West Perth has intrigued me for several years. It is everything that governments try to do when they create business parks or clusters to help foster the development of an industry.
West Perth has intrigued me for several years.
It is everything that governments try to do when they create business parks or clusters to help foster the development of an industry.
It has, at its core, a significant number of relatively small companies surrounded by the service players that gravitate to where their clients live.
You could not have planned it better if you tried.
But this has happened naturally and is therefore much more resilient and healthy than an artificially induced version, which we have seen in various forms of success and failure throughout the world.
On the doorstep of the central business district, and an easy drive to much of corporate Perth’s homes by the sea and river, West Perth is home to a group of businesses so distinct you’d struggle to find anything like anywhere in Australia.
In all there are 160 listed resource companies and dozens, if not hundreds, of service players devoted to them.
It is unique – like tailors on London’s Saville Row, private banks in Switzerland, sparkling winemakers in Champagne or advertisers on New York’s Madison Avenue – and allows for economies of scale not normally generated by small companies.
It makes a healthy environment for investors and advisers that understand these particular types of companies and how they operate – flexible, innovative and adaptive.
Many of Western Australia’s richest people have made their fortunes through companies based in West Perth and they continue to plough their profits back into firms in the district.
Expertise, like capital, flows easily between the different players, many of whom have the same people on their boards, in their management and doing the hard yards on the ground.
The flexibility of companies from the area is legendary.
Spawned from the tough mining industry of outback WA yet comfortable with the investment advisers of London, the leaders of these companies have reinvented themselves and their companies time and time again.
When difficulties beset Australian exploration, they went offshore.
When the internet was the rage, they turned into dot.coms by the dozen.
When the dot.com bombed many became biotech stocks.
And, when the sniff of a boom was scented, those that had strayed returned to their roots.
There is nothing wrong with this.
While charlatans do exist in West Perth, many of the traits required for genuine success in technology – as opposed to brief runs on the stockmarket – are evident in the junior resources sector.
Investors with a taste for risk and the mighty rewards that can come from exploration see much of the same in research.
Management must be adept at explaining why their techniques are better and will get their product to market faster.
The key players are often experts in fields beyond the comprehension of laymen.
It is a great and exciting blend that has led to an investment explosion in the current boom, giving listed resources stocks based in West Perth a combined market capitalisation of $16 billion.
Given this success and the fact so many of these companies hold sway over minerals and energy resources leases that would cover a few small countries and small seas in combination, it is easy to think of West Perth as WA’s modern ‘golden mile’.
Roberts’ tale worth telling
I never met John Roberts. Even for a bloke as intensely private as he was, this seems strange to me as a journalist who has operated in business circles since the early 1990s.
I regret that because I always prefer to make my own impression of people, rather than relying on hearsay.
So I have to mark his passing in an imperfect way, through other people’s opinions.
From everything I gather he was one of Western Australia’s toughest businessmen. That is understandable given the rough and tumble of the construction sector.
Clearly it is a trait that helped him reach the pinnacle of the sector in Australia, and allowed him to take Multiplex onto the international stage.
I am sure the debacle at Wembley Stadium would have soured the final year of his life but, if he had not passed away, I am sure he would have bounced back.
Legend has it that he went broke, or at least suffered a significant financial setback, decades ago in Adelaide. For what its worth, there’s no record of such a bankruptcy.
It was from that alleged incident, so I’ve been told, that he started afresh (as so many business greats do) and established a new business in Perth, including a culture friendly to the unions that had previously frustrated him in business.
I hope his family finances a book outlining the true story about his life.