The Kellys make hay while the sun shines

Booleroo Centre, a small township in the southern Flinders Ranges about 300 kilometres north of Adelaide, isn't necessarily the first place you would think of as a hub for global innovation.

Derived from an Aboriginal word which loosely translates to 'a place of mud', Booleroo is in the heart of wheat and sheep territory, acting as a service centre for the grain and livestock producers of the surrounding areas, and more recently as the home of the Booleroo Steam & Traction Preservation Society.

The Kelly family, now in its seventh generation, has been farming there since 1875, operating a 1,200 hectare farm that once acted as the central shearing shed for all the local Merino sheep farmers. But these days the Kellys have a global reputation to uphold, thanks to the pioneering efforts of fifth-generation family member Peter in the 1980s.

While his sons Shane and Kim continued to run the family farm, Peter focused his efforts on modifying, building and adapting his agricultural machinery to get better results, developing equipment designed to make it easier to break up the soil in their fields and prepare it for the planting of new seeds during crop rotation periods.

His modified equipment worked a treat, and soon word spread across the district that the Kellys, in effect, had reinvented the agricultural wheel. Orders quickly flooded in, and a whole new chapter in the Kelly farming dynasty began with for the formation of Kelly Engineering.

“We really had to kick into gear quickly and everyone around the local district spent a few weeks working casually to help out,” says Shane, now managing director of Kelly Engineering. Tragically Kim was killed in a plane crash in 1985, but Peter and Shane pushed ahead as the farming machinery manufacturing business picked up steam and injected much-needed cash into the farming side of the business.

“Dad was pretty much the innovator in creating new machinery, or seeing a new idea that could be turned into a solution,” says Shane. “I stayed on the farm full-time and we were co-located, so it was a good relationship. But I spent a fair bit of time working in the workshop fixing equipment when I needed to.”

Peter continued to work on farming solutions, adapting his equipment so it would work across undulating ground as well as the flat and open ground in the Wimmera region. During the 1990s, the Kellys developed 'prickle chain' equipment to help sustain soil by breaking down plant stubble and levelling out seed beds post tillage. They then developed flat disc and heavy chain equipment to help with the decomposing of plant stubble and to control weed growth at a much lower cost to using expensive chemical weed killers.

“There was a big opportunity to help farmers reduce their costs and improve margins, and to bridge the gap between old-style farming equipment and new equipment,” says Shane. “It's still a case of making hay while the sun shines, and disc chains and the diamond harrow are our speciality.”

Today the Kelly Engineering business turns over around $20 million per annum, has 50 employees, and as well as having a strong presence across the Australian market is one of the nation's largest farm machinery exporters. It holds around 90 per cent of the Australian and United States disc chains markets, and now has a substantial outsourced manufacturing base in the US and growing operations in Europe and Africa.

“We have really focused on our niche, and have pushed ourselves out into new markets across Australia and overseas. Through continuous improvements in efficiencies as a manufacturer, we have become world-class in terms of our machines and workforce productivity,” Shane adds.

Kelly Engineering has patents on its machinery in various countries around the world including the US and Canada, Brazil and Argentina, and Europe. That didn't stop one Texas farmer from trying to copy the Kellys a while ago, but they were able to stop him without even taking legal action by using an even more powerful technique -- word of mouth. By spreading the word across the farming community in the US, the Kellys were able to shut him out of the market.

To cut down on shipping costs and to speed up deliveries, Shane says the business is now looking at options to send a bigger percentage of its parts to contract manufacturers in the US. This will shorten the supply chain and free up more working capital working, but it won't mean that Australian manufacturers will miss out completely. Adelaide-based suppliers will still make and deliver the Kelly components to the US for incorporation into the company's machines.

So the next phase of Kelly Engineering is well and truly under way. Peter has retired from the day-to-day family business operations but continues to show an interest in the business, while Shane's son Tobias (20) is now working at Kelly Engineering in an administrative role. His other three children are at university or school, and are being offered a range of options to come into the business should they wish to.

Recently, the Kellys formed a family council and had their first meeting with all three generations late last year.

“One of the things we've been trying to do for a while is make sure there are lots of attractive opportunities, whether it's as trade hands, or as salesmen, or to do law or commerce, media, promotion, advertising, electronics, leadership -- there are a lot of different aspects that the business can now offer, including travel. I'm kind of hopeful that they will see something attractive in the business.”