Production of caravans, camper trailers and transportable homes has grown rapidly over the past decade, creating plenty of opportunities for industry players such as Fleetwood but also posing some big challenges.
The strong expansion of the caravan and transportable homes industries in Western Australia has culminated in a year of major change, with new competitors entering the fray and some firms coming under new ownership.
The industry’s big player, Fleetwood Corporation, has boosted its executive team by recruiting former Austal chief executive Bob McKinnon to complete a major rationalisation of its manufactured accommodation business.
Fleetwood is integrating its portables and durabuilt operations, and has gone from three manu-facturing sites to a single purpose-built facility at High Wycombe.
As chief executive of Fleetwood, Mr McKinnon sits on the parent company board alongside managing director Grey Tate and runs the group’s entire manufactured accommodation business.
Fleetwood’s two major competitors, local company Nomad Consolidated and Brisbane-based Ausco Building Systems, have also gone through notable changes this year.
Nomad chief executive Phil Guy led a management buyout, backed by the ANZ Bank’s private equity arm, while Ausco is also under new ownership after a management buyout at its parent company, South Africa’s Waco International.
On the local front, listed home insulation company Cool or Cosy moved into the sector last year when it bought start-up manufacturer Blue Ridge WA, which was established nearly a year ago by former Fleetwood Portables chief executive Alan MacKenzie.
The caravan sector has also experienced big changes.
Fleetwood has expanded its production capacity in WA and Victoria from 50 units to 90 units per week.
The WA business, Coromal, has expanded twice in the past five years and now has 280 staff.
A new player in the industry is private WA company Trailcraft, which is best known as a boat builder but is aiming to become a major national supplier of caravans, targeting annual output of 1,200 units within five years.
Smaller manufacturers such as Western Caravans are sharing in the boom, recently moving into new premises in Canning Vale that will double its capacity.
Camper trailers are becoming an increasingly significant sector, as the number and quality of products expands.
The sector features a large number of small manufacturers but its importance was signalled by Fleetwood’s decision to launch its own camper trailer.
On the retail side, prominent car retailer John Hughes Group has established a recreational vehicle centre selling motor homes, while Ranger Camping has diversified its product range by adding camper trailers.
These developments are underpinned by Australia’s ageing population, with baby boomers buying caravans, camper trailers and motor homes for their retirement.
The ageing population has also boosted interest in lifestyle and retirement villages developed by groups including National Lifestyle Villages, which is developing three new ‘resort style’ villages with more than 1,000 ‘park’ homes.
Add in the resources boom, which is generating strong demand for transportable accommodation, and it is little wonder firms such as Fleetwood are battling to keep up with demand.
The accommodation that is erected on mine sites is a far cry from the old ‘dongas’, which were built to a very basic standard.
One of the key reasons for the improved quality has been the skills shortage, which has forced mining companies to offer better accommodation in order to attract and retain workers.
The skills shortage has also been a big issue for the manufacturers, who cannot compete with the high wages offered by mining companies.
In its recent half-year profit announcement, Fleetwood said labour shortages were a big problem at nearly all of its existing facilities.
In addition, it said contractors building its new production facilities experienced delays because of “significant difficulties sourcing labour”.
Trailcraft managing director Brett Martin said the shortage of skilled labour was not a recent phenomenon.
“This labour shortage that people are talking about now, we’ve had it for the past five years,” Mr Martin said. “All I’ve known from day one is that it’s been tough.”
Industry players agree there is no simple solution – they need to try everything they can to retain existing staff and lure new staff.
This includes offering more flexible working hours – for instance, the standard working week at Trailcraft is four full days and a half-day on Fridays.
Employers also agree that bringing in migrant labour is not an easy solution, and most have shied away from this option because of the costs and legal obligations.
Trailcraft was fortunate in that it could recruit a large group of workers for its newly established caravan manufacturing business from failed boat builder Wavemaster, but Mr Martin knows he won’t be so lucky in future.
“As our production grows, it’s certainly going to be an ongoing issue.”
