Manufacturers must specialise and customise: boss of Australia’s high-tech van company Byron Group

Manufacturers must specialise and customise: boss of high-tech van company Byron Group

Published 13 February 2014 11:22, Updated 14 February 2014 09:07

Simon Evans

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Byron Group CEO Bill Pike says there’s no future in mass manufacturing. Nic Walker

Bill Pike says there is “absolutely a future for manufacturing in Australia, but it’s not in mass manufacturing’’.

Mr Pike is chief executive of Byron Group, a thriving Sydney company with annual revenues of $50 million that supplies high-tech ambulances, ­correctional services vans and aged-care transport vehicles to domestic and export customers.

It builds between 1500 and 2000 vehicles each year, some of them costing $250,000 each for the fully-specified high-tech mine site ambulances bought by customers such as BHP Billiton and Rio Tinto.

Mr Pike winced when Toyota Australia announced it would close as a car maker in 2017, in part because he was a former Toyota executive who was ­integral in expanding the car maker’s export program from 1999 to 2002.

He was general manager of export and distribution for Toyota Australia at the time and spearheaded a rapid improvement in Toyota Camry exports from 10,000 a year to 66,000 a year by the time he left, but did benefit from a much lower Australian dollar.

NSW Premier Barry O’Farrell will open Byron Group’s facility at Smithfield in the outer west of Sydney on Thursday, following a consolidation of five previous sites it had operated around the suburbs.

The group is 100 per cent-owned by private equity firm Wolseley Private Equity, which acquired the business in 2010.

Mark Richardson, managing director and founder of Wolseley Private Equity, said the firm had invested $25 million in the business, which includes the purchase price and capital spending.. It had been attracted by the long-term customer base, the highly-specialised industry with a large amount of repeat business, and the fact it was protected by ­intellectual property that couldn’t be commoditised. “We only invest in growth,’’ ­Mr Richardson said.

EXPORT CUSTOMERS

Wolseley is raising $300 million for a new investment fund and has 13 different companies in its stable. Its last major transaction was the sale of Australia’s third largest childcare operator Guardian Childcare Alliance for $120 million in September. Wolseley sold the asset to new owners after improving and expanding the operations.

Mr Richardson said Byron Group has sales revenue of $50 million and is making profits of $5 million.

He aims to lift that to $80 million in revenue and $10 million in profit within three to four years. “Then it will be very attractive for a new owner,’’ he said.

Mr Pike, who became chief executive in early 2012, said domestic sales ­represent more than 90 per cent of Byron Group’s ­business.

The firm also has export ­customers in Singapore, Qatar and Malaysia.

It supplies all of the ambulances in NSW and Tasmania, and about half of the ambulances used in Victoria and Queensland.

Byron Group has a growing business in supplying specialist transport ­vehicles in aged care and disability care, and is also a large supplier of prison vans and vehicles for correctional ­services organisations.

Mr Pike said the fit-out of prison vans was highly specialised and required substantial customisation, depending on the needs of the correctional services bodies in each state.

“You can’t have an axe murderer in with a fine defaulter,’’ he said.

He said Byron Group, which employs 300 people, needs to carefully manage fluctuating exchange rates, labour costs and try and build more critical mass, just like any business.

But its strength is being in a specialist industry where its technical prowess is recognised as a world leader, and being able to build to exact specifications.

“It’s customisation and having specialist skills,’’ he said.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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