13
COATESHIRE INTERVIEW
IRNAPRIL-MAY 2014
investment in natural resources – but the reality is
that “at the moment we have more fleet than we
have revenue for.”
Someof the larger constructionequipment used in
themining sector can be redirected for construction
work, but older fleet is being sold off and any
investment is being channelled into areas where
there isdemand.
He mentions LED lighting towers – very popular in
the mining sector – as an example of where Coates
is investing; “Hybrid booms [aerial platforms] have
been popular, and we will have more and more of
these, and dual fuel generators is an opportunity
to exploit for some of the gas field operations in
Australia’s Coates Hire is
retrenching in the face of a
slowdown in the country’s
natural resources sector, as
company CEO LeighAinsworth
tells MurrayPollok.
T
here may be vast differences in how
economies are performing around the world,
but at this moment Coates Hire – the largest
rental business in Australia and wider Asia – has a
lot in common with its European counterparts, with
a shared focus on operational efficiency and cost
control.
In the European case it is about succeeding in a
sluggish economy. For Coates, it is adjusting to a
more difficult environment after years of growth on
the back of amajor boom in themining and oil and
gas sectors.
“The economy is unsettled”, says Leigh Ainsworth,
CoatesHire’sno-nonsenseCEO, speaking to
IRN
inLas
Vegas during a hectic visit to Conexpo, “Investment
has slowed considerably. At themoment we are in a
transitionperiodbetweennatural resources projects
and the start ofmajor infrastructureprojects.
“The new government is trying to expedite
significant transport projects, and we’re in that lull
in themiddle. Weprobablyhave 12 to 18months until
thebiggest infrastructureprojects start.”
Lower revenues
That lull is expected to lead to lower revenues this
financial year, following a4%decline in theprevious
year (to30June2013)when saleswereA$1241million
(€831 million). This has required the company to
concentrate on efficiency and be more selective on
fleet investment. It is probably no coincidence that
this focus on its core operations has coincided with
the decision in December to sell its Aberdeen-based
oil andgas rental subsidiary, CoatesOffshore, toaUS
privateequity firm, SCFPartners (seebox story left).
“It was not core – just 2% of our revenues”, he
says, “So I guess if the right deal comes along it
is the right thing todo”.
Mr Ainsworth points out that
commodity prices can change quickly
– with the prospect of a return to
Commodityprices
Saleof Coates
Offshoredivision
In late JanuaryUSprivate equity firm
SCF Partners acquiredCoatesOffshore in
partnershipwith its existingmanagement, for
anundisclosedprice.
SCF, based inHouston, Texas, owns oil andgas
service companiesworldwide and its investment
inCoatesOffshore is its second inAberdeen,
having acquiredConserveOilfieldServices in
2012.
CoatesOffshore is nowbeing rebranded as
Rentair Offshore, reflecting theRentair name
it carriedwhen itwas established in 1970 and
useduntil its acquisitionbyCoatesHire in
1999. TheUS$30millionbusiness rents Zone II
diesel air compressors, steamgenerators, heat
exchangers and sand filters to theworldwide
offshoreoil, gas and renewable energy
industries.
KieranWhite, whowas executivedirector at
CoatesOffshore and is nowCEOof bothRentair
Offshore andConserveOilfieldServices, said the
acquisition represented a fantastic opportunity,
with thenewowners bringing “expertise and
specialist knowledgeof our industryon aglobal
scale.”
AndyWaite, managingdirector of SCF, said;
“Webelieve thiswill be an excellent platform
for bothorganic and acquisitionbasedgrowth
opportunities. We alsobelieve theremaybe
excellent synergies tobe realisedwithother
companies in theSCF portfolio.”
Leigh Ainsworth, CEO, Coates Hire.
A Coates Hire lighting tower receiving some
maintenance. LED towers are a key product for
Australia’smining and oil and gas sector.
