08/11/2005 - 21:00

Quartet builds on solid foundation

08/11/2005 - 21:00

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In 1969, John (Giovanni) Rubino, John (Giancarlo) Trettel, Sam (Santino) Castelli and Charlie (Carmelo) Bontempo were among the thousands of young migrants toiling in workshops and construction sites across Australia.

Quartet builds on solid foundation

In 1969, John (Giovanni) Rubino, John (Giancarlo) Trettel, Sam (Santino) Castelli and Charlie (Carmelo) Bontempo were among the thousands of young migrants toiling in workshops and construction sites across Australia.

Today they can look back at achievements that are matched by very few Western Australians.

Together they established and built United Construction, rescued engineering construction company Monadelphous and backed the establishment of Kwinana company, Total Corrosion Control.

Mr Rubino continues as chairman of Monadelphous, which achieved record sales and record profit last financial year and plans to get even bigger (see next page).

His former partners have moved into the property industry, where they are making their mark with some prominent developments (see page 14).

Their success is a timeless example of migrants using hard work and enterprise to get ahead, though it hasn’t all been plain sailing. In the early 1990s they came close to losing control of their extensive business interests (see page 15).

The four men are very different, and people who have worked with them agree that it was their ability to work effectively together and harness their respective strengths that was the key to their success.

In fact, 35 years after they started working together, the four men are still friends and meet regularly.

Mr Trettel’s character traits are reflected in his Ferrari car collection. He is described as a perfectionist who was always looking for a better way of doing things.

Mr Rubino was considered the ‘numbers man’ with the shrewd business brain, Mr Bontempo was the engaging personality who dealt with customers and staff, while Mr Castelli made sure all the work got done.

Accountant Keith Johns, of KD Johns & Co, who has worked with the men, said they were very disciplined and had an “unbelievable work ethic”.

Former Freehills partner and current United Group director Bruno Camarri says their success was “entirely due to their ethic of getting the job done on time and ensuring its highest quality”.

Coogee Chemicals chairman and former United director Gordon Martin was also a customer of United in its early days.

“They’d give us a fixed price and they would go out and make it happen,” Mr Martin said. “They managed commercial risks that a lot of older, established businesses wouldn’t look at.”

Mr Rubino said the four men recognised the others’ strengths and differences.

“The most difficult thing to judge is knowing what you are good at,” he said. “We argued but we had respect and support for each other.”

Mr Castelli said the men “had a very good understanding. We didn’t have to check everything with each other.”

The four migrated to Australia separately between 1964 and 1968.

Mr Trettel, a fitter and turner by training, found work as a boilermaker and welder.

Mr Bontempo had trained as a mechanic but decided there was better money in welding, even though he had no training.

Mr Rubino was a qualified surveyor but worked in a variety of roles, including as a rigger.

They won their first small sub-contracting job in 1970, working on the Ord River dam project near Kununurra.

Mr Castelli joined the fledgling business the next year, after the men won a job at Pannawonica to construct the piping for a new power station.

The quartet initially traded under the name of Rubino & Co before changing to United Construction in 1976.

In the early years, the men spent about half their time on construction sites in WA’s north.

Gradually they started buying their own equipment, then purchased land at Kwinana and built a workshop, which provided an opportunity to start doing steel fabrication.

It was from those small beginnings that the state’s biggest steel fabrication workshop was to emerge, employing up to 600 workers at its peak.

Mr Castelli said the workshop provided new business opportunities and also meant the four partners – who all married in 1974 and 1975 – could spend more time in Perth with their families.

Mr Trettel said the company achieved rapid growth right through the 1970s.

“We basically doubled our turnover every year, so it was quite challenging,” he told WA Business News.

United also became a significant employer of staff in the late 1970s.

“That’s when we started to employ the core crew that stayed with us for a long time,” Mr Trettel said.

As the group expanded, the four partners started to take on more defined roles.

Messrs Trettel and Rubino handled the office work and the finances while Mr Castelli and Mr Bontempo took charge of the workshop and the on-site construction activity.

“Sam and Charlie were very good at building up a crew of loyal and experienced people,” Mr Trettel said.

Jim Harris, who joined United in 1988 and works today for Mr Trettel, said it was a rare partnership between four “fairly passionate, intense Mediterranean people.

“The most interesting thing I observed when I joined the company was their method of decision making and conflict resolution,” Mr Harris said. “They never put things to a vote; it was always a consensus decision.

“Resolving things might mean staying in the office and having a beer until three o’clock in the morning until they reached a consensus, but it was always reached.”

A key part of United’s strategy was to offer clients a full range of integrated services, hence their decision to back the establishment in 1982 of Total Corrosion Control, which continues today under independent ownership as a major industrial services company.

Later they established UC Engineers, which employed up to 60 engineers targeting ‘turnkey’ design and construct projects.

The group also took over management of a fabrication yard at Batam Island in Indonesia, opened an office in Singapore and had its own cranes and transport fleet.

It also won increasingly large and complex contracts, working for blue chip clients such as Alcoa, BHP Billiton, Argyle Diamonds and Woodside.

Mr Martin believes the links with these big companies were crucial to United’s growth.

“They built strong relationships with the majors, those people swore by them,” he said.

Mr Trettel believes United was always one step ahead of its compe-titors, with new ideas, larger cranes and better maintained equipment.

Mr Rubino said he and his partners thrived on new challenges, including technically demanding projects.

“We loved the challenge, we grew with the challenge,” he said.

United also had a big commitment to staff training, taking on about 35 apprentices each year.

“That was pushed by Sam and Charlie, they really believed in it,” said Mr Trettel, adding that the commitment to training helped United foster a very loyal workforce, who helped to weed out staff who didn’t perform.

“Without management input, they were really put under pressure to perform and behave.

“If there was drugs or bludging they wouldn’t last, they would leave and go and work for somebody who didn’t care.”

The rapid growth of the 1980s culminated in a major cash flow squeeze in 1991, when the group came under acute financial pressure (see page 15).

United worked its way through that crisis and continued to expand the business, and by 1993 the partners had made plans to float the company.

Mr Trettel said the float was partly in response to the financial difficulties of 1991 “but there was also a need for further growth and more capital to make that happen”.

The four partners took the decisive step of recruiting investment banker Mark Fitzpatrick as chief executive.

“We realised that we needed a professional manager with a finance background,” Mr Trettel said.

Mr Castelli acknowledges this was a difficult period of transition

“That was the hard time, when someone was telling us what to do instead of us telling people.”

Mr Trettel was more matter of fact in his appraisal: “I went along with it, I’d made that decision so that was that”.

The float preparations included the progressive closure or pull-out from ‘non core’ business activities, such as UC Engineers and the Batam Island workshop.

“There was a turnaround in philosophy,” Mr Trettel said.

“The new directors thought that the structure was too complex for the market to understand.”

The float provided a financial reward for the four partners after 25 years of hard work.

Mr Trettel, Mr Castelli and Mr Bontempo stayed as executive directors after the float but gradually exited the company.

Mr Castelli left in 1997, Mr Trettel left the board in 1999 while Mr Bontempo stayed as an adviser to the chief executive until 2001.

When they floated United in December 1994, it had annual revenue of $159 million, net profit of $8.6 million and 1,100 employees.

Its projects division accounted for most of its revenue but it had built up a substantial maintenance division, which provided more stable, recurring revenue.

This included landmark maintenance contracts at Nabalco’s alumina refinery at Gove and Shell’s oil refinery in Geelong, which helped to put United on the national stage.

The company had a hiccup soon after the float, when it announced it would not meet its revenue forecasts.

The shares, issued at $1 in the float, sank to 36 cents. With hindsight, that was a great buying opportunity because the company has achieved profitable growth ever since.

Now based in Sydney, United Group has continued to diversify its business into areas such as rail services, real estate and facilities management. It has about 10,000 staff and total revenue last year was $1.3 billion.

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