Chip off the block

Aus­tro’s list­ing re­veals two go-get­ters

Finweek English Edition - - Business strategy - ANA MON­TEIRO

BE­HIND THE LIST­ING on the JSE of wood­work­ing ma­te­ri­als and tool­ing com­pany Aus­tro – whose shares gained some 90% on the day of list­ing on the main board, show­ing in­vestors’ ex­u­ber­ance for all things “ con­struc­tion” th­ese days – are two hum­ble in­di­vid­u­als: founder Daniel Roth­lis­berger and chair­man David Brouze.

The story of the 27- year- old com­pany starts with a trip to South Africa by Roth­lis­berger, an Aus­trian en­gi­neer, in 1974. “A friend of mine who was in furniture man­u­fac­tur­ing con­vinced me that there was a good busi­ness in sell­ing wood­work­ing equip­ment and pro­vid­ing af­ter-sales ser­vice for that. So I stayed,” he says.

In Au­gust 1980, Aus­tro En­gi­neer­ing – com­pris­ing a small work­shop manned by Roth­lis­berger and an as­sis­tant – was born. In 1981, Aus­tro ob­tained a li­cence to dis­trib­ute the renowned Felder brand of wood­work­ing ma­chin­ery in SA. “It was dif­fi­cult,” says Roth­lis­berger, “be­cause peo­ple didn’t know ei­ther the com­pany or the brand, as we were in­tro­duc­ing ma­chin­ery that was not known lo­cally. It took many years and hard work to build up a name.”

But the hard work paid off: from a twoman team op­er­at­ing in a small work­shop, the firm has grown into one with a staff com­ple­ment of 116 work­ing at premises in Gaut­eng, the West­ern Cape and KwaZu­luNatal and build­ing up a solid rep­u­ta­tion as a trusted sup­plier to the con­struc­tion in­dus­try.

Aus­tro has – for some time – ob­tained and held li­cences to sup­ply and ser­vice Boere, Ca­solin, Striebig and Weinig prod­ucts, all well known in the wood­work­ing world. “Th­ese days, big over­seas man­u­fac­tur­ers ask us to rep­re­sent them in SA,” says Roth­lis­berger.

The com­pany has also built up a tool­ing busi­ness to cater for cus­tomers’ de­mands for a sin­gle sup­plier of ma­chin­ery, tool­ing and af­ter-sales ser­vices.

Piv­otal in bring­ing the com­pany to the mar­ket but keen to re­main out of the lime­light is Aus­tro chair­man David Brouze, known to in­vestors through his in­volve­ment in build­ing up (to­gether with his brother Keith) suc­cess­ful cloth­ing and ac­ces­sories re­tailer and dis­trib­u­tor House of Busby.

Brouze, who thrives on work­ing with man­age­ment of small-cap busi­nesses to grow their ven­tures, bought a stake in Aus­tro four years ago (an­other suc­cess story he’s been in­volved in is on­line re­tailer Dig­i­tal Planet). “Aus­tro was well known for its brand in­tegrity, high stan­dards and good client ser­vice. Not only does it han­dle the big­gest in­ter­na­tional brands lo­cally, but also more than 25% of the ma­chines are sold un­der its own brand. You can’t overem­pha­sise the de­tail that has gone into this busi­ness.”

Brouze, Roth­lis­berger and other se­nior man­age­ment own just over 40% of the com­pany; other in­vestors in­clude an eq­uity fund run by private eq­uity firm Spy­glass (with 7,4%), In­vestec and BoE Private Clients.

Part of the rea­son for list­ing was to re­tain and at­tract scarce tech­ni­cal skills for the busi­ness, with a list­ing of­fer­ing staff the ben­e­fits of a share-in­cen­tive scheme. “There’s been such growth in the econ­omy that in­dus­try hasn’t trained enough peo­ple for the growth level we’ve been hoisted to.”

List­ing well re­ceived by the

mar­ket. David Brouze, John Burke and Daniel Roth­lis­berger

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