16/06/2011 - 00:00

Stars illuminate state’s potential

16/06/2011 - 00:00

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WA Business News’ annual Rising Stars awards highlight the entrepreneurial flair in the state’s business community.

ONE of the common, and misguided, critiques of Western Australia is that the state is simply a giant quarry for China.

Mining and resources are obviously critical parts of the state economy, but there is so much more to business in WA, and that is clearly evidenced by the Rising Stars awards program.

The winners this year are headed by an innovative engineering business, Velocious, that has leveraged opportunities in the fast growing oil and gas sector.

Like many innovative businesses, Velocious was set up by young people who gained experience in larger companies but saw opportunities that nobody else was pursuing properly.

Hence, they took a punt and, judging by their experience to date, are on a winner.

Australian Pressure Testing Services has a similar story – a specialist business set up to pursue a niche opportunity servicing the resources sector.

It will be fascinating to see if businesses like Velocious can follow the lead of other Rising Stars winners such as Calibre Global.

An engineering and project management company, Calibre was a winner in 2005, just three years after it had been established.

At that time, it was just starting to take advantage of the iron ore boom.

Since then, it has achieved further substantial growth, helped by the financial backing it has obtained from private equity investors First Reserve Corporation and Connect Resource Services.

Calibre now has 1,200 staff, annual turnover just north of $200 million, and has undertaken its fourth acquisition, to help build its interstate presence.

While Calibre’s growth is primarily tied to opportunities in the mining space, Velocious is tied into the oil and gas sector.

There has been a lot of disappointment in recent years about the limited flow of work from big oil and gas projects to local engineering firms and fabrication workshops.

It was reasonably expected that the workshops on the Kwinana strip would be full to capacity this year – that hasn’t happened because the local firms have struggled to compete with Asian suppliers.

The businesses that have succeeded have often found a specialist niche that gives them a lasting competitive advantage; or they have adapted their business model to suit the prevailing circumstances.

Strategic Marine, which was the Rising Stars winner in 2008, illustrates this point.

It started life as Geraldton Boat Builders. It still has a boatyard in WA, at Henderson, but it has opened yards in Singapore, Thailand and Mexico, where it can utilise low-cost labour.

It would be nice if all of their work could be done in WA, but that just isn’t realistic.

Other winners in this year’s Rising Stars awards illustrate the diverse growth opportunities in WA – the winners operate in renewable energy, construction, recruitment and training, medical services, wealth management and retail.

A look back at past winners reinforces the diversity of growth opportunities in WA. Advertising agencies (Gatecrasher), IT firms (Datacom and Empired), insurance brokers (Specialised Broking Associates) and technology developers (Thinksmart) have all featured in the annual awards program.

While the success of these and other winners has been a boon for WA, it is also instructive to look at what the awards recognition has delivered to the owners of these businesses.

Success has given them choices.

Some, like Thinksmart and Empired, have chosen to list their business on the stock exchange.

Others, like Calibre and National Lifestyle Villages, have secured financial backing from private equity investors.

Many others have decided to sell their business to trade competitors – this includes Australian Mine Services, Change Corp, Mainsheet Corporate, Global Dial, scaffolding firm Blackadder and Commtech Wireless.

The owners of these businesses were not always looking to sell. In most cases they were just getting on with business, until approached by an interested buyer.

That put them in the nice position of being able to decide their own fate – sell their business, ride into the sunset with a leisurely retirement, or more likely start another business that delivers more success.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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