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Industry doyen warns of post-COVID challenges

Elphinstone

 

After more than 50 years of involvement with an OEM and supplier to the mining and aggregates industries in Australia, Dale Elphinstone is no stranger to the twists and turns of fickle economic conditions – but he remains ever the optimist.

On 24 March, the Victorian branch of the IQA hosted its first face to face meeting since Australians first went into lockdown 12 months earlier: a breakfast meeting at William Adams’ headquarters in Clayton, in Melbourne’s southeast.

The drawcard was Dale Elphinstone, executive chairman of the Elphinstone Group of companies, which includes Elphinstone Pty Ltd, an authorised Caterpillar original equipment manufacturer and an advanced products manufacturer in the surface mining, underground mining and rail industries. He is also executive chairman of William Adams, the Victorian and Tasmanian distributor of Caterpillar earthmoving plant and equipment. William Adams itself has been a Caterpillar dealer for 95 years and became part of the Elphinstone Group of companies in 1987.

Elphinstone, 70, has been involved in this family group of companies for almost 50 years but his passion is undiminished. In 1966, aged 15, he began his career as an apprentice with William Adams before going to work as a field mechanic in mine sites in Tasmania and King Island. He worked as a field mechanic for Finning in British Columbia in 1973-74. In 1975, he started the Elphinstone business out of his father’s farm shed in Burnie, Tasmania, where he modified Caterpillar surface mining equipment for underground applications. By 1983 Elphinstone had designed and manufactured his first underground mining product – a 13-tonne articulated dump truck based on a 518/528 Caterpillar skidder power train. In 1986 he developed the first U/G loader (Load Haul Dump – LHD). After this machine was widely accepted in the Australian market as a significant leap forward in productive capacity, Elphinstone exported his first machine to the USA in 1987. 

Dale Elphinstone admits it is difficult to pinpoint when the Elphinstone name moved from a “him” to an “it” – somewhere in those years of growth from the 1970s to the 1990s. Perhaps it was the first employee in 1976 or first major sale in 1983, or when he formed a joint venture with Caterpillar to advance the U/G equipment business in 1995. 

Fast forward through more than 45 years of world-renowned manufacturing in Burnie, and Elphinstone and Caterpillar has built thousands of Elphinstone- and Caterpillar-affiliated mining machines.

INDUSTRY RESILIENCE

At the IQA meeting, Dale Elphinstone acknowledged the construction materials industry’s ability to adapt to the waves of inconvenience attributed to COVID-19. 

“As a business, we’re grateful to the mining, quarrying, civil construction and forestry industries, all of those bodies that took the time to think about how to keep their businesses functioning, how to set up the proper safety protocols that allowed their businesses to continue to function,” he told Quarry.

“Australia has fared much better out of this than most countries. When you see countries whose GDP has dropped by minus 10 per cent, and Australia has had growth of 1.1 per cent, then I think that speaks volumes for our governments and our industries, in the way they’ve handled the pandemic.”

Elphinstone explained how his own businesses managed the “ins” and “outs” of COVID-19 restrictions. Despite the expected challenges from within his companies with changes to rosters, etc and within the broader Australian community, Elphinstone said the level of willing employee support and conformity shown by the masses had gone a long way to ensuring the success of certain restrictions and “reasonable continuity in the support of our customers”. 

“As we started this journey, I don’t think any of us knew – government or industry, employers or employees – what to do,” he said. “We’ve learnt as we’ve gone along and then developed guidelines, with guidance from the government, the medical and scientific fraternities.” 

Elphinstone acknowledged the perseverance and commitment of his employees in troubled times. Such is the pride and determination of his workforce, they helped to keep all nine of the Group’s businesses in full operation while dealing with family challenges in lockdown over prolonged periods,. 

“Back in April 2020, when this became very difficult, we asked people in each of our businesses to work split shifts, so we had three separate workforces. This approach was in case we experienced an infection within our facilities. We could ask that group to go home, clean our facilities and have the next group come in. The co-operation of our employees was fantastic. When we needed to do it the second time, patience had perhaps worn a little thinner, but people were still co-operative, and we are so very grateful.”

Elphinstone revealed that observing safety has been the cornerstone of the success of his businesses in the past 12 months. 

“Our measure of success is that we have kept our people safe,” he said. “I can put my hand on my heart and say we kept our people safe. We had some really difficult situations, especially in Burnie, where the hospital was locked down, and we had about 20 of our employees with partners who worked at the hospital, a number of whom contracted the virus.

“On one occasion we had to shut our facilities until we had control, because we didn’t know who was or wasn’t infected. We managed to keep our people safe, and apart from those one or two areas that we had to shut for short periods, we’ve kept everybody gainfully employed. That to us is the measure of whether we’ve handled this life-changing experience successfully.”

The health of the workforce was one concern to be dealt with by businesses the world over. The other was the health of the business itself – the bottom line, but more importantly going the distance.

Elphinstone wasn’t too concerned – a luxury afforded by decades of professional business management – because he took the holistic view that big business is a “rollercoaster”. 

“From a profitability point of view, we had a period of uncertainty, probably more in the April to May 2020 timeframe. Our businesses for a large part finished the last financial year pretty well. It was certainly dampened by the last quarter of the year, but we’d had a good year up to then. So that left us in good shape.

“It always evens out. I always have a concern, however, that if we have two really big industry years, then there will be a year that is down a bit.”

Elphinstone anticipated for 2020 that new equipment orders and sales might drop by 15 per cent on 2019. However, possibly due to government stimulus measures, sales increased by nearly 20 per cent.

ADAPTING TO A CHANGING WORLD

Elphinstone, the man and the business, showed great optimism through the trials of 2020. He said the way in which people adapt to great change, as has occurred in recent times, will affect the world in ways they may not even realise yet. 

“I think the year has really taught us and our customers to do business differently,” Elphinstone said. “We’ve improvised on all sorts of things to continue functioning and do what we do. I don’t think that’s just been us, it’s been our customers, our hospitals, our schools, our governments. 

“We’ve improvised and learnt how to do things differently – and I think it will change our world forever. You could say the advent of the smart phone changed our world forever. 

“COVID-19 will change our world again, for a raft of different reasons. However, technology has moved to a new level, and things we stopped doing – because we have had to use a different technology-based approach – may never start again. It will be a balance, but life will go on and it will be good and the sun will always come up tomorrow,” he said optimistically. 

Examples of such technological changes flowed within the Elphinstone Group of companies, such as Teams and Zoom meetings, online training and working from home. While these evolutions have their benefits and efficiencies, their use is all about balance. Drawing on the companies’ love and respect for its people, Dale Elphinstone said it was inevitable that such a close knit team wouldn’t stay apart for too long and “would want to spend the majority of their time working out of our facilities”. 

“If our people can work from home for a couple of days, where this is possible, it may help their work/life balance. We think, though, it’s also good for people to come to work for their own well-being, so they get to mix with other people. You shouldn’t just work in isolation. Some industries might be able to work that way but we’d miss the personal contact of being able to sit with our people,” he said. “It is also important for the development and advancement of our people that our teams have the opportunity for direct engagements with their leadership and their peer group. Knowing your colleagues is a very important part of our work/life balance.” 

With technological adaptation and advancement, the extractive industries have the chance to grow once more. Governments are allocating record amounts to major infrastructure projects and this has flowed down into job creation and growth. While Elphinstone said these industries would flourish on the other side of COVID-19, the next challenge – barring another pandemic – will be environmental issues. 

“I think the biggest challenge the quarry industry faces is one we all face – that’s a social licence to operate. We all have challenges of recruiting and retaining good people, training young people and making sure we can keep the industry attractive,” he said. “We need to bring the broader community on the journey of our important industries and this is not easy in the era of enviromental change. 

“In developing Australia and the world, and in taking advantage of recent government stimulus to develop our economy, it will be important to find a balance between digging everything up and leaving it all in the ground,” he added. “My old dad used to say, ‘everything in moderation’. That will be the key to our future growth and success.”

CHANGING OF THE FAMILY GUARD

As the time nears for Elphinstone to pass the reins to his two children Kelly, 41, and Adam, 40, the business has done all it can to prepare everyone involved for the changing of the guard. It will soon be time for Dale to begin a new chapter as the Group’s non-executive chairman, with much less involvement in day to day operations.  

“We’ve published updates regularly to keep our employees informed of where we are at and what the plan is,” he said. “We set up a 10-year plan. The aim was to have Kelly and Adam in key positions in the business by the time I was 70 and that has been achieved.

“I’ve had a great relationship with our team for the entire journey. While transitioning to Kelly and Adam is very rewarding, it can also be a challenge – it’s about getting people comfortable working with Kelly and Adam’s leadership style, and vice versa.

“As the leader of a large group of companies, nine in total, working across 10 countries, with some 2900 employees, you have to take more of a back seat, and watch and observe, and answer questions, and try not to interfere with the management team you have entrusted to run the various operations. This is not easy when you are a hands-on guy.

“While it’s a challenging transition for Kelly and Adam to make, as they have both been hands-on senior operational managers running individual businesses, they have made excellent progress. I have enormous respect for families that can successfully pass businesses from one generation to another and many through multiple generations.”

Dale Elphinstone understands the importance of continuity of leadership – whether he is directly involved in the business or otherwise. 

“I think it is extremely important for our customers to understand that we have a detailed transition plan in place,” he said. “We have a lot of customers who rely on our businesses to support them and they need to know that regardless of what happens to me the business is going to continue unaffected – to serve and support their businesses today and into the future.” •

 

This article appeared in the July edition of Quarry.

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