27/02/2008 - 22:00

McIntyre CAPS it off with transition

27/02/2008 - 22:00

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If it all goes to plan, the succession process at industrial equipment supplier CAPS Australia will have taken at least eight years.

McIntyre CAPS it off with transition

If it all goes to plan, the succession process at industrial equipment supplier CAPS Australia will have taken at least eight years.

That’s a lot longer than most private businesses take to hand over control, but it’s close to the 10 years some experts believe the process should take.

Bob McIntyre, who began CAPS (Compressed Air and Power Solutions) as a one-man air compression business in 1980, has already taken most of the significant steps required in a good succession plan.

At the start of this year, Mr McIntyre stepped down from day-to-day control of the business in favour of Raymond Han.

He’d employed Mr Han five years earlier as general manager, gradually increasing his responsibility and taking his time to determine if his choice was the right one.

But the changeover to Melbourne-based Mr Han is not complete, with Mr McIntyre taking on the role of executive chairman of the company which has a workforce of almost 200 across Australia and New Zealand.

He sees that as a medium-term proposition.

“Let’s say for three years, and see how it goes,” Mr McIntyre said.

“I have a lot of other projects I want to complete in the period.”

During the past five years, CAPS succession planning has not just been about a change of personnel at the top.

While growth across the country and the Tasman has continued at 20-25 per cent a year in that period, there has been significant focus on back-office systems to make the company more manageable as it develops beyond anything its founder could have imagined 30 years ago.

Currently looking at turnover of $65 million this financial year, Mr McIntyre said the recent investment would allow CAPS to expand to the next level without needing too much additional capital.

“We have put in structures and systems which will carry us, enable us to ramp up to $100 million in turnover without changing things too much,” he said.

“There has been a lot of money spent on this so we won’t have to do anything but fine tuning.”

One of the innovations is a simple phone answering system, which ensures clients get expert advice quickly.

The CAPS story is an impressive one of growth, notably across the Nullarbor, which Mr McIntyre admits is both a blessing and barrier.

Perth’s isolation has protected CAPS, with its main business as a distributor of Ingersoll equipment (often with a substantial value-add component manufactured at its Welshpool facility) as it is has spread its presence around the country.

The cheaper back-freight prices for east-bound goods, and the benefits of being in a later time zone have helped CAPS become a truly national business, which has been able to diversify out of the cyclical mining services sector.

Even its management is nationalised, with key players based in Perth, Melbourne and Sydney liaising regularly by teleconference and monthly in person.

Along with the national growth, Mr McIntyre said CAPS had learned to grow with the industry and customer demands.

With customers less likely to buy equipment off the shelf, they want modifications, documentation, performance guarantees and lots of after-sale service.

CAPS has up to 70 laptop-armed service technicians who often descend in teams to undertake round the clock repairs and maintenance.

“Customers are more demanding,” said Mr McIntyre, whose factory is currently full of equipment destined for remote mine sites in Australia and abroad, but will also be adapting compressors to fit rail carriages in Adelaide.

“They don’t accept things as they are any more,” he said.

“Probably about 40 per cent of what we sell is value-add.”

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