The buoyant resources sector has proved a boon for Paladio Group Ltd with the diversified industrial services provider expanding its existing operations and acquiring businesses complementary to its existing infrastructure.
The buoyant resources sector has proved a boon for Paladio Group Ltd with the diversified industrial services provider expanding its existing operations and acquiring businesses complementary to its existing infrastructure.
The Belmont-based group, founded as Novacoat Holdings Ltd in December 2004 and listed in April 2005, recently completed a $10 million capital raising to fund a transaction, finalised last month, to establish a joint venture with US-based environmental remediation company Remtech Inc.
Paladio executive chairman Dick Wright told WA Business News the company was approached by Remtech in November last year with regard to a collaborative venture in environmental remediation.
“What evolved earlier this year was that we would join together and form Remtech Environmental Solutions, which is 51 per cent owned by Paladio and 49 per cent owned by Remtech in the US, and that we would tackle the market on a global basis,” Mr Wright said.
RES was to provide services, he said, including environmental construction, soil remediation, water and sludge treatment, site containment and encapsulation.
“At the end of 36 months Paladio would have the right to acquire the other 49 per cent of RES,” Mr Wright said.
“We are confident that the environmental service market in both Australia and overseas is active and will continue to develop into the future.”
Under the agreement, Paladio acquired a direct thermal desorp-tion unit, which treats soil or waste by heating, for $A2 million and will provide revolving working capital of the same amount.
“The TDS is a direct fired model which is under manufacture now and will be available in July 2006 and will be ready for operation in the third quarter of 2006,” Mr Wright said. “Where it goes first is undecided.”
Mr Wright told Paladio’s annual general meeting last month, the units are transportable and have a 10 to 25 short tons per hour capacity, depending on the soil or waste being treated.
“The services of RES had been marketed in such countries as Taiwan, Italy, Dubai and Australia with its first order expected in late 2006 or first quarter of calendar 2007,” he said.
The current CEO of Remtech Inc, Patrick Garrett, has been appointed the managing director of Remtech Environmental Solutions, while co-chairman of Remtech Inc, Roy Rose, has been appointed a director of Paladio Group.
Mr Wright said the group had been experiencing 12 months of revenue growth across its other operations.
“We see the growth is coming from several areas and we are looking at acquisitions that fit our model and have some synergistic benefits with our other businesses,” he said.
Paladio subsidiary, McFee Pty Ltd, a construction and mainten-ance contractor servicing the resource industry, has grown considerably, from a zero revenue base when the group bought it in mid 2005.
“We have been able to generate $4 million in revenue per month, mainly through the strong demand for services in the resource sector throughout Australia,” Mr Wright said.
Recently, McFee secured service contracts with Alcan for the provision of a completions team for the Gove Third Stage Expansion Project in the Northern Territory. It also has a deal with Man Takraf Australia to provide trades services for the assembly of five container loader cranes in Botany Bay, New South Wales.
The recent contracts add to a growing list, which includes projects at Paraburdoo for Rio Tinto Iron Ore, work on the Pinjarra project, the Worsley upgrade project, and construction work for Bendigo Mining Ltd’s gold mine in Bendigo, Victoria.
McFee, which has offices in Perth and Sydney, has recently established a small serviced office in Gladstone Queensland and has appointed Peter Stuart, who joined the business in late 2005, as general manager.
Earlier this year, Paladio Group acquired Completion and Support Engineering Pty Ltd, which provides professional engineering services to undertake management and implementation of project commissioning, technical support services required to cost-effectively run and maintain a plant and services to help develop quality and safety management systems.
Mr Wright said the new acquisition was favourable to the group as it offered services complementary to McFee’s business.
“McFee can provide services to it while CASE, with their technical writing, can provide services to the group, so we see some synergies, and it also balances our standing in the resources industry,” he said.
CASE was awarded its first project by the Barclay Mowlem-Roberts & Schaeffer Joint Venture to provide commissioning support for a coal handling and preparation plant in the Queensland coal fields.
Paladio Group currently employs 250 people and has a current market capitalisation of $29.2 million.
