Could you go into business with your competitor? To compete for major projects, that’s exactly what six Queensland steel manufacturers have done
Thursday, October 31, 2013/
Six small far-north Queensland-based steel manufacturers have come upon a novel solution to compete with the larger companies that dominate construction, mining and infrastructure in their area.
Recently, number of large projects in the area have gone to overseas companies to meet their steel capacity, despite this adding to the regulatory and management risk of projects. But currently, the six companies that formed joint venture Australian Steel Fabricators do not have the capacity to bid for the state’s largest projects.
So, in Townsville yesterday, Industrial Laser Cutting, Totalfab Engineering Services, APG, Fitzroy Steel, Thomas Steel Fabricators, and Cairns Steel Fabricators announced a new joint venture, that’ll see the six companies join together to bid and deliver major infrastructure projects in far-north Queensland.
“We’ve got major projects that are happening in our backyard, but are getting manufactured either overseas, or from some of the bigger southern companies,” Australian Steel Fabricators director Marcel McLeod told SmartCompany.
“We want to compete in that marketplace, so that’s why we’ve come together.”
Coming up with the solution wasn’t easy. The companies involved in the venture compete the rest of the time.
It took eight months from first approach to yesterday’s launch. McLeod said a lot of the effort pre-launch went into building the relationship between the leaders of the firms, many of whom hadn’t had much to do with each other before.
“We’d crossed paths at conferences and the like, but the relationship had to be built, and is still being built.”
A lot of time went into choosing the companies that would be involved in the joint venture.
“There’s always a mindset that you are competitors. But when you’re focused on the goal, and on the vision, the conversation itself is quite easy to have.
“In the past, there have been other attempts to get something happening along these lines, but that competitiveness… stepped in, and it didn’t eventuate. We’re one of the first companies to do this in this industry, and it does take a special group of people. You need common values, common goals and common interests.”
The way the joint venture will work is through having a director of each of the representative companies on the board, with an independent chairman. Australian Steel Fabricators will tender bids for major projects, but if it wins one, the parent companies best able to deliver the service will then form a new joint-venture specifically for that project. This is intended to resolve situations where not all the companies involved can commit to working on a particular project.
“We want to show companies it can be done,” McLeod says. “Competitors can come together for a larger cause.”
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