Company Report: H&M Engineering & Construction Pty Ltd.
The steel experts This Australian company has a solid reputation for tackling difficult projects within tight deadlines thanks to its manufacturing and site development capabilities

H&M Engineering & Construction Pty Ltd.

H&M Engineering & Construction Pty Ltd.

H&M Engineering & Construction Pty Ltd.

H&M Engineering & Construction Pty Ltd.

H&M Engineering & Construction Pty Ltd.

H&M Engineering and Construction Pty Ltd. has seen its fair share of challenging projects; however it’s racing the clock on its toughest one yet. A wharf for the Newcastle Coal Infrastructure Group – a $30 million project managed by Laing O’Rourke –has required the New South Wales company to develop methodology for supplying and installing more than 2,000 tons of fabricated steel work. The scope of this endeavor includes detailing, drafting, fabrication of heavy plate and welded beams, and the painting of 640 meters of steelwork.

“The wharf has been our biggest undertaking. We’ve had tight time frames across the 18 months we’ve been building it and we expect to finish in April 2010,” says Greg Giles, H&M’s National Business Development Manager for Queensland. “The company that’s building the wharf actually has coal ships booked, so we have to be finished by then.”

Given H&M’s reputation for extensive skill and expertise, it’s inevitable the company will complete the project with flying colors.

Founded in 1997 by mining industry veterans John Horseman and Brian Marheine, the privately-owned company has since been recognized as one of the leading providers of steel fabrication and erection services on Australia’s East Coast. Its varied customer base includes mine and mineral processing, power generation, bulk materials handling and the construction industry. With prominent facilities in Rutherford and Muswellbrook, NSW, and Queensland, and support by site-specific representation in several additional locations, H&M is well placed in the market to address the customized needs of each client.

“Our experience in the engineering field is what sets us apart; we’re not only a manufacturer, we also offer site Erection as well. We’re one of the top 20 heavy engineers in manufacturing on the East Coast of Australia,” says Giles.

H&M decided not long ago to refresh its management team and bring in dynamic new leadership that could lead the company forward with a new corporate structure designed to provide innovative systems that meet and exceed customer and statutory requirements.  Greg Giles was brought on in 2008 with a background in the steel industry, where he served as General Manager of a company in Sydney for five years. After that, he spent another five years as Head of Market Development for Onesteel Reinforcing, specializing in engineering mesh products in Mining. In his current capacity, he’s centered on H&M’s Queensland & NSW projects.  

COMPANY GROWTH
H&M, an AU$70 million company, has experienced fairly steady growth over the past five years although during the industry boom in 2007 it saw an almost 20 percent increase, followed by a drop down to $60 million. Greg says last year’s economic downturn restricted the marketplace for steel engineering and construction projects as mining companies had to cut back on spending. Things have since leveled out, however, and the company is seeing overall revenue return in the sector.

“We were fairly lucky that during the worst of the economic downturn we picked up the wharf project and it carried us through,” Greg says. “Now, with the wharf project coming to an end, we’re in the market for more projects.”

In addition to new projects, H&M will be focused the first quarter of 2010 on reevaluating its business strategies and making sure the company’s restructuring is still in line with where the company wants to go.

CURRENT PROJECTS
Of the various industries H&M works in, it tends to see the most activity in the coal mining sector. It recently won a highly-coveted $10 million project with the Mt. Arthur Coal Mine, one of the biggest BHP Billiton mines in New South Wales’ Hunter Valley. H&M will be upgrading the facility from 12 million to 20 million tons per annum, with the completion date scheduled for July.

The company is also building 14 km of overland conveyors between mines in Blair Athol & Clermont mines in, QLD, as well as working with a power station in Lake Macquarie, NSW, to build a fly ash silo.

In carrying out these projects, H&M relies on a dedicated group of vendors – almost entirely locally-based. For steel, it relies on top Australian supplier BlueScope. Because of its need for an extensive steel supply, H&M has felt the impact of fluctuating metal market prices.

“During 2008 there was massive escalation in pricing so it was difficult to win projects and win pricing; a fixed price contract is what we do, which made it difficult. When the global crisis hit, we saw a reduction in prices between 40 and 50 percent,” Greg explains.

“That pricing came down when work stopped. The steel suppliers were fighting over a much reduced market share and we benefited with cheaper steel. It’s stabilized now to where the steel companies are saying there’s a shortage for the early part of 2010. Prices might come off again, but I’m not seeing any major pricing crisis.”

POSITIVE MARKET OUTLOOK
H&M hasn’t been known for a strong safety record in the past, however through heavy investment and training in the past 12 months it’s upgraded considerably. It’s continually measuring its performance against projects and reducing lost time from injuries, heading towards world’s best practice.

Aside from hiring by application and word of mouth, H&M also finds new employees for its workforce of nearly 200 through its apprenticeship program. Approximately 20 apprentices, which are generally sourced from technical colleges or high schools in the local area, receive hands-on experience in metal fabrication As the aging workforce retires, these new employees will be crucial in helping H&M continue to meet the changing markets. In just this year, Greg predicts Australia will be in the grips of another mining boom with demand jumping for coal and iron ore. India and China are expected to soon become equals as importers in coal versus exporters as well, he adds. Infrastructure improvements and a solid staff are crucial to meet these new trends.  

Over in the US, H&M is talking to the Oil & Gas division of The Bechtel corporation in a bid to win some of the work on the LNG projects in Queensland which are due to commence in the 2nd half of 2010, these projects will require massive infrastructure and cost roughly AU$5 billion to AU$10 billion each.

“We’re looking at a lot of infrastructure for mining, LNG and coal-seam gas extraction, plus some new wharf projects in Queensland,” Greg says. “I see a busy period near the end of 2010 running up through 2013 and 2014.”

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