Veza's big vision

Succession planning and the need to strengthen brand profiles have resulted in a changing of the guard at one of Western Australia's largest construction and mining equipment dealerships.

After seven years at the helm of WA Hyundai dealer Earthwest, founding partners Trevor Nielsen and Bruce Cunningham have sold the business. The new owner is Equipment Group Australia, which comprises major shareholder Richard Veza and three silent investors. Veza has taken on the role of Earthwest's new managing director, while Nielsen will stay on as general manager.

"For many years now, we have been very successful with our product range,” Nielsen told CIN'S sister publication Contractor Magazine. "We doubled our turnover in the first year of our dealership agreement with Hyundai and we are now the fourth-largest supplier in our product range in WA.

"That success has attracted a lot of attention from broking houses who have been interested in managing the sale of our business, but we were never really interested until last year, when we started to seriously consider what the future had in store for Earthwest.”
To compete with the likes of Westrac (Caterpillar) and CJD Equipment (Volvo) it was clear that Earthwest was going to have to spend money to raise its profile. Part of that process involved securing new premises just a short drive from the company's old warehouse in Welshpool.

The premises are modern and boast a major road frontage, which Nielsen says "portrays us in a more professional light compared to many of our local competitors”.

The main focus, though, was on the search for a financially committed, long-term partner to add resources that would help manage the future of the business.

"It was clear that Bruce and I would not be able to achieve what we wanted on our own so we took the advice of one broker who suggested getting a financial partner to come in and help manage our growth,” Nielsen said.

EGA was approached on the strength of its experience in financial control, sales support and strategic management. Veza had previously held senior management roles at several dealerships within the Automotive Holdings, Australia's largest car retailing group.

But as negotiations progressed it became clear that Veza and his partners could offer Earthwest something greater than just financial input and by December 2007 the consortium had made Nielsen and Cunningham an offer too good to refuse

"After much discussion, it was agreed that the most obvious outcome would be for us to sell our business assets to EGA,” Nielsen said.

"And in the interest of maintaining continuity for our clients, it was also agreed that I would remain with the company as general manager for a few years, basically to continue supporting the three brands that we had originally built the business on.

"It was a sensible move really – I have grown the business in a certain fashion over the years and I personally want to see it continue to do well.

"I guess I could have walked away from it all but I decided to make the most of my experience with the products we have and eventually pass that onto the new owners.”

The sale was also conditional on Earthwest's current staff keeping their jobs. Most importantly, however, was the need for the ongoing support of Hyundai, represented in Australia by an alliance with the Porter Group, one of the largest construction equipment suppliers in the South Pacific.

Porter also owns Conquip Pacific, which distributes the Astra range of articulated dump trucks, manufactured by Iveco in Italy, and Japan's Furukawa rockbreakers and hammer rockdrills.

Earthwest began selling Astra and Furukawa products in 2007 and 2008 respectively and used this year's Construction & Mining Expo in Perth to launch the Astra Iveco ADT40C truck to the WA market.

"We are now one of the major players locally and our profile will increase as these brand names mature and the product range continues to display outstanding performance and quality,” Nielsen said.

"As an exclusive dealer, we need to get approval from the manufacturers of our product ranges – not necessarily to sell the business, but to allow the products to stay with the business post-sale.

"We took EGA to Queensland earlier this year to meet with the manufacturers and discuss with them the advantages of staying on with the new owners.

"It was important that we made the effort firstly to provide [Hyundai/Conquip Pacific] with the confidence that we were passing the business onto a respected and experienced team who would give Earthwest added scope and strength for future success.

"And we also wanted to demonstrate that EGA's vision for the business would ensure the Hyundai, Astra and Furukawa products will maintain the same level of growth in the immediate term and hopefully increase over the coming years.

"That dialogue could have meant the difference between selling the business and not selling.”

New MD Veza has now embarked on his strategic vision for Earthwest to become the state's premier supplier of OEM machinery in terms of sales volumes. It is a big dream, which, if fulfilled, will see the company knock Caterpillar out of pole position.

"One of the reasons we purchased this business was because we had researched the Hyundai product and we knew that it had significant potential for further growth in WA,” he told Contractor Magazine.

"Part of that future success will be in keeping Trevor on, because he has been the main man in the past and we see him as integral to what we achieve during this new phase of the company's development.

"The idea is that we [EGA] will work with him, combining our talents and expertise to take Earthwest to a whole new level.

"I think our biggest challenge will be securing a team of people who have the same desire, passion and commitment to customer satisfaction that we have.

"We want to be able to create a working environment with a strong product range and profile that attracts high-calibre people regardless of their location. If we can bring those elements to the table repeatedly, we will forge a good reputation and people will approach us for work, not the other way around.”

Nielsen said he had no regrets about selling Earthwest, instead looking at it as a window of opportunity for his eventual retirement.

"As a business owner, there are a lot of things that you would like to do but never actually get around to and succession planning is definitely one of those,” he said.

"We are very fortunate that the EGA opportunity came across our table when it did and that our suppliers have responded very positively to the change of ownership.

"We could not have hoped for a better outcome.”

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