It’s now a case of where to from here for a small family company that grew rapidly in the aftermath of the Canterbury earthquakes. HUGH DE LACY reviews the options.
WHEN RUSSELL WORTHINGTON started his contracting company in 1984 he gave it an impressive name – North Canterbury Excavation and Drainage – for an outfit whose inventory of plant comprised an optical level, a wheelbarrow, a shovel and a world-weary Austin ute.
Today, as Rangiora-based Worthington Contracting, but currently operating from leased premises in Shirley, Christchurch, it’s a medium-sized earthworks and drainage player in the post-earthquake Canterbury rebuild with around 50 staff and an eye to surviving a future in which the billions of rebuild insurance money have long since been spent.
The earthquake recovery dollars lent wings to the heels of Russell Worthington’s company, as they did to many small businesses, but the company’s rapid expansion over the past five years came on the foundation of solid and steady growth over the previous 25 and a realisation that the boom years wouldn’t last forever.
Worthington and his wheelbarrow had managed to crank turnover up to $1000 a week within the first year, enough to fund the purchase of an old three-tonne Komatsu excavator that made the shovel partly redundant, and an equally ancient Isuzu 4×2 truck to cart it around on.
Within two years of start-up the company had made a big enough incursion into the North Canterbury residential drainage market to employ a registered drainlayer and a labourer.
In the early 1990s the company opened up alternatives to the septic tank by installing the first Oasis Clearwater 90 residential sewerage system in collaboration with manufacturer Lou Austin, and also secured its first big local authority contract, re-laying a 300mm diameter PVC stormwater line for the Waimakariri District Council.
The rest of the decade saw an upgrading of plant with the addition of, among other machines and trucks, another Komatsu digger and a Ridgid K1500 drain-cleaning machine.
Nor was the little company with the big name slow on the uptake of other developments: Russell Worthington’s engineering background came into play as he produced designs and pushed through the resource consents for rural effluent disposal systems and trebled the turnover reached by urban installations.
By 2004 annual turnover had cracked the $500,000 mark and the company had expanded into commercial drainage for property developments in the Rangiora area.
Four years later Russell’s sons Josh and James bought into the business, renamed Worthington Contracting, as equal shareholders, and the company began pitching for bigger civil and infrastructure jobs, the first being a Westport stormwater project for Buller District Council.
Other ventures outside the home market took Worthington Contracting to Blenheim for a Grovetown sewer upgrade contract installing eco-flow pressure sewer tanks on 150 properties, and to Southland for its first major job as head contractor, the $400,000 Edendale water-main contract.
The new millennium saw turnover exceed $2.5 million, and Worthington was simultaneously involved in a sewer upgrade for the Christchurch City Council at Diamond Harbour, and joint ventures with big boys HEB Construction, installing a Rangiora water-main headrace, and Downer Construction installing the headworks on the same scheme.
And then the quakes struck; the first in September 2010 and the rest from February of the following year.
The earth moved for everyone in the Canterbury construction industry – or at least everyone who could handle the rapid rise in standards of professionalism, especially as they affected staff health and safety.
But where other local building construction companies, especially the likes of decorators and house-builders, struggled in the new safety-conscious environment, the higher standards within civil construction allowed Worthington to thrive.
By this time Russell Worthington had kicked himself sideways into a human resources role, son James had left to join Hawkins Construction, and management was now in the hands of Irish engineer Kenny Corrigan.
Not that Corrigan was one of the many new arrivals from Ireland to work in post-quake Christchurch: he had in fact already been here for 11 years after marrying a Canterbury girl, Claire Walsh, whom he’d met in an Irish pub in London.
Corrigan was recruited from Fulton Hogan where he’d been a business development manager, and his agenda was to push Worthington up the ranks of medium-sized contracting businesses while the rebuild largesse was still flowing, then consolidate it once the market resumed a more sustainable shape.
It’s that consolidation phase that the company is now entering.
“It’s very much crystal ball-gazing at the moment,” Corrigan told Contractor.
“There’s lots of speculation around what Christchurch is going to look like after SCIRT [the Safer Christchurch Infrastructure Rebuild Team] closes up shop next year.”
SCIRT is the alliance responsible for rebuilding the city’s horizontal infrastructure, and comprises five major contractors – City Care, Fletcher, Downer, Fulton Hogan and McConnell Dowell – plus the three infrastructure owners, the Christchurch Earthquake Recovery Authority, the Christchurch City Council and the New Zealand Transport Agency.
The winding up of SCIRT signals the start of a gradual reversion to a normal market state in the wider Canterbury construction industry, and implies the return to their home markets of many non-local companies, Corrigan says.
“It’s inevitable: it’s been like bees to a honey-pot.
“When there’s lots of honey you’ll have lots of bees, but when there’s not the numbers will reduce.
“A lot of contractors that came to town are starting to move back to their original locations” leaving locals like Worthington to survive in a market that must eventually begin shrinking.
For Corrigan, working with a turnover now topping $8 million, the first step into that murky world is to consolidate the existing operation.
“It might mean trying to retain the best staff you can, and trying to continue until we get some sort of surety around what that demand is going to be.
“We want to build on our reputation” – which includes winning the NZ Contractors Federation’s 2012 Contractor of the Year Award for Innovation and Best Subcontractor – “and the one thing that will probably come out of this is that if you retain good staff you’ll retain some security in forward work.”