24/06/2010 - 00:00

Fulton Hogan makes WA push

24/06/2010 - 00:00

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NEW Zealand-based contracting group Fulton Hogan is aiming to boost its market share in Western Australia after buying out its joint venture partners and rebranding its local operations.

NEW Zealand-based contracting group Fulton Hogan is aiming to boost its market share in Western Australia after buying out its joint venture partners and rebranding its local operations.

After 10 years of trading in Western Australia under the RoadCare banner – a 50 per cent joint venture with Pioneer Road Services – the civil engineering and construction contractor plans to start building the business under its own name.

The group has a modest presence in WA with about 200 staff, but across Australia and New Zealand is a substantial industry player with 6,000 on the payroll.

Managing director Nick Miller is pitching Fulton Hogan as an alternative to industry heavyweights such as Leighton Contractors, Thiess, Abigroup and Baulderstone.

“We’re independent and a very credible alternative to the German-owned companies across Australia, and this is really reflected in the relationship contract model we’ve developed with Main Roads.”

Fulton Hogan is one of just 11 contracting groups prequalified with Main Roads to build large and complex roads and bridges in WA, based on its experience in other states.

“Our presence in Australia dates back to 1981 when we started a business in Brisbane,” Mr Miller told WA Business News.

“Since then there’s been a mixture of organic growth and acquisitions that’s culminated at the end of last year with the acquisition of Pioneer Road Services, which has been in WA for more than 40 years.”

Fulton Hogan originated in New Zealand in 1933 and its shareholders are a combination of Fulton Hogan family descendants, employees and the Royal Dutch Shell Group.

Mr Miller said the company’s vertically integrated structure, which extends from quarrying to manufacturing and asset management, is a major point of difference. He said the model wasn’t too dissimilar to neighbour and competitor, BGC.

While Mr Miller admitted the low brand recognition of Fulton Hogan was an issue in WA, he said the plan was to leverage off the relationships it had forged over the past 10 years.

Those relationships are based on RoadCare’s contracts to maintain 4,500 kilometres of roads in the South West.

Fulton Hogan’s Australian chief executive Lindsay Crossen said the group had built a strong partnership with Main Roads, culminating in the recent signing of a new ‘integrated services arrangement’.

“Main Roads went around the world looking at models for how road maintenance was delivered – how you got progressive improvement, productivity and value for money etc – and this is what they came up with,” Mr Crossen said.

“I guess we’ve been their guinea pig for the past three years.”

Fulton Hogan qualified for Main Roads’ highest prequalification status 18 months ago, which is the same level they have been granted in the rest of Australia.

Currently each of the state road authorities have different requirements, however Mr Crossen said there was talk in the industry to create a national prequalification system that would result in “a standard footprint – it would be good to see some rationalisation across the industry”.

Mr Miller and Mr Crossen said the majority of Fulton Hogan’s projects sit in the up-to-$300 million range, but they hope to win tenders in WA that would replicate the scale of eastern state ventures, such as the $1.95 billion Origin Alliance in Queensland.

“We’re pretty excited about WA,” Mr Miller said. “If you look at the statistics, 27.5 per cent of infrastructure projects are undertaken here and we would enjoy a piece of that action.”

Mr Miller said the Western Australian market was similar to New Zealand in that “it’s very parochial here and it’s all about repeat business”.

“In Fulton Hogan’s 77 years of trading, the company has not been to litigation once with a contractual dispute – we’re proud of that record and we don’t want to tarnish that,” he said.

 

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