Andrew Pellizarri, general manager of Flinders Logistics and Peter Cheers, general manager of Flinders Adelaide Container Terminal, discuss how Flinders Ports has adapted to evolve.
Many companies around the world have felt the effects of the global financial crisis since it first began to take hold in 2008. Harsh lessons have been learned in the time since, yet some businesses have managed to weather the economic storm and, in some cases, come through stronger than before. Often what we find is that one characteristic these businesses share is diversity.
“By moving away from being purely a port owner,” explains Andrew Pellizzari, general manager of Flinders Logistics, “we have diversified as a business and this has sheltered us in some ways from the financial crisis and allowed us to go from strength to strength.” The diversification he mentions relates to the steps taken by Flinders Ports, over the last 18 months, to establish a logistics business, take full ownership of the Adelaide Container Terminal and expand its reach across Southern Australia.
As the mining sector within South Australia has grown, the company has been increasingly looking to develop its ports to offer a competitive supply chain solution to the industry. It is South Australia’s growing importance within the commodities and raw materials markets that first spawned the concept of Flinders Logistics. What was originally positioned as a bolt-on to the main business has rapidly evolved into its own entity, providing infrastructure and specialised services in niche markets.
Despite its short history, Flinders Logistics has already made its presence felt, introducing its rotating tippler solution to the marketplace. “What we have done,” Pellizarri continues, “is develop a technique that is changing the way concentrates are handled and that is now being embraced across Australia, and soon the world over.” In recent months, CEOs and directors from companies near and far have visited Adelaide to examine the company’s solutions and they all agree that Flinders Logistics is the market leader when it comes to this technology.
Integral to the technology is the company’s DF misting system. Designed to eliminate air contamination from the dust generated from the movement of container loads, the system has been a revelation for both Flinders Logistics and the sector. “Naturally,” Pellizzari states, “different products and loads create different types of dust particle. Additionally we have to adjust the misting system to varying degrees of pressure, wind and humidity in order to supress the dust. The DF misting system is flexible enough to do all of that.”
In July 2012, Flinders Ports confirmed that it had acquired 100 percent ownership of the Adelaide Container Terminal following its buyout from previous co-owner DP World. The deal valued the business, which handles approximately 300,000 containers a year, at more than $223 million. With the success of the terminal being integrally linked to the success of Flinders Ports as a whole, the company has taken the view that major investment is needed to take the business further.
“When we went into the terminal,” Peter Cheers, general manager of Flinders Adelaide Container Terminal explains, “we knew we had to spend capital in order to buy equipment such as additional cranes, and implement a planned maintenance programme. These are the sort of things that, once in place, allow you to more effectively manage your resources.” Such actions also send out a strong message not only to the company’s employees, but also its clients that Flinders Ports is ready to invest to provide a more efficient, effective service. Presently the company is assessing the market for additional quay cranes.
The port side of the company is constantly looking at ways in which it can grow, be it through the expansion of its existing assets or through the acquisition of mature or new opportunities. One on-going development for Flinders Ports involves the Port of Bonython, 20 kilometres east-northeast of Whyalla, South Australia. A large greenfield site, it is intended to become a deep water port tailored for the bulk commodities sector. As the leader of the consortium that won the tender for this development, Flinders Ports is currently undertaking an environmental impact study on the project. The Port of Bonython is expected to take around three years to build, at a cost of between $600 and $750 million.
The successful growth of Flinders Ports and its various businesses is clear to see, yet evidently there is much still to come. “From a logistics perspective,” Pellizzari says, “our natural progression involves replicating what we have achieved locally on a grander scale. Through word-of-mouth alone, we are now working on several interstate projects and this will be the way forward. While we want to avoid overstretching or overcapitalising the business, what we are able to do is pick strategic points in the region where we can set ourselves up and invest in capital with plant, equipment and operations.”
When it comes to its Adelaide Container Terminal, the company has a clear mission in front of it and that involves tackling the issue that, at current rates, the terminal will have reached its full capacity within 12 to 18 months. “Unlike other terminal operators,” Cheers says, “we are in a position where we have significant land holdings adjacent to and around the terminal itself.” Ownership of this land will allow any future redesign of the terminal to be undertaken in the most effective way. Additionally, it provides Flinders Ports with the opportunity to establish and run empty container depots and other businesses that are ancillary to its main container operations.
“In addition to having good management and a professional, dedicated workforce,” Cheers concludes, “one of the core strengths of Flinders Ports is that it has always retained a very strong ethical position. The transparency we have with our employees and clients allows them to see the good work that we are doing and having the sort of demonstrated business record that we have, particularly in the maritime and stevedoring industry, is a very strong selling point for the growth of our business in the future.”
Written by Will Daynes, research by James Boyle