The West strikes back

THE tide appears to be turning for WA with more multinational organisations preferring to base major branch offices here and a greater number of small companies prepared to look eastwards to grow their businesses.

Increasingly, major companies are opting to split Australia into at least three zones, with the Northern Territory, South Australia and WA being run from one head office.

It seems Perth is picking up more than its fair share of the ‘western’ zone head offices, reversing an apparent favouritism for Adelaide – largely due to its proximity to Sydney and Melbourne.

A turning point may have been last year’s takeover bid for Woodside by global oil giant Shell.

One of the big fears, had the takeover been successful, was the potential loss of major decision makers from the WA economy.

Stories of companies shifting their WA management to Adelaide or further east can still be heard, but that news is increasingly balanced with State or national headquarters being moved to Perth – particularly in the oil and gas business as the stature of WA rises.

Plans are afoot to move Shell Australia’s distribution headquarters for WA, NT and SA from Adelaide to Perth. Indeed, Shell Australia’s national chairman Alan Parsley is currently based here.

Labour hire firm Manpower has its head office for both WA and SA based in Perth.

Oil and gas giant Phillips is building its Australian headquarters in West Perth.

The bulk of Phillips’s business in Australia is based in the Timor Sea but it has chosen Perth ahead of the much closer Darwin (see story right).

Perth builder Multiplex is another example of what could be called the reverse branch economy.

Its head office remains in Perth while its branches have spread to every Australian capital, bar Hobart, plus Malaysia, Singapore, United Arab Emirates, New Zealand and the UK.

And other WA players are starting to turn to the larger markets of the eastern states while keeping their head office arrangements in Perth.

Lionheart Insurance, a niche player in the automotive insurance industry, is drawing 70 per cent of its turnover from the eastern states.

The company has been targeting the eastern seaboard for the past three years and, after expanding rapidly in New South Wales and Victoria, has turned its attention to Queensland.

Lionheart general manager Laurie Holder said the company was confident of similar successes in the smaller markets of Queensland and SA.

WA-based advertising agency Adlink JLS is building its client base on the east coast.

The agency, ranked sixth in the 2002 WA Business News List of Advertising Agencies, will be opening an office in Melbourne in July and is also picking up clients in Sydney.

Adlink director John Carlson said WA agencies had a price advantage over their competitors in the eastern states.

“In the main we might be 20 per cent to 30 per cent cheaper on most jobs,” he said.

Mr Carlson said about 15 per cent of the agency’s business was coming from the east.

Property developer Cedar Woods opened its Melbourne office in March to support development of the old RAAF base at Laverton in Victoria.

The office boasts one development manager but that could be expanded to a staff of 10 if the development takes off.

Cedar Woods chief executive officer Paul Sadleir said the company had been forced to turn to Melbourne due to the limited opportunities around WA.

“Plus, having the second market gives us greater diversity,” Mr Sadleir said.

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