The latter half of last century was a boom era for Southland contractor A G Hoffman, but the long-established company has had to adapt to the much more subdued tempo of recent years. By GAVIN RILEY.
ANYONE LOOKING to understand the increasing struggle for survival of provincial contractors over the past 25 years could do no better than examine the lot of those who make their living in sparsely populated and remote Southland.
The second half of the 20th century was kind to enterprising Southland contractors, offering lucrative work on such major schemes as the Manapouri hydroelectric power station, the Tiwai Pt aluminium smelter, and the Rayonier medium-density fibreboard (MDF) plant.
But in the 21st century, Southland, with a population of below 100,000, is relying on its traditional (and admittedly thriving) economic strengths of farming, forestry, fishing and tourism, which means selective pickings for those contractors who have shown the resilience, adaptability and determination needed to survive.
There is no better example of the rugged and resourceful nature of the Southland contractor than A G Hoffman Ltd, which now has just over one tenth the number of employees it had 40 years ago (an admittedly labour-intensive era) but which has shrewdly altered course to ensure it has a future.
The company is headed by Grant Hoffman, who looks after the civil side of the business, and his brother Dale, who is in charge of the rural work and whose working life is divided between being on site, pricing contracts, and marketing.
A G Hoffman was a versatile and fast-expanding general contractor last century but is now more specialist, with fewer but more repeat clients. “In broad terms, half of our workload would be earthworks and drainage relating to industrial and forestry roading and maintenance,” Grant says. “Farm drainage and development has always been an important component of our business operations, which includes stock underpasses, stock water schemes – we’ve recently finished one that is over 40 kilometres long – and occasional dairy effluent ponds.
“The balance of our work would be project contract work and maintenance contract work for local industries. Recent projects include siteworks at Mobil’s Bluff fuel storage compound, and upgrading the containment infrastructure, siteworks and underground infrastructure, including constructing a biofiller, for Allied Lorneville freezing works’ new rendering plant that processes offal for export.”
Grant and Dale have spent a combined total of nearly 70 years with A G Hoffman, the company founded in 1962 by their father Gordon, now 85.
Initially employed by the Southland Catchment Board, Gordon actually started out in business in 1952 at the age of 22 when he spent £2000 on a Ruston Bucyrus 10-RB dragline excavator, formed a partnership with a friend to keep the machine working 16 hours a day, and undertook work in the fast-growing farm-development sector.
Though the partnership ended after a couple of years, Gordon kept the 10-RB working and was eventually to rack up an astonishing 20,000 hours operating it. After marrying and moving into Invercargill in 1960, he added civil drainage to his farm drainage work, and as A G Hoffman Ltd he went on to win numerous contracts from Invercargill City Council, as well as from the expanding freezing industry and other private clients.
“He took on a lot of contracts, stormwater drainage jobs, some of them big jobs,” Grant Hoffman says. “He made good money doing civil drainage, he got into subdivision work, and he also did streetworks and civil reticulation. He started his own subdivisions, a critical thing [in the company’s development]. We’ve still got sections left.”
In 1966 A G Hoffman completed the reticulation of Kelvin Heights in Queenstown and a foul-sewer rising main job in Bluff after the main contractor went out of business.
The following year the company was subcontracted to Wilkins & Davies to carry out drainage work and install culverts on the Tiwai Road upgrade, part of the preparatory work for the Tiwai Pt aluminium smelter project. Two years later A G Hoffman was awarded Tiwai construction water-supply and maintenance contracts by the smelter’s main contractor, Kaiser Engineers and Constructors from the United States. A G Hoffman also carried out construction of subdivisions to house the project’s labour force.
By 1970 Gordon Hoffman had 100 staff and a plant and equipment fleet that included hydraulic and Tracgrip excavators, draglines, graders, a pivot-steer loader, bulldozer, trucks, and a transporter.
“He made very good decisions and he put a good team around him to do it. Also he was very ambitious and driven, and there were some strategically major opportunities happening in those days,” says Grant when asked how his father was able to become so successful in just eight years.
“Tiwai Pt really opened things up massively. Kaiser wanted to work with local contractors and we had a reasonably established business and business structure. And Invercargill in those days was deemed to be the Hamilton of the south. It was going to be a massive place.”
A G Hoffman continued to work on the various stages of Tiwai Pt’s development, including carrying out a $3.3 million earthworks contract on stage five. It also completed an $860,000 underground reticulation contract on Rayonier’s MDF plant at Mataura and the foundation excavations for the milk-powder tower at the Edendale dairy factory.
But the 1980s was not an altogether prosperous decade for Southland or its contractors. The Lange reformist government of 1984 seriously undermined the prosperity of agriculture, the 1987 sharemarket collapse took a heavy toll on business, and Southland suffered a specific blow of its own with the 1984 flood, which caused an estimated $100 million worth of damage as almost 150mm of rain fell in just three days. Some 5000 people had to be evacuated from their homes and A G Hoffman’s premises were flooded to a depth of 1.2 metres.
Though the company gained some recompense by being contracted to erect stopbanks along rivers to protect farmland and residential areas, it went on to voluntarily forfeit work possibilities elsewhere. In the late 1980s it carried out a number of roading jobs but a subsequent influx of major companies such as Fulton Hogan, Bitumix, South Roads and Works (now part of Downer) made it decide to restrict its roading role to that of bulk earthworks and drainage subcontractor.
Grant Hoffman is comfortable with downsizing the 63-year-old company. “Previously we were always geared to service an expanding market. But in the ’80s we had to downsize to survive and now we focus on continuity of work. We have a very experienced and respected base to work from and we focus our attention on the client’s needs and delivering a quality job,” he says.
“Switching from main contractor to subcontractor was a conscious decision and the best thing we ever did as it expanded our market and we developed strong business relationships with the large roading companies, which increased our roadworks market tenfold.
“The roading market has tightened since, with shrinking budgets and increased competition. The Southland District Council has to manage nearly 5000 kilometres of roads with ever-increasing pressure from heavy traffic with the expansion in dairying and forestry.
“In this increasingly competitive marketplace the major roading contractors are undertaking the earthworks and drainage components themselves and not subcontracting work out to the same extent.”
The heady days when his father was building A G Hoffman Ltd at a fast rate may have begun to subside somewhere in the 1980s. But, says Grant: “Southland’s always had a rich hinterland, a really productive base, and Invercargill’s slowly growing. There’s going to be a good future for contractors.
“Contractors are opportunists and contracting evolves quickly and adapts amazingly fast. There are always opportunities and it depends how big your balls are and what you really want to do.
“Contracting is a very flexible, malleable thing and the region depends on contractors.”
The meaning of service in Southland
In Southland the name “Hoffman” is synonymous with “service” – both within the company and in the local branch of Civil Contractors New Zealand.
Grant Hoffman says the company was built on talented and loyal people. “Their average service in 2000 was just over 20 years, which gave the business a terrific depth of experience and know-how.
“Gordon Hoffman is to be credited with growing this culture, on which he built his business, based on mutual loyalty and respect.”
The company’s accountant and financial manager, Russell Walker, joined in 1968 and has thus chalked up 47 years; Craig Smith, foreman and machine operator, has put in 35 years since leaving school; while retired machine operator Andy Murray and the late Mike Swain, contracts manager, both worked for the firm for 28 years.
Three Hoffmans have given extensive service to the Southland branch of what was until a few months ago the Contractors’ Federation.
Gordon Hoffman joined the branch in 1960, was elected vice-chairman in 1963 and was chairman from 1965-67. He was re-elected to the executive in 1970, was chairman again from 1980-82, and continued to help the branch until 1993. He was made a life member in 2003 at the age of 73.
His son, Grant, was branch chairman from 1994-97, after which he remained on the executive and continues to support it today. Grant’s younger brother, Dale, is the current chairman.
If A G Hoffman is in debt to its long-serving employees then Southland contractors in turn owe an equal debt to the Hoffman family.