Keeping it civil

Written on the 15 September 2009

BMD Group is involved in a number of large scale developments around Australia with an end value of around $2 billion, but group executive director Scott Power says the challenge is to keep new projects coming. While half of the family-run group’s revenue comes from Queensland, BMD has managed to make inroads outside the state.

WITH a company that turned over $847.5 million last financial year, BMD group executive Scott Power says with size comes complexity, especially in keeping the family-oriented culture that sets the company apart from the rest.

His father Mick Power founded the company 30 years ago and since then BMD has grown into the largest residential subdivider in the country, with infrastructure projects as well, of which the largest is the $700 million Safelink Alliance Ipswich Motorway upgrade.

Scott Power says BMD has diversified across sectors and geographically as well, which helps avoid dependence on concentrated sources of revenue in a difficult financial environment.

“Obviously our scale and being so large are some of the biggest challenges we face – you’ve got to secure a large volume of work to keep the business going,” says the civil engineer.

“You only have to go back 20 years ago and we were primarily a subdivisional contractor, but we made the decision to diversify our service offerings and geography. Firstly we expanded within Queensland, we opened up in Townsville, progressed to Darwin, then Melbourne, Sydney and most recently two years ago in Adelaide.”

“We now have a very large infrastructure capacity, which has been a big part of our growth. Opportunities in infrastructure in New South Wales and Victoria are high on our list, as well as industrial business.”

The other big challenge right now is financing, which Power says is not as easy for a private company, or the state government as one of BMD’s major clients.

“The whole business is made difficult by the financial environment – as a private company we rely on private financiers and that’s a major difference between ourselves and public companies, where they have access to capital markets,” he says.

“I think what will affect the industry is funding – for example, the Queensland Government is selling off it’s assets to fund growth. At the moment there is significant spending on infrastructure but whether or not that continues will depend on how the government manages its finances.”

“From our perspective we’ve diversified across sectors to try and not be too dependent.”

The projects
In addition to the Ipswich Motorway upgrade BMD is also involved in a $60 million alliance in Logan, the $50 million Abbot Point Coal Terminal upgrade, the F3 Freeway in Sydney, as well as a section of the $750 million Lathams Road Overpass in Victoria.

“And there’s also South Australia’s Christies Beach. In the development area we’ve got the 2000-block Capestone Estate at Mango Hill which has just kicked off, the 1000-lot estate Moorebank near Melbourne and a 450-lot at Ascot Chase,” he says.

“They’re all big projects and it’s hard to put a figure on them but in terms of end value we’re looking at a value in excess of $2 billion across the construction and development sides of the business.”

He says last year’s revenue was a record for BMD and with its 1200 staff the group has managed to expand operations in what have been difficult times.

“The growth of the last few years will be difficult to maintain but in these markets there’s opportunity for growth – if not high growth at least at an acceptable rate.”

Power says to keep growth going BMD is always looking for new jobs, which at the moment include tenders for the Nagambie Bypass in Victoria, as well as $100 million worth of upgrades on the Great Western and Central Coast highways in New South Wales.

Going green
Another great opportunity for BMD stems from its involvement in the first carbon neutral road project in Australia – a type of operation that Power plans to continue with further works in the future.

“The carbon neutral road project on Mickleham Road was the first of its kind in Australia and there’s great opportunities for us in tackling the greenhouse challenges we face,” he says.

“It’s absolutely something we’ll be offering. In development, reducing greenhouse emissions is important so we do what we can and have the relevant tree planting to improve the carbon footprint.”


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