Australia's Leading Online Business Magazine
Subscribe Today. It's Free!

Decmil Group Limited

Decmil_Group_Limited
Outperforming others, on time & on budget

To keep up with Osborne Park-based civils infrastructure and building company Decmil Group Limited (DGL) planning ahead is critical. Whether you’re hankering for a simple magazine interview or taking in its efforts in the past year, the group moves fast.

DGL’s core asset is Decmil Australia, founded by Dennis Criddle 32 years ago, which became part of an ASX-listed company in 2007. DGL today represents decades of hard work, flexibility and smart adaptation by Criddle, who is now Chairman and his son Scott Criddle who is Chief Executive Officer of the listed entity having held various roles with the subsidiary.

DGL’s current year-on-year goal is simple; to grow 20 per cent in revenue per annum and deliver an impact margin of between five and six per cent.

“At this stage we’re looking at revenue of over $400 million for the June year end and we’ll deliver that within the margins we’ve done in the past. The overarching strategic goal is to achieve sustainable growth,” Scott says.

“We’ve focussed on developing a model founded on our business vision which is very relationship centric. We work on our client relationship at all times and in everything we do. It has been our experience, that if you deliver and execute a project well and maintain a good relationship with that client, you will get more work.”

And we’re talking blue chip heavyweight clients. Longstanding business relationships with the likes of Woodside, Fortescue Metals and BHP Billiton have been well crafted. Wherever you turn—from Decmil’s involvement in the Gorgon LNG joint venture with Theiss and Kentz, to its $71 million contract at BHP Billiton Iron Ore’s Warrawandu project—the group is, quite frankly, giving everyone a run for their money.

Years of relationship building

Starting out in Karratha, Western Australia over 30 years ago, the Criddle family began working in the State’s northwest and undertook various civils and related works for Woodside and Hammersley Iron. After finishing studying, Scott Criddle joined the family business on the ground, “practically on the tools,” before setting off for Perth to open the company’s head office as the business began to grow.

After gathering momentum and growing to generate an annual turnover in the region of $90 million, Decmil Australia was purchased by Paladio Group Limited in 2007. Paladio was a publicly-listed entity pursuing a strategy of developing an integrated engineering services company with a lot of smaller subsidiaries, akin to the United Group. Decmil Australia was sizably larger than other subsidiary businesses and before long its people and performance began to shine through. In March 2009, to capitalise on the company’s strong reputation and sustained performance, shareholders voted to change the company’s name to Decmil Group Limited and a number of Board changes. This was quickly followed by a restructure of the group with surplus business units closed or sold. The remaining company, essentially the core asset of Decmil Australia, had no debt and DGL swiftly grew into the contender it is today. Key work to underpin DGL’s growth in recent years includes Woodside contracts at Pluto, the large LNG project off the northwest coast, which totalled around $230 million initially.

Focusing on whole-of-life project services for such a high profile set of blue chips can’t be easy, with such large contracts based on capital expenditures rather than maintenance or similar. Australia’s booming LNG and resources industries are big spenders too, not least in iron ore where DGL is part of the furniture having been involved in the overwhelming majority of projects rolled out in the last few years. However the group is pragmatic and forward-thinking in its approach, grouping its wide ranging services into three particular disciplines: the design and construction of accommodation facilities from fly camps to fully-equipped “resort style” villages for more than 3,500 people built with community amenities; concrete civils work associated with a project; and non-processing infrastructure (NPI) such as administration buildings, workshops and control centres.

“Our idea is to get in first, usually via the village, and if you’re doing that contract providing quality skills in a good relationship, executing the project on schedule, you are awarded more work—next the civils, then the NPI. In this way, we give ourselves the largest opportunity to be on a project,” Criddle explains.

“Pluto is a good example. We did a village for Woodside in 2008 and we’re still there now. We’ve been there three-and-a-half years and total work completed is in the order of $400 million.”

It is clear that when Decmil arrives on site, many clients may feel a wave of relief. Once in situ, the company will stay and see through its project commitment on time, on budget—whatever it takes.

Continued project successes

In mid-April, DGL was granted a $55 million contract extension at the Fortescue Metals-owned Christmas Creek 800-man accommodation village in the Pilbara, Western Australia which, at the time, took its forward order book to well in excess of A$300 million.

“That is the second stage to what we were doing there. It’s about making sure that you do a good job—then the client will keep you there. It’s much easier and cheaper for them and they’ll feed through more work,” Criddle explains.

“We have approached the job we were recently awarded with BHP Billiton Iron Ore the same way.

Strategically that project has a lot of similar civils and non-process activities to come. For us we wanted to get on site early, pick up the village contract to be competitively positioned for later work too.”

At Christmas Creek, like at Warrawandu, Decmil’s presence from day one demonstrates that it has the people, knowledge and commitment to get each job done, one after another. It is this approach which has enabled it to cultivate long-running working relationships across its client roster. Criddle says that in having a few clients and a big commitment for each, it is more important than ever to be the top option on any site.

“The whole model is based on repeat work, and if you don’t do a good job, losing one client would leave a gap,” he adds.

“For us it’s all about maintaining our relationships and delivering on time and on budget.”

One project which Criddle says really cemented DGL’s presence as a major player in the market was Chevron’s Gorgon LNG Project, where it is partner in a joint venture that was awarded a significant contract several years ago when the group’s balance sheet was on its ascent.

“It’s a challenging project. It’s on an island and logistically it’s not easy to work there, but it’s a great project and probably the real trigger point where our share price climbed and the company’s profile lifted,” he says.

“It started out at $518 million, and at the moment the JV is probably about $700—it’s grown a lot—and we think it’ll probably grow further in the future. We’re an equal partner with Theiss and Kentz. All parties bring something different to the table and it’s working out well.”

In DGL there are a lot of individuals bringing their own strengths to the table too. In identifying the group’s objectives today, Criddle says it is important to note the central importance of its staff and how, from the ground to the boardroom, DGL strives to gather the best in the business.

What makes a DGL team member?

Describing the different facets of a project and the challenges posed by getting the right people in place, Criddle says it’s like layers, beginning with using what is locally available and coupling it with DGL’s own in-house expertise.

“We self-perform a lot in what we do, pulling resources such as labour that we need from all over Australia, then we subcontract some of it depending on what it is, mechanicals for example.”

“We are also committed to further development of our Indigenous employment programs and are actively pursuing options to provide further opportunities to locally-placed Indigenous people.”

While DGL’s history is firmly founded in Western Australia’s northwest, Criddle is quick to point out that the company has capacity to complete work across Australia.

With every pair of boots to tread a project site comes DGL’s staunch standpoint on health and safety; not a focus to aspire to, but a basic necessity to every single task.

“Protecting the health and safety of our employees is a must for us; it is a part of our culture. Commercially it’s one of the main records a client will look at, and all Decmil employees and contractors need to be able to work within our client’s systems as well as upholding DGL’s high standards,” he says.

“It’s important for us to maintain our record alongside our good reporting culture. I am a strong advocate that you need people to report any health and safety incident or near misses that happens as that is how you can mitigate problems. It is pleasing that we have an open culture and our health and safety team have a lot of initiatives in place to protect our people.”

Key management regularly visit projects in person both to see how work is progressing and liaise with staff on all levels on how their day-to-day needs, including health and safety, are being managed.

Citing one of the industry’s biggest challenges today as people capacity, Criddle further highlights how vital DGL staff is to optimise the bigger performance picture.

“No client will award any contract to a company unless they have the right people in their business to start with. So, as with our competitors, we pay particular attention to attracting and retaining quality people to help us grow,” he explains.

This applies on every level, as the recent arrival of ex-Leighton Contractors General Manager, now Decmil Australia Managing Director, Ray Sputore demonstrates.

“Opportunities and people like Ray don’t come up in the market very often,” Criddle says. “He has overseen large resources and construction market projects so brings a wealth of experience to the table.”

And he brings it at an opportune time. Criddle says that the coming months provide plenty of opportunity for more positive news to flow from DGL as it continues to attract the best individuals, uphold sustaining and successful relations with its clients and ever expand on its reputation for excellent project deliverance.

“Hopefully news throughout the rest of the year and into the future will include more contract awards and, potentially, an acquisition,” he says.

“We’re looking at a number of opportunities to diversify geographically into Queensland as well as increase our civil capacity to expand into the government infrastructure market.”

As part of Western Australia’s resources story, DGL is interlinked with most projects and companies gracing international market headlines today. Few peers can blend family and human value with best-in-class staff, stellar performance records and controlled year-on-year growth like this: A rare and increasingly admired outperforming, responsible, expert contractor.

www.decmilgroup.com.au