BALCATTA-BASED MSP Engineering has beefed up its board of directors and executive management team in preparation for continued growth as rival Western Australian mining services companies move to slash costs in the face of market uncertainty.
MSP Engineering has been around for more than 40 years, having been formerly known as McSweeney Partners and established by current chairman David McSweeney’s father, John.
The company turned over more than $80 million in-house last financial year, delivering more than $160 million worth of minerals processing facilities across Australia, including the Talison Lithium processing facility at Greenbushes and a 200-person workers camp at Wodgina in the Pilbara for Atlas Iron.
With more than 20 years in the resources sector under his belt, including a decade-long stint as founding managing director at iron ore miner Gindalbie Metals, Mr McSweeney reckons he has seen the same sort of uncertainty before, that is sending shivers through the market.
“The period (of uncertainty) that we have been through was impacted by a crisis in confidence, led by the banking and the government debts in Europe,” Mr McSweeney told WA Business News.
“Of course, it is impacting on us, but I don’t think that it’s going to change demand for commodities a great deal over the next five to 10 years.
“Over the last 10 years, commodity prices have increased 200 to 300 per cent across the board and, in my view, we’ll see the same thing over the next 10 years.”
Mr McSweeney said the company was targeting 100 per cent growth over the next financial year, and was looking to double its permanent staff under the guide of new chief executive Brett Grosvenor.
The promotion of Mr Grosvenor follows Mirabela Nickel and Panoramic Resources cofounder Craig Burton joining MSP’s board of directors in April.
“There is enough work in Western Australia that has been announced and has been committed to that’s going to keep most of the engineering houses flat out, including us, without the major expansions from BHP and Fortescue,” Mr McSweeney said.
“The high level of existing committed project developments in Western Australia over recent years has kept most of the engineering houses flat out, but we are experiencing a tapering off of the high-activity levels, particularly at the smaller end of the market.
“At MSP we find that we have always thrived when the market slows down as companies look for more innovative and cost-effec-tive minerals processing solutions.
“What we are seeing is that there are a number of companies with good projects, completed feasibility studies and approvals in place that are ready to press the button when funding is available.
“There are some great projects held by well-managed companies and, when things do turn around and funds do free themselves up again, we will be right there to help them get their projects under way.
“I think we will start to see this turnaround beginning in the first half of 2013.”
Mr McSweeney said there was no great secret to the company’s success, with MSP’s contracting model designed to align with clients’ objectives.
“It is basically a pain-share, gain-share model,” he said. “Our goals are to align ourselves with our client’s objectives, and their objectives are always to meet their schedule and their start up dates.
“It is also refreshing to be involved in a private company that doesn’t have any debt, that has sufficient working capital and isn’t subject to the daily speculation of the capital markets.
“We can get on and plan our business without that distraction and I think our clients appreciate that as well.”