ATC Feature on Inside Business
16 August 2010
The GFC sent many businesses involved in the construction industry into a spin as the banks put the brakes on credit.
But one small Australian export company ATC believes the days of growth are about to return, despite the hurdles of the world wide downturn.
BEN CHAPMAN, MD, AUSTRALIAN TURNTABLE COMPANY: That economic crisis actually changed the way business is going to be done in the future - definitely by us and in the Middle East in general. As they say, cash flow is really king - that's has been belted into us recently.
REBECCA NASH: The Australian Turntable Company was established by the Chapman family 25 years ago.
BEN CHAPMAN: Really, the way we see our company is that we provide solutions using rotational movement.
We produce truck turntables for loading docks, we provide products for the mining industry, right through to revolving restaurants around the world. We've provided probably half a dozen revolving restaurants into the Middle East.
REBECCA NASH: Turnover was about $4 million a year, thanks to healthy exports, when the financial crisis hit.
BEN CHAPMAN: We saw a dramatic drop off in international inquiries. They just almost stopped entirely for about a nine month period. But we also saw a slowdown in the construction side of things in the large developments here in Australia.
The bread and butter product, which is the driveway turntables, was probably our best performer over the past 12 months. So it was good to have that regular product going through the factory. We sort of used the time to develop new products and investigate new markets.
REBECCA NASH: Some hard lessons were also learnt along the way.
BEN CHAPMAN: We've had to look at ways of securing debtor payments at certain times, which weren't in place at the time so it put us at a lot of risk. But during that time in the Middle East, business was flying and some of those risks were worth taking but now that's definitely changed for the future.
Just before the crisis hit we were going through a fairly substantial growth phase and to cater for that we had to expand on our factory site and went into that fairly significantly. If we had of known that we were going to go through this financial crisis for the next 12 months we definitely would have slowed that down and managed that a little more sustainably.
REBECCA NASH: Difficulty accessing extra finance is one of the more frustrating legacies of the GFC.
BEN CHAPMAN: Because we're dealing in international projects and our products are a little bit different, it creates a lot of risk and uncertainty for the banks. But we've had a relationship with our bank for long time - we've been with them for 20 odd years and been through a lot of hard times, but also some good times together but all of a sudden that history between us really had a lot less importance.
REBECCA NASH: Ben Chapman sees the credit clampdown as ironic.
BEN CHAPMAN: We're less risk because of the crisis. We've spent so much time on our contractual and payment terms and we're a lot stronger in negotiations regarding those factors. And, you know, we'll actually turn down jobs that don't suit our payment terms.
There's often a lot of R and D requirements for our products and we've definitely had to slow them down. Rather be a little bit more proactive in getting our product out there.
REBECCA NASH: But the market is starting to pick up with international interest growing again.
BEN CHAPMAN: We're being recognised as leaders in our field and people are starting to understand the benefits that we can bring to a development, and that's starting to really reap rewards.
To see the interview please click on the link below.
Export Company Recovering After GFC
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