Bisalloy Steel Group (ASX:BIS) CEO Greg Albert: re-engaging Australia and Asian expansion
CEO of Bisalloy Steel (ASX:BIS), Greg Albert, had his start in mechanical engineering, with extensive international experience that proved valuable to Bisalloy.
“I’ve worked with three very market-leading companies: one American, one Finnish and one Swedish.” Originally working as a heavy equipment design engineer for an American company, he moved on to various metal firms overseas, before partnering with an entrepreneur and starting an Australian-based mining equipment manufacturing company.
After the sale of this enterprise, he was offered several roles by the Finnish company that acquired it, including positions in Australia and Singapore. In total, he spent roughly 10 years working in Asia before coming back to Australia and building a consulting and executive coaching firm of his own. “I did executive coaching with quite a number of iconic companies,” he remarks. He was once again recruited by the Finnish company that he had worked with in the past and asked to run their global operations out of America, and eventually out of China and Finland.
After being offered a position by a Swedish heavy equipment manufacturing company and taking on the role of global president for several years, Albert was eventually recruited by Bisalloy Steel in January 2016 to replace their retiring CEO.
When it comes to being in a leadership position, Albert’s wide experience in global roles where he managed operations in dozens of countries led him to one conclusion: Talent is primary. To be able to run the businesses as efficiently as possible, a leader must seek people who can eventually take his role. He remarks that this is true regardless of the culture one is working in, and in his experience: “Even though the countries were different, and the businesses were different, and the market was different, and the way you service customers may be different, the way you run the business was actually very, very similar.”
According to Albert, his approach is to never “hold on to power,” and to instead nurture and train those under him until they can effectively replace him. “I learned very early on that to get to where I wanted to go—which was to eventually be a global president—I had to make myself redundant in a way.” In addition, he found that no matter which region he worked in, the staff universally needed a sense of purpose and a global perspective that could be adapted to the local mindset. The needs of a company in South Carolina, he explains, are very different from those of a company in India, and so both global and local perspectives are a necessity.
Ultimately, though, “the glue that [holds] everything together [is] always the company’s values, the company’s culture.” The values that transcended all cultures were the higher, ethical ones, and Albert believes in never compromising on these. He also stresses that running a company requires a certain degree of cultural sensitivity, and even humility. “You have to have empathy and you have to have respect,” he says. “I always tried to speak the language as much as I could. I would always try to learn as much as I could.”
Emphasizing the importance to trust, Albert says that he comes from a mindset of assuming that people are interested in genuinely helping the company. “Everybody wants to go to work and do a good job; they don’t want to go to work to do a bad job.” This goodwill and trust is key according to Albert. That, along with being sensitive to the local customs and marketplace, while still being true to the universal values of the company as a whole, was one of the most important lessons that he learned working in his global positions. These insights were partly why he went into executive coaching at one point in his career, as many people saw value in his international leadership experience.
In spite of all his work around the world, he was eventually attracted back to Australia because he wanted to “re-engage with the Australian industries and key people [in Australia].” He remarks that having the chance to spend time in his native country and “be Australian again” has left him feeling refreshed and reinvigorated. While he says that working in Australia is very different from working abroad, it has been an overall good experience for him, even when having to handle challenges like stalled deals with local unions. “It’s good to be able to communicate and to work with Australians again.”
Indeed, Bisalloy is a very Australian company with a rich history. It has been in business for 37 years and was founded by a South African immigrant. Originally called Bunge Industrial Steels (the BIS in Bisalloy), it was one of the first companies in Australia to work with high-strength steel. They manufacture steel plates and at one time manufactured long products such as pipes and tubes. Eventually, they changed their name to Bisalloy and listed themselves on the ASX. Three major investors own the bulk of this stock, including Anchorage Capital.
Nowadays, Bisalloy is the only Australian company that offers these specialised grades of steel. “There isn’t anybody else in Australia that does what we do now. We’re the only manufacturer.” They are a standalone high-strength steel company, and they work with a “quench and tempered” (Q and T) method of manufacturing, which essentially means that the steel is heated, then quenched with water, and then finally tempered in a furnace to make it change its properties. Unlike integrated operations—where the steel mill and the Q and T plant are coupled together—Bisalloy is not attached to any particular steel mill, so they can choose which supplier they need at a given time.
This flexibility has allowed Bisalloy to remain efficient. “Being a standalone operation, we’re small. We’re not ‘steel mill big.’” Thanks to their small size and extreme specialisation in the niche of high-strength steel, Bisalloy has the luxury of not needing the huge amounts of staff or capital investment that larger companies require. Operations only require roughly 140 full-time employees, 80 of whom reside in Australia.
“We’re totally focused on what we do, we have a small dedicated team, [and] we’re flexible, which means that we can meet with customers, they can say, ‘we’re looking for steel with these properties,’ and we can design a new recipe, and we can test it. We don’t have to go through and ask whether the steel mill can do it, whether we need to go to a big corporate structure to ask for approval, so we’re quite agile.”
Unlike every one if its competitors, Bisalloy processes all of its specialty steel products in Australia, which is attractive to those customers wanting to use Australian made products, “For the big mining companies to buy imported steel—wear-grade steel—to keep their mines running, they would have to order that 12 months minimum in advance from overseas steel mills.” By contrast, Bisalloy has the flexibility to fulfill custom orders and to fulfill them quickly. “We can partner with the customers right here in Australia.”
In spite of their lean operations, Bisalloy makes use of an extensive network of over 100 distributor locations, and their major distributors include OneSteel Metalcentre, BlueScope Distribution, and Southern Steel Group. They also have formed joint ventures overseas: one in Indonesia, one in Thailand, and another in China.
Bisalloy is the only Quench and Temper steel company in the world to have a joint venture with a Chinese steel mill. Much of the joint venture consisted of Bisalloy’s allowing Shandong Steel to manufacture under the Bisalloy brand name, and to employ other kinds of intellectual property. Bisalloy also trained the employees on the process and the chemistry involved in their techniques. Shandong Steel, for their part, provided the labor, the steel mill, and the Q and T plant.
The joint venture with Shandong allowed Bisalloy to expand their market to this region, as well as use China as a springboard for bringing their product to other nations in Asia. This was a forward-thinking strategy in light of the number of Australian OEMs who have moved their operations to Southeast Asia. Unlike the Chinese partnership, the Indonesian and Thai joint ventures are strictly sales and distribution as the market grows in these areas. “Bisalloy has a very, very good reputation all the way up through Asia and all the way through China for a number of reasons,” Albert explains. “One is [that] we’ve been around for a long time. The other is that our JVs in those regions have been quite successful at penetrating the marketplace and getting the brand out there.”
Including these joint ventures, the company turnover is around 60 million dollars per year.
There are a number of reasons why Bisalloy’s Quench and Temper steel processes are unique, but the main advantage is that they can produce some of the strongest steel in Australia. Using their methods, they can produce steel of three different kinds: wear-resistant, structural, and armour.
The wear-grade type of steel that Bisalloy manufactures mainly goes into industrial use, especially in the mining industry. For instance, many dump truck bodies use this kind of steel. “All the wear and tear components of a mining or quarrying operation would use our steel,” Albert says. Customers are mainly seeking longevity with wear-grade steel.
With structural-grade steel, on the other hand, customers are looking for lighter and stronger steel. This grade of steel is commonly used in the transport sector, for example in truck chassis. This allows the vehicle to hold its payload, while still being light enough for efficient travel and use. For similar reasons, structural-grade steel tends to be used in tall buildings, windmills, and other structures that require high structural integrity. Strong, light steel promotes the use of innovative designs that may have been impractical otherwise.
Finally, there is the defense-grade or armour-grade steel. This is used largely for military applications, including bullet resistant ballistic-grades, explosion resistant blast grades, and specilised high strength steel grades used in applications such as submarines and naval crafts. Bisalloy is the only defense-grade steel manufacturer in Australia. “We obviously work with […] the defense contractors and defense industries in Australia, so […] we’re accredited with all of those companies. One of them is BAE Systems in Australia. We’re now also engaged with BAE Global Access Program, which is the USA BAE Systems, and we’re well advanced going through the process of being accredited to be able to supply to the USA market.”
The company’s steel also plays an important role in protecting Australian Defence Forces servicemen and women, where Bisalloy’s steels have been used for Australia’s protected Infantry Mobility Vehicle (IMF), the Bushmaster. Since 1993 Bisalloy has produced over 3500 tonnes of steel for the Bushmaster program adding to Bisalloy’s internationally recognised armour capability which began in 1988 with an order for hull plates for the local construction of two FFG 7 guided missile frigates.
Bisalloy went on to help develop HY80 steel plates in cooperation with (then) BHP Port Kembla and the Defence Science and Technology Organisation (DSTO) to a US specification that significantly outperformed the equivalent US-manufactured steel plate.
Australia’s four US-built FFG 7 frigates were subsequently retrofitted with the HY 80 plate. Bisalloy produced a total of approximately 1000 tonnes of steel for the FFG program. Bisalloy then went on to supply the Collins Class submarine program with more than 8000 tonnes of hardened steel of excellent low-temperature impact properties — also developed with BHP and the DSTO.
Governments in the US, India, the Middle East, and Asia have since qualified Bisalloy’s armour plate for use by their militaries and the company’s (military) exports now far exceed domestic orders. Bisalloy supplies to several sovereign militaries including Israel, Turkey, Thailand, Indonesia, and to various civilian and private groups in a range of countries including countries in the Middle East, such as the UAE. They have also been recently selected as the armour supplier for the Hawkei Protected Mobility Vehicle, which is a light armour patrol car built for the Australian military. “[There’s] quite a lot going on in the defense side of the business,” Albert says.
Keeping with their philosophy of niche simplicity, Bisalloy produces only flat steel. “Flat steel in steel terms is a plate,” Albert says. “It’s a certain width, a certain thickness, and a certain length. […] Like a table.” Bisalloy then passes these steel panels onto their distributors, and these distributors either have processing capabilities themselves, or they have partnerships with external companies that can work the steel into its final product. “So we just make the plate; that’s all we do,” he explains.
“Our product is actually very technical,” Albert says of the various grades of Bisalloy’s steel. “The different type of customer requires a different level of technical expertise. So if you look at defense grade, it’s about the highest level of technical expertise.” Bisalloy even manufactures steel that is used on submarines, which Albert says is about “the highest” grade of steel that can be made.
“We have some really strong technical people that have been with the company—some of them have been here for 30+ years. They’re all PhD’s—metallurgy and specialty PhD’s such as welding and high-strength steel.” Because of Bisalloy’s dedication to a single niche, they were able to assemble a dedicated and highly-motivated team of specialists that can engage intimately with the customer to identify their needs. Technical support is one of Bisalloy’s biggest strengths, and it gives them a significant advantage over their competition. “The people buying imported steel get no technical help, no technical support,” he says.
Thanks to this high employee engagement, not only are customers served and given technical support, but employees tend to be long-term and very serious about their jobs, resulting in an industry-leading safety record and over 3 years with no LTI’s. “They live and breathe Bisalloy, and I think that permeates out into results such as the LTI records.”
Looking towards the future, Bisalloy is training its focus on improving their sales and marketing strategy. “Our way to market is good and bad. Our way to market obviously is mainly through distributors, and if our distributors are not representing our product, then there’s a challenge for us,” Albert says. Bisalloy’s new strategy will involve engaging not just the distributors, but the end user as well, and focusing on their needs and their specifications first. “We need to go back out, we need to engage with the marketplace, we need to get our product re-specified—and if that means we need to grab some of these customers, bring them back down to our plant, let them see our people, let them see the product, then that’s what we’re doing.”
Bisalloy is also looking to launch a training center for fabricators, distributors, and engineers. With proper training, those in the industry should learn how to apply the product better and this will lead to more satisfied end users. In addition, Bisalloy is looking to engage with the federal and local governments in order to possibly supply for future infrastructure projects.
“This year, it’s all about looking for opportunities,” Albert says. After some time of “strengthening [their] operations,” the company is ready to engage with the market and reinvigorate it. “We need to regain the Australian marketplace. We should own this marketplace.”
Another area of focus for the company is on losing its dependence on the resource markets, which can be volatile. This will require Bisalloy to start looking beyond the mining industries for much of its customer-base.
Finally, Bisalloy has embraced international development. “There’s a big opportunity for us globally,” Albert says. “We can’t do everything. We’re a small company, so we’ve identified that we need to partner with companies.” This means solidifying their operations in Indonesia and Thailand, as well as growing their joint venture in China and forming new partnerships all over the world.