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Features

10 16

BusinessTimes Greater Dandenong ISSUE 3 / OCTOBER 2010

Avocare: Training feeds needy

TONY MURRELL KEITH PLATT MARG HARRISON DAVID HILET MELANIE LARKE SIMON BROWN Design MARLON PLATT

Publisher / Director Editorial Director Sales Director Managing Director Material production / Prepress

Racing merger: A track winner

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Columns 4 6 8 17

Managing: Hamish Petrie Markets: Richard Campbell Health: Mike Ellis Motoring: Ewen Kennedy

18 19 20 22

Cover: Trish Keilty balances and sometimes subsidises running the non-for-profit Avocare with the for-profit Workforces.

Are you in BusinessTimes? For advertising, contact: Marg Harrison: 0414 773 153 / marg@businesstimes.net.au Make sure every business knows your business. DISCLAIMER: Information in BusinessTimes contains general advice only. No article or column has been prepared taking into account any individual reader’s financial situation, investment objectives or particular needs. Readers should personally consult professionals for advice on any matter, including investment, health and the law. While all care is taken, BusinessTimes accepts no responsibility for errors or omissions in the published material. Views expressed are not necessarily those of BusinessTimes Pty Ltd. All content is copyright.

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news

‘‘

Bridge name honours saleyards

QUotes

“I believe in capitalism. Democracy just gets in the way.” – Fisher Investments chief executive Ken Fisher, who argued that the “bailout concept” that led to high government debt was wrong. “Many of (those companies) should have been left to fail. And others, like Lehman, were not left to fail, they were killed. The US government killed Lehman.” (The Age, 29 September, 2010

“I’m no genius, but I’m smart in spots, and I stay around those spots.” – Tom Watson [IBM founder],

THE new George St bridge linking Cheltenham Rd with the heart of Dandenong is to be called Stockmans Bridge, honouring the site of the famous Dandenong Saleyards. Greater Dandenong City Council will submit the name to the Office of Geographic Names for gazettal. VicRoads launched a community competition in May to name the new bridge, the first of four Dandenong revitalisation projects to be completed in a $290 million facelift of Melbourne’s second city by the state government. The projects are being delivered by VicUrban in partnership with Greater Dandenong City Council. The new bridge includes a two-way road for drivers, a shared bicycle and pedestrian path on the station side, a pedestrian path on the other

side and street lighting. The bridge features artwork based on historical images of the former saleyards. The George St bridge naming competition closed on 18 June with more than 100 entries. A working party from council, VicRoads and VicUrban met and shortlisted the names before seeking a community response. There were 42 responses to the shortlist with 62 per cent favouring Stockmans Bridge. The shortlist included two indigenous names, which the Victorian Aboriginal Corporation for Languages said were not appropriate. Further, the Office of Geographic Names discounted another name, stating it was ‘not named after a locality in the area’. This left three preferred names – Stockmans Bridge, Gateway Bridge and Drovers Bridge.

Crisis and govt damage family business plans operations, worth $1.5 trillion, and these businesses have been badly bruised by the financial crisisn, according to results of The MGI Australian Family and Private Business Survey 2010. The survey was undertaken by RMIT University and supported by MGI, an international accounting firm specialising in advice to family and privately-owned businesses. Ms Prestney said that besides a substantial reduction in the value of their businesses and their retirement savings as a result of the GFC, family business owners also have to deal with: • Maximum deductible contributions to superannuation for intending self-funded retirees over the age of 50 being reduced by 50 per cent (from $100,000 to $50,000)

from July 2009 and will be further reduced to $25,000 from July 2013. “This comes at a time when business values and retirement savings have fallen and therefore substantially reduces the prospect of financial security ...,” Prestney said. • The Australian Taxation Office issuing a ruling in June 2010 that will substantially increase the rate of tax payable on earnings retained for business investment by family businesses that have chosen to operate through a family trust. This has retrospective elements for the businesses involved. • In 2006 a total of 75 per cent of owners were considering selling their operation if approached. In 2010 this figure is down to 61 per cent.

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MANY Victorian family business owners have been forced to shelve retirement plans because of a drop in the value of their business and their retirement savings. Because aged business owners are working longer, succession planning in many Victorian family business operations is in disarray. Ms Sue Prestney, Principal, MGI Melbourne and MGI Australasia Executive Chairperson, says it’s not just the global financial crisis (GFC) that’s causing financial and management difficulties for small business – it is the laws and regulations imposed by the government. Prestney called for all political parties to have a major re-think about their attitudes to family businesses. Australia has two million family business


Market the first port of call for PoMC THE future of the Port of Hastings and the way industry and business operates in Melbourne’s southeast depends of the Port of Melbourne Corporation. The PoMC set an end of September deadline for submissions on the future use of the state’s premier port, Melbourne, and will be reviewing the feedback. The “market sounding” exercise sought options to increase container capacity instead of redeveloping Webb Dock once full capacity was reached at Swanson Dock. PoMC CEO Stephen Bradford said that by 2020 there would be 4.4 million containers passing through the Port of Melbourne and “we need to ensure the port, as a key component of our economy, is capable of achieving the next stage of container capacity development”. A spokesman for the PoMC, which also controls the Port of Hastings, said it would not be making any comment on any proposals until after the closing date for submissions on 30 September. Already one company has publicly suggested upgrading the Port of Geelong before spending more money on upgrading infrastructure to connect Hastings to industrial areas like Dandenong, despite the natural deep water advantages of Western Port. The plan, if adopted by the PoMC, could set back development at Hastings by at least a decade. Although dredging estimated at $360 million will be required at Geelong, infrastructure and stevedoring company Asciano says the economic advantages far outweigh the $11 billion Western Port option. Asciano says Geelong already has the vital road and rail infrastructure in place to justify

Patrick Jetty, Stony Point.

its development as Melbourne’s next major port. Asciano, parent company of Patrick Stevedores and transport company National Rail, has about a 30 per cent interest in the Port of Geelong which, in its publicly-released strategy, it says could be expanded, dredged and up and running within five years. Asciano’s strategy, A Port Plan for Victoria’s Future, acknowledges Hastings has the capacity to handle all of Victoria’s container needs, but maps out various scenarios to show the benefits of waiting until at least 2030 and also avoiding spending an estimated $1.3 billion redeveloping Webb Dock in Melbourne. Salta Properties earlier this year proposed building a $750 million inland port on 187 hectares of land at Lyndhurst, just south of Dandenong. It said containers could be taken by existing rail lines from the Port of Melbourne to Lyndhurst from where goods could be easily collected and distributed by trucks.

Salta also said it had land at Altona for another inland port to service Melbourne’s industrial west. The inland distribution centres would ease traffic congestion emanating from the Port of Melbourne and also provide the extra storage space that would be necessary if the port reached its projected import and export levels. Salta’s executive chairman Sam Tarascio envisioned stevedores DP World and Patrick loading ships’ cargoes onto trains from the Victoria Dock rail terminal for transport to the two inland ports. Asciano says Hastings could be developed by 2022 when an upgraded Swanson Dock nears full capacity but cautions “it would be prudent to discard the option of fast-tracking Hastings due to the significant funding requirements in the short to medium term and the difficulty in delivering the project within the required timeframe … the early development of Hastings appears not to deliver the best long term outcome when compared to expansion of Swanson Dock in conjunction with Geelong”. “Medium term development of Geelong Port and then Port of Hastings would match Victoria’s broader freight and transport plans better, and create investment and jobs in regional Victoria.”

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October 2010 | Greater Dandenong BusinessTimes | 5


BUsY bites

Jobless at 5.1 per cent The Australian unemployment rate remained at 5.1 per cent in September, according to the Australian Bureau of Statistics

Village news

Apple’s Steve Jobs launches iPhone 4 in June.

We’re smartphone fanatics: survey OUR obsession with mobile internet-connected ‘smartphones’, like iPhone, has reached new heights, with Australians admitting to using their devices in bed, on the loo and, alarmingly, when behind the wheel, according to Telstra research released 5 October. Telstra Consumer Executive Director Rebekah O’Flaherty, said the first Telstra Smartphone Index revealed that smartphones go wherever we go. “Whether we’re at home in front of the tele, in the bathroom or in bed, Telstra’s research suggests smartphones have become an indispensible way for Aussies to get connected and access the information, entertainment and news that matters to them,” Ms O’Flaherty said. “Over the past 12 months we’ve seen huge growth in the popularity of smartphones and they now make up more than half of all Next G handset sales in Telstra Stores Australia-wide.” Telstra Smartphone Index reveals: • Smartphones are our new bed buddy: More than half of smartphone owners admit to using their phone in bed, with women the most likely offenders (54 per cent versus 49 per cent of men).

• We love throne-surfing: Almost one third of Aussies have used their smartphone to surf the web while on the toilet – although only one per cent admit to doing so regularly. Additionally, men are more avid loo-surfers (38 per cent have used their phone on the toilet versus 22 per cent of women). • Smartphones don’t make us smart drivers: One in five Australian drivers admit to surfing the web on their smartphone while driving – despite this being illegal in all states and territories. Smartphones are not just for Generation Ys. Almost one in five Aussie smartphone owners are over 50, and 41 per cent are over 40. The research suggests smartphones are beginning to eclipse PCs as the preferred way of accessing certain online content. Nearly 25 per cent of smartphone owners visit social networking sites like Facebook on their mobiles, more than on a computer. More women use social networking sites. The survey found around 10 per cent are more likely to do their online banking from their phone than on their PC,” she said.

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EMAIL from Commonwealth Games athletes’ village, Dehli, 6 October (first day of competition): “Don’t worry about the bomb scare in the village that you may read in today’s papers. We were in the village at the time with …….. and honestly we wouldn’t have had a clue anything was going on. A big complex, half finished. Shoddy workmanship everywhere, but you just sort of have to laugh and realise this is how the Indians obviously do things. Certainly liveable though, and “touch wood” the food is pretty good, too. …Headed off to the swimming. Good once we found our way in. The signage is poor but the people are really willing to help out. Still hard to get used to having guns pointed in your direction all the time though. “While we are feeling relatively safe, there are moments that you just think …., this isn’t ideal. “Waiting to get in a taxi after the event is worst, but we’ve got through day one and know (a little better) how the system works.”

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LED lighting just got more flexible LIGHTING distributor Vibe, has just made LED lighting more flexible with a new range of LED Flexible Strip Lights. Vibe director Phillip Hill said that LED (light emitting dioade) the strip lights are a new technology. “There has never been a more flexible way to decorate,” he said. “Flexible strip can be bent back on itself, easily cut and rejoined at regular intervals and can be mounted on any smooth, dry surface. “Before LED flexible strip lights, people were restricted to neon lights which were bulky, contained harmful gasses such as argon and mercury and would flicker and often go out.” “With flexible strip lights, you’re now only limited by your creativity.” At 14.4 watts a meter, the Vibe Flexible LED strip is low on power and boasts a super long life of up to 50,000 hours, reducing maintenance costs. The low energy range is available in warm white, cool white and RGB and uses a DC12V driver to connect to 240V. VIBE expects a strong uptake for use in homes, hotels, clubs and bars. The LED strips come with strong adhesive backing so can

Poppy profits

New strip lighting a switch-on for designers and decorators.

easily be mounted on any smooth, clean and dry surface. To achieve the best results possible, mount on aluminium to disperse excess heat and prolong the lamp life. The LED flexible strip can be simply cut to desired length at every three LED chips and can be easily rewired by an electrician. Vibe says it is supplying a growing network of lighting retailers and hardware stores, electricians, landscape designers, architects and builders with a wide range of lamps, light fittings and other electrical merchandise.

Small businesses view social media as ‘digital wild west’ ONLY 28 per cent of small and medium businesses (SMBs) are active in social media, according to Optus Business Social Media Index. A national survey of 380 Australian SMBs revealed that more than 50 per cent are not taking advantage of social media as a marketing tool to promote their business. The Optus Business Social Media Index, in association with Council of Small Business of Australia (COSBOA), found that 28 per cent of SMBs use social media, investing on average 6.6 hours or more a week. However, 56 per cent of SMBs do not use it at all nor do they have any near-term plans to start. More than 50 per cent of SMBs not involved in social media believe that social networking is not appropriate for their industry, while 25 per cent believe there is no clear way to build a business case for an investment in the area. On the other hand these non-users cited customer satisfaction measures (44 per cent) and sales data (37 per cent) as key measures of success that might convince them to use social media in the future. In the next 12 months, a further 16 per cent of SMBs plan to use social media, although more than two thirds are still unsure of the exact benefits. Despite this uncertainty, 77 per cent of SMBs planning to use social media cite increasing sales by reaching more prospective customers as

their primary motivation for getting involved. Phil Offer, Marketing Director for Optus Small and Medium Business, said that while social media presents a powerful opportunity for SMBs to connect with prospects and customers, the survey results indicate that the majority of SMB decision makers are yet to be convinced it is worth the time and investment. “Our research shows that many small to medium businesses are keen to embrace social media as a means to drive sales by reaching new prospects and engaging loyal customers, but are holding back until they can justify the return on investment. Social media is still perceived as the ‘digital wild west’ so many SMBs are still learning and experimenting to determine how social media can help them achieve measurable business benefits. • To assist SMBs along their social media journey, Optus has launched a suite of ‘how to’ social media guides and case studies which are available for free on our www.bizthinktank.com.au advice portal. While the majority of SMBs are still uncertain about the value of social media, the 28 per cent of businesses that actively use the tool are embracing the medium. Of these, 47 per cent of SMBs sold products or services through social media sites, with Facebook emerging as the tool of choice for 58 per cent of sellers, followed by YouTube, Twitter and LinkedIn.

THIS year’s opium poppy crop in Afghanisatn is reported to have been cut by half. However, the loss is due to nature and not the efforts of Australian, United States or other Western forces whose countries feel the downside of the heroin trade. The poppies have been hit by a naturally-occurring rot. But, as in most markets, there is always and upside for the astute. Heroin prices are rising on the back of the shortage, encouraging Afghan farmers to plant more crops. Afghanistan is thought to supply at least 80 per cent of the world’s heroin.

Tavern unlikely AN application for a tavern in Hemmings St, Dandenong has been given the thumbs down by Greater Dandenong City Council officers. The application was to go before council on 11 October for decision. Applicant Dino Ramic was seeking to have the car parking requirement lowered by nine spaces. Officers said the tavern was an inappropriate use within a ‘neighbourhood activity centre’. They said it failed to complement existing uses within the Hemmings St precinct. The officers added that a tavern would be detrimental to the safety of th surrounding residential centre. The 20-seat tavern would have a lounge area of about 30 sq.m. Objections included the behaviour of patrons and the tavern’s proximity to a primary school.

Contact us BUSINESS and service groups are welcome to provide BusinessTimes with details and dates of their activities. Send information plus contact details to news@businesstimes.net.au Fax: 035979 7944.

October 2010 | Greater Dandenong BusinessTimes | 7


LocaL GOVeRNMeNt

Parking squeezed

Nod for ‘gateway’ high rise THE former Bells Funeral Parlour in Stud Rd, Dandenong North, will become the site for 96 apartments in two seven-story buildings plus six convenience shops. Councillors at Greater Dandenong City’s September 27 meeting ignored officers’ advice to refuse the redevelopment on grounds of insufficient car parking. Council has accepted the redevelopment with 102 residents’ spaces, 18 residential visitors’ spaces and 18 spaces for the six convenience shops, Officers considered the proposal for the higher density development as appropriate for the site in an area of strategic importance, a “gateway” to the municipality, and which has convenient access to high levels of public transport. However, they baulked at the number of car parks proposed, saying there were not enough given the size and scale of the development,

which could lead to potential added pressure on parking in the immediate area. Mayor Cr Jim Memeti disclosed a conflict of interest and left the chamber while the matter was decided. Cr Memeti said the applicant, Ammache Architects, did work for him. There were 10 objections to the proposal, citing traffic movements and parking concerns; safety due to the location between two fuel stations; neighbourhood character; access difficulties to and from Stud Rd and nearby residential streets; potential impacts on nearby wetlands; visual bulk; intrusion into the privacy of surrounding neighbours; convenience shops not appropriate for the site; impact on water supplies; and noise pollution. A condition of the planning application was that initial and subsequent buyers of units be aware of their obligations with regard to the mechanical vehicle stacking procedure in the basement car park.

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GREATER Dandonong City Council has overturned an officers’ recommendation to refuse a town planning application for high density development in Herbert St, Dandenong. The application from Asian Musai for 17 dwellings in a four-storey building in a Residential 2 zone was granted with a reduction in the required number of car parking spaces to 20. However, councillors backed the officers’ recommendation to refuse a planning permit for No.54 Buckley St, Noble Park, where a three-storey building comprising 18 apartments was proposed. They agreed the proposal would be an overdevelopment of the site with a building that did not comply with site coverage, setback or height rules.

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AFTER a two-decade hiatus, trams will again roll off the production line at Dandenong. Fifty trams each costing $6 million will be built by Canadian transport manufacturer Bombardier which bought the former Commonwealth Engineering (Commeng) plant. Commeng built hundreds of Melbourne’s trams in the 70s and 80s, the last being produced in December, 1993. The $300 million contract won by Bombadier will create 100 direct jobs and at least 400 more flow-on jobs in the city’s south east. The 33-metre trams designed to carry 210 passengers will start running on Melbourne streets in mid-2012.

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Bombadier tram deal hailed for south-east

24-Hour Hot Line: (03) 9790-5100 October 2010 | Greater Dandenong BusinessTimes | 9 Our aim is to satisfy all our customers, who are in need of casual staff, with a fast and efficient service.


FEATURE feATure

Avocare:Training with a social conscience WORDS/IMAGES: KEITH PLATT

T

rish Keilty uses “rescued” food to nourish the needy. But the blueprint for turning donated food into meals distributed among a section of Dandenong’s population that is sometimes desperate, often marginalised and daily hungry, has a surprising benefit. The tasks of collecting, sorting and preparing meals are included in the syllabus of classes offered by Avocare, a governmentaccredited jobs training agency. The symbiotic arrangement has emerged from the more than 80 Jobs for the Dole projects undertaken by Avocare since June 2003. The business name owes its origins to Keilty’s “favourite spot in Ireland, Avoca”. Avocare in Mason St, Dandenong, appears as a progressive training centre, with students and lecturers in neat rooms seated before computers, reading from training manuals or studying characters and figures on white boards. But Avocare is also a precarious business, depending on government contracts which this month was hit with a massive rent hike for its offices ($55,000 a year to $80,000) and the news that the building is to be demolished in 18 months, a victim of Dandenong’s revitalisation project. The not-for-profit’s future will next year depend on its ability to attract enough government-subsidised students to its courses in training and assessment, business services, community services, hospitality and first aid. This year the pressure eased a bit when Avocare received $1.6 million from the federal government’s Jobs Fund to expand its food “recycling and distribution” enterprise. The money paid for five full time positions and a 24-week training course for 60 young people. The contract included the proviso that, at the end of the course, Avocare finds permanent jobs for at least 12 of the 30 trainees in each of two intakes.

Trish Keilty

10 | BusinessTimes Greater Dandenong | October 2010


Next July when the Jobs Fund money runs out Avocare goes into competition for students with other training agencies, as well as TAFE. The model Keilty devised for Avocare sees hospitality students being trained in food preparation and distribution. The food donated by supermarkets and manufacturers is collected daily by Avocare which, as well as its central office and training rooms, runs the Avocare Community Distribution Centre from a warehouse in Wauchope Lane, complete with computer hub and training cafe that has cooking and packing equipment. One farmer in the Mallee each year donates grain to VicRelief Foodbank. The grain is trucked free to a mill which in turn sends the flour on to a pasta producer who then delivers the final product, in bulk, to Avocare’s warehouse. Once there the pasta is weighed, packaged and used to prepare meals. Meals cooked on the premises are ordered and distributed by several organisations, including the Royal District Nursing Service, Hanover and Joyce’s Van, a mobile service handing out up to 70 meals near Dandenong market each Wednesday night. “The van is never short of customers,” Ms Keilty says. “In fact, they’re becoming quite discerning, telling us which meals they prefer. “We don’t ask who these people are or where they come from. Some are families, others might be drug addicts, but they all need a meal.” Avocare also earns income by helping other community agencies with such things as publishing and advice. A Chinese importer donates unsold items to Avocare which are added to gift bags for schools or disassembled with the beads being bagged and sold in shops. Avocare’s output is the result of a desire to train people to find fulfilling jobs within the community. The meals, really a by-product of the training, contribute to solving a problem caused by poverty. Keilty, whose husband Bernard also works for Avocare, also has a “for profit” business - a blue collar temporary employment agency, Jobsforce (Australia) Pty Ltd. “I’m trying to increase the labour hire side of things because much of the money from this goes towards what I do best, helping people,” Keilty says.

Eddie Toombs

Bernard Keilty

Albiona Memet

Millie Harrison

“We’ll never be able to keep Avocare open unless I increase the labour hire business.” Tears well in Ms Keilty’s eyes when she is asked the obvious question: Why struggle with Avocare when Jobsforce could keep her occupied and financial. “So many people depend on us. Who would look after them? “I guess you could say we have a social conscience. I can’t not do it. How would I give up the people [20 staff, including

trainers] who work with me? “I need to get out to the business world that what you see here is what you get. I need to market Jobsforce, but Avocare is my passion.” Husband Bernard is of a similar resolve: “More and more people are going hungry. Where would they be without people like us?” Keilty’s looming rent and student recruitment problems will in all likelihood be faced with the same philosophy

October 2010 | Greater Dandenong BusinessTimes | 11


FEATURE when initially asked to prepare meals with donated food: Let’s find a warehouse, fill it, and they will come. “Lo and behold we found a warehouse with a cafe attached and spent a fortune getting it up and running.” The Avobreak Cafe serves meals to the needy, not the general public, but it will cater for small functions such as low cost funerals “helping families in dire need”. While VicRelief pays half the warehouse rent, Ms Keilty says she is looking for a miracle to solve the problems facing Avocare’s need for offices and training rooms. Her faith in resolving the impasse comes down to quoting a saying of her mother’s: What’s for you won’t pass you. “I really would like a large warehouse so we can have everything under one roof,” she says. In the meantime VicRelief has asked Avocare to take its formula of using unemployed people to run a centre in Bendigo after seeing “that it works by taking the burden off aid organisations”.

Gain after the pain THE skills Trish Keilty uses to run the not-for-profit Avocare and the for profit Jobsforce were learnt in Dublin, Ireland, while working in an employment agency and studying for a diploma in human resources management. Keilty had returned to Ireland in 1990 after husband Bernard was seriously injured in a fall over an internal balustrade on the second storey of their house on Queensland’s Sunshine Coast. Bernard had been leaving home before dawn to run his cleaning business when the accident left him concussed and with

multiple fractures to his legs, shoulders and head. Doctors predicted he would be disabled and unable to do manual labour. The couple sold the cleaning business “for a song” and headed back to Ireland where family could help with their plight. “Once there I decided I should do something about it if I was going to be the breadwinner,” Keilty says. But a year later, with Bernard beating the worst of the medical predictions and making a remarkable recovery, the couple was back in Australia, and on their way to establishing Avocare.

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12 | BusinessTimes Greater Dandeong | October 2010


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FEATURE

Tim Dash works in a vacuum to make what the client ordered. WORDS/IMAGES: KEITH PLATT

W

orking in a vacuum is not usually the best phrase to illustrate an outward looking business. But economies of scale bring some of the world’s biggest car manufacturers knocking on the door of Tim Dash’s Seaford factory, and the vacuum principle is one of the attractions. Being able to utilise the principles of a vacuum as well as produce the shiny, reflective bits of a car that attract customers to one model over another will ensure the motor men keep coming. Although he does work for them on a regular basis, Dash vividly remembers showing some executives the door. They have been back since, order books in hand, no grudges held. It may sound a bit twee, but Dash’s reflections on the company he and his wife Natalie bought four years ago provide an insight into a business that succeeds because of its intellectual knowledge: A knowledge he wasn’t keen on sharing with the car company’s representatives even though his dealings involve them showing him new model designs before they are released. Decor Engineering specialises in silver linings, or chrome plating. But the method used – vacuum metalising – requires just electricity and a few grams of pure aluminium. Gone are the cyanide based chemicals and large amounts of water traditionally associated with the chrome plating process. The technology that has been around for more than a century involves placing items to be be given a reflective surface

in a reinforced metal chamber, extracting the air and then atomising a pure metal so that its minute particles settle, covering them completely and evenly. Dash likens the coverage to “moisture covering a cold window near a steaming kettle”. The technique is ideal for small volume items, which is where the car companies again enter the scene with such jobs as rebadging vehicles for specific markets.

14 BusinessTimes GreaterPeninsula Dandeong | October 36 ||BusinessTimes Frankston | August 2010 2010

The most obvious use of the “chroming” is for light reflectors, although the list also includes coffin handles, plastic surrounds and ornamental strips on car doors, candle holders, anything that requires a bright reflective surface. Unlike traditional chroming the vacuum technology does not require heat and is a “green” process that does not use chemicals or contaminate water as highlighted in the 2000 movie Erin


Brockovich starring Julia Roberts. Dash has silvered a Terminator and mannequin head “to see what they would look like”. He says his vacuum method can be used to apply a thin film of any pure metal. Branching out on his flight of fancy is not the indulgent pastime it seems. Knowledge of his product and ability to coat seemingly any item may lead to other income streams. While the motor industry has been good, Dash is also wary of its volatility and the unpredictable twists and turns of such tier one companies. While big volume jobs have been taken overseas the economies of scale dictate it is cheaper to stay in Australia for small runs. “But it’s wise not see the automotive industry as my mainstay,” Dash says. “Rising petrol prices had me looking for other things, even before the global financial crisis.” The GFC was an unknown that hit Decor Engineering just a few years after it was bought by Dash and his wife. “It was like everything else, you don’t know until you’re in - it was a learning curve. “But we got some new products. You’ve got to, it’s sink or swim. That’s why I’m pushing the technology further.” From this writer’s perspective congratuDash needs to be congratu lated for (a) reading a book titled “Reactive Sputter Deposition” and (b) admitting he reads it at night, in bed. “It’s my bedtime reading and I can adapt things in it to move forward. I don’t really care how many atoms hit the plastic, I’m more interested in the outcome. “The research and development is great, pure science. We have to scale-up lab-based systems for use in the factory. “You can’t buy off-the-shelf for what we need. If you do, it’s a black box which you can’t decode because its intellectual property.” Dash is also working towards attaining compliance with European Union standards RoSH) to enable him to export products in the UK and other European countries. The regulations implement an EU directive which limits the marketing of electrical and electronic equipment containing specified levels

“...it’s sink or swim. That’s why I’m pushing the technology further.” of lead, cadmium, mercury, hexavalent chromium, polybrominated biphenyl (PBB) and polybrominated diphenyl ether (PBDE) flame retardants. “We’ll be able to help Australian companies piggyback into Europe. The only thing we’d export directly would be masks and stencils.” Decor Engineering also specialises making intricate, long lasting metal masks (reverse stencils for covering sections of parts that do not need

painting) for hand painting or manufacturing processes using robots and precision batch painting. But it is the vacuum metalising that shows Dash’s go ahead attitude, even though some of his research and development ideas may not have the desired marketing bite: “In the end, everything can be silvered. We thought about doing a surfboard but, on reflection, decided that making such a big fish lure might not be the best idea.”

BusinessTimes October 2010 | Greater DandenongFrankston | 15 August 2010 | BusinessTimes Peninsula | 37


feATure

Racing merger a track winner words/picture KeIth PLatt

L

1279

ack of a foolproof system has never stopped anyone from taking a punt. The actual race around a grass track seems simple enough – saddle up a bunch of horses, assign a colourfully dressed rider to each, lift the barrier and watch ‘em go. The reality is that the art of running a good race meeting is the end result of a lot of careful planning and hard work. The race is just the tip of the racing iceberg. All punters want to do is turn up on raceday, have a good time and, hopefully, go home with a shirt on their back. Fraser Bayne, Mornington Racing Club’s CEO for the past two years, knows a bit about presenting a smooth-running raceday without revealing to racegoers or involving them in the myriad activities that contribute to the net result. Walking around with him near the end of a midweek training session shows his affinity with horses and the people who bring them to the standard required to win races. Brought up in a horse-owning family at Tyabb, Bayne is easy around the highly strung beasts that carry the hopes and dreams of so many. He pats horses as we stroll near the mounting yard and has an easy familiarity with their strappers and

jockeys. Out on the track where he shows why Mornington delayed the first race meeting of the season, he pauses while a jockey brings his mount around the inside sand-covered training track. Once horse and rider have galloped safely past, Bayne kicks the ground covered with new kikuyu and rye turf and drained by 22 kilometres of new piping. He says the works have made Mornington an all-weather track, doing away once and for all with the “heavy” tag it has worn and the unwanted and costly cancellation of meetings (four in the past three years). “We wanted to make sure it was ready, so we scheduled the first meeting for October instead of the usual Grand Final day.” The decision to hold off for a month was made easier because a merger with Melbourne Racing Club in August cleared the way for the scheduled meeting to be held at Betfair Park (formerly Sandown) near Dandenong, including the running of the $100,000 R M Ansett Classic. The winner of the classic avoids having to go in the ballot for February’s Mornington Cup. The merger also means a change in direction for Bayne who now takes a “narrower but deeper role” as general manager events and sales for all three courses - Mornington, Caulfield and Betfair. “I’ll be excited to see how these metropolitan clubs operate and bring some of

16 | BusinessTimes Greater Dandenong | October 2010


that expertise here to Mornington, which is not really country or regional. Peninsula Link will bring it within 40 minutes of Melbourne, making it a lot more suburban than other country courses.” Bayne says the merger with Melbourne Racing Club was committee-led and will enable Mornington to bring forward elements of its blueprint for the future. “Non-negotiables” included Mornington retaining its name and history, which date back to 1899. The merger came into effect on August 1, although it may be the end of the year for all contracts and agreements to be completed. Mornington members can now attend races at Betfair Park and upgrade their membership to include Caulfield without paying a separate $500 fee. While horse racing is the most celebrated and glamorous part of Mornington Racing Club’s activities, the largest proportion of revenue comes from its pokies venues, Steeples Tabaret (opened 1997) at Mornington and Stoney’s Club at Bacchus Marsh (bought in 1999). Racing-related income comes from memberships (2200 current), turnstile receipts, corporate hospitality and food and drink sales, and a percentage of turnover from on-course bookmakers (0.9 of 1%) and TAB (4.25%). On top of that comes the non-raceday events which use the racing club’s facilities (various-sized conference and dining rooms) and property, including a Sunday market, the cool climate wine show (judging and awards presentation dinner), the Solar music festival, schools’ cross-country races, RACV rally, weddings and other celebrations. “These events are something that I intend Fraser Bayne and a “customer” during an early morning stroll at Mornington.

to aggressively grow,” Bayne says. “There are 120 a year now and we can easily take another 40 at least.” While income also comes from the trainers and owners of the 300 horses trained at the course each a week as well as a subsidy from Racing Victoria, there is a $200,000 a year deficit on maintaining the track. “But it’s in our interests to look after the training group as they are the product providers. We provide the best facilities as there is no better advertising than having a group one winner trained here.” Bayne was imbued with an interest in horses from early age by his parents who “had horses” at their Tyabb property. His father Fred runs a pharmacy in Hastings and as recently as early August had a winner with the Jason Warren-trained Garter Girl at Cranbourne. A self confessed “sports fanatic” Bayne draws a line along his career path with his placement with the Victoria Amateur Turf Club while studying for a Batchelor of Business and majoring in sports management: “Now, 18 years later, my employer is the Melbourne Racing Club. “I’m a bit of a purist and had grandiose plans of being a bloodstock agent so I went on to study at Marcus Oldham College, but ended up being an event manager.” The events which he managed included a horse expo at the Melbourne Exhibition centre, a fashion week, Australian music week and various exhibitions. The chance to move back into the world of racing came when the then CEO of Mornington Racing Club Michael Browhill left to take up the top job at Moonee Valley. With the Melbourne Racing Club merger and a new track on his home turf and a new position, Bayne is ready for the next turn in his career.

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Building a high performance team MOST organisations realise the importance of having teams of people that can implement their business strategy irrespective of how much change occurs with the team members. Team members come and go so the challenge is to initially design a team that can implement your strategy and sustain its performance. The initial challenge is to be able to break down your business strategy into the critical components that can be implemented. This may be a manufacturing process where you start with your customers and work back through your value adding processes to your raw material suppliers. It may be a service proposition where you work from the customer back to your service staff and your functional professionals and or franchiser. At each stage, it is important to determine which measures are the best to represent your strategy and the timeline for achievement of specific milestones. These key performance indicators (KPIs) become the focus for your people, so choosing the right parameters with an optimum amount of stretch is critical to create a positive drive for change. The primary issue is to decide on a structure that can connect your strategy to your teams and individual jobs. This stage must be done cleverly as a poor selection of the structure will result in major complications later in the business. For example, do you have a manufacturing team with a separate sales team reporting to the top or do you choose to have smaller general manager roles where manufacturing and sales come together lower in the organisation? Both structures can work well, but both will deliver different experiences to the people in the teams. The next challenge is to select the people for these roles. There is a wide range of considerations when selecting individuals. For example, if you want a team that can perform immediately, then experience and specific job knowledge are

Hamish Petrie* business Consultant

‘empowering your team members to stop their work when they encounter a problem is important.’ more important. But if you are building a team to change the way your processes operate then creativity and risk-taking may be more important. When you finalise the selection of people for your positions, it is important to reflect on the choices that you have made and identify any risks that you have taken. If you have chosen a team with lots of experience, then conflict of ideas may be significant as the experiences have resulted in different concepts. If you have chosen a more creative team, then the risk may be that they will be too creative and not be able to deliver early. In any case, you need to design a business process that will reduce the potential for these risks to negatively impact the business. This is an area where the business owner or team leader can visibly support the new team members. This is particularly important if they place a high risk candidate into an existing team without a support process. The classic issue is to place a woman into a traditional male team culture and then wonder why team performance is disrupted. Once you have chosen the team members then the real fun begins. The team leader role is the key to this process to build connections in the team to deliver the strategy. Here, each

18 | BusinessTimes Greater Dandenong | October 2010

team member should see the specific connections between the work that they do and the business strategy. They should also understand their connections to their internal customers. Once these connections are clearly defined individuals can analyse their own work to ensure that they can standardise each component of work and commit it in writing. This step can be time consuming but it is important if you are seeking to save time, quality and cost for each component. This standardised work needs to be tested upstream and downstream in the business process to ensure that it will work under normal circumstances and to also decide what protection may be needed for the abnormal circumstances. Empowering your team members to stop their work when they encounter a problem is important so that the organisation can learn from the problem. Rather than just a quick fix, each problem should be studied so that its true source can be identified and a permanent remedy designed. Once all of this has been done, then every member of the team should understand how their work connects to your internal and external customers and to your business strategy. Toyota was one of the early organisations to show how well this could be done and many organisations have benefited by learning from its production system. Obviously, measurement of current performance is critical and KPIs are the fundamental tool to help the team understand how well they are working at present and how big a gap they have to close to reach their strategic targets. Action planning questions: 1 Do KPIs directly connect to your business strategy with the optimum amount of stretch? 2 Have you connected your strategy and KPIs to each team and to each team member? 3 Is each team members’ work designed and standardised to support internal customers? 4 Do you have an individually designed process to support each new team member? 5 Have you studied Toyota’s systems of work and decided how they could apply to your business? *Hamish Petrie had a 37-year corporate career including 29 years with Alcoa Inc. His last position was as VP–People and Communication for the global Alcoa corporation based in New York, NY. He can be contacted at hamish@nitroworld.net or on 0404 345 103.


MarKets

Gold: we’re spoiled for choices As gold moves higher no one can say investors lack choice. Our 350 or so gold listings outnumber North American gold stocks three to one. Certainly Canada and the US offer more stocks of global scale, but those gold giants chomp through billion of tons of ore a year and need constant inventory supply to maintain their values. Richard Campbell* stock Analyst

the slow train crash that is the current United States economy get little or none. The exception to this is Perth. It is well known there that we are the world’s second largest gold producer and gold ’s export value is more than wool, wine and dairy combined. It is also true that there are many gold nuances and varieties. Some have low grades and low cost, others high grades and high costs. Many have nil or low debt, a few pay dividends and others are setting themselves up for take-over. Many are like Andean, operating off-shore due to the generally declining grades in Australia, the slow approval processes and the relatively more attractive conditions in places like West Africa where at least 30 local companies are exploring or producing. This is a serious national effort, but the average superannuation investor will see no benefit from it. One explanation for the lack of effort may be less to do with the technical complexities

*Richard Campbell is Executive Director of Peninsula Capital Management, Tel. 9642 0545, 350 Collins St, Melbourne, 3000. email: rcampbell@peninsulacapital.come.au

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Australia serves as a good conveyor belt. Newmont gobbled up Normandy, for example, and now the latest example was Goldcorp’s dazzling $3.6 billion bid for Andean Resources. The Andean bid came as a shock – a double shock, not simply for the size of the bid and the eight-fold gain in the price over two years, but because this seemed plainly unfair. Few had heard and it wasn’t even in production. To add to its obscurity it wasn’t even a local. It was operating in the remote and windy plains of Patagonia. There’s another twist as well. Not only are the Canadians knocking off the next generation of our best gold stocks our investment funds are almost invariably precluded from investing in them. They fail the size test then, even if they have world-class gold discoveries, they fail the cash-flow test. For many funds there’s also the minerals test. Minerals are risky and gold worse. Consequently, the broker research efforts focus on stocks that do fit with fund mandates. This produces the ironic consequence that companies bruised and bloodied by their US exposures get a lot of attention, but investments benefiting from

of grade, processing, forward sales and so on, than a deeper distrust of the irrationality of gold. As an investment it is s a paradox. Some reserve banks don’t believe it; others do. Some are increasing their holdings. Most are sitting pat. It is part consumer item, part currency. It earns no interest, costs money to store, is hard to transport safely and in general points back to a crude past where nations stole it, hoarded it, settled debts with it and used it as the value base of their currency. Haven’t we gone past all that? Sadly no. For 40 years we have tried a currency system which has no reference to gold or anything of tangible value and it worked while the rules were followed. But the inevitable happened. Once again bank executives became wildly avaricious. To pay absurd bonuses they lent money they didn’t have. Essentially the US government is now doing the same. US interest paying debt is up to $13 trillion and that doesn’t count unfunded pension liabilities. To produce the activity that will generate the taxes to pay this interest, the US Treasury is now creating money by decree. While deflation holds, this monetary magic might work, but those with a sense of history know that this is not the way to treat a currency. Across the border from Canada there are communities who can’t afford dental care, fire services or school teachers. A stench is rising. It is more than likely one of the giant gold companies will emerge again and snap up one of our obscure West African “juniors” and think they got a bargain.

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October 2010 | Greater Dandenong BusinessTimes | 19


heaLth

The chill wind that ills It’s not so cold now, right? But it is windy. It might seem obvious to state that the almost-gone winter is the season of coldness, summer is the season of heat, and spring is the season of wind. ‘Standing in the north wind is more dangerous than standing in front of 100 archers’ - ancient Chinese saying. Michael Ellis*

Chinese Herbalist

Two issues back I wrote about cold and how it is the creeping enemy of health. I will add a little more to that discussion shortly, but first something about “wind”, a fascinating concept in Chinese medicine’s worldview. In nature, wind is simply the movement of air caused by temperature variations. The bigger the variation, the stronger the wind. So between the heat of summer and the cold of winter, we should expect wind. And wind, according to Chinese medicine, is the most “pernicious” of all the climates in its effects on health. That is because it intensifies the other climates: cold is so much colder, a hot day so much more extreme. Common human experience has it that unpleasantly cold and hot temperatures are intensified when accompanied by wind. Cold wind blows through inadequate clothing and “chills us to the bone”. Chinese medicine has noticed over 20 centuries of clinical practice that colds and flus - and their more serious sequellae - are more prevalent in the windy season. Spring is characterised not only by windy conditions but also by changeable weather - a few days of warmth, followed by a south-westerly change and return to winter cold, then back to warmth - and this is the problem. This period of changeability is when everyone’s defences are easily compromised and we all tend to catch colds. Start taking notice if you don’t believe me. It happens year after year. The ancient Chinese - and just about every other folk medicine tradition - thought of catching a cold as being invaded by “wind”. After all, the symptoms of colds and flus are very much like having “wind” trapped inside the body - aches and pains that move

around, coming and going unpredictably, a stiff neck, headache, sudden sneezes … a disease that can move and spread unpredictably. When one has a cold, most will agree that being exposed to the wind makes the symptoms feel worse. Hence the ancient Chinese saying: “Standing in the north wind is more dangerous than standing in front of 100 archers.” (For north, we can transpose “south”, since we’re in the southern hemisphere.) Of course, Western medical science has long established that weather conditions play no role in disease, right? We may still describe ourselves as “under the weather” when unwell, but we don’t catch colds by getting cold: that’s an old wives’ tale. It’s all about germs - viruses. The ancient Chinese had no notion of microscopic pathogens - viruses - that entered the body and caused illness. But they did understand that illness could be airborne - that you could catch something “on the wind”. And as far as I know, every naturalistic medicine system held weather conditions and their effects on the body to be an important explanation of ill health. Even Hippocrates, the father of the

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Western medical tradition, suggested to prospective students that they first study meteorology. “One should be on one’s guard against the most violent changes of the seasons,” Hippocrates said. (He was on to something.) In Asian cultures, wind is accepted to be an agent of disease. That is why many Chinese people are fastidious about dressing warmly and wearing a scarf to protect the neck and head when it’s windy. Especially when the lingering winter chill still lurks in the air. • Which brings me back to a post-script to my August column on “cold”. Recently my wife injured her knee skiing and five days later presented to a physiotherapist, who made a perfectly competent diagnosis (strained medial ligament, possible minor cartilage damage) and provided a list of suggested remedies. On top of that list was “icing”. Now here, in my view, is a classic example of where Western medicine has missed something. When we hurt ourselves, our body’s self-repair mechanism clicks in, flooding the injured area with extra blood and fluid to generate extra warmth and carry the nutrients necessary to accelerate tissue repair. And what do we want to do? Ice it. Find me the scientific research that proves ice is a good thing to do for injuries. After all, it’s now such standard practice that as soon as anyone hurts themselves in any setting, the informed cries of “ice it” quickly follow. I seriously doubt that credible research exists. I have searched and can find only the opposite: experts who question the benefit of icing injuries. Chinese medicine holds that icing not only does not help - apart from when acute swelling or bleeding is so severe it poses a health threat in itself - but it introduces another pathological agent into an already compromised area. I am not advocating the use of heat in place of ice, as that can easily exacerbate an acute injury. But I’m prepared to say this: icing injuries is overrated, usually unnecessary and even unhealthy. * Michael Ellis is a registered Chinese herbalist in Mt Eliza. www.mtelizaherbal.com


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Economy rules in a luxury market It takes some degree of bravery by a car company like Lexus to pit its latest car against the vehicle it replaces. After all, the new car should embarrass the old one which means they are almost denigrating their own product. But that’s just what Lexus did at the Australian launch of the all-new Lexus RX450h (h standing for hybrid). We were able to road test the new Lexus hybrid against the old RX400h at Sydney’s Eastern Creek race track, both on the track and sliding around a skid pan. We also did some road testing following the track time. The Lexus RX450h is Robinson Crusoe in the luxury SUV segment, its petrol-electric powertrain being pitted against a raft of diesel-powered vehicles. And, in any case, there was not too much too wrong with the now-superseded RX400h. The new RX450h is clearly a generation ahead of the old – the aspects you discover on the skid pan and track, that are primarily handling, braking and passenger comfort when the car is pushed to the limit. On road, the difference is marked. Here we found out the big difference is a real-world, hip-pocket one: economy. Now using an Atkinson cycle engine, the second-generation RX hybrid is capable of fuel consumption as low as 6.4 litres a 100 kilometres. That’s in the same ball park as small, four cylinder cars and well under the already impressive 8.1 litres/100 km achieved by the RX400h. And this from a three-engined SUV that weighs more than two tonnes, has the power of a V8 but with low emissions. The RX450h incorporates a number of changes from the RX400h, the only vehicle to which it can be compared.

Ewen Kennedy Motoring Journalist

One thing that has not changed is the unique configuration. A 3.5-litre V6 petrol engine driving the front wheels, along with a 123 kW/335Nm electric motor, and a 50kW/139Nm electric motor to power the rear wheels. The two electric motors have slightly increased power, while the petrol engine is an all-new affair using Atkinson cycle technology to achieve 183 kW at 6000 rpm and maximum torque of 317 Nm at 4800 rpm. The theoretical combined system output of 220 kW gives it significant grunt, however not all motors will be peaking at the same time, so the number varies according to driving conditions. The RX450h zooms to 100 km/h in just 7.8 seconds, which will see many a car off at the lights. In our road test were able to achieve 7.4 litres a 100 km on the plains areas outside Eastern Creek, moving up only a little to 7.9 litres/100km as we headed into the Blue Mountains foothills. We have little doubt 6.4 litres is achievable given relatively flat roads and a moderate driving style. This low fuel consumption means the Lexus RX450h is Australia’s first hybrid

22 | BusinessTimes Greater Dandenong| October 2010

Lexus RX is modern in its looks, and ultra modern under that sleek bonnet.

vehicle to be exempt from the Federal Government’s LCT (luxury car tax). The SUV set an official 6.4 litres/100km to come well under the 7.0 litres/100 km cut-off. This exemption equates to more than $4000 enabling the hybrid to enter the market with a recommended retail price of just under $90,000. Statutory and dealer charges have to be added to that figure, but that $4000 makes a big hole in them. The Lexus RX450h will emit almost 1.6 tonnes less CO2 than the petrol-powered Lexus RX350, and significantly less than its diesel-powered rivals. According to John Roca the new Lexus RX450h will, in a single year of motoring, save the same amount of carbon emitted from eight return jet aircraft flights from Melbourne to Sydney. The RX450h will have a three-model line-up (unlike RX400h that had just one, the Sports Luxury). The RX450h is offered as Prestige ($89,900) Sports ($96,900) and Sports Luxury ($107,900). These are rrp prices only and do not include state government charges, or delivery costs, which vary from state to state. The RX450h now features 10 airbags, up from seven in the RX400h. The Atkinson cycle engine seems to be quieter than the engine it replaces and this leads to better NVH, (noise, vibration,


harshness) and leads to less noise intrusion into the cabin. Power is run through a continuously variable transmission (CVT) which is seamless, but still retains some of the slipping-clutch feel that is inherent in these gearboxes - but that’s only when you plant the right foot. The real differences in driving feel between the two vehicles are in ride and handling. Built on a new, stiffer, chassis, and with a new suspension, the RX450h’s ride is flatter and smoother under hard cornering. The rear suspension has made the changes possible and features a trailing-arm type double-wishbone arrangement. This system also allows for the coil springs and dampers to be set below the floor, adding increased luggage space. The car sits on a

lower centre of gravity and has a 25 mm longer wheel base as well as wider track front and rear. This is all fine-tuning from the previous model and adds up to a better handling vehicle. The front suspension spring rates have been revised along with other improvements related to durability.

There is a lot less spring in the front, noticeable under heavy braking, which gives the vehicle a lot more stability. Before the Lexus RX450h July release orders had already been taken for the first three months allocation of 60 cars a month, mostly from Lexus RX350 owners.

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