Western Australia quietly lost yet another cooperative in recent weeks, with the decision by automotive parts distributor Capricorn Society to become an unlisted public company.
Western Australia quietly lost yet another cooperative in recent weeks, with the decision by automotive parts distributor Capricorn Society to become an unlisted public company.
But despite the transition, the corporatised Capricorn said it was motivated by corporate governance issues and planned to remain true to its cooperative roots.
Capricorn is something of a quiet achiever on the WA landscape, having grown in 30 years from its Perth base as a collective for 12 Golden Fleece service station operators to a position where it operates across Australia and internationally.
The former cooperative – which boasted more than 10,000 members who made purchases through the society amounting to $607 million – has had a strong year financially amid the unusual process of changing the corporate structure, a shift which was agreed to in May at a vote.
Capricorn, which mainly supplies mechanical workshops, panel beaters and service stations, joins a long listed of demutualised cooperatives.
The most successful example was the rural group that was the basis for the emergence of Wesfarmers Ltd. More recently there was the financial disaster of Bluewave Seafood, which was short-lived as an independent company after it emerged from the Fremantle Fishermen’s Cooperative Society.
Capricorn chief executive Trent Barlett said the success of the cooperative approach meant the group operated across eight different Australia jurisdictions as well as South Africa and New Zealand which created issues for compliance.
“We haven’t walked away from co-operative principals” he said.
The new company’s consti-tution enshrines many of the cooperative ideals of equal treatment for each member, he said.
Mr Bartlett said another issue was Capricorn’s plans to widen its involvement in financial services, which also made it hard to manage as a state-registered cooperative under the Financial Services Reform changes.
He said the company was looking at financial services such as offering factoring and bank-like facilities to members, following the success of its three-year venture in insurance.
The former cooperative has provided loans totalling $4.9 million since Capricorn Mutual’s inception in 2003, while the associate has paid out $7.7 million in claims in that period.
Like those mutuals, Capricorn has also entered the travel and finance businesses.
WA remains an important chunk of Capricorn’s business, which spreads geographically from as far west as South Africa and across the Tasman Sea to New Zealand.
South Africa is a relatively small market, generating just 2 per cent of sales, while New Zealand provides more than 10 per cent.
Victoria and Tasmania have a combined total of 27 per cent of Capricorn’s sales, out-muscling WA which stands at 22 per cent.
The cooperative made a surplus of $12.7 million and paid out $9.6 million to members.