INFRASTRUCTURE and utilities player ATCO Australia plans to invest $25 million over the next year building a new operational headquarters and a big manufacturing facility as it banks on Western Australia remaining a growth engine.
The bigger of the two projects - a $15 million, 75,000 square metre factory at the Latitude 32 industrial area 25 kilometres south of Perth - is forecast to be completed by June 30, when the lease on its existing Canning Vale operation ends.
The Canadian-owned company paid $8 million for 7 hectares of land at Latitude 32, where it will make portable buildings for the mining and construction sector.
ATCO also plans to complete construction next year on a new $10 million office at Jandakot to house 200 staff for its gas network, which services Perth and much of the South West.
The decision to go ahead with its plans, most notably the donga factory, which will increase its WA manufacturing capacity more than eight-fold, came after the sustained period of bad economic news this year, including volatility in the previously buoyant iron ore sector.
“I must admit, back in August when the price of iron ore shifted and the whole world shifted ... we did stop and have a meeting and said, in true conservative fashion, because we are a conservative company, ‘do we want to continue’,” ATCO Australia managing director & chief operating officer, Steve Landry, said.
“We talked about all the projects up north that are listed; the LNG projects and iron ore projects.
“We looked at that and decided the advantage we have over the competition is certainty of execution.
“Everything we have said we would do -building a power station at Karratha or putting in the right addition for the gas pipeline - we do.
“For that reason, when someone needs 2,000 sheds or 3,000 sheds we are going to be the one company that people can come down and watch them get built during the day ... it will get done.
“We believe that is our competitive advantage.”
Mr Landry said that the firm, which already has a large operation in Queensland servicing the same sector, has developed strengths that helped it compete with Asia’s manufacturers beyond the advantage of being closer to the market.
He said ATCO had aimed at the quality end of the market, building-in significant cyclone proofing, for instance, and had specialised in areas such as kitchens, to remain competitive with cheaper builders.
Outside the portable building sector, the company has ambitions to grow its utilities businesses both in the Pilbara and the South West, underscoring its bullish outlook for WA.
In the South West it continues to expand the Perth gas network - having spent $50 million since acquiring the business for nearly $1 billion in 2011 - and has put its hat in the ring to link Albany’s gas network, which it also owns, with Perth’s.
There were also long-term growth opportunities with the existing network. In addition to population growth, Mr Landry pointed out that most houses in Perth are geared towards electricity, whereas many other parts of the world have a higher percentage of gas-powered appliances, including air-conditioning, one of the biggest causes of peak power problems.
In the north, ATCO sees opportunities in expanding its Karratha operations, developing power assets in Port Hedland and playing a role in delivering electricity to some of the newer mine sites in region.
Mr Landry said he would like to see more of a regional approach to electricity generation, which would allow a company like his to invest in a bigger, scalable multi-user power plant rather than individual companies developing their own solutions, usually in diesel.
Outside of existing local operations, he said gas processing, notably shale and coal-seam, and water were other areas the infrastructure player views opportunistically, based on its existing expertise in other parts of the world.
In that regard, Mr Landry said WA’s requirements from a water perspective were high on the company’s agenda.
By contrast, Mr Landry played down ATCO’s likely activity in ports and rail -despite regular speculation that it could be a player in such infrastructure. He said the firm had no experience in those fields.
“I would not mind getting involved in a port so we as a company know how to do it, but there are enough people around here who know how to do ports and rail,” Mr Landry said.
