Peter Beattie, who is guiding the federal government’s push to help local industry win more work on major projects, says he detects a change of mindset among resources companies.
Bassendean company Hofmann Engineering has been hailed as a role model for local industry trying to be globally competitive and win work on major projects.
Former Queensland premier Peter Beattie, who was appointed this year as the federal government’s Resources Sector Supplier Envoy, said businesses like Hofmann and Queensland’s Austin Engineering, set an example for others.
“Their innovative approach has meant access to markets across the world, not just Australia,” Mr Beattie said after addressing a local content conference in Perth this week.
Mr Beattie’s appointment as Resources Sector Supplier Envoy was one of several initiatives taken by the government in response to job losses in the manufacturing sector.
A major focus of his role is helping local firms to win work on large projects and tap into global supply networks run by giant engineering contractors like Bechtel and KBR.
Mr Beattie said he was feeling positive about the opportunities for local industry, with resources companies adopting a constructive approach.
“I think you are seeing a change of mindset,” he said. “The public debate has been good because it shines a light on the processes.”
Whether that good sentiment turns into real business opportunities remains to be seen, especially as many of the initiatives Mr Beattie is promoting have a very familiar tone to those who have followed the local content debate over the past decade.
For instance, Mr Beattie said firms, such as fabrication workshops, needed to collaborate so they could bid for work jointly.
“What people have to do is partner, work together, so they can bid together for work on the large projects.”
However, national engineering company United Group (now UGL Limited) famously tried that in 2006, when it linked up with local firms Ausgroup, Park Engineers and Fremantle Steel and bought Steelplan, one of the major steel detailing firms in Perth, to bolster its chances of winning work on Chevron’s Gorgon project.
The strategy was not successful, because the local firms were still not able to compete with much larger and lower-cost offshore suppliers.
Mr Beattie also said local industry needed to look beyond the construction phase of large projects to maintenance and operational opportunities, which could stretch for 20 to 30 years.
Ironically, resources company executives have made this very point when defending the relatively low local content during the construction of liquefied natural gas (LNG) plants and other large projects.
Another of Mr Beattie’s goals is to get local industry looking beyond the domestic market.
“What we’re trying to do is get a collaborative approach and work with the mining companies, the projects, the suppliers, both domestically and internationally,” he said.
To this end, Mr Beattie said he would be leading a trade delegation to Latin America and later to Houston, Texas, to meet engineering contractors.
The latter visit will be similar to the annual trade mission organised by the American Chamber of Commerce of Australia, which takes Australian businesses to the giant Offshore Technology Conference in Houston.
And his advocacy of tapping into global supply chains is remarkably similar to a scheme launched by the government-backed Industry Capability Network (ICN) in 2009.
The ICN’s Supplier Access to Major Projects (SAMP) scheme was designed to connect Australian companies into the supply chains of major Asian contractors that build oil and gas modules, as well as the Asian procurement hubs of global engineering companies such as FosterWheeler, KBR, Bechtel and Technip.
Mr Beattie said innovation would be a key factor.
“If we modernise, collaborate, innovate, I think we can do a lot more than we are doing,” he said.
