02/06/2011 - 00:00

Turning adversity into WA’s Advantage

02/06/2011 - 00:00

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A FACTORY fire, the global financial crisis and the rise of Chinese imports have not stopped David Devoy and Darren Bee from cementing Advantage Air as the largest manufacturer of air-conditioning components in Western Australia.

A FACTORY fire, the global financial crisis and the rise of Chinese imports have not stopped David Devoy and Darren Bee from cementing Advantage Air as the largest manufacturer of air-conditioning components in Western Australia.

Managing director Mr Devoy, who founded the Kewdale-based company in 1995, had previously worked as an agent for one of Advantage Air’s biggest competitors.

“In the early years we started building up a manufacturing base, making basic stuff like flexible duct and sheet-metal fabrication,” Mr Devoy said.

“Then we bought an injection moulding factory and for the last five to seven years we have focused on electronic components and controls.”

For almost a decade the company made air-conditioning parts out of its Willetton manufacturing facility, until a ‘disaster’ hit in 2005.

“I was away in Brisbane and I got a call and was told that the factory was burning down … it was a ‘near-death’ experience for the business … it’s something I try to put out of my mind,” Mr Devoy said.

The fire, which Mr Devoy said was attributed to an electrical fault, had gutted the Willetton facility and caused “millions of dollars” worth of damage.

Advantage Air general manager Darren Bee said he was impressed by the company’s ability to regroup and remain operational.

“The whole lot was gone but, amazingly, within two days we were fully operational again,” Mr Bee said.

“Within the same day, we found a facility in Bentley and one of our competitors was nice enough to let us use their sheet-metal workshop at night time.”

However, Mr Devoy said the factory fire was only the second-biggest challenge for the business.

“The worst thing that has happened to the business is the growth of Chinese manufacturing and, as soon as a product of ours gets successful, there are five or six competitors who have taken the product to China to get it copied,” Mr Devoy said.

Mr Devoy and Mr Bee said the increase of imported Chinese air-conditioning components forced the company to develop electronic or ‘control’ products for both ‘defensive’ and ‘positive’ purposes.

“The China problem is becoming worse every year and some of our competitors do choose to import rather than manufacture locally,” Mr Bee said. “And now, if you make a good product it will be copied and that’s why we have moved to controls like our Zone 10 product because controls are harder to copy,” Mr Devoy said.

To maintain an efficient manufacturing process, the company has invested heavily in research and development and has kept abreast of new technology.

“We aren’t the cheapest in town, but our innovative products are better than what’s on the market. They are easier to install and we provide superior customer service,” Mr Bee said.

He said the company’s unique Zone 10 product set it apart from its competitors and had been designed to allow customers to have greater control of the air flow in different rooms of their house.

“You don’t have one light switch controlling all four bedrooms, so why would you have an air-conditioning system controlling all four bedrooms?” he said.

Advantage Air also hit headwinds during the GFC as air-conditioning sales plummeted because of the item’s ‘luxury’ status. More recently, a sluggish housing market and rising electricity costs have prompted a switch in the company’s business from almost 80 per cent reverse-cycle systems, to an equal share with evaporative air-conditioning.

“When the GFC hit people started to downgrade and spend less and since then evaporative air-conditioning has become more popular again because it’s less expensive initially and to run,” Mr Devoy said.

“And with the flat housing market, sales have fallen as well so we’ve had to find growth in other areas, like our control products.”

For strategic purposes, Advantage Air has consolidated its business by recently shedding its Adelaide, Melbourne and Sydney branches.

“We have plenty of opportunity to expand in WA, South Africa and Brisbane and we have a lot of organic growth we still have to do and that’s the benefit of slimming down to three operations,” Mr Devoy said.

“At this point in this economy, it is the smart move to strengthen what you’ve got and we will be in this mode for another two years.”

 

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