John Sidoti, NSW MP for Drummoyne

John Sidoti, NSW MP for Drummoyne

John Sidoti
Member of the NSW Legislative Assembly (MP)
Electorate: Drummoyne
Position: Parliamentary Secretary for Transport, Roads, Industry, Resources and Energy
Party: Liberal
Faction: Moderate

Background

NSW MP John Sidoti was elected as the representative for Drummoyne in 2011, a seat that had been a Labor stronghold since 1962. The swing to Sidoti was greater than the state average, and he increased his vote in the 2015 election, even in the face of an overall swing against the party.
The son of Italian migrants, he ran a function centre in Five Dock together with his family, before turning this attention to politics.

John Sidoti
John Sidoti

“I got involved with politics at a young age. I was a member of the Young Libs when I was fifteen years old. At the time the Young Liberals President of the branch was John Brogden. John Brogden actually inspired me to run. When he became the Leader, I looked at representing my area of Drummoyne.”
Before entering state politics he was a councillor on the Burwood Council, serving as mayor from 2009. In 2011 he stood down, remaining as a councillor as he took up his position as a NSW MP.

The Issues

“A million people will be making Sydney their home shortly. A thousand people a week move into Sydney, and the bulk of them are going to be in Western Sydney. Allowing more density into established areas is a necessity. The growth of population, new schools and keeping up with the demand in hospitals.”
“Transport is the lifeline of this area. When you see the growth, particularly in the western end of the electorate there’s so much high density living going on. The challenge is to keep up with that by encouraging public transport. This area (Concord) has been notoriously average for public transport. With the growth and additional services going on, the challenge is to grow public transport at a faster rate than the population. It’s one of the fastest growing electorates in the state.”

Personal Objectives

“It’s about priorities. First and foremost you have to represent the community. My responsibility is to the community first, before the party.”
“You only have to show your electorate that you’re out of touch by focusing on yourself and that’s death in politics. Get in there, get your hands dirty. People don’t want politicians, they want community representatives.”

Advice

“If I had to give advice, I’d say get some life experience. Get out there and employ some people and see what it’s like.”
“I ran a function centre for fifteen years with 30 staff before I got into Parliament. I know what the problems associated with business are, and I think that will drive a lot of the change by having people who have done something with their lives before entering Parliament.”

To read and download the full profile click on the cover image below. To view this editorial as it appeared originally in The Australian Business Executive magazine, click here.

Diving Australia: Cultivating success

Diving Australia: Cultivating Success

David Bell is the CEO of Diving Australia, the National Sporting Organisation for the Olympic Sport of springboard and platform diving. He has been in sports management and administration for over ten years, after spending over 5 years as a commercial lawyer.

After a stint in the event management team of V8 Supercars, with a particular focus on the iconic Supercheap Auto Bathurst 1000, David took on his first CEO role at Queensland Athletics. Following that he spent 3 years as the General Manager of Virginia Golf Club before accepting his current role.

David has undergraduate degrees in Law and Business (Accounting), a Masters in Sports Management and is undertaking a Masters in Business Administration. He is admitted as a lawyer in the Supreme Court of Queensland and the High Court of Australia. He is a Member of the Australian Institute of Company Directors as well as the Sport Management Association of Australia and New Zealand and the Australia New Zealand Sports Law Association. David is also a non-executive director of Golf Queensland Ltd.

In our exclusive David discusses the unique environment of competitive diving.

J. Landry: Can you tell us about your background?

David Bell: I am Brisbane born and bred and the eldest of 4 children. My father and uncle were in law (David’s father Graham recently retired as the second longest serving Australian Federal Judge ever) and as my main role models law was a natural progression for me following school. I had always loved sport and played cricket, rugby and tennis at a reasonably high standard as a child and once I was studying, I found myself spending a significant amount of time involved in sport.

Diving Australia CEO David Bell
Diving Australia CEO David Bell

I was not an excellent scholar, perhaps because of my love of sport, but following university became a solicitor at HopgoodGanim Lawyers – one of Queensland’s largest independent law firms. I was a competent lawyer but struggled to achieve my quotas of billable hours due almost entirely to my fascination with keeping up to date with all things sport and the business of sport. HopgoodGanim were a great employer and were supportive of me when after four years practicing as a lawyer, I decided to study for a Masters in Sports Management while still working full-time. At the conclusion of that degree, knowing my heart was not in law, I moved on to a position at V8 Supercars.

After two amazing years with the V8 Supercars making some lifelong friends and gaining a huge amount of skills and insight into the business of sport, I was lucky enough to be offered the role of CEO of Queensland Athletics. One of the young stars of Queensland Athletics (QA) at the time was Sally McLellan (later Pearson) and I look back at my time at QA really fondly in the great work they carried out and the small part I played in the development of athletics in Queensland and Australia.

From QA, I accepted a role as General Manager of Virginia Golf Club (VGC), a 27 hole facility with bar, restaurant and gaming facilities on Brisbane’s northside. VGC is famous as the only golf Club in the world that I know of with two former Club Champions going on to win a Golf Major Championship. Both Greg Norman and Wayne Grady are former Club Champions at VGC. I saw this as a great opportunity to learn more about running a business and thoroughly enjoyed my time there. If you want to see grassroots politics in action, suggest layout changes to a members golf course!

After my time with VGC, I was offered the CEO role at Diving Australia.

JL: How did you get involved with Diving Australia?

DB: I had agreed with my wife that six months after the birth of our second child I would take some time off to be a stay at home dad and assist in her return to work. We had agreed that I would spend about 6 months as a stay at home dad before I started to look for a new opportunity. After about five and a half months, the CEO role at Diving Australia (DA) was advertised.

Diving is a sport that I have loved watching over the years and have always been amazed at the skill and grace required. Also, DA’s offices are based in Brisbane so it seemed like an opportunity I had to throw my hat in the ring for. It has been a steep learning curve as diving is such a technical sport but I have learnt a lot and am proud to be working with our excellent coaches and amazing athletes.

JL: Are there similarities in the sport management industry that has made it easy to crossover from one code to another?

DB: The short answer is absolutely. All sports that I have worked at have their own unique challenges and issues which take some time to get used to, but all sports have the same broad challenges. Communication and stakeholder engagement are at the top of the list. I have a very firm view that good communication is not a destination, but rather a journey that you will never complete. I always try to improve the communication and engagement in the organisations I work in, but I freely admit there is always opportunity for improvement.

Another example of similarities are the financial (P&L, balance sheet, cashflow), legal (risk managements, contracts etc) and human resource management areas. There are some peculiarities, but the broad issues remain constant.

JL: How many types of diving are involved in the organisation?

DB: The traditional disciplines are 3 metre springboard (and to a lesser extent 1 metre springboard) and 10 metre platform.

There is also 3m and 10m synchronised where 2 divers perform the same dive at the same time, and recently FINA (the international governing body for diving) introduced mixed synchronised. This is quite a difficult event as male and female divers usually do different dives, so to “match” up a male and female is challenging.

These events were held for the first time at the World Championships this July where our 10m pair of Melissa Wu and Domonic Bedggoood managed a bronze medal and our 3m pair of Maddison Keeney and Grant Nel finished 4th.

In addition, High Diving has become more mainstream and was also held at the World Championships this year. For the women it is 20m and for the men it is 27m. This is something DA will be looking to invest more in over the next few years just like mixed synchronized. High Diving is not yet an Olympic discipline, but it may become one.

JL: How many members does the organisation have currently?

DB: There is no denying that diving is a niche sport. We currently have around 2,000 members, which includes coaches and officials.

There are 6 excellent, passionate and committed State Associations – Diving Western Australia, Diving South Australia, Diving Tasmania, Diving Victoria, Diving New South Wales and Diving Queensland that do a great job.

JL: In the face of such a competitive sporting landscape, how does Diving Australia try to recruit new participants?

DB: I mentioned our State Associations previously and they are a big part of our recruitment process. Within each State are local Clubs that seek to recruit new participants via come and try days, holiday clinics, regional events and more. Diving is a little challenged in a facility sense. There are not that many indoor pools with a full 10m platform so that is certainly a constraint. That said, our Clubs and our State Associations do a great job in trying to utilise the resources that we do have. Particularly in light of the difficulty of getting the balance right between grassroots participation and our high performance aspirations.

In a high performance sense, diving in Australia is an incredibly successful sport internationally. We derive the significant bulk of our annual revenue from high performance grant funding and as a result, we need to prioritise pool time to our high performance programs which we are certainly aware creates issues for States and Clubs, but they are great partners in what we are trying to do.

In terms of recruiting new participants for high performance, we look to good Club divers and we also have a big focus on talent transferring from gymnastics. A huge number of our elite divers were high level junior gymnasts and we are indebted to the preparation work that Gymnastics Australia and its States and Clubs do.

We recently commenced a partnership with Gymnastics Australia and Ski and Snowboard Australia titled ‘Spin to Win’, a targeted program around finding more young athletes that have excellent spatial/aerial awareness and the ability to spin, and directing them to either gymnastics programs, diving programs or aerial skiing.

The 2015 Diving Australia National Team
The 2015 Diving Australia National Team

JL: What is the relationship with the Australian Institute of Sport and how do they compliment your activities?

DB: We have a very close working partnership with the AIS. They fund us to the tune of a little over $2.1m per annum which makes up the significant bulk of our annual revenue.

In addition to that, the AIS provides servicing support for our top end athletes. This includes physiotherapy, soft tissue therapy, psychology support and logistics support for our younger elite athletes. That is, liaising with their schools and universities to ensure they are able to train to the right degree. Elite divers will train 10 sessions a week which equates to about 27 hours plus massage and physio appointments. The AIS also provides significant system support through advice, training and development.

It is absolutely true to say that without our great relationship with the AIS we could not have been as internationally successful as we have been. As a headline statistic, Diving has won 11 medals across the last 4 Olympic Games – 2 Gold, 3 Silver and 6 Bronze. We are really looking forward to adding to these numbers in Rio next year!

JL: What is the perception of the Diving Australia brand internationally?

DB: Diving is such an international sport with a large number of participants. Australia is right up there among the best and we are regularly in the top 3 or 4 medal winning countries at major events. In fact, we recently returned from the World Championships in Russia where we won 2 bronze medals.

Diving Australia is very much considered a strong diving nation. China is dominant, there is no escaping this fact, but we are very much in the next level of countries including USA, Mexico, and Russia. Only three countries other than China have won at least one Gold Medal in the last 4 Olympics combined – Russia 3, USA 2 and Australia 2 (note: there are 8 gold medals on offer at each Olympics).

JL: How is the organisation funded?

DB: Our AIS funding contributes the significant bulk of our annual revenue, in excess of 80%. The remainder is self generated either through events, memberships, or training fees from younger athletes. We have very little in the way of sponsorship and this is an area that we could really use some additional support. We have amazing athletes that are great ambassadors for our sport and I would love to be able to get them some more exposure and assistance.

JL: Since most athletic organisations are not run on a for-profit basis, what constitutes good governance and how do you benchmark success?

DB: As a former lawyer, I am really interested in governance – and ensuring organisations I lead practice good governance. I have found that corporate governance principles apply equally to not-for-profit organizations, but often have challenges in implementation for reasons like revenue constraints and the ‘passion’ involved in sport.

Having good diversity on the Board is a key component with a strong skills mix and the ability to appoint some Directors to ensure that any skills shortages can be addressed. I am lucky at DA to have an amazing Board with an excellent mix of skills.

We recently made some constitutional changes to fully adopt the AIS’ Sports Governance Principles and this is another area that the AIS offers great assistance to us. They also help with benchmarking in providing good data across all spots as to the kind of things that are in place in the governance area and where we should be striving to reach.

Integrity issues are key in sport (Anti-Doping considerations etc) and I have found that good communication (eg policies and education) and transparency are so important in addressing these issues.

As a public company limited by guarantee, we are required to adhere to the Corporations Act (2001) which requires high levels of reporting, transparency and integrity.

The 2015 Diving Australia National Team took home medals at this year's World Championship in Russia
The 2015 Diving Australia National Team took home medals at this year’s World Championship in Russia

JL: You’re currently investing in a number of new areas, can you tell us about this?

DB: The AIS’ high performance strategy, Australia’s Winning Edge, has required sports to rethink their operating methodology and to take on increased accountability for performances. DA has embraced this and has increased our presence in 2 of our 5 high performance centres. We are lucky enough to be in partnership with 5 of Australia’s State Institutes/Academies of Sport (VIS, SASI, WAIS, NSWIS and QAS) and we are now investing heavily in Brisbane, Adelaide and Sydney. These three locations represent the best facilities in Australia. Although, recently an excellent new facility opened in Melbourne. This new facility may take on an increased focus for us in future.

We are exceptionally lucky to have great support from our partners including the AIS, our State Institute partners and the AOC and ACGA. This really helps us to deliver world class training programs to our athletes – the reason we do what we do!

Find out more about JG King Homes by visiting:

www.diving.asn.au

To read and download the full profile click on the cover image below. To view this editorial as it appeared originally in The Australian Business Executive magazine, click here.

Interview by J. Landry

CLAW Environmental: Plastic recycling

CLAW Environmental: Plastic Recycling

Established in 2004 by three partners who identified an opportunity in the commercial recycling space for the sustainable recycling of plastics, Perth-based CLAW Environmental is still leading the way in offering a cheaper way of dealing with polystyrene and plastic than taking it to landfill.

The company’s business model focuses on the collection and processing of plastic materials of a reasonable quality. With their value increased through processing, the material is then sold on to manufacturers and further processors.

CLAW receives plastics from a wide range of industries, with a particular focus on those using crates and drums for storing and transporting material. The company is also involved in a number of large recycling programmes, be it through government initiatives or recycling projects with individual clients.

Doing the Right Thing

Owners John and Kate Cameron purchased the company in 2010, after several years working in their respective fields of computing and metallurgy, as well as running an oil recycling plant in Port Hedland, WA.

When an opportunity arose to move to Perth and work in other waste processing, they became involved in a project that looked at plastics as a diesel substitute for vehicles and generators.
“As part of this project,” John tells us, “CLAW Environmental was identified as a potential supplier of raw material. As can happen, the company decided that they did not want to pursue this project and offered CLAW to us to purchase.”
Today CLAW employs a small team of full-time staff and is based in Welshpool, Perth, with most of its client base made up of businesses. The company also serves some domestic clients with a passion for keeping plastics out of landfill, and is working to widen its current services with government and council bodies.

“We also provide services on behalf of other major waste management companies, who find our services can compliment their operations and help in providing their customers a complete recycling service. As landfill rates continue to increase, we see more enquiries for our services.”

“The balance of our business focuses primarily on the recycling of rigid plastics,” Kate explains, “pots, drums, pipes, crates. We are a primary processor, providing shredding and granulating options for plastics. We provide some materials back in to manufacture, but most will go to further processors in the east of Australia and Asia, for further processing into pellets for manufacture.”

The organisation has recently employed a full-time business development manager, in the hope of being able to identify new clients and investigate fresh ways of dealing with plastics that CLAW has not previously been involved with.

“We have been existing on work that has come to us and not having the time and the people power to chase up other similar businesses, or to look at expanding into other plastics.”

CLAW also recently ran trials of polystyrene collection at two government landfill sites, hoping to persuade the government that this plastic can be diverted from landfill, and that there are other ways of dealing with recycling polystyrene.

The company’s recycling plant offers both a collection service and drop-off point, making the recycling of polystyrene accessible to all. The polystyrene is first checked for contaminants such as labels or tape, before it is granulated and stored in a hopper. It is then compressed into a high density log for shipping to overseas markets.

“As the price of landfill continues to rise,” John adds, “this issue will become more urgent.”

Government landfill costs were increased as of January 2015, and Kate believes this increase will only have a positive impact on CLAW’s business.

“We offer a cheaper way of dealing with polystyrene and plastic than taking it to landfill. The problem is sorting it into ‘like’ plastics. If this is done at the source there is no problem for recycling.”

“Education within the workforce as to the different sorts of plastics and sorting at the source will go a long way to helping. As a domestic recycling bin user we all learnt what to put in and not to put into our yellow recycling bins. It’s not hard, it just takes a bit of effort to do the right thing by the environment.”

Owner John & Kate Cameron
Owner John & Kate Cameron

DrumMUSTER

WA represents approximately 10% of the recycling volume of Australia. The PACIA (Plastic & Chemical Industries Association) annually survey recycling in Australia and provide a comprehensive overview of the recycling processes in the country.

Considering the large distances and lower population of the state, WA struggles somewhat in terms of recycling, but in general manages to maintain a reasonable level compared to the rest of Australia.

CLAW’s role in the state’s recycling needs is significant, as they provide recycling options for a variety of plastics, and are currently the only company recognised by EPSA (Expanded Polystyrene Association of Australia) for the commercial recycling of polystyrene in WA.

CLAW Environmental is also the only company in WA currently servicing drumMUSTER, an industry-funded program aimed at providing rural and metropolitan recycling of used chemical containers.

This federal government initiative ensures a few cents of every pesticide and herbicide sold to farmers is put into a kitty in Canberra, where the program is coordinated.

The farmers then return their empty rinsed containers to shire and council depots all around Australia, where drumMUSTER processors like CLAW use mobile shredders to shred the drums, before shipping them both nationally and internationally.

“At present we are the only drumMUSTER processors operating in WA,” John says. “We liaise with the DM inspectors and shires as to how full their compounds are, and when and if they’re having a collection day, so we can empty the compound before then.”

The program is dependent upon the farming season and whether it’s been a good or bad year. With drumMUSTER recently celebrating its 25-millionth processed drum in Australia, CLAW is delighted to be in on the act.

“We are proud to have been processing since pretty much the beginning and we have a good reputation with both drumMUSTER in Canberra and the shires scattered around the state of WA.”

When the company first started working with the program, it found many ‘rats nests’ of drums on private farms, but has since cleaned a lot of them up and now primarily attends just the shire compounds and some farm sites.

“Knowledge of the program is widespread in the farming community and has been well received as a way for farmers to deal with the problem of disposing non-biodegradable containers. They are constantly looking at ways to deal with problems like this in farming communities. We hope to be around for the 50-millionth drum!”

drumMuster's 25 Millionth drum was delivered to Goomalling site in Western Australia.
drumMuster’s 25 Millionth drum was delivered to Goomalling site in Western Australia.

Key Materials

CLAW specialises in the processing of high-density polyethylene (HDPE), polypropylene (PP) and expanded polystyrene (EPS)—a range of plastics stretching from pressure and agricultural pipe to standard shipping packaging found in any household.

Other plastics the company deals with include low-density polyethylene (LDPE) such as shopping bags and bubble wrap, and rigid polystyrene (PS), found in coat hangers, picture frames, imitation timber flooring and toys.

Both EPS use and rigid plastic recycling have seen an increase in recent years. With the advent of new technologies in the building industry, EPS is used quite extensively in the second stories of houses that have been added retrospectively, as well as for general construction and extension work.

The bottom layer of the house has not necessarily been built to hold the weight of an original constructed second floor, but the use of polystyrene makes it light and viable. The advance in making patterns in concrete walls is also made easier by using polystyrene as the forms for concrete core walls.

Rigid plastics have seen a boost in recycling for a few reasons, mostly because of the increase in population and as a result an increase in consumption generally. In addition, plastics have been, and will continue to be, developed for new uses.

“An example is the barrier layer plastic drum,” John explains, “which has almost seen the complete demise of the steel drum for certain chemical and hydrocarbons.”

On top of this, the recent increase in costs for landfill disposal options has made the recycling of rigid plastics more attractive, and a growing awareness of recycling and the options that are available has likewise been a factor.

Kate is adamant that if everybody in the country gets on board with the problem, then the efforts of Australia in recycling plastic could easily be doubled, and it is CLAW’s intention to help push forward this increase.

“When I traveled to Japan, I saw households put their different types of recycling into different bins. A milk bottle was split into two bins, the bottle in one and the lid and ring in another.”

The secret to harnessing the potential of this increase is to make sure the population is well educated in the benefits of recycling. This education must come from the government, within the schools, the media, and anywhere else it can be effectively dispersed.

“If the information is out there,” Kate concludes, “then I’m sure there are many, many people who wish to do the right thing, if they only knew how.”

Find out more about Resitech Industries: www.clawenvironmental.com

This CLAW Environmental business profile has been made possible by the generous support of:
drumMUSTER

To read and download the full profile click on the cover image below. To view this editorial as it appeared originally in The Australian Business Executive magazine, click here.

By Nicholas Paul Griffin

Resitech Industries: Resin Technology

Resitech Industries:Resin Technology

Resitech Industries, a subsidiary of the Resitech Group, is a company with thirty years experience in the plastics business and a major recycler of post-industrial plastic waste. With its main manufacturing operation based out of Brisbane, the company specialises in Polyolefin plastic waste, which it both recycles and reuses through its two distinct approaches to the business.

Yinon Trieger
The company’s Managing Director, Yinon Trieger, was born in Israel. A farmer by trade, Mr. Trieger came to Australia just after he had finished studying and soon fell in love with the country.

In 1980 he started working in the recycling industry, as a partner in a company run by his father-in-law. The company recycled plastic waste in Melbourne, specialising in waste from the manufacturing of master batches, which are colours for plastics, as well as the manufacturing of pipe and film.

“That’s where I started with the basic knowledge that I picked up in the plastic industry,” Mr. Trieger says. “I then moved into Queensland as we had an opportunity in a market that had no recycling services to start recycling plastic waste.”

Mr. Trieger began working for a company called Plastic Recyclers Queensland, the first recycler in Queensland to acquire a local collection company, whereupon he commenced a collection and recycling factory for plastic waste.

In 1984, Plastic Recyclers Queensland became Polymer Corporation, a company that is now a part of the Resitech Group. The Resitech Group is a collection of companies, specializing in the recycling and manufacturing of recycled plastic end products and resins trading under the name of Resitech Industries.

“Resitech was created as a company to be able to do recycling and finished product; Resitech is actually a short name for Resin Technology. That’s how we came up with the company name.”

Resitech Group MD Yinon Trieger at the Home Show
Resitech Group MD Yinon Trieger at the Home Show

Recycling Landscape

The company has two approaches to the business: one is the recycling of resin from plastic waste, and the second is the creating and selling of products made from that recycled resin. “

It has changed a lot,” Mr. Trieger says, when asked about the shifts in the industry since Resitech’s inception. “In the beginning we were absolutely clutching at straws to be able to recycle, because at that stage there wasn’t any machinery.”

During the 1980s there were several other Australian companies starting in recycling, mostly in Sydney and Melbourne, but Resitech credits itself as one of the first to be working with recycling in the country.

“At that stage it was very primitive. What we were recycling then, which was very basic and hard for us to recycle, now is very easy to recycle because there is a lot of development in the demand for recycling and the huge development in the equipment and the market opportunities available.”

Even though the scale of manufacturing in Australia is dropping, the advances made in plastic recycling over the last few decades means the industry is bigger than ever.
During the early years, the majority of waste was produced by companies in the plastic industry, which created plenty of excess plastic from the manufacturing of new products.

“Mainly [it came] from film extrusion—companies that were making plastic bags, or wrappings and packaging and generally what we call soft plastics, a product which is normally between fifty to five hundred micron in thickness.
That’s fairly thin.”

Resitech would then buy the plastic waste for recycling, a process known as post-industrial recycling. But the landscape soon shifted from this traditional method, due in the most part to advances in technology.

“Although the machinery became better and more efficient,” Mr. Trieger tells us, “and with less waste, there was still more waste because more plastic had been consumed and demand for recycling has increased.”

Perhaps the most significant industry change came in the late ‘80s, when Resitech started to work on post-consumer recycling. This began with the collection and recycling of milk bottles creating a whole new challenge for the company.

During that period various councils experimented with this method of post-consumer recycling, and the trend soon became fashionable. Now almost every council in Australia has some recycling program of this kind in place, either running it in-house or employing contractors to do the job.

Resitech Industries services clients all over Australia with much of its business originating from the east coast, Victoria and Queensland. The plastic waste suppliers with which it works are mainly in New South Wales and Queensland.

A large area of the company’s business now comes from collecting waste from the mining industry. All aspects of the mining industry—sand, coal and even gas—are seeing increases in the use of plastic, mostly in the transport of water or effluent and are now required to remove the plastic waste off-site for recycling.

“When they finish with a particular project,” Mr. Trieger says, “they need to get the used pipes out of the ground and recycled, or sometimes they just change them after so many years and upgrade; they go bigger normally.”

Gas mining activity in Queensland especially requires more piping in order to accommodate the amount of transportation needed and this has become a large source of business for Resitech.

“There are various stages in the operation; you start with a smaller pipe, then going to a bigger pipe, going through pumping stations, [where] they’re actually cleaning the gas, then they send the water for recycling, the gas going into compressors.”

Some of the gas is now being used straight from the ground, cleaned and separated from water and used for power mostly in smaller power stations employing more efficient technologies and therefore operating solely from gas.

“As part of the by-product of using, storing and moving the gas and the water, there is plastic pipe,” Mr. Trieger says. As a result of large networks of piping, off-cuts are created. The company then takes these off-cuts as plastic waste for recycling.

“That’s something that we will grow, because obviously there are a lot more wells that need to be drilled. However, because of the resources sector slowdown, prices have gone down and the flow-on effect in the sector has impacted on the growth to service the industry with removal of this off-cut waste, however we believe it will continue to develop.”

Resitech Group Head Office in Wacol, Queensland
Resitech Group Head Office in Wacol, Queensland

Recycled Products
The company’s supply comes from various producers of plastic waste, mostly from the plastics industry in the form of packaging. It has now become a lot more viable for companies to use plastic in their operations because of the wealth of recycling options that are available.

The second arm of Resitech’s business is the design and creation of products from the waste supplied by these companies. The company has a special technology to treat recycled re sin ensuring the product i s of a higher quality than its original form.

“It’s very important,” says Mr. Trieger, “that when we get the plastic waste, we grade it, quarantining contaminated waste so it is not used. The grading of the various waste is paramount to the success of the business as rubbish in- rubbish out. The utmost QA procedure is conducted to ensure the waste cleanliness and labeling prior to the recycling process. Then we allocate the graded resin to meet the specs of particular products to ensure the quality will meet Australian standards.”

One such product is poly Damp Course for the building industry. When a house is built, a plastic Damp Course is used to stop water rising through the walls, the bottom of the house and the windows.

Another key product is the Slip Sheet, which is made for the export industry for companies selling food and drink product overseas. Instead of putting the product in a container with a pallet, they are now using plastic recyclable Slip Sheets.

“What you do is stack that on the pallet then there is a special attachment on a forklift – called a push-pull attachment and you actually lift it off the pallet and move it into the container, eliminating the use of a wooden pallet and saving on fumigation.”

When wood is shipped globally, the container it is shipped in needs to be fumigated to protect from bacteria which can be a problem for companies receiving foodstuffs. The use of a Slip Sheet prevents this fumigation from being necessary.

Another of Resitech’s creations is a garden product called Root-Gard, a root barrier sold mostly to councils and landscapers to prevent roots from growing into areas of the house and garden that might be detrimental to the property.

Resitech sells these products through distributors, very rarely going direct to the client. Products are also sold to other businesses such as window companies, and can be found on the shelves of major hardware chains.

Staying Competitive
Despite industry concerns such as low margins, high power and labour costs and the issues created by the government’s recent carbon tax, Resitech endeavours to stay competitive, currently hitting an annual turnover of around $6 million.

The carbon tax in particular has created a significant financial strain due to the electricity needed to aid production. “We are high users of power,” Mr. Trieger says, “as we require high temperature to melt the plastic and then recycle it.”

Plastic is by no means perfect, and there are still significant problems with the material, especially in terms of its difficulty to break down which has created a surplus of plastic in the ocean.
“Plastic is like a computer—so if you put garbage in, you get garbage out. However it is a clever material and it came to replace wood, glass, steel and paper and has succeeded very effectively.”

But plastic’s strength has made its use far more common in the modern day. For instance, polyester piping will have a greater chance of staying intact during a small earthquake than most other materials, meaning it has become the preferred option.

Mr. Trieger agrees that there is room in the industry for new technologies and more advanced recycling processes, especially in terms of producing the same recycling output whilst using less power.

“That’s what we’ve done and are constantly striving to do into the future including being successful in getting a grant from the government to be able to get machinery which is more energy efficient and able to produce basically more kilos for less power/hour.”

The grant has allowed the company to be more innovative in its business, working with machinery that will be capable of dealing with a variety of products, increasing the scope and efficiency of Resitech’s operations whilst providing a monitoring system of power auditing to constantly manage the power usage.

“We offer a service in a complete form, ” Mr. Trieger concludes. “We now have our own collection service with skip bins, some smaller bins, larger bins and we can give that service to our suppliers to further expand the recycling opportunities that the market is requiring whilst remaining cost effective in the delivery of the service.”

Find out more about Resitech Industries:

www.theresitechgroup.com

This Resitech Industries business profile has been made possible by the generous support of:

Beneficial Recycling

To read and download the full profile click on the cover image below. To view this editorial as it appeared originally in The Australian Business Executive magazine, click here.

By Nicholas Paul Griffin

PharmaSynth: Embracing biopharm

PharmaSynth: Embracing Biopharm

The sourcing of pharmaceutical drugs from biological production systems, known in the industry as Biopharm, is becoming increasingly popular in the field of modern pharmaceuticals. In Queensland, Biopharmaceutical Contract Manufacturing Organisation PharmaSynth is helping continue the trend of using bacteria, yeast or mammalian cell type culture modification to produce pharmaceutical products.

In a recent discussion with PharmaSynth CEO Les Tillack, The Australian Business Executive sought to discover more about the company’s position in this steadily growing industry.

Progen Pharmaceuticals

Mr. Tillack’s pharmaceutical background was developed through his study at the University of Queensland, from which he graduated as a chemical engineer, though a double degree in microbiology was originally intended to see him move into a more scientific field.

“What I was specifically aiming at when I went through university was to get into biotechnology and in particular fermentation technology,” Mr. Tillack explains, “and I guess I hung around for a few years after I graduated, looking for a job, because the industry is not a huge one in Australia.”

Having worked in clinical pathology for a number of years, both during and after university, Mr. Tillack eventually settled in Brisbane, working for a company called Progen Pharmaceuticals, one of the few establishments in Australia undertaking this type of work.

“We’ve just had 25 years last year as Progen,” Mr. Tillack says, “who are our parent company. Progen started 25 years ago as a life sciences and molecular biology reagents company. So they used to make a range of molecular biology kits and chemicals, for use by researchers in universities and research institutes.”

At some point within that time the decision was made for Progen to move into drug development. Since there had been a manufacturing group within the company from day one, the switch to pharmaceutical development for internal products was an easy one to make. This change in direction eventually led to the manufacturing of other company’s products.

Mr. Tillack had been at Progen for about twelve years when a move away from the life sciences and chemical business meant the requirement for internal manufacturing ended, presenting an opportunity to spin Progen’s manufacturing group out into a separate company called PharmaSynth. This process happened seven years ago, and Mr. Tillack has been running the company ever since.

Supporting the pharmaceutical industry from bench to clinic market.
Supporting the pharmaceutical industry from bench to clinic market.

Development Phases

“We’re a contract manufacturer,” Mr. Tillack tells us, when asked to expand on his company’s processes, “so we manufacture other people’s products. The vast majority of products we manufacture are for use in clinical trials. So the drugs that we manufacture are new drugs that are under development and going through the process of becoming a registered, approved drug.”

The first stage of a lengthy development process is usually performed by the company, institute or university which first developed the drug. This is followed by the establishment of some rudimentary procedures for making the drug, after which the developers will approach a company such as PharmaSynth to begin production, which it ensures is done under GMP (Good Manufacturing Practice) conditions.

“We tend to work for the smaller drug development companies,” Mr. Tillack says, “earlier on in a drug development phase. The types of companies we would normally work with are small to middle-sized biotechnology or drug development companies, or in fact research institutes and universities.”

Once the drug is deemed fit for use in humans, it will be used in the clinical trials process, passing through three phases of clinical development, before it finally becomes registered.

Most companies coming to PharmaSynth at Phase 1 will already have patents in place to protect the product. PharmaSynth tends not to be involved in developing intellectual property, but in the few cases it is involved on that level, the company it is working for retains the IP, not PharmaSynth directly.

“Mostly, by the time someone would come to us, they are ready to go into clinical trials. We may have to do further development work for a company before they can get to that point, but in general everything we manufacture will end up in a clinical trial. Whether that drug is eventually successful and becomes a registered drug on the market is an entirely different thing.”

“We will manufacture for a company for their Phase 1 trial, and assuming that’s successful, a couple of years later they will be back for Phase 2. Assuming that’s successful again, a couple of years later they will be back for Phase 3 manufacturing.”

In between these phases, a company will run its own testing to continue developing the drug, either using an internal team or another service provider to which it has outsourced the job.

“A lot of the business we do is word of mouth and ongoing manufacturing, so a lot of the projects we have we will have had for many years. It takes at least 10-15 years to develop a new drug from the start of development, where the drug might be first put into humans, to where it would ultimately be successful and registered.”

In fact, the entire process is so lengthy and costly that PharmaSynth has not actually been involved directly with any drugs that have become a commercial product since its breakaway from Progen in 2008.

“The only commercial product we manufacture is a veterinary product,” Mr. Tillack informs us, “which we were involved in the development of through to approval, and we’ve been manufacturing that product for about fifteen years.”

There are trials in progress, however, most notably for Chinese-American company Zensun USA. Zensun is developing a recombinant protein drug used in the treatment of late stage cardiac failure patients, essentially triggering the body to re-grow damaged heart muscle tissue and improve cardiac function.

Zensun is currently starting a Phase 3 clinical trial in the U.S., and Mr. Tillack tells us it will likely have another three years of trials ahead before the drug has a chance of getting to market. This highlights the length of time it can take for the development phases to be completed; PharmaSynth has been working with Zensun since 2008.

Another key product in development involves one of Progen’s original drugs, known as PI-88, now licensed to a Taiwanese company, which has since been given the name Muparfostat. The company is still running a Phase 3 clinical trial, but there is hope within PharmaSynth that Muparfostat will eventually become a licensed product.

In addition to these products coming towards the end of their testing cycles, there are several Phase 1 products in development, including drugs developed by UK-based Immunobiology Ltd, and Melbourne agricultural biotechnology company, Hexima.

“In terms of new clients, a lot of it does come from word of mouth. Particularly in Australia, the industry is not huge and the whole drug development industry is not huge, so word of mouth is very important. But we also market ourselves as well… our largest area of marketing is attendance to scientific and business conferences, in particular we attend one of the largest conferences in the U.S called BIO.”

PharmaSynth is one of the Australia's most experience biophermaceutical contract manufacturing organisations.
PharmaSynth is one of the Australia’s most experience biophermaceutical contract manufacturing organisations.

Regulatory Environment

“In Australia the manufacture of human pharmaceutical products is regulated by the Therapeutic Goods Administration (TGA),” Mr. Tillack tells us, “we follow a code of GMP regulations, like everyone else does in the world. Over the last number of years the world has been becoming harmonised on those regulations, through a thing called ICH, the International Conference on Harmonisation.”

The ICH had prepared guidelines for Good Manufacturing Practice to be implemented globally, meaning most countries around the world now follow the same code. As a member state, Australia was instrumental in helping set up these rules.

“That means the products we manufacture can generally be used almost anywhere in the world,” Mr. Tillack adds, “certainly all through Europe and a lot of Asian countries that are ICH member states.”

PharmaSynth does a lot of business in the United States, where companies are regulated by the FDA (Food & Drug Administration), a body with similar practices to the TGA. The guidelines followed in the U.S. are very similar to those in Australia, though there are a few differences.

“We ensure that we perform our manufacturing practices to meet both the Australian and the U.S. guidelines,” Mr. Tillack says.

The status of the Australian dollar over the last few years has meant the cost of manufacturing has proved somewhat lower than in other countries. PharmaSynth in particular has benefited from low overheads, due in the most part to the way the business is structured and run compared to those larger Contract Manufacturing firms overseas.

“That results in us being able to offer a service at a lower cost than working with a U.S. or European manufacturer, even though we work to the same level of quality and regulatory framework as those areas do.”

But around the rest of the world, being fully GMP compliant is not an easy thing, especially for countries that don’t have the same quality of companies and regulatory framework. GMP can often represent an extremely high level of regulatory burden.

Despite this, Australian companies like PharmaSynth still face competition from other areas of the world, especially in places such as China and India and increasingly, South Korea. The advantage for Australia is that most of the nation’s clients are extremely risk adverse.

The cost of manufacturing pharmaceutical products is therefore very high, with the cost of running clinical trials and other development work even higher. The truth is, it is hugely expensive to develop new drugs. “The risk of using a country where the regulatory framework is not quite so certain is high,” Mr. Tillack tells us.

India in particular has a very large pharmaceutical manufacturing industry, and some companies have recently run into significant issues with products made in India and used in the U.S. “A lot of it is being able to trust the company that one of our clients has been working with, and having a western regulatory framework around that is a big plus.”

Mr. Tillack understands that the Australian drug development industry has not performed particularly well over the last decade and a half, and this has resulted in the investment market being wary of pharmaceutical developments, particularly in biotechnology, meaning the access to capital in Australia for drug development has not opened up after the GFC in the same way it has overseas.

“It is a very hard thing to do for smaller companies, and the model in Australia in drug development has always tended to be small companies doing it. Spin outs from universities and startup companies that will take one drug and then try and raise the money to do it. And generally it always has been difficult in Australia to raise enough money to do drug development properly.”

This results in most companies having just one product in development, with the reality being that only 1 in 10 of the drugs going into Phase 1 will actually be successful and make it to market. It is inevitable then that the failure rate is going to be very high.

Public Perception

Our interview concludes with a question regarding the image of the drug business, as seen from the outside, since the pharmaceutical industry seems to have garnered a reputation for putting financial gain before the health of the population.

“I think the biggest misconception people have outside of the industry,” Mr. Tillack says in response, “in general consumers, is that there is a lack of understanding of how much it costs to develop new pharmaceutical drugs. There’s a lot of perception that pharmaceutical companies are very rich and the money they charge is just to rip everybody off.”

The reality is that it may cost up to two billion USD to develop a single drug, taking into account research and trials in development. This often runs over a ten to twenty year period, and so by the time they are registered, drugs will have at the most another five years of patent life left.

“So that money, the two billion dollars that’s been invested by the industry, has got to be made back within a very short period of time, before generic drugs are allowed to come onto the market. That’s the reason why, particularly new drugs, are so expensive.”

Find out more about PharmaSynth Industries

This PharmaSynth business profile has been made possible by the generous support of:

Waters Corporation

To view this editorial as it appeared originally in The Australian Business Executive magazine, click on the cover image below

PharmaSynth Cover

Written by Nicholas Paul Griffin
Research and interview by Jesse Landry

Pristine Living Management: Understanding strata

Pristine Living Management: Understanding Strata

Through providing “knowledge and experience you can trust” to property owners and developers since 2008, Sydney-based Strata Management firm Pristine Living has developed a reputation as a reliable local supplier of quality Strata Management services, setting it apart from its competitors.

As the company points out on its website, “Strata Management can sometimes be complicated and confusing,” and as a result of the contractual nature of the arrangement between the Strata Owners and the Strata Manager, the business requires longer-term business development strategies.

Pristine Living believes its unique selling point is its ability to deal with Strata clients in a clear and concise manner, regarding communication and attention to detail as the company’s main areas of focus.

Mr Washer is your one-stop shop for a reliable plumber or electrician in Sydney: 1300 039 226
Mr Washer is your one-stop shop for a reliable plumber or electrician in Sydney: 1300 039 226

Pristine by Name

Pristine Living’s Managing Director, Danielle Marchand, first became involved with the complicated business of Strata Management in the 1980s. She began by working for Robert Andrews Real Estate, where she was employed for eleven years.

Pristine Living Management's Managing Director, Danielle Marchand
Pristine Living Management’s Managing Director, Danielle Marchand

After taking a long service leave from the company, Ms. Marchand decided to move out of Strata Management, and returned in search of a new opportunity. At this point she turned to Property Management, and found herself beginning an affiliation with Australia’s largest residential apartment developer, Meriton.

“The job I landed was with a company that was doing project marketing exclusively for Meriton,” Ms. Marchand says, “for the first six months that their building came on the market.” Though never working with the company directly, Ms. Marchand established herself in the industry by renting out apartments built by Meriton.

In 1996, Ms. Marchand began working for a company called Grants Strata Management. After a successful period of almost a decade with the company, Ms. Marchand and her daughters—Guylaine Senat and Sandrine Markov—bought the company in 2005.

“We thought about how we would change the company, and give the company a much better image, an image that we would like. So effectively it took us about the best [part] of three years to get that together.”

For those years, the company continued to run under the name Grants Strata Management. In 2008 the company changed its name to Pristine Living Management, moved premises, and the current incarnation of the business truly began.

On the back of such an impressive career in the industry, Ms. Marchand was invited in 2011 to join the board of the Strata Community Australia (SCA) for New South Wales, the leading professional body for the Strata and Community Title sector. The resignation of a former board member meant that no election was necessary, and Ms. Marchand quickly took her seat, holding it for the next four years.

Accurate Locksmiths, proudly servicing Sydney for more than 10 years. Call us on 0418 375 100.
Accurate Locksmiths, proudly servicing Sydney for more than 10 years. Call us on 0418 375 100.

“It was a good learning curve with them,” Ms. Marchand explains. “I’m not with them anymore, because of a lack of time, with my schedule being very heavy at the moment. So I just resigned from my position last year.”

During her time with the SCA, Ms. Marchand worked closely with a group of Strata Managers as part of the Strata Management Chapter, which is now known as the Professionals Chapter.

At the time, the chapter was responsible for liaising with the government in order to see better industry laws passed and implemented. Within the next year or two, the new laws Ms. Marchand had a hand in writing should be coming into effect.

“We were very much at the forefront of discussions,” Ms. Marchand says, “and our group was working on better ways to manage and better ways to get our clients to understand what goes on in the industry… it was very interesting, in the sense that you were there at the discussion that would essentially at the end help those laws to be changed.”

Pristine by Nature

After purchasing and renaming the company, Ms. Marchand and her daughters set about redeveloping the business by targeting more boutique, up market properties around the city fringe, including the North Shore and Inner West suburbs.

After engaging in research on the properties already held by Grants, the new owners found that there was a large demographic divide between many of them. Consequently, it was established that some of the properties in certain areas were not the right fit for the high standards associated with the name Pristine Management.

Servicing the Sydney market for over 10 years, call us on 1300 88 36 35.
Servicing the Sydney market for over 10 years, call us on 1300 88 36 35.

The company began to move away from certain types of properties, intending to give the same quality of service to every building on the books. After engaging in a strategy to push the price up in these properties, to raise the level of its management service to be in line with other locations and improve the whole aspect of the building, the company saw several existing clients decide to move on.

“Then gradually, what we did was put our name out there and started to look at buildings very close to the Inner West, or within the Inner West, and decided to target those buildings rather than go into areas that we feel did not have the sort of buildings we wanted.”

On the flip side of that coin, a number of the company’s clients stayed with them as Pristine developed, some having been there since before 1996. For Ms. Marchand, the reason for this retention is simple, as the high level of service given to these buildings has stayed at the same exemplary standard from day one.

“We need to make sure that our philosophy is always on improving the value of [the client’s] property. In doing that we make sure that we have policies and procedures in place; sometimes we double check and triple check things to make sure that they are being done the way we want, and it does take more time.”

Pristine Living Management are award winners, including the Schindler Strata Industry Awards for Excellence in 2010. They are pictured here with Today show host Karl Stefanovic.
Pristine Living Management are award winners, including the Schindler Strata Industry Awards for Excellence in 2010. They are pictured here with Today show host Karl Stefanovic.

“We are happy to say that we are not one of the cheapest Strata Management companies, but if we can provide the service to go along with the dollars we are actually charging our clients, then there is no reason for them not to be satisfied. What they’re paying is what they’re getting.”

Another key element of the business model is the employment of high quality and trusted suppliers to undertake work on Pristine Living’s behalf. Company policy ensures that suppliers understand from the start that nothing less than their best work will be accepted.

“The moment we find that our suppliers are not abiding by what we tell them,” Ms. Marchand says, “then straight away they are spoken to. And if it persists, then we take them off our books… at the end of the day, when we get someone to go and do a job, they are the face of Pristine.”

Another example of this close working relationship is the company’s preference for working with a builder from the very beginning to the very end of a build, ensuring high quality standards are met throughout. Working this way is not always easy, and Ms. Marchand admits that the Strata Manager is almost the last person builders are likely to contact during the lifetime of a project.

“The reason I prefer to work with them at the very beginning is so I understand where they want to bring the building. Whether they intend to keep some of the lots for themselves, whether they intend to sell everything, whether they are interested to retain a portion with a view of optimizing their income on that particular property. There are things that we discuss with them; we discuss also the bylaws that they want to have in place, so that makes our job easier in the long run.”

In addition to this, arrangements will be made for the division of responsibility between owners and Management Company, especially in terms of the cost and payment of maintenance and safety issues. “If we can capture these things at the very beginning,” Ms. Marchand adds, “then when the plan gets registered, it goes in with all these bits and pieces attached to it.”

The leading body for the strata and community in NSW.
The leading body for the strata and community in NSW.

When, in 2010, the SCA introduced its first industry award, Pristine Living, despite having only 5 years of experience since buying the company, decided to put its name forward for the prize. Ms. Marchand admits it was a good exercise for the company, giving them a valuable opportunity to look within the organisation and assess its achievements since she took over in 2005.

“We could see that we actually gave away some management, but we also sustained the income because of the way we were pricing and were putting ourselves in the market. So that was one positive thing. We were able to ensure that all our staff were paid properly, and at the same time we were very much targeting education for our staff as well.”

The following year, Ms. Marchand’s daughters both went for the Strata Manager of the Year awards, with Guylaine Senat gaining a nomination to the Young Strata Manager of the Year and Sandrine Markov coming as runner up for Strata Manager of the Year. The company itself won at the Schindler Strata Industry Awards for Excellence in 2010, in the category Small Business of the Year.

Improvement in Education

Like many Strata Managers at the moment, Ms. Marchand is concerned by the fact that ordinary members of the public do not tend to have a good understanding of the Strata industry, and a lack of communication between owners and managers does not help the cause.

When working with the SCA, Ms. Marchand helped put together an easy-to-use website, encouraging clients to register in order to become aware of what it takes to become a member of the Executive Committee (the body which will serve as the voice of the Owners Corporation in overseeing the running of the Strata Scheme), and to learn about the implementing of Strata laws.

“This, for us, has been something very good in respect of our Executive Committee members getting education that they need. I still feel that, at the end of the day, those who are on the Executive Committee, they do understand, or they are getting there. However, there are those who do not, and who will never be interested to get onto the Executive Committee, except if they’ve got their own agenda. They will never learn.”

The education Strata owners receive is not enough to keep them well informed. Often, for new owners moving into a block of apartments, the only thing they will know from the first day is basic facts about the facilities.

Despite paying a huge amount of money for a property, the salesperson or property manager is often interested only in getting them to sign on the dotted line, and will provide no relevant information about what they can or cannot do. This results in people buying properties for up to $2 million, and often not realising they are actually only purchasing the air space.

In cases such as these, a company like Pristine Living is on hand to help the new owners. “You can start imagining how many jaws drop when we tell that to these people… the education should start with a package that can be given by the solicitor doing the conveyancing at the very least, explaining the pitfalls. However, no-one is prepared to do this, and I can’t see that anybody will.”

Ms. Marchand believes further issues are affecting the Strata industry at present, including the lack of parking in urban areas. “The parking has always been an issue,” she says, “and will always continue to be an issue.”

In response to the parking shortage, people are now offering spaces in and around the CBD for rent, but Ms. Marchand is certain this will create more problems for the people residing in those buildings. And the problems do not stop there.

Another huge stumbling block is the level of training for new Strata Managers, which Ms. Marchand believes is often woefully inadequate, with some new managers only receiving a fortnight’s training to gain a $50k earning. “How do you give a property that is worth millions of dollars to someone that has only got a background of two weeks in the industry… they don’t have the knowledge.”

This has a knock-on effect for small businesses like Pristine Living, which struggles to find staff due to high wage demands, a response to unrealistic contract offers from larger competitors.

“Even if I do pay the dollars they’re asking,” Ms. Marchand says, “after three months you start seeing the cracks, and then the turnover of staff is terrible… these people are there with a certification, and even sometimes have a three year license, and some of them don’t know much about [the business].”

Despite these issues, Pristine Living Management continues to offer the highest quality management service, valuing its integrity and reputation for professionalism in dealing with all facets of Strata Management. With new laws being developed, the team at Pristine is very optimistic about the future of the Strata industry in Sydney.

Find out more about Pristine Living Management by visiting www.pristineliving.com.au

To read and download the full Pristine Living Management profile click on the cover image below. To read this editorial as it appeared in The Australian Business Executive magazine click here.

Prestine Living Management

Editorial written by Nicholas Paul Griffin.

Mustera Property Group: Local and offshore investment

Mustera Property Group

Western Australia’s Mustera Property Group are an Australian–focused Property Investment and Development Company, with a particular focus on mixed-use and residential developments, as well as investing in commercial, industrial and retail property. In November 2014 the company was listed on the ASX, and today has a market capitalization of $23 million, with a spread of both local and offshore investors.

Nicholas Zborowski

As the company’s Executive Director, Nicholas Zborowski has many years of experience in the property sector behind him, both at home and abroad, beginning after a degree in commerce and property at Curtin University.

After undertaking a valuation traineeship during his study, he moved into a construction administration and Project Manager role with Australand, working on a number of its Perth projects in the industrial space.

Soon after, Mr. Zborowski was presented with an opportunity to work in the Middle East, in the Development Management space, for a large government-initiated Property Development Company called Emaar Properties, a company with diversified interests across real estate, including residential, retail, commercial and hospitality.

Mr. Zborowski’s role was as Development Manager for the company’s malls division, which included the design, development and delivery of regional malls throughout the Middle East.

“During my time at Emaar,” Mr. Zborowski explains, “I did see a shift in the property market, where a number of the mooted developments were put on hold. Essentially the focus of the group was then to deliver on a number of projects which were currently under construction, which included the Dubai Mall.”

An opportunity to move to Abu Dhabi soon followed, where he was offered work as a Development Manager with the mixed-use development team, working for the Tourism Development Investment Company (TDIC), a master developer in Abu Dhabi, established to drive investment growth and development of the Emirates tourism sector.

“This opportunity got me involved in a number of different projects across multiple asset classes, and my primary focus was on Saadiyat Island Cultural Canal development, which involved the financing, master planning and design of 2,200 residential apartments, 40,000 m2 of retail, 6,000 m2 of office and two five star hotels.”

The Saadiyat Island project stretched along a 1.5km manmade canal and was located amongst world-class tourism developments including the Louvre, the Guggenheim and the Abu Dhabi National Museum.

After two years with TDIC, working on some impressive projects and with a number of key design architects and consultants throughout Europe and the Middle East, it was time for Mr. Zborowski to return to Australia.

“[I’d] been working in the Middle East for over four years and thought it was the right time to come home. There was plenty of opportunity back in Australia, especially in the Sydney property market, and shortly after arriving in Sydney I commenced working for Charter Hall, working as a Development Manager on two of their significant CBD projects.”

Mr. Zborowski worked with the development team at Charter Hall for two years, playing a key role in the progression of the two CBD projects at 333 George St and 20 Martin Place through design, approvals, contractor appointment and construction commencement.

Utilising contacts amassed over the years both locally and abroad, Mr. Zborowski soon began offering his own services in property development to offshore investors looking to enter into the Australian market, particularly in Melbourne, Sydney and Perth.

Within his work as an independent developer, he became involved with the Mutual Street Property Group, going on with the help of the group to create and deliver the vision to form a listed Property Company, which became Mustera Property Group.

Listed Company

Mustera’s two areas of focus are key to their business model. Firstly there is the investment base, an Investment Management business focused on generating attractive returns and value through strategic acquisitions.

This arm of the company is concerned with the underlying quality of assets, project returns and stability of cash flow, as well as capital growth through the investments.

The second area is the company’s development angle, which compliments the investment business through sourcing, managing, developing and refurbishing high quality assets and investments.

“What we focus on is understanding and adapting to market conditions,” Mr. Zborowski says, “creating quality product and quality residential developments for the end user.”

“Essentially, the company’s key to success, in order to maximise the full potential of the Shareholders value and their returns, is to provide consistent annual growth through commercial investments, to provide attractive profit margins through developments, and also to operate in a sustainable manner.”

The decision to list the company was taken for a number of reasons, but most significantly because it presented an opportunity to have a vehicle capable of facilitating local and foreign investments, especially the Asian investment market entering into the unfamiliar territory of Australian property.

“We’ve seen a significant amount of foreign investment in the Australian property market, especially Sydney and Melbourne,” Mr. Zborowski says, “and the majority of the time the foreign investors do tie up with local partners. We identified the opportunity to create a public company to facilitate this offshore interest together with local investment, with a particular focus on the Perth market.”

By structuring the business as a public company, Mustera is able to offer a diverse range of Australian properties across multiple different investment types, as well as capital structures and different asset classes.

“The public company also allows for investors to have a high level of transparency across the deals, and gives us the ability to access offshore capital markets in a very clear and transparent manner.”

Victoria Quarter Poject, Midland (Internal Render)-Quality is a key focus of Mustera. All apartments included quality finishes, designer kitchens, luxury bathrooms and ample built-in storage.
Victoria Quarter Project, Midland (Internal Render)-Quality is a key focus of Mustera. All apartments included quality finishes, designer kitchens, luxury bathrooms and ample built-in storage.

Western Australia

“The WA market is currently going through an interesting stage,” Mr. Zborowski admits, “the WA economy, which is predominantly driven by the resource sector, is definitely seeing signs of stress, which has had a ripple effect across all other industries. We have seen a reduction in the overall number of residential sales in Q1 2015, followed by reduced rental returns.

“We have also seen office rents diminish as supply outweighs demand. Although a correction is imminent in the property space, we are seeing this as an opportune time for investment and development in certain asset classes and certain price points, especially with the cost of capital being at an all-time low.”

The state is currently the focus of a campaign by the Western Australian Planning Commission (WAPC) to initiate the delivery of growth in the residential, retail and commercial sectors.

This campaign looks to spearhead new developments that capitalise on fast-growing rapid population growth, changing economic conditions, a shift in demographics and the evolving needs of industrial community requirements.

The WAPC has recently issued a draft planning framework, “Perth and Peel @ 3.5 million”, for public comment, which includes a suite of strategic land use planning documents.

This planning framework has brought to light the need for high-density residential developments in and around activity centres and along some of the existing public transport routes in the state.

The draft frameworks initiated by the WAPC are to deliver a more compact and connected city, to promote connectivity and development of activity centres, corridors, industrial nodes and station precincts, and to drive employment opportunities outside of the CBD.

“Their key objective essentially is to provide employment options where people live, thereby reducing congestion and the need for people to commute long distances for work. What we’re seeing currently is a number of people who are traveling up to and more than one hour every day, just to get to their workplace.”

The planning framework outlines an expectation that the Perth population will rise by an extra 1.5 million by the year 2050, and has been put in place to capitalise on this expected increase. 800,000 new homes will be required in and around the city, of which 380,000 will need to be in strategic infill positions.

“In 2014 the rate of infill developments had reached 28%,” Mr. Zborowski says, “whereas the WA Planning Commission refer to this increase as about 47% by 2050.”

The composition of households in the area is changing, as is demographic diversity. The number of one-person households is projected to increase greatly, as is the makeup of the ageing population—currently there are 13% of people in the region who are over 65, a demographic expected to rise to 22% by 2051.

“Increasing demand for houses in areas with convenient access in a range of services, including health, is also on the focus,” Mr. Zborowski adds. In addition to this change, there is evidence that two-person households will soon outnumber those lived in by couples with children.

“Historically the perception of Perth’s population was to live in a large single dwelling home on a larger block, whereas this perception in now changing, and people are acclimatising to apartment living.”

As a state, WA still offers plenty of investment opportunities with relatively low land costs and attractive yields, in contrast to some of the investments seen on the East Coast.

“A significant amount of foreign investment in Australia to date has been focused on the Melbourne and Sydney markets. As a result this has created a very competitive environment, where investors are paying a premium for property, which has resulted in cap rate compression.”

In response, a number of foreign investors have started to look for investment opportunities in the west. By having an existing high yielding investment portfolio, an attractive development pipeline and an existing company platform, there is a clear opportunity for Mustera to tie up some of this offshore capital.

Victoria Quarter Project, Midland (External Render)- High density mixed use development in Midlands fast evolving metropolitan centre. 70 apartments with one and two bedrooms options all with large balconies and parking. Construction commencing Q3 and completion date estimate Q4 2016.
Victoria Quarter Project, Midland (External Render)- High density mixed use development in Midlands fast evolving metropolitan centre. 70 apartments with one and two bedrooms options all with large balconies and parking. Construction commencing Q3 and completion date estimate Q4 2016.

Key Projects

To fulfill the needs of the WA market, the planning framework put into place by the WAPC has identified a number of satellite locations around Perth CBD, hoping to combat traffic congestion and create areas for people to both work and live.

One of these key locations is Midland, 16km north east from Perth’s CBD, an area with a population of about 300k residents, which Mustera is contributing to with the rejuvenation and development of its Victoria Quarter Project.

Midland benefits from its existing infrastructure, including the Midland railway line, which provides direct access to the CBD in under 30 minutes.

“Perth has experienced aggressive urban sprawl in the northern and southern corridors,” Mr. Zborowski says, “up to 150km, but we’re beginning to see a focus now on infill development, particularly in the eastern corridor between Perth CBD, Perth airport and north east along the Swan River, out to Midland.”

There is a large population already residing and working in Midland, a town with a rich history, including the Midland Railway Company, which became the Western Australia Government Railway Workshops, and the home of the long-standing Midland Brick.

The governing body in charge of overseeing the rejuvenation of the existing shunting yards—the old Midland Railway Workshops—is the Metropolitan Redevelopment Authority (MRA).

“Midland to date has only seen a small portion of apartment supply being brought to market. The apartment stock that has been brought to market has been very well received, with high levels of interest, especially at the entry level price point.”

“We identified an opportunity to work with the MRA through acquiring the site and working together with their planning and design teams to integrate modern apartments whilst complimenting and respecting the rich heritage of the surrounding sites.”

The area is seen by many as a ‘gateway to the east’, which itself has a large catchment area. Residents of surrounding suburbs and country towns to the east enjoy the amenity Midland has to offer, especially the Midland Gate Shopping Centre.

There are already a number of public and private developments in the pipeline in Midland, including the State Government’s $350 million St. John of God hospital project, due for completion in November 2015. The project is expected to create an additional 1,000 jobs and include 367 beds.

In addition, a $150 million expansion of the Midland Gate Shopping Centre has also been proposed. The Midland area also offers access to the Swan River tourist and wine region and a number of local amenities and schools.

Victoria Quarter comprises 70 residential apartments, all with secure car parking, flexible free flowing designs, designer kitchens, luxury bathrooms and ample built-in storage.

Victoria Quarter offers one and two bedroom apartment options, with prices ranging from $310k up to $485k. The project is 55% pre-sold, and due to this success Mustera is closing out its due diligence on an adjoining lot, where work will commence later in the year.

Another element of the WAPC planning framework is a change in zoning on a number of strategic infill locations in Perth’s CBD fringe suburbs. Potential future zoning changes could allow the company’s property in Rivervale, WA, to be earmarked for a mixed-use development.

“We’ve seen a number of high density residential developments being delivered in the Rivervale location in recent years,” Mr. Zborowski says, “especially with its attractive location being close to the Swan River and equal distance to the Perth CBD and the airport.”

The Rivervale property currently comprises an office warehouse of 2,309 m2 over 4,029 m2 of land. The property is currently leased on a passing yield of 8%.

Another addition to the company’s existing portfolio is the acquisition of Lot 70, Haig Park Circle in East Perth, an investment property 1.5km from the CBD. The property consists of 2,233 m2 of land, including an open-air car park with 50 bays, leased to Wilson Parking Australia for public parking.

With a passing yield of 8.25%, the company will retain the property as an investment in the short to mid-term, with a longer view of repositioning the site as a mixed-use development, adding to and complementing the East Perth precinct.

As part of the acquisition of Lot 70, Haig Park Circle, the company also secured an option to acquire an adjoining commercial property; the company is currently undertaking due diligence in light of an $8.5 million price agreement.

Market Saturation

“What we’re currently experiencing in the Western Australian residential market is localized saturation whereby supply is exceeding demand in certain locations across certain price ranges. As additional stock is delivered in these locations we will see price and rent adjustments.”

Concerned by this saturation, Mustera has adjusted its short-term strategy to focus on cash flow stability, and will look for development opportunities with sufficient holding income to offset holding costs and offer options for future development.

These concerns have also taken the focus off saturated locations and mid-level price ranges. Focus is now on entry level, high-density residential developments, located along existing public transport routes, where the Government are investing in public amenity and infrastructure.

The group looks for development properties that include a level of holding income, so that if required the company can delay development until the market demand is sufficient to take the project into fruition.

“Economics and market knowledge is a key focus when looking at new opportunities. Understanding land costs (based in highest and best use), construction costs, including innovative methodologies and materials, together with market pricing, is fundamental to acquiring feasible sites and ensuring that target returns are met.”

To read our full editorial profile, click on the cover image below.

 Mustera Property Group

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Hera Engineering

NEXTDC (ASX:NXT): Where the cloud lives

NEXTDC CEO Craig Scroggie

Established by one of Australia’s most successful information technology entrepreneurs, Mr. Bevan Slattery, NEXTDC (ASX:NXT) is a carrier and vendor neutral data centre operator, providing world class UTI Tier III certified facilities in every major market in Australia.

In a recent interview with CEO Craig Scroggie, The Australian Business Executive learned a little more about the growing business of carrier neutral data centres.

“The company’s goal is to serve both enterprise and the cloud computing providers, domestic and international, as the home for all of their computer infrastructure,” Mr. Scroggie tells us.

“We tend to say, when people think about NEXTDC, it’s where the cloud lives. It’s where people come to house their computing infrastructure, but also connect to their network providers and connect to their cloud computing providers as well.”

Neutrality

Data centres are not a new phenomenon, but the changing nature of the industry, and the rapid rise of cloud computing, means carrier neutral centres have become a big player in the industry, offering an alternative to in-house or vendor-run facilities.

“The data centre is somewhere where people come to do business together in a neutral location,” Mr. Scroggie says, “so enterprises will come to the data centre in order to get access not to just one outsourcing provider, they’re coming to get access to all of them.”

Carrier neutral data centres are fast becoming commonplace, both in Australia and across the world. In the emerging cloud computing world, organisations require a different kind of access, due to the bonding of networks together in order to provide pay-as-you-consume computing capacity.

“We provide not only the physical aspects of housing all of that computer infrastructure… but importantly a network connectivity, the ability for organisations to be able to connect to a multiplicity of carriers and cloud computing providers.”

The company is also soon to release NEXTDC switching fabric, enabling fast, direct connections to cloud services, bypassing the public internet.

Technical issues like the amount of power, cooling, security and standards are all highly important to a company like NEXTDC, but neutrality is the crucial component that puts such businesses in high demand.

At the enterprise cloud level, big, global public cloud suppliers have changed the way enterprises are consuming computing capability. Organisations can pay for exactly the amount of computing they need, no longer required to spend large amounts of capital on servers and software without an immediate return on the investment.

“In the pay-as-you-consume computing world,” Mr. Scroggie explains, “you can spin-up a server, and only pay for the minutes that you use it for. So too it goes for storage, or network, or anything else that is moved into the consumption economic model.”

Mr. Scroggie uses Apple’s iTunes model as a comparison, a platform where users have access to a huge catalogue of content, but only pay for it as and when they use it.

“As a consumer,” Mr. Scroggie adds, “those services that you’re eating in the application economy are far more pay-per-use, than they are just a payment for a fixed amount of capacity whether you use it or not.”

The switch to more on-demand content means issues such as latency, the speed of the network and the larger consideration of where the information lives, are far more important than they used to be.

“A lot of people tend to imagine one big cloud in the sky, one big cloud globally that all the information is delivered from at a very low cost. And that’s not the case.”

The reality of the distribution and consumption of content is now actually the opposite, driving content to the edge rather than it being centralised at the core. As a result, anything that is latency or application sensitive needs to be located in closer proximity to the end-user.

In Australia, all the data is cached in regional centres, with content going out to almost every major city. “The availability and the scale of the network is important today, and it’s going to continue to become increasingly important,” Mr. Scroggie says.

This means the majority of larger U.S and European content providers that come to Australia require local infrastructure service and content, a requirement that is driving a lot of investment from offshore in local hosting of infrastructure.

“This is only going to continue to accelerate the rate at which the amount of content continues to grow,” Mr. Scroggie says, “the way that we consume that content from an on-demand perspective is continuing to increase, and consumers wanting pay-per-use, that is increasing.”

The way Australian consumers are behaving, and the increase in on-demand type services means going forward, the infrastructure and software services will continue to be placed close to the user.

NEXTDC has been recognised for its leading carrier neutral data centres
NEXTDC has been recognised for its leading carrier neutral data centres

Network Infrastructure

Mr. Scroggie’s background in the industry was developed through the best part of ten years’ work with Symantec, as Vice President and Managing Director in the Pacific region. After working in storage and security, he went on to gain experience in the data centre space.

When Mr. Slattery began setting up NEXTDC, Mr. Scroggie was asked to join the board, and spent 18 months as a non-executive director with the company before being offered the position of CEO, taking the company on the next leg of its journey.

When asked about the decision to list the company on the Australian Stock Exchange in December 2010, Mr. Scroggie highlights the huge level of investment needed to establish a company like NEXTDC.

“In the data centre industry, you’ve got to build all of your project, or the majority of your project, up front, and that is the base building, and the core infrastructure needs to go in—so it’s hundreds of millions of dollars in order to build out a national network of data centres.”

“The only way really in Australia to put that together on such an enormous scale was to list the company very early in its life, and that’s why it was [made an] IPO, pretty much from the beginning.”

The company now works out of multiple locations, in all of the major Australian markets—Brisbane, Sydney, Melbourne, Canberra and Perth.

The establishment of such a wide base of operations represents the best part of a few hundred million dollars’ worth of investment. But the current rate of growth in data centres is huge. Considering the way organisations are consuming on-demand, NEXTDC expects the growth to continue, and the investment to be justified.

The benefit for the client is there for all to see; the security that comes along with facilitating large-scale deployment is a huge selling point in terms of luring clients into a co-location model.

From an operational standpoint, one of the most enticing aspects of carrier neutral data centres is that the customer needn’t have ownership of the land, building or any physical assets.

“Many organisations would not be able to offer either the physical security or the size of the infrastructure, or the high availability nature of what we do… in a lot of cases they’re more secure and more resilient than what they would have been able to manage inside their own organisations.”

For organisations looking to set up infrastructure, the amount of capital needed in order to support the level of computer capability is of paramount consideration. Nowadays organisations needn’t put up that kind of capital, as they can co-locate their infrastructure with public and private computing providers and other enterprises.

“One of the most important benefits… is that the ecosystem, the way that companies share information today, has changed, and if you move into a co-location facility, inside that ecosystem, you are doing business not only with other enterprise customers, but with telecommunications providers, with public and private clouds.”

This exchange of information is no longer done via the internet or fibre intercap from city to city, it is happening within the four walls of the data centre, saving companies sometimes tens of thousands of dollars per month on communication costs.

NEXTDC’s data centre management portal ONEDC® offers further benefits to the customer. Designed to give customers remote visibility of their data centre service, considerations such as access management and power monitoring, which used to be done at the data centre, can now be done remotely.

ONEDC is now being developed into a feature-rich cloud platform for Data Centre Intelligence that will enable end users to manage their data centre assets across multiple locations through a single pane of glass, creating new efficiencies and business insights.

“When you think about changing the user’s experience, and what’s unique,” Mr. Scroggie tells us, “ONEDC has been an important enabler for customers when they think about additional value outside of just the data centre.”

NEXTDC provides world class UTI Tier III certified facilities in every major market in Australia
NEXTDC provides world class UTI Tier III certified facilities in every major market in Australia

Head in the Clouds

Investment in overall larger network infrastructure to support consumers and businesses in Australia is critically important. Considering the change in consumption and creation of online content, high-speed network access will only further the productivity and economic leverage that will be gained from these pursuits.

There are still a number of companies in Australia, such as Fujitsu and Hewlett Packard, which still have their own facilities, with which they operate carrier or outsourcing data centres.

“One of the advantages when we’re working with enterprises,” Mr. Scroggie says, “is that they want choice… they don’t want to be tied to a single carrier. Generally when you go into a carrier-owned data centre, clearly that carrier would prefer that you consume their services rather than a competitor’s.”

“We tend to think of ourselves as the Switzerland of the IT and telecommunications industry because of our commitment to neutrality, so you can have access to everybody, rather than having access restricted to only the carrier or a small number of carriers that are available in a non carrier neutral data centre.”

The same can be said for cloud computer providers, which are predominantly interested in selling the services they provide. When customers move to NEXTDC, they have the option of over 40 carriers and more than 180 service providers offering a huge range of services.

“Within those 40 carriers and 180 service providers, there are many, many different public and private cloud computing services available to our customers, and they can move between them if they want to, they are not locked into having to stay with one particular provider.”

Cloud computing offers the ability to consume and pay only for what it used. Providers of public clouds are usually referred to as offering a ‘multi-tenanted environment’, involving sharing the infrastructure with multiple other users.

In contrast, a private cloud will likely be made available only to the individual user. Sometimes these two cloud services are combined, creating something known as a ‘hybrid cloud,’ allowing companies to have a greater degree of control, as well as the ability to customise the platform.

A number of enterprises will retain legacy infrastructure, as was the case with Australia Post, a great example of a company which, despite having the capacity to manage its own data centres, chose a more efficient method by using a large, hyper-scale, co-location facility run by NEXTDC.

“[It’s] not only the security and the availability that’s afforded to them, but it’s the multiplicity of other service providers that are doing business with them that they get access to. And the combination of all of those brings many economic benefits to an organisation the size of Australia Post.”

Australia Post has a traditional or heritage computing infrastructure, but is also an innovative organisation. By using several different public and private service providers, it created a hybrid infrastructure, which it moved to NEXTDC’s Melbourne facility.

“Depending on the organisation,” Mr. Scroggie says, “there are many and varied different considerations that they make relating to security, data sovereignty and pay-per-use.”

Many organisations will embrace public cloud platforms, as they are quick and cost effective to set up, and offer the added benefit of the customer paying only for what they use, but others are more wary of the model.

“Some organisations might be concerned that if they’re using a public computing service, that the data is not hosted in Australia, [so] they have to choose a provider that has the infrastructure and information that is based in Australia.”

Data sovereignty is currently a hot button issue in the industry. In 2013 NEXTDC sponsored a University of New South Wales whitepaper addressing the issue. When thinking about the use of public and private clouds, concerns about where the information lives are on the top of a company’s agenda.

“A primary decision criteria for any investment in a public or a private cloud is going to be: is the infrastructure hosted in Australia, and does the content stay in Australia?”

If information goes into another geography, it can cause significant problems. For example, if private health information has the potential to end up in a different country, there is an obligation for providers to make sure it stays in Australia.

“Depending on the type of information, we have different regulatory obligations for protecting information… every industry has a different set of regulatory requirements, but then there’s the governance requirements, and that is that an organisation might just say: we are not comfortable with our information sitting in a country where another government’s regulations govern how that information can be accessed.”

Any time information is stored outside the country, that country’s government will be able to decide and enforce the laws regarding how it is used and distributed, and dictate the rights a company has to access that information.

“Data sovereignty is a very, very hotly debated topic for organisations when they’re thinking about leveraging public and private cloud computing providers.”

Australia has a number of requirements in relation to data and what should be stored in the country. It is therefore down to the organisations to ensure they are complying with the government’s laws to help the system run smoothly.

“Certainly if you’re Microsoft or Amazon and others that have made big investments in Australia, there is no question that those organisations want to sell to federal and state and local government departments, and in order for them to get access to those government dollars they need to have infrastructure in Australia.”

So even the big multinational companies will have some kind of sovereignty in the country of origin, meaning user information will not travel halfway across the world to be regulated by another government.

“If you’re using Microsoft’s services, it is hosted locally in Australia, so the data is resolved here in a geo-cluster and it’s split between Melbourne and Sydney. Microsoft publicly made that announcement and you can get information about those services and the types of information that are stored locally.”

In contrast, a company like Apple has its services hosted offshore, and so any details entered by the user may be subject to another country’s laws. “Depending on the user and depending on the application,” Mr. Scroggie adds, “whether you’re a consumer or an enterprise, those things matter to varying degrees.”

To read our NEXTDC editorial profile as it appeared in The Australian Business Executive magazine, click on the cover image below.

To see this editorial as it originally appeared in The Australian Business Executive magazine, click here.

NextDC

Written by Nicholas Paul Griffin