Popular wisdom holds that Perth has become a ‘branch office’ economy, but the reality isn’t that simple. Mark Beyer reports.
Popular wisdom holds that Perth has become a ‘branch office’ economy, but the reality isn’t that simple. Mark Beyer reports.
Mineral sands company Ticor last week announced it was moving its head office from Melbourne to Perth, providing a small but symbolic example of Perth’s growth as a major hub for the resources sector.
Ticor joins far bigger companies such as Alcoa, ChevronTexaco and Woodside that have moved their Australian or global head office to Perth over the past decade.
The biggest growth has been in the oil and gas sector – Woodside has just under 2,000 staff in Perth, while ChevronTexaco has more than 500 staff and contractors in Perth, including about 300 staff from its former subsidiary, WAPET.
The gain is not just in direct employment. The likes of ChevronTexaco, Apache Energy and ConocoPhillips are engaging lawyers, engineers, accountants and other professionals in Perth to support their growth.
South African mining giant AnglogoldAshanti is another international firm that has chosen Perth for its Australian base.
Anglogold moved into Australia in 1998 with the acquisition of Acacia Resources, and one of its first moves was to close Acacia’s Melbourne head office.
Like Anglogold, Ticor wants its head office closer to its operations.
“The rationalisation of Ticor’s asset base … has provided an opportunity to relocate the corporate office closer to our core businesses, located around the Indian Ocean rim,” managing director Peter Robinson said.
PricewaterhouseCoopers managing partner Andrew Edwards believes businesses globally have become more flexible in choosing head office locations.
“It’s about companies working out where they can best operate,” Mr Edwards said.
“In oil and gas, we are going to be net winners out of that.”
The flipside of this process is that some companies head east. Construction giant Multiplex and engineering company United Group have shifted head office to Sydney, and B Digital recently moved most of its head office functions to the east coast.
However, not many companies have chosen to move their head office from Perth; most of the losses have stemmed from takeovers.
Challenge Bank, Aherns, Swan Brewery, SGIO and Bristile are just a few examples.
HBF managing director Mike Gurry believes the loss of WA-based players in the financial services and retail sectors is a result of globalisation, which has prompted national and international players to buy-up local competitors.
“What that tends to do, in the end, is you become a branch economy,” Mr Gurry said.
“The problem with that is the consumer doesn’t get treated seriously.”
At first glance, BankWest falls into this category, now that it is wholly-owned by UK banking group HBOS.
However BankWest managing director Rodger McArthur said the current HBOS structure would create local opportunities, since marketing, technology and other group functions would be run from Perth.
Wesfarmers stands as the prime example of a nationally successful business keeping its head office in Perth, though even in that case its hardware (i.e. Bunnings) and industrial safety divisions are run from the east coast.
Moving Home
- Gains: Alcoa, AnglogoldAshanti, ChevronTexaco, Ticor, Woodside.
- Losses: Aherns, Bristile, Challenge Bank, Marlows, Multiplex, SGIO, Town & Country, United Group.
