14
COATESHIRE INTERVIEW
IRNAPRIL-MAY 2014
Leigh Ainsworth is one of the keynote speakers at the
International Rental Conference (IRC) in Shanghai, China
on 24November, 2014, the day before the Bauma China
exhibition. For details, seewww.khl.com/irc
explains Mr Ainsworth, “It’s a strange thing for a
rental company to say, but if you get their trust, you
benefit over the longer term. Of course we can also
say it’sbetter to rent thanown.”
The company may have sold its Aberdeen oil and
gas business, but Mr Ainsworth says Coates is still
on the acquisitions trail, only closer to home. “We’re
always in the acquisitions market – sometimes a
stressed market pops up some opportunities. The
last time there was a downturn we made some
acquisitions.” Last summer it acquired the non-
access activitiesof ForceAccess, a small deal.
He says speciality rental businesses would be the
preference – not least because they have no need
for additional general fleet – and also says that
opportunities are likely to be domestic rather than
in wider Asia, for example; “When you
have opportunities at home you drive
past business getting there [tooverseas
markets].”
Depot network
Thedepot network requiresnooverhaul,
other than the usual opening and
closures associated with changes in
local activity levels, so no big hub and
spoke projects of the kindbeing seen at
rental companies in theUSandUK.
The size of the country means that
a lot of depots are required to give
national coverage, andCoates hasmany
large generalist stores stocking pretty
much everything because it might be
500km to thenext specialist store.
And in the tool and equipment business, the stores
areprettymuchessential; “Close to 70%of thework
wehavewedidn’t knowweweregoing toget theday
before”, saysMr Ainsworth.
Coates ownership has also been on the agenda in
recent years, with joint major shareholders Seven
GroupandCarlyleannouncing last summer that they
would retain ownership after a six month review
of the business. The feeling is that this topic will
reappearwhen theyareable toattract abetterprice.
If this is unsettling, Mr Ainsworth’s demeanour
suggests otherwise; “It doesn’t really make a
big difference – we just run the business and the
shareholdersdo thebest they can.”
In any case, he has other concerns for a business
that remains in a transitional period: waiting for
payback on the efficiency projects, waiting formajor
infrastructure contracts to start, and, of course,
keeping a close eye on the prices of ironore, natural
gas and coal.
IRN
Australia. We’re still investing, but puttingmore into
specialist products, growing theseareas.”
These include shoring equipment – such as large
hydraulic struts that it is buying from UK rental
company Groundforce – traffic control, pumps and
environmental equipment, such as water recycling
products. There isalsostill demand forCoates’ power
rental fleet, which is focused on mid-sized units
rather than the 1MWplus sector.
Aerial platforms
Coates remains one of the largest owners of aerial
platforms in Australia: asked if the company is
interested in buying the massive new JLG 185 ft
booms, Mr Ainsworth is positive; “I think we will. We
bought the 1500s as soon as they were available,
so it would be a natural thing. They are expensive
machines, sowill never be a big part of the fleet. We
need to talk to customers and make sure there is a
demand first.”
He says the 185 ft units would potentially be very
useful for some of the LNG plants that are currently
being completed.
Capital expenditure may be more selective than
in the past, but Coates has still managed to invest
heavily invariousprojects tobecomemoreefficient.
“During any period when revenue is constrained,
attention turns tocost andefficiency, that’sanatural
shift in focus”, he says. “We’ve really invested in
business improvement projects over the past four
years [around A$30 million]. We do expect to get
returns – someareyieldingquitewell already.”
These include a shift to paperless working, using
bar codesonproducts todigitise service recordsand
the like. Around 70-80%of the fleet is nowbarcoded
and Mr Ainsworth says the company is still only
getting 20% of the benefits; “We’ll get to 75-80%
next year.”
Coates has also invested in the PROS price
optimisation system. “That’s the same. We’ve done a
lot of work over the past few years and we are now
rolling it out. Wehope to seeyield from that over the
next few years. It’s really about giving guidance to
the branches, the ability to change prices quickly.”
He says it also makes it easier to review pricing on
annual contracts.
As at other big rental companies, Coates is aiming
to provide more data to customers, particularly its
major accounts, which is in part a reflection of a
more mature relationship. “We have told customers
in some cases that it is better to buy than hire”,
Safetypayback
LeighAinsworth says CoatesHire’s successful
campaign to improve its safety recordhas cut
itsworker compensationpayments by asmuch
as 40%, saving itmillions of dollars and creating
abetter culture at the company.
“Youdo it bynot having accidents”, he
deadpans. “Youhave tobe serious about safety
and convince the leadership thatwe are serious
about it...Ultimately a fewpeoplehad to lose
their jobs for doing things thatwereunsafe.”
He says abigpart of the success is adifferent
attitude tounsafepractices; “It takes a long
time to change a culture. In the end, a company
cando somuch. Peoplehave to care about
themselves and their friends and colleagues.
“We are seeing that peoplewill report unsafe
practices, andwill go to friends and colleagues
and say ‘that’s not safe’. Now, peoplebelieve
that Coates cares about their safety. People
accept absolutely thatwedon’t expect them to
work if itmeans doing somethingunsafe.”
He says Coates looked at areaswhere there
were safety risks, such as using lathes in the
workshops; “Wedecided that if we can’t do it
safely, we saywe just don’t do it.”
Lathework has nowbeenoutsourced to
specialist engineering companies. “It’s not
convenient”, saysMr Ainsworth, “but it’s safer.”
Coates staff using
personal protective
equipment.
Shoring equipment, like these standard 5m boxes, are an area of
investment by Coates, including large hydraulic struts imported
fromGroundforce in the UK.
Portable accommodation units
form part of Coates’ rental fleet.
