WA firms go east

THE eastern states, with its large markets, is beckoning WA consumer goods and services producers.

Some of WA’s biggest companies such as BankWest and Wesfarmers subsidiaries Bunnings and Kleenheat are successfully growing their eastern beachheads.

However, firms contemplating an eastern move need to be sure they can service those markets as well as their WA customers.

BankWest managing director Terry Budge said the bank now had a strong eastern states presence through brokers.

“The quality of our book outside WA is very good,” Mr Budge said.

“We’re getting some good products into the eastern states.”

He expects the bank’s business to grow there even though the economy is expected to slow down there due to post-Olympic blues.

Bunnings Building Supplies moved east in 1993 when it bought the McEwans hardware chain.

It used the acquisition to launch its Bunnings Warehouse product that has proved successful on both sides of the continent.

Bunnings Building Supplies managing director Joe Boros said the chain was now the dominant player in WA, South Australia, the Northern Territory and Victoria and was pushing into Queensland and New South Wales.

Mr Boros said the majority of Bunnings’ $1.25 billion business was from the eastern states. Its Victorian business is worth about $600 million.

Mr Boros said Bunnings had been successful because it built strong support bases in its regional markets.

“You can’t afford to be arrogant and try and run those markets from here,” he said.

Kleenheat general manager Gary Ireson said the firm’s eastern states push began 15 years ago with its move into South Australia.

“Our real eastern push began in 1991 when we acquired Shell’s LPG business,” he said.

The eastern states market contributes 70 per cent of Kleenheat’s market volume.

“It became a case of being a national player to generate the critical mass needed to justify the overheads required to service a modern LPG business,” Mr Ireson said.

“We risked being taken over by an eastern states operator if we hadn’t made the move.”

He said the company’s success came from its approach to the LPG business. A lot of its competitors concentrate on a part of the business such as auto gas.

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