Queensland Construction Market Set to Become More Global 2

Thursday, October 29th, 2015
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The business world is becoming increasingly global and many Australian industries and companies are experiencing an influx of foreign investment and ownership.

One area which has remained somewhat sheltered from the global influence is the building contractor market, more so in Queensland specifically than any other Australian state.

Historically, many of the dominant players in the Queensland market are still local, with many of the mid-tier contractors owned and operated out of Queensland.

However, given recent significant acquisitions in the past 12 months, one wonders if the days of locally owned and operated contractors in Queensland will be become a thing of the past.

More importantly, how will the market prepare and adapt?

In March last year, Germany’s largest construction company, Hochtief, became a major shareholder in Leighton Holdings (now known as the CIMIC Group). Leighton Holdings also owns Thiess, which is one of Queensland’s largest employers.

Further to this, in April this year the China Communications Construction Company (CCCC) acquired the John Holland Group for $1.1 billion, which made them the first major Chinese construction company to enter the Australian market.

Prior to this, for 65 years John Holland Group was Australian owned and operated, despite being acquired in 2000 by Leighton Holdings. All three companies have been some of Queensland’s largest employers and business influencers.

As a whole, Queensland has experienced a significant influx of global investment – more than ever before. Investment in the resources, property and tourism sectors have made Queensland a more global location.

One indication of how this will affect the market long-term is to compare the building construction market with the civil construction market.

The civil construction market has already seen a significant involvement from overseas companies such as Acciona (Spain), OHL (Spain), Ferrovial (Spain), Bouygues (France), Balfour Beatty (UK) and now CIMIC (who own Leighton and Thiess).

All of these companies are already active players in the Queensland market and playing an influential role.

If we draw parallels from both markets, we can see it’s not a matter of if the Queensland construction market will become global, but more a matter of when.

The sale of one of major employer within the Queensland construction market was just the start, and an increase in global influence within the sector is inevitable.

So what does this mean for the market generally and the companies that work within it?

When dealing with global companies across resources, civil and property in Queensland, the key is adapting and preparing for the new opportunities it can present. Here are some tips:

  • Think global – companies that don’t adapt their policies and processes will miss out. The days of quick decisions or calling your contact for a quick catch-up to nut out some details are gone.
  • The devil is in the detail – global companies have more boxes to tick. Contracts and agreements may be lengthy and detailed. Make sure all of your internal documentation is current and amendable to the details they need to address key requirements with bigger companies.
  • Preparing the workforce – the hiring stage is often longer, given that a letter of offer or contract needs to be signed off by a number of directors, who might not all be in Australia. The interview process may be more thorough and can involve video interviewing with key decision makers overseas. This means more communication and transparency with potential candidates to ensure they are aware of the situation and not deterred.
  • Global companies mean global opportunities – globalising will help to increase the local market and assist in meeting the demands that will no doubt be placed on the Queensland construction market in the future. Globalisation means access to new technology, new candidate skill-sets and new opportunities.
  • New skills and techniques – the skill-sets and knowledge the Spanish companies brought to the civil market was second to none and saw the development of new state-of-the-art infrastructure and techniques that were introduced to the Australian market.

Given past examples and looking at other sectors, it is only a matter of time before more overseas-based companies make significant investments in Queensland’s construction space and begin to acquire businesses which, up until now, have largely flown under the radar of major overseas investment.

So how ready are you?

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  1. Kendrick Myers

    Thanks for this Jess, Interesting the web of companies and how what we recognise as being a true blue aussie company is now owned off shore. Do you think that this will create more cut throat antics that has already diseased the industry or can this add to a more balanced approach by implementing better process and structure?
    Well written and easily understood.

    • Jess Mitchell

      Hi Kendrick, thanks for your kind words and glad you liked the article. It’s definitely a very topical issue in Queensland at present and always good to reflect on the parallels with NSW’s civil market. Through discussions with clients and candidates across this space, I think this approach will impact the industry in a number of ways. One main one being the implementation of stronger and more thorough processes and structures particularly in hiring and retaining quality talent.
      Thanks for your feedback.