SPECIAL REPORT: Garden products manufacturer Richgro has marked its centenary by completing a major capital project that adds a new dimension to the business.
Garden products manufacturer Richgro has marked its centenary by completing a major capital project that adds a new dimension to the business.
In the backblocks of Jandakot, Geoff Richards oversees an expansive business operation that produces many of the garden products used by families around Australia.
Richgro has expanded to become one of the major suppliers to the industry and has recently invested close to $9 million to ensure it stays there.
The company has upgraded the automated production line that turns out thousands of bags of compost, mulch and potting mix every day.
“To keep our edge, we had to be the lowest-cost producer,” Mr Richards told Business News.
An ever-bigger initiative was the development from scratch of a bioenergy facility that turns food waste into multiple products.
These investments add to a string of growth initiatives that have made Richgro, with 75 staff, one of Australia’s biggest producers of garden products.
“We’re a major supplier to Bunnings and Mitre 10 and Home Hardware in every state in Australia,” Mr Richards said.
The automated bagging machine illustrates how the business has evolved.
Until 17 years ago, the bagging was done manually. Now the company has two machines to bag the products, stack them on pallets and apply a waterproof cover; and it’s getting more efficient as the technology improves.
“The first automated bagging line did 25 bags per minute; the new one is closer to 40 bags per minute,” Mr Richards said.
The bioenergy facility was a much bigger investment and helps the garden products business while creating new opportunities.
It stemmed from two issues – Richgro was facing rising power bills, while food and drink manufacturers faced a problem disposing of their waste streams.
The installation of the bioenergy plant addressed both problems, with the food producers paying Richgro to take their waste, which the garden products business uses to produce methane and electricity.
Richgro has cut its power bills, and is able to sell surplus electricity after being hooked up to the Western Power grid.
But that’s just the start.
“You can utilise every facet of the waste stream from that process,” Mr Richards said.
The facility produces waste liquid, which the company uses in composting.
“Not only do we replace the underground water, but it’s loaded with nutrients, so it produces a higher quality compost,” Mr Richards said.
“To make the story closed loop, we looked for a way to use the waste heat and the CO2 that comes out of the exhaust.
“We built hothouses for blueberries, which we can grow out of season.
“We’ve been approached to produce the berries for export, when no-one else has fruit available.
“Nobody else could afford to heat a hothouse, because they don’t have the waste heat.”
Mr Richards’ next plan is to pressurise the methane to produce compressed natural gas (CNG).
That system will be used to replace the diesel-powered equipment that grinds wood and green waste in its composting operation.
“California has mandated that every waste disposal vehicle must run on CNG by 2017,” said Mr Richards, adding that while the business was stretched by these growth projects, he was pleased with the outcome.
“We’ve stretched ourselves in this period, but you need to do that on your way through.
“It’s only when you demonstrate you haven’t got control, that’s when your bankers get a bit nervous.
“Our bankers have certainly done the right thing by us.
“If we get everything right, our payback is amazingly achievable.”
A total of $1.6 million in federal and state government grants helped to accelerate delivery of the bioenergy project.
“We’ve achieved every milestone we said we would along the way,” Mr Richards said.
Diverse history
Mr Richards joined the family business in 1964, and has been working there ever since.
“I never got to university as I’d planned.”
He took over the business after his siblings chose other career paths.
“None of them were at all interested, though the business they knew was totally different to the business that has evolved today,” Mr Richards said
His grandfather, Arthur Richards, established the family company, A Richards Pty Ltd, in Cannington in 1916.
It started as a grocery business before moving into stock and poultry feed.
The move into garden products gained momentum in the 1960s, following the growth of big garden centres like Waldecks.
“The first big move was winning a tender in the 1960s to pack the Grobrite fertiliser brand for garden centres in Perth,” Mr Richards said.
The Richgro brand was launched in the early 1970s.
“In 1972, we were the first one in Western Australia to pack bagged potting mix,” Mr Richards said.
The business started distributing cladium peat soon after.
“That was really the start of the organics that were needed in our state’s hungry sand,” he said.
“We’ve always had a desire to maintain our green links; we will always look for organics where possible.”
In 1988, Mr Richards bought the Soils Aint Soils business, primarily to obtain the large Jandakot property where he currently operates.
“I wanted the property because it has the airport at the back and bushland around it and I knew I could continue to expand in organics,” he said.
He subsequently sold Soils Aint Soils to Kevin Pollock, and in 2004 moved back into bulk soils with the purchase of the Amazon Soils business.
Mr Richards said some of his growth initiatives hadn’t worked out.
“When you look back, there are always points where you trip up and slow down and go again,” he said.
In 1979, for instance, he bought an operation in South Australia, and sold it five years later.
Next came by a chain of sales warehouses in every state.
“Then I realised I was an agent for everybody and there weren’t the margins to support that,” Mr Richards said.
“In the early 1990s I closed them down and started just selling products we manufactured.”
On reflection, Mr Richards said the experience helped the company’s subsequent growth.
“That allowed us to understand the differences in each state and where the opportunities were.”
Succession
When Mr Richards took over the family business in the 1970s, his father split the business to ensure all siblings obtained a fair distribution of assets.
“This ensured the family had a balance, so that one of us wasn’t favoured,” Mr Richards said.
He is now planning for the handover to the next generation, and intends to share the business equally with his three children.
His sons Tim and Matt currently work in the business, and he expects they will keep the current operating structure intact, but acknowledges that may change.
“We’re trying to develop a degree of diversity, so if they decide to go their separate ways at some point, there is a way out of it so it doesn’t destroy the company.”
But handing over the reins is some way off.
“I’ll stay around as long as I’m useful.
“I enjoy what I’m doing, working with the boys.”
FACT BOX: WHY BIOENERGY ADDS UP
· Food and drink producers pay Richgro to take their waste
· The waste is treated in anaerobic digesters, which produce:
o Methane - used to make electricity, with surplus sold to grid
o Waste liquid – replaces groundwater used in composting
o Waste heat and CO2 - fed into hothouses to grow blueberries all year
o Next step is CNG to replace diesel
