08/04/2010 - 00:00

Business lessons helped BYAC diversify

08/04/2010 - 00:00

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LAST year, the leadership at Aboriginal-owned BYAC Contracting learned a very big business lesson when the global financial crisis hit – the dangers of its over-reliance on a long-term customer.

Business lessons helped BYAC diversify

LAST year, the leadership at Aboriginal-owned BYAC Contracting learned a very big business lesson when the global financial crisis hit – the dangers of its over-reliance on a long-term customer.

BYAC is a 16-year-old business owned by the Burrna Yurral Aboriginal Corporation from the Laverton area and has a number of long-running contracts connected with the Murrin Murrin nickel mine.

The company has a history dating back to 1994, when it won a contract to transport scrap metal from another mine site and then ran a small depot in Laverton to service local industry.

But it was the Murrin Murrin contracts that really helped it on its way. The original deals were with Andrew Forrest when his Anaconda Nickel was starting up. BYAC has remained as a contractor, providing services such as waste management and dust suppression at Murrin Murrin, whose owner is now called Minara Resources.

The deal has proved beneficial to BYAC, which, among other things, now owns 14 houses in Laverton that provide housing for Aboriginal people from the area.

But the events of the GFC brought home just how much BYAC, which has less than 20 permanent employees, relied on Minara and the success of its single operation for one commodity. Nickel fared particularly badly in the global meltdown.

BYAC CEO Quinton Tucker said that, despite a decade and half of business experience, the company did not learn the risk of having all its business reliant on just one customer until the GFC.

Mr Tucker said the long-term nature of mining meant that relationship had allowed BYAC to gather the business experience required to broaden its income stream into areas such as training. It has plans for a new training facility at a property it has bought in South Guildford.

“We have had a sweetheart deal for a long time; we are now putting in tenders in other areas,” Mr Tucker said.

“That is more competitive,” he admitted.

BYAC is just one company to come out of the Goldfields. Mr Tucker’s cousin, Dan Tucker, heads Carey Mining, one of the most successful Aboriginal businesses in the state. It now operates in the Pilbara and Perth.

In the Pilbara, groups such as Ralph Keller and Kenzie Smith’s collection of businesses (including Portaccom and Civil Road & Rail SX5), Neville Stewart’s GLH Contracting, Geoff Stocker’s Pilbara Logistics, and Charlie Smith’s CMC are names cited as success stories by those with knowledge of the area.

The biggest player is Ngarda Civil & Mining, a joint venture between Leighton Contractors, Indigenous Business Australia and Ngarda Ngarli Yarndu Foundation, which has more than 300 employees.

Ngarda’s public accounts show that it was involved in direct contracts and joint ventures through which its share of revenue was $154.7 million in the 12 months ending June 30 last year. That compares to $125.9 million in the previous corresponding period.

Net profit rose to $2.4 million for the 2008-09 financial year, compared to $1.8 million in 2007-08.

Last year, the company earned a $3.6 million dividend from the Ngarda Alliance, a joint venture with Leighton to construct the Gap Ridge village at Karratha for Woodside Petroleum. In 2007-08 the dividend was $5.6 million.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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