, which can house football, soccer, and cricket games
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City of Albany
“These are all things we can build on over a period of time,” he says. His intention is for Albany to become “one of the best cities to live in,” while still maintaining its character. One factor that is helping to build Albany’s future is the development of “clusters,” which are local business entities that would normally be in direct competition working together on given projects to solve problems. For instance, clusters of farmers are investing in scientific research which has helped them to grow better barley for new and innovative types of beer. Business clusters like these allow an area to gain a good reputation in certain industries, which attracts further business. Agriculture is not the only sector in which this clustering strategy works. Albany hopes to expand its aquaculture industry thanks to the appeal of its pristine waters, and also hopes to expand its wineries. In fact, 26% of the state’s wine is already grown in the
region with many well-established vineyards in Denmark and Mount Barker already producing large volumes of quality wine Mayor Wellington emphasises that a spirit of cooperation among individual businesses in these sectors is what will ultimately move the region’s economic prospects to the next level. “We’d like to see it formed together as a conglomerate, to take the whole market to a certain area, and then everyone sells out of that. Still in competition, but then in cooperation at the same time, so it’s a different way of doing business and it’s a different way of looking at things.” According to the Mayor, these clusters are part of the long-term growth plan of Albany, but they can also offer immediate impact in the industries that are already well established in the region. “That’s why we want to start immediately in looking at the places and looking at the things that we already do well,” he says.
Albany’s recently launched National Anzac Centre has seen over 200,000 visitors since its opening
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The Australian Business Executive - Q2 2017
City of Albany
Albany is looking to attract 3 million visitor nights by 2021 by making the city more walkable for tourists and residents alike
There have been some subtle changes to Albany’s existing infrastructure as well, in order to accommodate tourists and create more vibrancy and activity within the community. One of these efforts has been the revitalisation of the city centre, which has transformed the area from a major four-lane roadway with little room for wandering pedestrians, to a two-lane road with a low speed limit. “The center of town is not supposed to be a place for cars, it’s a place where you’re parking, where people walk around, where they go to the shops,” the Mayor says. “The traffic has slowed down to about 40 km per hour, there’s plenty of parking there, and we want to get people out of their cars, walking around the shops, and walking into the shops and spending their money.” With a host of restaurants, shops, and cafés, the city centre has proven to be a location that is growing in popularity. It has also been an increasing source of revenue thanks to the redesigned streets that encourage people to step out of their cars. “You don’t spend too many dollars when you’re sitting in a car, but walking around you tend to do that,” explains Mayor Wellington. Albany is also moving its visitor centre from the South of the city to the centre of town and has plans to re-purpose its old town hall, built in 1888, into an art gallery. Albany is also building up its walkway and bike path infrastructure in an effort to make the city
more walkable—and in turn, healthier and more convenient—for both tourists and residents. “We’ve started a program where we’re using a lot of e-bikes around the place; we’re getting people back into cycling,” says Mayor Wellington. In addition, Albany is in the midst of a $27 million dollar upgrade of its sports complex, which can house football, soccer, and cricket games. They also have 7 indoor basketball courts, and 7 fully-lit outdoor sports fields. On Saturdays, there can be as many as 1,400 children playing soccer and 1,200 children playing football. The city also boasts 195 basketball teams. “We need to get kids basically out of their houses and off the computer games, getting about, running around in the field and exercising more and playing sport.” Its all part of the City of Albany’s aim to provide better facilities so youth and the wider community can exercise and in turn live healthier and happier lives. Looking towards the future, Albany hopes to grow its population to 50,000 by the year 2025. The city already has the infrastructure to handle such a population, thanks to their prior experience with tens of thousands of tourists. In other words, the groundwork has already been laid, and Albany is ready for its next major economic expansion. “We’re ready to go,” Mayor Wellington says. Written by Raul Betancourt.
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Albany’s Middleton Beach
Albany’s Middleton Beach Oasis for visitors; once-in-a-lifetime opportunity for developers
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estern Australia’s south coast, with its pristine white sand beaches, lush ancient forests, and wonderfully temperate weather, is a magnet for tourists and permanent residents alike. At its heart lies the beautiful historic city of Albany, which came to the world’s attention during the 2014 ANZAC centenary celebrations, attended by international dignitaries and televised around the globe. Albany’s iconic Middleton Beach is THE destination for locals and visitors. Each year more than a quarter of a million people travel to Albany for business or pleasure. Many more flock to the Middleton Beach foreshore for the vast range of sporting and recreational events. Recognising the untapped potential of the area, the State Government is investing heavily in
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the revitalisation of the city. This investment includes the development of the Middleton Beach Activity Centre, providing a vibrant residential, boutique retail, hospitality and tourism hub for the community. With the Local Scheme Amendment and Structure Plan approved earlier this year, the first stage of works will begin mid-2017, which includes road realignment and associated landscaping. The jewel in the crown of this city-defining project is a magnificent mixed-use hotel site (short stay/permanent residential apartments) that boasts absolute beach frontage. With four development sites soon to be released to market, it’s no exaggeration that we call the Middleton Beach Activity Centre a unique, rare and exciting opportunity for private investors.
The Australian Business Executive - Q2 2017
Albany’s Middleton Beach
Middleton Beach Activity Centre
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n 2014 the Middleton Beach Activity Centre Improvement Plan was gazetted, paving the way to redevelop the Middleton Beach area as a highly desirable centre for the community and delivering a mix of residential, retail, comm e rcia l , and tourism opportunities for the private sector. The project is being progressed by the state’s land development agency, LandCorp in close collaboration with the City of Albany, together with the Department of Regional Development, other parts of Government, and the community. A foreshore management plan is b e ing p r e p a r e d and design guidelines a r e b e i n g p r o g r e s s e d fo r mixe d - u se site s up to five storeys and a mixed-use waterfront hotel site up to 12 storeys.
Middleton Beach Attractions
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iddleton Beach is one of the most picturesque locations in Australia. The main swimmers beach is enclosed by a 275m shark barrier, installed by City of Albany. It is also home to an 18-hole true links golf course, the Albany Surf Life Saving Club, boutique e ate rie s , wh a l e watchin g va nt a g e p oint s , a n d n atu re wa lk s . Middleton Beach is located at the base of Mount Adelaide, home to the award winning N a t i o n a l Anzac Centre, one of Australia’s most important cultural pilgrimages. Other attractions include nearby boutique wineries offering world-class wines, whale watching b o a t t o u r s , f i s h i n g c h a r t e r s , a n d d a y t r i p s t o s p e c t a c u l a r lo c atio n s su ch a s th e a n cie nt e m pire fo re s t , Va ll ey of th e G ia nt s .
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