Challenges and opportunities in the Top End
Following completion of the construction phase of the multi-million-dollar Ichthys LNG project by Japanese company Inpex, now considered one of the most significant oil and gas projects globally, Darwin is now dealing with an economic downturn. New opportunities are currently being sought to avoid a potential boom and bust scenario. Hartley Henderson reports.
Business: Alltools NT
Owners: Robert and Jenny Treumer
Location: Darwin, NT
Buying Group: United Tools
At its peak, the Ichthys project employed some 8,000 workers and around 1,000 of those were local residents. Inpex still has around 500 workers in Darwin but there is now a need to identify potential new projects to boost the economy and provide employment opportunities.
Alltools NT, in the Darwin suburb of Winnellie, is one such business that continues to not only serve the local community but provide employment opportunities that ensure the local economy remains strong. The store commenced trading in 2001 after Robert and Jenny Treumer identified a gap in the market. The company has five employees, including long term employee and current Store Manager, Simon Hamill, who says the store’s main customer segments include tradies and builders across Northern Australia, plus the mining industry. Power tools, especially cordless tools, are the biggest sellers.
Geographical areas serviced by the store include remote communities such as Broome, Kununurra, Katherine, Wyndham, Gove, Groote Island and Tennant Creek. Alltools NT Business Manager, Melissa Treumer, her husband Darren and their three children, all born in Darwin, are often heavily involved within the local community. Melissa says that their customers’ trust in the store’s operations, alongside maintaining an established and loyal customer base, is a high priority in building a good business brand.
“Tradies, builders and DIY customers in the Darwin area prefer to come into the store rather than purchasing online, as they like to be able to feel the product and also receive good advice on the effective and safe use of products,” she told the Australian Hardware Journal during a recent interview in Darwin.
“Key factors in operating a successful store include providing committed and knowledgeable staff, ensuring a wide range of quality stock, and balancing stock holdings through a clear knowledge of fast-moving stock, compared with slow moving stock. We believe that our attention to detail and willingness to go out of our way to source and provide products that we would not ordinarily supply is very important in making the store stand out from our competitors.”
“We also operate a repairs workshop where we conduct warranty work and repairs on all the major power tool brands. This is a huge benefit to the business as it provides a service to customers where they are not required to send their tools away for repairs, thus reducing downtime for customer projects.”
“Our repair technician, Allan Hill, affectionately known as Abdul, has been with us from the beginning in 2001 and has extensive knowledge when it comes to repairing tools, including onsite if necessary,” according to Melissa.
Melissa said that although the tools supply sector is generally travelling well, challenges in the company remain, including not having the buying power and support of the big southern companies, which can create difficulties in the current economic climate.
“We belong to the United Tools buying group which means that we only sell quality products at competitive prices, rather than cheaper tools that may be available elsewhere,” Melissa said.
“With the current downturn of the market in the Northern Territory, all businesses have been feeling the financial impact. Our strategy is to multi-skill our staff across all departments. Long term this will increase staff value in various roles because they will gain an understanding of all facets of the business and how it operates.”
“To be business smart, we have to look closely at all areas of our operations and identify any areas of unnecessary expenditure. Darwin has always been a community that has stuck together and supported local businesses, especially in challenging times. At Alltools NT, we strive to support local and regional businesses by supplying and purchasing locally wherever possible, and we hope that our customer base will do the same,” she said.
Melissa said that the store’s future marketing strategy is to strongly promote that Alltools NT is locally owned and operated. However, she also said she believes much more could be done by the State Government to support local businesses by ensuring there is more local content in its purchasing policies and practices.
All Tools was a Telstra Business Awards Finalist in 2014 and has been a member of the Northern Territory Chamber of Commerce for 15 years.
While the Northern Territory has been confronted with a number of economic challenges, including a downturn following the LNG construction boom, increasing unemployment, and declining population, new project opportunities are now being sought to bolster the economy.
These initiatives include proposed construction of a $400 million Ship Lift at the Port of Darwin, construction of a new wharf at the Larrakeyah Army Base, a major solar farm at Tennant Creek, a proposal to attract 5,000 overseas students to Charles Darwin University, development of the Arnhem Space Centre, agribusiness projects including prawn farming, and development of a Northern Territory business events and tourism strategy. Other plans in the pipeline include potential expansion of the Inpex LNG onshore processing facilities in Darwin, and a likely $400 million US investment in military infrastructure in Darwin.
Northern Territory Chamber of Commerce Chief Executive Officer, Greg Bicknell believes that the development of onshore gas underpins the prosperity of the Northern Territory and that there is enough gas under the ground to power Australia for the next 200 years.
“However, there is a need to even out the massive curves in the economy, create jobs and halt the population decline,” he told the Australian Hardware Journal during a recent interview in Darwin.
“A lot of work is being done to identify and bring to fruition a wide range of economic opportunities. Data shows that the NT economy is now at the bottom of the current curve and can be expected to improve.
“The Northern Territory has some natural advantages that can be exploited. For example, production of solar energy is an obvious area that can be developed because the NT climate is ideal for construction of solar farms, including the proposed $20 billion project at Tennant Creek to provide power to Darwin as well as export energy to Singapore via a sub-sea cable.
“Other important proposals include a Ship Lift next to the Port of Darwin, which is a great new project that can be utilised not only by defence ships but also fishing fleets and offshore rig tenders.”
Mr Bicknell says there is a push to diversify out of the cattle and cotton industries, including establishment of a cotton gin in Darwin, and development of other agribusiness opportunities.
“This includes development of the Sea Dragon prawn farm on the NT/WA border where the Federal and NT governments are investing in an all-weather access road. In addition, the company is establishing a grow-out prawn nursery in Darwin. The $2.1 billion project has already attracted $25 million investment by Japanese company Nissui (Nippon Suisan Kaisha Limited),” he said.