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Future Freight Networks : Yearbook 2016
84 ALC MEMBER INSIGHTS Conquering the world one container at a time Richard Sykes, CEO of container business SCF, started his business with an order for just 60 containers. Now, the company has an impressive 13,000 containers in the market. Sykes modestly states that the business has ‘grown reasonably well’. With such large numbers, he can probably claim to be doing a bit better than that. The business, which has operations across Australia and China, was founded in 1991 by Sykes and two partners. Its containers are predominantly intermodal transport, but they are also used by numerous other businesses in storage, chemicals and construction, and in the mining and resource sectors. SCF employs 80 staff members nationally. Sykes explains that a private equity business, Intermediate Capital Group – which is publicly listed in the United Kingdom – has taken a 49 per cent share in SCF. This allowed Sykes to perform a management buyout in 2011. He is the only original partner still invested in the company. ‘The business has grown steadily over the past 25 years. Our focus is on being innovative and providing solutions for our customers. We’ve done the hard yards building prototypes and pushing boundaries to develop a well-founded reputation for being a market leader in container design and supply,’ he says. Before starting SCF, Sykes had built up a small transport company, and had already designed containers for that business. After designing one for the furniture removal industry that allowed the contents of a standard house to fit in one container, he decided to take his container product to the wider market. ‘The container had a higher cubic capacity than what was then being used in the industry, and we were able to build the business from there,’ Sykes says. Sykes credits the success of his business in part to his young and dynamic team. ‘Despite their youth, most of our senior managers have been in the business for more than five years, and they have helped take on the challenge of growing the business,’ he says. Addressing challenges While the enterprise has grown consistently over time, Sykes acknowledges that there have been challenging periods, especially since the recent mining downturn. SCF’s equipment has been deployed in this sector, including accommodation for mining workers. ‘At the moment, there is real pressure on businesses to improve profits, and we have been working with our major customers, who are looking to us to support them with cost reductions or avenues to increase margins generally. This has resulted in us partnering with customers to identify potential efficiencies in their fleet management,’ Sykes says. Despite the prevailing market conditions, SCF is still exploring plenty of growth opportunities. Its core business is the supply of equipment for the transport and storage of numerous products, with a strong weighting towards retail and fast-moving consumer goods products. SCF has been able to capitalise on the strength of the retail sector, given that food retailing is growing in line with population growth. Statistics back this up. According to the Australian Food and Grocery Council’s CHEP Retail Index, the results for the December 2015 index were four per cent higher than the December 2014 figure. Additionally, despite the mining downturn of the past 18 months, there are now indications that the iron ore price is improving, which should reinvigorate demand for containers from the resources sector, helping to enhance SCF’s continuing success. The iron ore price was US$41.25 per tonne at the start of January 2016. By the end of March, it was US$55.52 per tonne. ‘As iron ore prices increase, we are well placed to support companies involved in the sector,’ Sykes says. By Alexandra Cain Richard Sykes, CEO , SCF