IF a Geraldton-based business can win the backing of James Packer’s Consolidated Press, it must be doing something right.
IF a Geraldton-based business can win the backing of James Packer’s Consolidated Press, it must be doing something right.
If it then attracts a major private equity group like Archer Capital as its majority shareholder, it would seem to be on a roll.
That is the story of Fuelfix, a fuel management business that started operations just over four years ago.
The team that runs Fuelfix, led by managing director Mark Westbrook, has more than a decade of experience in the sector, having previously worked together at regional fuel distributor Sovereign Petroleum.
The new business, which trades as Fuelfix and Tanks2Go, offers a suite of services that includes setting up fuel supplies for remote construction camps and mine sites, hiring fuel tanks, and servicing existing facilities.
“It’s a very integrated offer,” Mr Westbrook said, marking a point of difference with other specialist providers.
The business started in 2007 with “half a dozen people and a few fuel tanks we were renting to customers”, according to Mr Westbrook.
Now it has 80 people in the business, working from six depots in Western Australia and two in Queensland, and a large stock of fuel tanks to enable a quick response to customers’ needs.
Mr Westbrook said the company’s turnover had grown eight-fold and he anticipated revenue of between $40 million and $50 million in 2011.
That kind of growth requires capital. In the early years, Mr Westbrook was the sole investor and the business relied heavily on debt.
“That was going to become a limiting factor,” he said.
That issue became more acute in 2008 when access to debt funding started to tighten, and Mr Westbrook realised it was time to strengthen the balance sheet.
Fortunately he knew people at Consolidated Press who were looking for a private equity deal; they subsequently become a major shareholder in the company.
“They were looking to invest in small, established, scaleable businesses with a differentiated service offering,” Mr Westbrook said.
The investment lasted about 18 months until Consolidated Press reviewed its portfolio, but critically it meant Fuelfix was able to grow through the GFC.
“They were a great partner, very encouraging, and had lots of faith in us as a business,” he said.
Mr Westbrook, who previously ran Cockburn Hire, drew on his business network to find a new investor to replace Consolidated Press.
He had a long relationship with some of the people at Sydney-based Archer Capital, which became Fuelfix’s largest shareholder through a deal completed on Christmas Eve 2010.
Mr Westbrook said he was very happy with Archer as a partner.
“Archer brings value. They assist in analysing the business, and formality, which is important because Fuelfix is getting to a size where it needs formal structures and processes,” he said.
Mr Westbrook is not concerned that private equity partners may come and go because Fuelfix is an entrepreneurial business with a focus on management.
“We’ve already had one transaction and nothing has changed; we still run the business,” he said.
“If you have a good business that runs well you won’t have a problem when financial transactions occur.”
Fuelfix is now looking towards organic growth to eventually expand beyond existing markets in WA and Queensland to other locations around Australia.
It will continue to focus on the same gap in market that it started with – customers predominantly located in remote areas that are looking for fuel supply, fuel infrastructure and related services.
The group now offers integrated fuel and lubricant handling, storage and management solutions, including: the sale and hire of purpose built, environmentally safe, self-bunded fuel tanks; tank installation; testing, repair and maintenance of tanks and pipes; on-site maintenance and rehabilitation; and refuelling services for mining vehicles and equipment.
Tanks2Go also supplies fuel management systems to record fuel usage.
Major clients include BP, Shell, Rio Tinto and Chevron.
The strategic acquisition of rival tank hire business Clean Fuels Australia in September 2008 by Tanks2Go assured its number one role in the market.
The company now has six depots in WA – Geraldton, Kalgoorlie, Karratha, Port Hedland, Tom Price and Paraburdoo – and two in Queensland. Brisbane opened two years ago and Townsville 18 months ago.
Last year, the company also opened a project office in Wangara.
Its management team has been expanded with the recruitment of former BP regional operations manager Simon Fracaro to the newly created position of general manager projects.
Fuelfix Projects covers the design and installation of fuel tanks, lines, pumps, and management systems for service stations and unmanned depots for the mining and transport industries.
