When specialist electrical and instrumentation services company, RiE set up in Chinchilla in 2008, the founders Jamie and Elena Short always had a view to positioning their business for the long term future, beyond the gas construction boom – a strategy which is now paying dividends.
Operations and Shutdowns Division Manager, Steve Condon spoke with the GasFields Commission and have shared some of RiE’s insights and experiences working with the onshore gas industry in Queensland over the past 8 years.
Steve says that key to developing and securing new contracts was building connections including using their own workforce to spot business opportunities.
"It’s all about relationships. It’s about constant reinforcement, always being out there in the field.
"A lot of jobs you first hear about from your workforce out in the field.
"We encourage our workers to keep their eyes and ears open to potential opportunities and to feel they are also part of our business development team," Steve says.
Building a diverse customer base
In the early days, RiE relied principally on two major contracts – a gas infrastructure project and the other a coal-fired power station.
"We were concerned that if we stopped getting fed from one of these contracts, what was going to happen? So we set about looking to diversify our customer base across the energy and minerals sector, without diluting or compromising our specialist services.
It also meant RiE diversifying geographically from its Chinchilla base to supply services into Gladstone, where they now have an office, but also doing jobs as far away as North Queensland, New South Wales, Victoria and South Australia.
In terms of RiE’s service offering, Steve says they took a specialist approach.
"Where businesses lacked the specialist capabilities we had, such as shutdown services and hazardous area work - that’s where we targeted.
He says it takes a certain skill set to do such work – it’s a very condensed and pressure cooker situation.
"A bit of kit that’s costing $6 million a day in lost production, they don’t want it to be offline for even an hour longer than it needs to be. You need to know exactly what you’re doing.
"We built on our commissioning experience from the gas industry and assisted a lot of businesses in power generation sector specifically in shutdown services and hazardous area inspections," he says.
Understanding the supply chain
When the business started in 2008, Steve reckons they were definitely a Tier 3 type entity.
"But we were smart enough to go in and secure a couple of direct contracts, and there’s no question because we did that, we stayed front of mind with end customers for a lot of ongoing work.
"We understood that big contracting companies come and go, and if you tie yourself to one, you’re in danger of having to re-develop relationships or potentially get dropped for price reasons.
"Our focus from day 1 has been to have the direct relationship with the end user, so much so that we are now about 80 percent Tier 1," Steve says.
Project work mix
Steve says from the outset RiE has tried to source and maintain a mix of both construction and operational project work.
"During the gas construction phase many companies were just focused on pure construction, whereas we have always had operations run the entire way through the business.
"For example, out of 140 people we employed at our peak, we might have had 60-80 in construction, and the balance in brownfields projects and operations.
"Construction always has its peaks and troughs, but operations and maintenance normally stays quite steady - that’s the sustainable business.
"We are still targeting construction-based projects – it awards you an increased workforce and an opportunity to get ongoing maintenance operations for those projects.
"So we have two dedicated divisions - a Projects Division, and an Operations and Shutdown Division – but we work together day-to-day, and horse-trade staff between divisions as required," Steve says.
Investing in systems and people
Steve says accreditations are a necessary and critical part of their business.
"We wouldn’t have got the commissioning work without the three ISO accreditations, or got into the gas industry without the accreditation and pre-qualification.
"Our business owners saw from day one that we weren’t going to grow or develop without them - it’s just a cost of doing business.
RiE has also invested in local people through both school and work-based apprenticeships.
"Last year, we had three guys complete their apprenticeship with us – local guys – and they’ve gone on to work with us after their apprenticeship - two were dual trades, and the other an electrical apprenticeship," according to Steve.
Steve says they prefer to have their apprentices as dual trade apprentices.
"We are considered a more specialist business, and it makes them really well rounded tradesmen. It definitely sets them apart from their counterparts who might have done an electrical apprenticeship and then done instrumentation to get an extra couple of bucks an hour." he says.
Steve feels the Chinchilla community is now more accepting of the onshore gas industry than in the early days.
"I don’t feel uncomfortable around town - it’s definitely not that way at all because the gas industry feeds so much of this town.
"The reality is that this town would be a regular agricultural town without the industry here - the gas industry has put a lot of additional resources and programs in, and enriched the area," he says.
As for the current economic outlook, Steve agrees it’s a hard slog now for local businesses.
"You have to fight for every bit you’ve got – and try to win as much long term, sustainable work as you can. The gas industry has got a 20-year shelf life, and the power station has a 50-year shelf life.
"Once the gas goes, is there going to be a replacement industry? No-one knows - yet there’s still a lot of coal in the ground," Steve says.
One thing is for sure, RiE will keep looking to future and the bigger picture for their business.
Steve likes to quote RiE’s founders Jamie and Elena who he says often say ‘if you think big and dream big, you can be big. If you think small and dream small, that’s all you’ll ever be.’
RiE tips for doing business with the onshore gas industry:
- Build relationships - be in touch with what’s happening in the area and the market – encourage workers to play a role in business development and build direct relationships with customers;
- Diversification – know your business niche, but where possible diversify the type and location of your customer base, and aim for a healthy balance of construction and operational work;
- Business practices - constantly review your business practices to find operational and cost efficiencies that can benefit you and your customer.
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