Pressform – Staying the course

Pressform Engineering was established by John Worner in 1976. After graduating in metallurgy from Curtin University, Worner had initially seen an opportunity to get into stainless steel fabrication with a couple of partners, together establishing a reasonably successful fabrication business. The partnership ultimately ran into problems and the company was broken up, but John decided to continue with the pressing side of the business.

“We went forward with the pressing side because I felt it was a better thrust of a business in that it’s based on niche products,” says John. “And so that’s what we’ve developed over the last 40 years, with more and more customers, more and more products.”

Today Pressform operates from a 2,200sqm facility in Bassendean, in north-eastern Perth, with a workforce of around 35. From its beginnings in pressing, the company has expanded its capabilities substantially to include CNC punching and perforating, profiling, rolling, bending and stamping, as well as all forms of welding, CNC machining, hot forming, and laser and high-definition plasma cutting. John’s background as a metallurgist means that Pressform is also able to offer high levels of expertise in terms of materials.

Pressform provides contract engineering services for a range of industries. It is heavily involved in the mining and oil & gas sectors, as well as processing industries such as cement, steel and petrochemicals. It is also involved in areas such as transport, construction and architectural. A tour of its factory demonstrates how diverse its interests are, ranging from tiling and paneling for the construction sector, to pumping equipment for the oil & gas industry, and even some impressively large welded metal frames to be used in a public sculpture project.

The company’s readiness to diversify and explore new markets and opportunities is also evident in the Pressform Group’s list of subsidiaries. The first of these was Pressurelube, which began in 1992.

“Pressurelube evolved because a friend of mine sent down a guy from Malaysia, where he was working in the valve industry,” explains John. “They were having trouble with valve maintenance and lubrication, and the injection of sealants into valves in a live situation where you can keep them operating. He persuaded me to get involved, so we went into this whole business of online valve maintenance. I started making the fittings and tools and then he realised that maybe I could make the pumps as well.”

If a valve leaks, it can cause big problems, particularly in an industry like oil & gas. Pressurelube’s solution can seal valves so they don’t leak, buying the user time in the event a valve needs to be changed. Pressurelube’s system are now employed worldwide.

“Our biggest customer is probably Saudi Aramco Oil Company,” says John. “We’re in the Middle East, we’re in Asia; and it’s now a system that’s worldwide, which is pretty good to have. And our engineering and manufacturing supports that.”

The same friend who was the catalyst for Presurelube was also instrumental in the establishment of another Pressform spin-off venture. Having started his own valve-manufacturing business in Malaysia – Mir Valve – he persuaded John to sell its products in Australia, and so Valve Sales Australia was born.

“They’re based on an Italian pedigree valve,” adds John. “The Italians are probably the best valve-makers in the world. This guy had a friend who had the patent for these valves so he was able to do it at that time, and Malaysia was emerging as the place to get manufacturing done because of the labour costs and ease of transport into Asia. Once again our fittings became very prominent because they adopted those to go on their valves, so that became another source of engineering revenue. Valve Sales are now doing something like $3m a year just in valves. We just got our first US$1m order from Chevron.”

A further success story has been Alloy, a subsidiary operating in a very different industry. Alloy was the brainchild of John’s son Jonathon Worner, who also manages sales and marketing across the Pressform business.

“I thought of the idea back in February 1998,” says Jonathon. “I thought ‘We’ve got this fabricating business that can pretty much make anything’. A friend of mine had this shop in Sydney and he said there was no precision industrial-looking napkin rings. He said ‘How about designing and making some?’ So I did. Then I went to a trade fair in Melbourne and I was staying at a hotel that had these big aluminum panels on the sides of the wall. And I thought ‘What about small, stainless steel mosaic tiles?’ That’s where that idea came from, and I think we were the first in the world to do that.”

Alloy now manufactures a range of 340 different types of metal mosaic tiles, from metals including copper, brass, stainless steel and titanium, in all different shapes and sizes. It also does more diverse work for the architectural industry, such as perforated metal screens for buildings, sun shading and cladding buildings, in all different materials and colours, as well as custom designs and sculptures.

Strength in breadth

Having a spread of subsidiaries has certainly worked to the Pressform Group’s overall advantage. In recent years, its broad range of interests has helped to insulate the company from the fluctuating market conditions faced by the industrial engineering side of the business.

“Engineering is struggling,” says John. “Not so much because we’re doing anything wrong. I think it’s just that all our customers are buying less, there’s not as much activity. We do a lot of truck and trailer parts and things like that, but there’s less trailers and less trucks. We’ve suffered maybe a 20% sales reduction. We’ve held it at that, that’s as far as it’s gone, but we’re trying to make up the 20% with new customers.”

A big factor in this has been the downturn in the resources sectors. John describes the situation in oil & gas in particular as “terrible”, with large numbers of projects on hold. He estimates that Pressform has around $3m worth in quotes out for projects just in oil & gas that have been deferred. It’s a situation, he adds, that is being felt throughout Western Australia.

“I think WA did get very tied up in oil & gas and mining,” he explains. “We’ve had a lot in beach sands mining, and that’s gone south as demand for rutile and those products has lessened. There are several kilns that are no longer operating, and that’s reduced our industry in the refractory side, which is high-temperature stainless steel componentry.

“That’s all part of the process industry. Cement is now being made overseas. I was devastated when we lost Commonwealth Steel, so now Australia doesn’t make stainless steel. And now we have all this gas up north that’s a perfect vehicle for stripping iron ore of its oxide to produce iron and steel, but we don’t have a production plant making steel up there. If I’d been the Premier I’d have said ‘If you want the iron ore you’ve got to build at least one steel plant.’ I don’t think our politicians understand the business of the country.”

John believes the political landscape in Australia is too combative, with Government and the unions too prone to come into conflict rather finding ways to co-operate. He believes the political class should seek bipartisan solutions when it comes to our industries.

“I think the Americans get it right,” he says. “Both sides of their political spectrum understand that their country is a business. I’d like to see less conflict. You can argue about the esoteric things, but the business side of the country, when we want to export something or make something, that’s when I’d like to see everyone put their shoulder to the wheel.”

Difficult market conditions are not just a problem at the local level either, when exports account for 10%-20% of Pressform’s revenues. Pressurelube has had problems with partners in the Middle East, while Alloy has a number of projects on hold overseas for new-builds – though as Jonathon points out, things could change quite quickly in that area.

“We’ve got a big project in West Africa that’s been on hold for 18 months,” he says. “We’re waiting for that to happen. There’s a number of projects on hold in the UK as well, so if they kick along that will boost our exports sales significantly.”

Despite these problems, Pressform’s broad-based approach leaves it well positioned to withstand them, as a low in one sector or region is offset a high in another. For example, Alloy is currently thriving amid the property boom in Sydney, whereas the residential market in Perth is down. Moreover, the various sections of the business often bring benefits for each other. John cites a local customer who supplies plumbing chains with bathroom drains produced by Pressform – a successful bit of business that was largely brought in through that friendship.

For the future, John raises a number of options, ranging from the potential for mergers or even a public listing, through to the possibility of establishing a sister relationship with an engineering company in Malaysia. One thing that does seem to be fixed on the horizon is succession planning.

“I moved back from Sydney two years ago to start the process of getting more familiar with the different processes and functions of the four businesses working together,” says Jonathon. “We plan to continue to build them up, increase sales, and manufacture and supply niche products. And to keep manufacturing going by helping companies that need smaller volumes of products made here. I think always you’re going to need to have local manufacturing.”

“Our eyes aren’t closed,” adds John. “We’ve got our eyes open and we’re ready for business. We want to do business.”

www.pressform.com.au