Insulation change cements place

By seizing on opportunities in the market and focusing on becoming a wholesale distribution business, Australian Gypsum Industries (AGI) has cemented a place as one of this year’s Rising Stars.

The building product supplier identified and seized on an opening in the market caused by the introduction of mandatory insulation for new houses in Australia with a heavy advertising campaign. It has diversified the business too, with a “product bundling and customer maximisation strategy”.

General manager Frank DiCosta said AGI underwent a complete paradigm shift in 2002 which allowed the company to emerge as a leading wholesale distribution business in its respective markets.

Mr DiCosta said a virtual franchise model is being used to help the company distribute plasterboard, insulation, fibre cement and other associated products.

“Sourcing complementary products has supported our product bundling and customer maximisation strategy which has been a main driver of our growth,” Mr DiCosta said.

“Plasterboard has been our flagship product, but we aim to become a one-stop shop and cover all market segments.

“A key difference from our competitors is that apart from being a specialist wholesaler, we also have integrated contracting arms. These allow us to operate at both levels of the supply chain and in similar markets to that of our customers allowing us to gear our business to suit the relevant market conditions. It has also allowed us to undertake several million dollar projects.

“It’s been an evolution rather than a revolution.”

Mr DiCosta said the company has dealt with rapid growth by outsourcing many non-core functions.

“We use external specialists to assist us operationally or, in some cases, to challenge our thinking. For example, building brand equity and giving our product personality has been achieved by engaging marketing company Cooch Creative,” he said. “We use external specialists to assist us operationally or, in some cases, to challenge our thinking. For example, building brand equity and giving our product personality has been achieved by engaging marketing company Cooch Creative,” he said.

The recent implementation of a $500,000 IT software upgrade will considerably aid future growth, Mr DiCosta added.

“The new IT system gives us a fully integrated working environment which takes away a lot of manual processes,” Mr DiCosta said.

“In addition, customers can also dial in to the system and become empowered and educated.”

The company has no plans to list in the future, and Mr DiCosta said he considers it an advantage not to be corporatised when most of AGI’s competitors are.

“We can get in and work with customers a lot more, gear our business to accommodate the market better, and not be so inward focused,” he said.

The key to the success of the company which aims to turnover $20 million this year, is “having a clear vision, understanding it, and executing it,” Mr DiCosta said.

“Everyone in the company is very clear about our objectives, and we have a performance-based culture which engages people at all levels.”

In terms of the future, Mr DiCosta said AGI would be looking at expanding on the east coast, with the first store in Melbourne opening earlier this month.

“Our strategy for growth is to maintain our current strategy – just to increase our local and national market share by doing what we have done the last three years.”

AGI 

• Underwent a complete paradigm shift in 2002
• Distributes plasterboard, insulation, fibre cement and associated products
• Outsources many non-core functions
• Recent $500,000 spent on IT to enable growth
• $20 million turnover expected for 2005