Civmec – A Growing Operation
Civmec was established in 2009 as an integrated multi-disciplinary construction and engineering services provider working in engineering and construction for infrastructure, oil and gas, metal and minerals and more recently defence. Where most construction projects tend to become a sophisticated lattice of interconnecting contractors and subcontractors, that isn’t the way Civmec works. We learn how Civmec is expanding its operations.
Our construction is carried out by our inhouse workforce. We have the largest heavy engineering and fabrication facilities in Australia, as well as offering earthworks and site civil concrete, modularisation, structural, mechanical and piping installation, electrical and instrumentation, maintenance activities, our own surface treatment facilities and more recently shipbuilding,” explains Patrick Tallon, Civmec’s CEO. “We bring in people to work for the company rather than subcontracting, and we have 2,500 people employed directly at any one time. We have a very strong client base with blue-chip clients like Fortescue, Chevron, Rio Tinto, Woodside, BHP, Santos and Roy Hill.”
This multi-disciplinary service offering forms the foundation of Civmec’s unique selling point.
“It means we can cut out a lot of interfaces across different disciplines that would often occur with contractors. We can take a project from a greenfield site to an operational plant,” Tallon points out. “You get us on the site and we’ll do the entire work directly ourselves. Others do not have this range of multi-disciplines inhouse themselves. We have large heavy engineering facilities, we can fabricate our own components rather than going abroad to order, so we can better control our supply chain.”
As well as having extensive facilities and equipment, they also boast a powerful talent pool.
“We also bring people into the company with our training and development, so we have a strong culture and crew and a strong management team,” Tallon says. “They’re all construction people who’ve come up through the industry.”
Growing Facilities and Talent
Currently, Civmec is undergoing an exciting period of expansion, in terms of both facilities and people.
“We’ve always built our own facilities. Our plan at the time was to do everything over the years in Australia,” Tallon says. “Australia is not an economical place when it comes to labour but it has a skilled and educated workforce. At our Western Australian waterfront facility, we started with five hectares of land and over a ten-year development programme, we have increased that landholding to 20 hectares and built extensive facilities. We have a lot of very modern equipment and very large facilities to take on big projects particularly for the resources sector. There are two homes for shipbuilding and sustainment in Australia, so our latest facility will allow us to take part in that and will also give us the ability to build large modules and material handling equipment under cover. We also have a facility at Newcastle in New South Wales for heavy engineering and precast manufacturing and we also have an extensive list of plant and equipment to support our operations at our facilities and construction sites across Australia. Since inception, we have spent approximately $100 million on training our people including offering apprenticeships, graduate programmes and various forms of in-house staff development. We’re investing in apprenticeships which have significantly reduced here in Australia because manufacturing had declined but us bringing that back in, showing our clients it’s possible to build cost-effectively to high quality in Australia.”
As well as these major facilities Civmec also has smaller facilities at various strategic locations around the country.
“We have the capability to establish ourselves at a particular location for a couple of years, establishing for the duration of a project or a series of campaign maintenance activities,” Tallon explains.
As well as growing their talent pool and facilities, Civmec is also aiming to grow its portfolio into a more diverse array of income streams.
“We’ve been very reliant on major projects, which can be cyclical, but we’re also seeking more revenue streams such as long-term shipbuilding and maintenance,” Tallon tells us. “The cyclical nature of the business can be a challenge. If you have 500 people coming off a project you want more work for them ready and waiting. This is always a challenge and a concern because you want to keep these people employed.”
Indeed, through Civmec’s expansion process, Tallon believes people are the company’s most important resource.
“Finding the right people would be the number one focus and it can be a challenge in buoyant markets. Everyone loves the idea of expansion, but you need a solid return on investment, knowing you will get a solid return on the capital invested,” Tallon says. “We are very much a blue-collar business with white-collar support and staff are here to support what the people on the ground are actually doing. We recognise the strengths and limitations of individuals and we bring together strengths that complement each other across the engineering and construction sectors for the best possible outcomes.”
Civmec’s strategy of keeping all their employees in-house is not simply a branding issue. For Tallon, it is also one of safety and culture building.
“One of the main reasons we have a direct workforce is the safety culture. It’s hard to bring someone in for a short period of time and imbue them with that real caring manner that’s part of the culture of the business,” Tallon insists. “So we make sure people fit in and understand the culture of the business. We’re people-focused. They’re a strong loyal workforce and we’re here to support that workforce, setting them up for success.”
Safety has been a major priority for everyone this year since the COVID-19 pandemic hit.
“When we had the first wave in Western Australia, we were lucky in being accustomed to the nature of the pandemic. We prepared quite quickly,” Tallon says. “We were very concerned initially about our facilities, having people working in close proximity to each other, and that it could halt operations. So we put in stringent measures well in advance. These included temperature checking, staggering break times and seating allocations in the lunchroom, and we put a lot of other controls in place. Thankfully we’ve had no cases in our facilities and as it transpires have worked heavily with our clients in a sector that is propping up the economy. We’ve also been learning from the experience, cutting down on flights or numbers of people in vehicles, cutting down the spread as much as we can. We found a lot of benefits to conducting meetings via Teams and Zoom, cutting down on the need to travel. It’s a good time to be in Western Australia because it’s an isolated place.”
The main impact COVID has had on Civmec’s business has been within the maintenance division that makes up approx. 15 to 20% of its business. The maintenance division has seen a portion of activity deferred, but not cancelled.
Tallon points out, “Where you might have had a larger shutdown for 300 people, the client has opted for two, three or four much more targeted specific area maintenance jobs to have fewer people on-site at any one time, thereby reducing the risk.”
Right now, Tallon is looking to the future.
“We now have a ten-year development and build programme behind us. Right now, while we are a reasonably new player in the defence shipbuilding sector, we are having a good start for the project that we are doing for the Navy. We’re involved in supplying the steel for all 12 vessels and actually building ten of the vessels here in Henderson at our new facility,” Tallon tells us. “Our key focus is to do a really good job and give the Commonwealth a quality product in a timely manner. Our focus is on reliable returns, utilisation of assets and strong revenues. We want to have a consistent increase in revenues over time. We’re a solid reliable resilient company.”