Rapid growth for engineers

The 20 largest engineering firms in Western Australia increased staff numbers by 25 per cent last year on the back of booming investment in resource and infrastructure projects.

The big companies have added more than 1,000 engineers to their payroll, according to the latest data compiled for the WA Business News Book of Lists.

Last year’s rapid growth followed substantial expansion in the two years prior, as engineering firms geared up for the current boom conditions.

Leading the growth has been listed engineering company Worley-Parsons, which employs 1,300 engineers in WA, up 500 during the past year.

Sinclair Knight Merz, GRD Minproc, AMEC Oil and Gas, Proteus Engineers, GHD and Hatch are others to have enjoyed rapid growth.

Most engineering firms say they could have added even more staff if not for the acute shortage of engineers.

Increasingly the industry is turning to international recruiting to meet its staffing needs.

Engineering firms are also sending work interstate or overseas, particularly drafting work that can be done in low wage countries such as the Philippines and Malaysia.

Sinclair Knight Merz general manager resources Mark Read speaks for many in the industry when he says that winning new work is the least of his problems.

“Its easier to win work now than at any time in the past 10 years but it’s the delivery that is the hard part, and that affects your reputation,” Mr Read said.

Mr Read was formerly SKM’s chief operating officer for the Asia Pacific but moved to Perth early this year to head up the fast-growing resources division, which he says accounts for one third of group turnover.

The biggest contributor to SKM’s growth has been its work for Rio Tinto and BHP Billiton (in a joint venture with Fluor) on their multi-billion dollar iron ore expansion projects in WA.

The fast-growing Queensland coal industry and mining projects in South America have added to SKM’s growth.

The buoyant state of the industry is reflected in the results of most listed engineering companies.

Sydney-based WorleyParsons this week reported a big increase in revenue and profit, with the WA office making a substantial contribution.

WorleyParsons is working on Fortescue Metals Group’s planned iron ore development in the Pilbara and recently was awarded a contract for Woodside’s Angel gas project.

Like many other engineering groups, it is also exporting Western Australian expertise to the global market.

For instance, much of the work on Sterlite Industries’ alumina refinery in India is being done in Perth.

GRD Minproc, a subsidiary of listed company GRD, nearly tripled its half-year pre-tax profit to $9.6 million after lifting its secured order book to $1.3 billion.

Key projects have been the Telfer gold mine and the Ravensthorpe nickel project in WA, the Eastern Creek recycling facility in Sydney and the Kansanshi copper project in Zambia.

Perth-based Lycopodium reported a 30 per cent lift in half-year turnover to $32.9 million based on its work on major gold projects in WA and Africa.

It also increased its full-year profit forecast by 11 per cent to $6.7 million as a result of new projects committed and additional work on existing projects.

Clough’s latest results belie the buoyant state of the industry, though its order book is a better guide to industry trends.

The company reported a half-year net loss of $42 million after making provisions of $45.3 million in connection with the BassGas contract.

However, orders won during the period totalled $827 million, led by oil and gas contracts in India, lifting work in hand to $925 million.

In addition, Clough has recently been awarded work on the giant Gorgon gas project in WA and the Bayu Undan gas project in the Timor Sea, and has started working on an expansion program by Saudi Aramco, the world’s largest oil company.

Managing director David Singleton said Clough, as a member of the Kellogg joint venture, was “working very hard to get as much of the (Gorgon) work done here as possible”.

He said the reputation and sophistication of the Gorgon development would help the joint venture attract skilled workers to the project.

• Details of the top 20 engineers will be published in next week’s WA Business News.

BIGGEST ENGINEERS*

• WorleyParsons: 1,300
• Hatch: 690
• Clough: 533
• SKM: 450
• GRD Minproc: 350
• AMEC Oil & Gas: 185
• SNC Lavalin: 150
• Lycopodium: 130
• GHD: 150
• PCT Engineers: 116
• Maunsell: 101
• Leighton: 100
• Halliburton: 77
• Proteus: 65
• Wood & Grieve: 63
• JP Kenny: 57
• Barclay Mowlem: 50
• HBH: 48
• Golder: 45
• Orbital: 45
  
  *  Number of engineers