05/09/2006 - 22:00

Case Study: Trusted business plan helps lift Freo Machinery to new heights

05/09/2006 - 22:00

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Freo Machinery is a long-established provider of crane hire, concrete sawing and drilling, heavy haulage road trains, logistical support and civil construction services to industry across Western Australia.

Freo Machinery is a long-established provider of crane hire, concrete sawing and drilling, heavy haulage road trains, logistical support and civil construction services to industry across Western Australia. 

The second generation, family owned and operated business was established in 1975 as a general service provider to industries around Fremantle and Kwinana. In recent years the company has experienced significant growth, recognising the opportunity to offer a viable alternative to other larger national providers.

Aided by the state’s current resources boom, Freo Machinery’s crane business, Freo Cranes, has undergone a major transformation, delivering impressive growth and diversification while maintaining its long-established and successful business model.

In addition to its head office in Kwinana, Freo Cranes has depots located in Welshpool, Karratha, Port Hedland, New-man, Collie and Ravensthorpe, and a recently established Queensland-based crane hire business. 

In 1996, Freo Machinery’s founding partnership was dissolved and Tony and Domenic Canci took over ownership of the business.

Managing director Tony Canci has since steered the company through its most ambitious transformation yet, restructuring the business to deliver sustained growth and improved performance. 

Faced with the challenge of sustaining and growing a business inherited on the eve of an industry downturn, the new owners immediately orchestrated a company restructure, implementing comprehensive and accredited management systems and upgrading its fleet by investing in higher-grade cranes.

In 1998, Freo secured its first major civil contract, providing cranes and operators for the BHP Nelson Point Upgrade project.    

“Our increased safety and risk management requirements translated to much higher standards of equipment reliability, operator verified competencies and the adoption of formalised management systems,” Mr Canci told WA Business News.

In 2003, the company undertook another business review, this time to take advantage of an industry upturn in the construction and mining sectors.

A strategic three-year business plan was developed as a result. 

The objective, according to Mr Canci, was to maximise the long-term value of the business while capitalising on the current resources boom. 

As part of the new business plan, the company underwent a restructuring of operations, further upgraded its fleet and introduced formal risk management processes to enable the safe achievement of growth targets.

“Our approach was basically to generate sustainable business growth while maintaining and improving on our minimum acceptable returns on capital employed,” Mr Canci said.

Freo has boosted its crane fleet to more than 100 mobile units and claims to operate the youngest fleet in WA.  The company recently acquired a 5000tonne all-terrain Liebherr telescopic crane, the first of its kind and capacity to be permanently based in WA.

Mobile cranes ranging from 250t down to 120t all-terrain and rough-terrain vehicles will soon be added to Freo’s heavy lift division.

The company also expanded its geographic coverage to meet the changing needs of its customer base, opening depots in Port Hedland, Newman and Ravensthorpe in 2005, as well as establishing its Queensland operation, Global Crane Hire.

The business plan has increased Freo’s capacity to tackle large-scale projects, and so far this year the company has been awarded with crane services contracts for Wesfarmers Energy and Newcrest Mining in Telfer.

“Our improved capital efficiency in recent years has not only provided financial success but has also afforded our customers greater value and access to a more comprehensive range of services,” Mr Canci said.

With a claimed one fifth market share and plans to move into other Australian states, Freo believes it provides strong competition for larger, publicly listed companies in the same space. 

“In today’s marketplace it is important to have stability within our industry. Freo Machinery has well-established roots across its industrial customer base and we remain firmly entrenched within the industry, as well as the community.” Mr Canci said.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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