JG King Homes is at the heart of the multi-faceted organisation JG King Building Group, and dedicated to building high quality steel framed residential housing throughout Victoria. The Australian Business Executive spoke recently with General Manager of Operations, Natalie King, to get her thoughts on the rise of the company to one of Victoria’s top 5 building firms.
“My father is the founder of the company,” says Ms. King, explaining how her career with the JG King Building Group began. “His name’s John King and he started the company thirty years ago. In fact we have our thirtieth anniversary this November.”
Ms. King was just thirteen years old when her father started the company, but her role within its ranks did not start properly until many years later.
“I didn’t initially work with the company. I obtained a degree in Business Information Systems, and then a Masters in Business. I became a Business Analyst and Strategist, specialising in Channel Strategy and E-Commerce.”
Ms. King worked predominantly in Asia and Europe, holding roles for several different companies as a Business Analyst, before deciding to return to Australia from London to join the family business in the same role.
“I joined the JG King Building Group around eleven years ago,” she explains, “and have since held a number of positions. Initially it was Corporate Strategist, and then I moved into General Management.”
“I am currently Director of the JG King Building Group of companies, and I’m the Manager of the JG King Homes business, which represents about 65% of the turnover of the whole group.”
The company’s start in building came when Mr. King bought a new home franchise in Ballarat from Queensland based Nu-Steel Homes. At the time he was working for VicRoads in Ballarat, and had been engaging in property development for rental for nearly ten years.
“[Property development] actually enabled him to get enough equity to buy a Nu-Steel Homes franchise. I think his business plan was to sell 15 or so homes in the first year, and I think he did around 35.”
The Nu-Steel product was originally marketed as a kit home, sold to individuals to construct themselves. Ms. King recognises, however, that it didn’t work like that, and Mr. King’s newly formed company took care of all the building work through the JG King Homes brand.
“Back thirty years ago,” she explains, “steel framing was quite new… it did have pretty good take up in Queensland and WA, although in WA they only do roof trusses made out of steel.”
“In the beginning, we purchased rolled steel for manufacturing our frames from BlueScope Lysaght. However, approximately 15 years ago we began roll-forming the steel ourselves in our Ballarat Manufacturing division.”
“We have come a long way since we welded our frames together 30 years ago,” she adds. JG King still purchase steel from BlueScope Steel and have strong preference for supporting Australian made products, materials and services.
The move to greater involvement in the direct manufacturing of the steel frames and trusses provided the company with a more cost efficient method of offering its services. Now JG King can offer a superior product to the traditional timber frames at a competitive price.
“The technology that we’ve developed,” Ms. King continues, “through that business, Steel Frame Solutions, is arguably one of the best in the world [for steel frame building]. The factory is purpose built, based on our experience, and is quite efficient.”
BlueScope has a growing stature in Asia, where they have had a lot of success with the same technology, and has advised JG King that they have arguably the best factory setup and product of any company using its equipment.
State of Victoria
The company builds almost exclusively within Victoria, occasionally crossing the border into southern NSW. It has recently identified a few key regions in that state where it can look to gain business growth.
“We have a very strong market share in the major Regional Victorian centres, for example 12% in Bendigo. Ballarat, our home market, is very strong as well, so we’d like to see some of our other regional centres achieve that level of penetration.”
The big focus for the company going forward will be to develop market share in the towns of Melbourne and Geelong, which together represents about 70% of all new home builds for the state.
The Victoria market is different from that in bigger cities like Sydney, where a lot less land is available to build on, and is more expensive. Ms. King believes Victoria, and Melbourne in particular, have an advantage in affordability.
“It’s a fairly strong new homes market, and it’s been fairly stable for some years now, because of the land that’s available and the affordability in the market; plus it’s got very good migration levels with population growth across the state.”
Victoria’s position as a high migration state comes from a combination of both interstate movement and international immigration. The State Government has been encouraging growth, through a number of recent policies on settlement in regional centres.
“So we would be the largest builder in regional Victoria,” Ms. King adds, “and centres like Ballarat, Bendigo and Geelong have been strategically identified by the government as growth areas.”
Part of this strategy has seen a governmental campaign encouraging people to migrate to these towns, areas where JG King Homes has a very strong brand, and a dominant presence within the marketplace.
“Because the company has a manufacturing facility,” says Ms. King, “and is vertically integrated in the way its frames are produced, we believe we are able to offer quality homes at the same price, or better, than the traditional timber frame builders in the state.”
“We would probably be fairly representative of the market more broadly, in that first time buyers would be between 10 and 15% of our business, with 20-30% of our sales from investors, and the rest would be to second or third home buyers or down-sizers.”
JG King Homes has held its position as one of Victoria’s top 5 builders for several years, seeing several other builders come and go, but staying fairly consistent in its market position over those years.
“That would be [based on] purely the volume of new homes,” Ms. King says. “In terms of houses that we put into the ground, we’ve being doing about a thousand houses a year for several years.”
The company currently employs over 350 staff, as well as utilising around 2-3 thousand subcontractors from around the state on a regular basis, with current annual turnover of around $250 million.
This relative stability and consistency over the years is due in the most part to the company’s fluid, regional approach, which helps it stay on top of local trends in the marketplace.
“We’re quite regionally diverse, so we sort of see ourselves as not really one business, but a lot of local ones, as part of these communities. Sometimes, some regions may be suffering a bit, but we tend to be able to compensate for any downfalls in a particular area with another.”
Steel Frame Housing
“Whilst we have a highly successful Projects division, run by my brother John, we predominantly build one off houses,” Ms. King tells us, “lots and lots and lots of them.”
“About two months ago, we launched a new affordable range of homes, which we’re calling the Up Collection.”
The Up Collection is made of seven homes, designed specifically with affordability and cost-effectiveness in mind, and targeted at first time buyers or investors, with the aim of offering great value for money.
“We’ve seen huge success with the level of interest and the enquiries and the conversions that we’ve been achieving with that range,” Ms. King says.
Trends in housing will come and go, but Ms. King is well aware that one of the keys to success is to be able to stay up to date with certain market trends and make sure they are being capitalised upon.
“At the moment we need to have walk-in pantries, walk-in robes, stone bench tops in the kitchens, al-frescoes and the number of rooms, I suppose is what people are looking for. They don’t want large rooms, so much as more zoned living spaces to accommodate larger, multi-generational families.”
Prices in the Up Collection vary depending on region, with areas further away from Melbourne being more expensive due to the cost of supplier delivery from the city.
“Our houses in Melbourne start from $112,900,” Ms. King explains, “and that’s for basic three bedroom home, and so that’s very, very affordable.”
“We’ve found that we’ve been able to hold the retail costs of our housing for the last few years through strong purchasing initiatives and efficiencies in our product design.”
Since 2009, all green field sites in Victoria have been classified in line with a scheme called Bushfire Attack Level [BAL], applied to areas that are prone to being significantly affected by bushfire.
“Depending whether you’re a BAL low [rating], or a BAL 19,” Ms. King explains, “or upwards, you have to do more things to your house to make it safe in a bushfire.”
JG King Homes’ position as a steel framer gives them a significant advantage in the area, as steel frames do not ignite under ember attack. A recent change in the National Construction Code recognised the positive impact steel frames have had on bushfire levels.
“We actually need to do less to our homes to have them comply to these different ratings, which means that price of $112,900 includes a BAL 12.5 rating, which if you went to any other builder could cost you $4,000, for example.”
Many other builders are offering similar house prices to JG King, however once the BAL ratings are taken into consideration, the price is likely to rise by $4k, as well as another $2-3k to have a Colorbond roof to meet regulations.
“It’s not just about pricing,” Ms. King stresses, “it’s about what specification of home you get for that price.” In addition to the cost and safety benefits provided by steel frame homes, BlueScope Steel protects the structural quality of the material.
“What that means is, that frame, those roof trusses, they are guaranteed, not just by JG King, but by BlueScope, for fifty years. We generally are very conservative in our foundations engineering, and as a result, we have very few problems.”
In February 2009, on a day now known as Black Saturday, the state of Victoria was devastated by bushfire, causing widespread destruction and casualties. Some of the only homes to survive the fires were steel frame JG King Homes in Marysville and other fire affected regions.
“With houses that burn down because of bushfires,” Ms. King says, “they burn down typically because the embers attack—getting under the gutter, or getting into the gutter—and ignite debris, or get into the roof cavity in some way.”
The difference with a steel frame home is that the only thing in the roof cavity is non-combustible steel and fiberglass insulation, giving companies like JG King a huge advantage in terms of offering safety against bushfire.
“I’ve got to be careful about the claim,” she adds, “because they can burn down in extreme flame situations, so I can’t make a statement that you are safe in one of those homes… but I can say that we haven’t had them burning down.”
People in regional Victoria particularly love the quality offered by steel frame houses, as they are more likely to value the lifespan and longevity of their homes a little more than those in Melbourne, who tend to turn over new houses more regularly.
“Plus, of course, termites don’t eat steel. The average cost of a termite infestation in Victoria is in excess of $30,000, and of course termites are everywhere.” All of these factors help to increase the natural longevity of a steel frame build.
“We’ve looked in houses that are 20 years old,” Ms. King says, “and the steel looks exactly the same as the day we put the house up.”
The question remains then, why aren’t more companies embracing the steel frame build? Ms. King reveals that the company has already been involved in supplying materials to another major builder in Victoria, though hasn’t been able to continue.
“We had to stop that supply,” she explains, “because we had a limitation on our own manufacturing, and so the growth of steel framing in Victoria has been constrained by our ability to supply to external companies.”
In response, the company has released some capacity in its factory, and will be looking to expand the supply of steel framing as its own business entity soon to help increase the productivity of steel frame housing in the state.
JG King boasts a multitude of impressive awards and recognitions, including numerous MBAV and HIA awards, with 6 housing awards in the year of 2012 alone.
But one award, from Dun & Bradstreet, was particularly well received by Ms. King, as it recognised the company for its financial stability. “For a building company that’s pretty amazing,” she says.
The award came almost 8 years ago, and as the panel does not accept self-nominations, it was the result of Dun & Bradstreet trawling its database and identifying JG King as particularly meriting recognition.
“They select businesses based on their own criteria, so we won the building category for Victoria, but then we won all categories for Victoria as well, that’s for financial stability and strength.”
“That’s fantastic when people are choosing a builder,” she adds. “You want to have peace of mind that you’re with a builder that is there for the long haul and isn’t going to get into trouble.”
Mr. King won an Order of Australia medal for his contribution to philanthropy in disability housing, and so has a personal interest in assisting organisations in the disability sector, something the company has been very active in.
“He’s on the board of McCallum House [Disability Services] in Ballarat and we, wherever possible, will work with organisations to help. And help is often in the form of charity homes.”
The company endeavours to provide two charity homes per year, using its network of suppliers and sub-contractors to build houses as cheaply as they possibly can, to then be either auctioned off by the charity or kept to provide cheap housing for its clients.
“So disability housing is an area we are particularly focussed on. I’m also particularly focussed on the provision of housing for underprivileged women and children, and I’m on an advisory panel for Women’s Property Initiatives (WPI).”
WPI is an organisation that looks at not just getting one homeless person off the street and into housing, but particularly on getting a woman and her children off the street and into a safe environment.
“It’s not just helping one person, it’s helping generations of people, by breaking that homelessness pattern. If you can get a woman and her children in a stable home, then the outcomes for that family are enormously improved.”
Another part of the wider JG King Group is the JG King Projects division, which specialises in building retirement villages and multi-residential sites, building anything from a 30-unit to a 200-unit site.
“I believe that we have been leaders in the field of building retirement villages over the last 15 years. We’ve built retirement villages for nearly all the major operators, and we have fantastic, long lasting relationships and repeat business with our clients.”
Ms. King believes the important areas in Victoria are the country towns and regional centres, where word gets around about quality and commitment far more effectively than flashy advertising campaigns or sales plans.
JG King’s success over the last thirty years has come from its work in these small towns, employing people in local regional centres, building for them and their families, and becoming an important part of the community.
“We originally are from Ballarat, and we grew out of that across Victoria, so we still have these country values, and I think people can relate to that. It’s a bit more of the honest builder, if you like.”
Ms. King concludes “We’re probably where we are, not because we’re great at sales and marketing like some of these other major builders, but because we’re really good builders.”
Find out more about JG King Homes by visiting:
This JG King Homes business profile has been made possible by the generous support of:
Hume Doors and Timber
To view this editorial as it originally appeared in The Australian Business Executive magazine, click here.
Editorial by Nicholas Paul Griffin.