COMMERCIAL construction firm Entact Clough, part of listed WA engineering firm Clough Limited, will soon be closing its doors and reopening as Perth Building Company.
COMMERCIAL construction firm Entact Clough, part of listed WA engineering firm Clough Limited, will soon be closing its doors and reopening as Perth Building Company.
Perth Building Company has been set up by Entact Clough general manager Adrian Ridderhof and two Entact staff.
Industry sources have suggested Entact’s closure resulted from its inability to compete on projects.
Entact is a signatory to the Construction Forestry Mining and Energy Union’s latest enterprise bargaining agreement, which contains much higher rates of pay than non-EBA builders are using.
CFMEU secretary Kevin Reynolds told WA Business News earlier this month some subcontractors and builders who had signed the EBA were being undercut by non-EBA companies.
However, senior management at both Entact Clough and Clough have rebutted claims of non-competitiveness as a result of the EBA agreement.
Clough will be retaining the Entact Clough brand and novating one of Entact’s contracts to Perth Building Company.
Clough group manager corporate affairs Peter Collins said Clough had decided to exit the commercial construction sector and get back to its core business.
He described the commercial construction sector as “low margin, medium risk, highly competitive and non core”.
“Entact is not being closed down. We’re keeping the identity and the brand and may still use it for something further down the track,” Mr Collins said.
Mr Ridderhof said the decision to exit commercial construction had been made by Clough.
“Clough wants to concentrate on the civil construction area,” he said.
“The new EBA was not part of the problem.”
Mr Ridderhof said the company had been low bidder on a couple of projects but had not been able to accept them.
“We have certain terms and conditions that we will work under and they are somewhat more onerous than other companies,” he said.
“Those clients chose not to accept them.”
Mr Ridderhof said Entact would be finishing all but one of its remaining projects before it closed and that final contract would be completed by Perth Building Company.
“Perth Building Company will be staying in the commercial and industrial sector,” Mr Ridderhof said.
Entact was formed by former Clough staffer Kevin Luttrell and has been part of Clough for more than a decade.
It has been involved with various commercial, industrial and residential projects both in WA and overseas.
Its largest project was valued at $30 million.
