Five steel detailing firms in Perth are aiming to boost the amount of work won by local industry after forming a unique alliance that combines their staff and resources for large projects.
Rapid Alliance is the five firms’ response to a market where smaller players increasingly find themselves squeezed out of work on large mining projects.
By coming together, Austruct Group, CADStruction Drafting, Minstruct Drafting, Universal Drafting, and Westplan Drafting believe they will be well placed to bid for $1 million-plus contracts.
These contracts have either gone to the two big players in the local markets – PDC Consultants or UGL Limited subsidiary Steelplan – or been undertaken overseas.
The alliance founders say their main goal is to stop work going overseas rather than pinching contracts from their Perth competitors.
“This opens up another avenue to keep more work in WA,” Alliance vice-chairman Garry Walker said.
“We’d be much more likely to take a package off China or the Philippines.”
Alliance chairman Emidio Giardini said changing procurement patterns had adversely affected his business (Westplan) and other firms in Perth.
Traditionally, the fabrication workshops in Perth awarded work to the steel-detailing firms, which resulted in the work being spread widely.
But since the mid 2000s, as mining and gas projects have become larger, the process has been managed centrally by the engineering contractors.
“The big issue in the industry is the offshoring,” Mr Giardini toldWA Business News.
He noted that Westplan had worked on some of the early modules for gas projects and on LNG jetties “but now we’re told we can’t do them any more”.
Mr Giardini also acknowledged that his firm had probably suffered as a result of doing sub-contract work for its competitors, because Westplan didn’t get any recognition for that work.
The five alliance members have 50 staff, which Mr Walker said was enough to meet the quality and tight scheduling requirements of the large mining projects.
The establishment of Rapid Alliance comes six years after UGL (formerly United Group) purchased Steelplan, as part of an ambitious plan to offer a ‘single point solution’ to the big projects.
UGL and fabricator AGC Ausgroup formed the WA Major Projects alliance, and signed up Park Engineers and Fremantle Steel as associates.
However, the initiative lapsed after failing to deliver the hoped-for results.
PDC Consultants, which was established in 1972 as Perth Detailing, has been the success story in this sector, having grown interstate and internationally to the point it now has about 350 staff.
PDC doubled its size last June when it bought 4D Global Group Inc, a steel-detailing company with headquarters in the Philippines and the US.
Former Queensland premier Peter Beattie will officially launch Rapid Alliance later this month. Mr Beattie has been charged with lifting local content on big projects after being appointed the federal government’s Resources Sector Supplier Envoy.
Mr Walker said the alliance had been formalised after nearly two years of preparatory work, and after many years of informal collaboration between its members, which had often worked together on larger projects.
The members were assisted by federal government agency Enterprise Connect, which funded local firm Wedge Consulting to assist in formalising the alliance.
The five members will continue to bid independently for smaller contracts.
“We will always have space for long-term good clients,” Mr Walker said.
He expressed confidence the alliance would win work in the short-term.
“We have already had interest, we know the work is available,” Mr Walker said.
