Des­per­ate need for ev­ery­one to achieve the same goal

Australasian Timber - - ASSOCIATIONS - By Ker­sten Gen­tle

Na­tion­ally there are ap­prox­i­mately 265 frame and truss plants spread through all Aus­tralian States and Ter­ri­to­ries. Most of these plants are small to medium em­ploy­ing up to 40 staff with the av­er­age prob­a­bly be­ing around 20 em­ploy­ees.

Cur­rently the in­dus­try is going gang busters in most ar­eas with the ex­cep­tion of a few and it is at these times that peo­ple have to wait for their or­ders. For example, in NSW fab­ri­ca­tors are so busy the wait time could be 10-12 weeks whereas in Vic­to­ria the wait time is up to 6 weeks with some firms.

There are a few things that never cease to amaze me when our in­dus­try is going so well:

Builders start to think that in­stead of wait­ing for frames & trusses they might as well set up their own plant.

Fab­ri­ca­tors still al­low them­selves to be bul­lied by builders.

With the first is­sue comes the prob­lem of un­nec­es­sary huge in­vest­ment costs and sec­ondly other builders do not nec­es­sar­ily want to buy from their com­pe­ti­tion leav­ing new fab­ri­ca­tors with a smaller mar­ket than they an­tic­i­pated.

FTMA Aus­tralia would en­cour­age ‘would be fab­ri­ca­tors’ to in­stead look at the op­tion of buy­ing an es­tab­lished frame and truss busi­ness as there are a hand­ful of fab­ri­ca­tors, I’m sure in each state, that would be ready for re­tire­ment and would se­ri­ously look at the op­tion of sell­ing their plant.

Add to this the need for some fab­ri­ca­tors to ex­pand in to dif­fer­ent ar­eas who may also like to pur­chase an es­tab­lished busi­ness rather than start from scratch again.

I know in NSW there are a few fab­ri­ca­tors want­ing to get out and a few fab­ri­ca­tors want­ing to ex­pand so why not help each other; why not look at buy­ing in to the ex­ist­ing fab­ri­ca­tors rather than start a new plant.

I was re­cently in­formed that in NSW some nail plate com­pa­nies are field­ing up to 5 calls per week from peo­ple in­ter­ested in set­ting up their own plant. This is some­thing FTMA doesn’t want to see as the cur­rent fab­ri­ca­tors in NSW have sur­vived by drag­ging their back­sides through the GFC and poor mar­kets with some even dip­ping in to their su­per­an­nu­a­tion to sur­vive. They sur­vived the ra­tio­nal­i­sa­tion and I would hate to think they won’t sur­vive the next one as we have in­creased the num­ber of plants in the state again.

I know this is the role of the nail plate com­pa­nies, to build their own busi­nesses, but we must look at our in­dus­try and en­sure those in busi­ness are sus­tain­able and con­tinue to sur­vive.

So, if you are a builder looking at en­ter­ing the frame and truss in­dus­try, or if you are a fab­ri­ca­tor looking to buy a plant, I en­cour­age you to con­tact FTMA Aus­tralia on 0418 226 242 or via email at ker­sten@ft­maaus­tralia.com.au to dis­cuss the op­tions avail­able as we are there to net­work within our sec­tor and help fab­ri­ca­tors cur­rently in busi­ness.

The other is­sue around bul­ly­ing by builders is an is­sue that un­for­tu­nately, in my opin­ion, is get­ting worse. Bul­ly­ing comes in all shapes and sizes and the one that an­noys me the most is when fab­ri­ca­tors can’t pass on tim­ber in­creases in their prices. Why should any­one, no mat­ter what busi­ness they are in, be ex­pected to not pass on price in­creases.

We see it all the time with the health in­sur­ance or gen­eral in­sur­ance. When the in­surer’s prices in­crease then they must pass it on to their cus­tomers, just like coun­cils do with their rates.

Why then can a fab­ri­ca­tor be hit with a tim­ber price in­crease and a builder sim­ply say no, they aren’t going to ac­cept the price in­crease. The cost of tim­ber ranges from 30%-60% of the to­tal costs of jobs so how can you ab­sorb the price in­crease?

In the fu­ture when the tim­ber be­comes harder to get, which it will, and the mar­kets drop off and you’re not as busy, which it will, how are you going to cope?

I urge fab­ri­ca­tors to talk to their ac­coun­tants, to have a third party go through their costs and en­sure they are cov­er­ing their bases and are not work­ing for noth­ing. You are in busi­ness to make a liv­ing not to be bul­lied by the sup­ply chain in to los­ing money or work­ing for noth­ing.

Ex­ec­u­tive Of­fi­cer FTMA Aus­tralia

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