WA steel fabrication firms are shifting gears into repair and refurbishment to combat offshore competition.
DESPITE a growing trend for steel fabrication work associated with the resources boom to be supplied from offshore, some Western Australian firms are expanding their workshop facilities in order to snare a bigger share of work in the refurbishment and repair of mining equipment.
Canning Vale-based Camco Engineering recently completed construction of Australia’s largest crusher component facility, to enhance its capability of servicing the mining, oil and gas and energy sectors.
Camco specialises in crushing equipment repair, component manufacturing, mechanical fabrication and fixed plant overhauls.
Camco business development manager Greg Carson said fabrication workshops across the state had expected more work to trickle down from resources projects such as Chevron’s $43 billion Gorgon development than what was currently occurring.
“Countries like Korea have had a boom out of this while the steel fabrication sector is getting slaughtered Australia wide,” Mr Carson said.
“The oil and gas industry is putting most of the work offshore, except what they have to have in WA.
“The Australian dollar is very high at the moment, which makes it very difficult to compete, the salary range of our employees compared to offshore employees is completely different, and that makes it impossible to compete unless the company is looking for a quality build, failing that they do a cheap build and make operations pay for it later.”
A source at another Perth-based steel fabrication workshop, who declined to be named, said without government intervention the industry could be left behind.
“The issue rests with federal and state governments to revisit local content policies and the way they view local content for these large resources projects,” the source said.
“Unless it’s rehashed to give local industry a fair go, it’s not going to work.”
Mr Carson said while Chevron had looked offshore for much of its fabrication work, BHP Billiton and Rio Tinto insisted on local content and used local infrastructure where possible.
But BHP and Rio were the exceptions, rather than the rule, according to Mr Carson.
To combat the trend of work going to overseas workshops, Camco has geared up its new multi-million crusher facility to specialise in the refurbishment and repair of crusher components.
“Even if equipment has been manufactured offshore, when it comes to repair, clients want to have it repaired locally,” Mr Carson said.
“That equipment will be refurbished locally, even if it’s purchased offshore, that’s why we’ve aimed for this larger crusher component repair facility, we see Karara Iron going ahead, we see Citic Pacific, there is a lot of crushing capacity in those two facilities, and there are a number of other operations under way.
“All these crushing facilities need to be serviced somewhere and we hope its here.”
Another steel fabrication firm to have recently expanded and diversified its operations in response to the changing market conditions is Hazelmere-based G&G Mining Fabrication.
G&G Mining, which specialises in the manufacturing and refurbishing of buckets for the mining industry, has just completed the first stage of an $18 million, four-stage expansion plan.
G&G also manufactures and refurbishes water tanks for dust suppression to suit up to 200-tonne dump trucks and designs and custom fits service modules and hydraulic staircases for dump trucks.
The new workshop has a floor capacity of 3,500 square metres and is equipped with two overhead 32-tonne cranes and three 10t overhead cranes, allowing the firm to work on machines ranging from 80t to 800t.
G&G Mining chief executive Richard Ladny said the new workshop also gave G&G the capacity to repair dump truck trays.
“In our old place we were only looked at as a boilermaking shop and we were limited by what we could do and the timeframe that we could do it in,” Mr Ladny told WA Business News.
“Now we’ve expanded we’ve lifted the benchmark up, the number of players in the field that can do the same things that we do has been reduced considerably, and consequently we can take on bigger jobs for our clients.”
