SCE buys Rocktec, eyes growth
Christchurch-based Southern Cross Engineering Group (SCE) aims to drive annual revenues to $100 million in five years, helped by the purchase of a contract engineering firm that specialises in quarrying and mining.
SCE, one of New Zealand's largest mechanical project engineering companies, with nearly 100 employees, has settled on the purchase of Matamata-based Rocktec, which will add 40 staff to the group.
SCE has a base in the Christchurch suburb of Bromley and sales operations in New Zealand and across parts of Australia.
Rocktec has been bought from the Stevenson Group for an undisclosed sum. The purchase, helped by bank debt, would help SCE's diversified product push into Australia, SCE chief executive Paul Thorn said.
Rocktec had a head office and manufacturing plant in Matamata, Waikato, with an Australian office in Brisbane. It employed engineers, draughtsmen, metal fabricators, and welders, among others, to provide solutions to the quarrying, mining and mineral processing industries.
"We plan that, within five years, by this acquisition we are at $100m [of annual revenues]," Thorn said.
Rocktec also had an international dealer and distribution network supplying Rocktec gear worldwide.
The purchase complemented the group's engineering capabilities, which have been developed over nearly 60 years in areas such as green and dry milling, timber processing, woodchip, coal and gypsum handling, contracting, and heavy engineering.
A recent gypsum-handling and conveyor project for Boral Australia, in Victoria, had been worth about $7m to SCE, and another conveyor and screen installation contract at a New South Wales rock quarry was worth close to $10m. Group revenues in the year to March, 2013, would be $50m to $60m.
The quarry upgrade project had helped stimulate the Rocktec purchase, Thorn said. He said it would enable SCE to grow, with a merger of two "high performing" contract engineering companies. "They each have a very strong performance history and both will market their established brands in their own areas of expertise. Each can support the other when needed.
"Rocktec had aspirations of growing into Perth. So the first thing we'll be doing is growing into Perth. There's heaps of opportunity [in Perth] for the gear we build, and the processes we can work in."
SCE was already working in Western Australia, having won a $7m contract to help supply equipment for an ammonium nitrate plant near Port Hedland to help make explosives for the mining industry.
SCE's traditional business was making materials-handling machinery, with decades of experience in providing machines to the timber and milling industries. It started in Rangiora, North Canterbury, in 1955 making water pumps for farmers.
Taranaki Daily News