This story was originally published in The West Australian on 21 March 2018 with the headline "Power, pipes, dongas keep Canadians busy." © Peter Milne.
It has been a long, convoluted journey for Canadian company ATCO to own Perth’s gas distribution network, build yellow topped dongas in Kwinana and soon start research on solar-generated hydrogen.
ATCO chief executive Nancy Southern runs the $4.8 billion conglomerate started by her father and grandfather in 1947 as the Alberta Trailer Company.
The company followed the oil drillers that bought their accommodation from Canada in opening up the Cooper Basin in South Australia in the early 1960s.
By 1980 Ms Southern’s father thought the transportable housing business was too exposed to the boom and bust commodity cycle, so he diversified by buying Canadian Utilities.
It was “like a minnow swallowing a whale,” she said.
When the next bust arrived the debt-laden ATCO was hit by interest rates of up to 22 per cent.
An expansion designed to provide steadier long-term cash flow had the opposite effect.
“We barely hung on to the company,” Ms Southern said.
ATCO shed assets to survive, including its Australian operation in 1986.
It returned to the donga business in Australia after a noncompete agreement expired and now manufactures in Jandakot and Brisbane.
Ms Southern said that during the resources boom ATCO lost some contracts to cheaper accommodation from Asia, but higher quality, knowing what the customer wants and lower transport costs had kept them competitive.
In 2011 WA’s gas distribution networks came into the fold at the cost of about $1 billion.
The third arm of the conglomerate is power, including a Karratha station that supplies Horizon Power.
While power, pipes and dongas may seem a disparate collection of activities, Ms Southern sees the engineering and operating skills of the regulated businesses complementing the more entrepreneurial side of ATCO.
“Our tip of the spear is the hut business,” she said. Supporting the construction of a project gives the company the chance to spot opportunities for longer term investments.
Canada provides 89 per cent of ATCO’s revenue, with Australia providing most of the rest.
Following her resource customers as her father did, Ms Southern is focussed on expansion in Australia, Chile and Mexico.
She said the countries share relatively good regulatory regimes and lots of sunshine that can be used to displace diesel fuel.
ATCO is building a clean energy hub in Jandakot for applied research on how to “green the grid.”
The first project will be using solar-generated electricity to split water into oxygen and hydrogen. The hydrogen would be mixed with natural gas and appliances will be tested for how well they can burn the blended hydrogen and natural gas fuel.
Ms Southern said it was an opportunity to use existing pipeline infrastructure as a huge battery to store excess solar power for later use.
“We're not building new storage, we’re just using the excess capacity in the pipes as the storage vehicle,” she said.
She said using hydrogen in pipelines would help ATCO future-proof its pipeline investments in the long term as the world decarbonises.
She sees similarities between the business environments of Australia and her native Canada. Both are federations with multiple layers of regulation.
She said differences in requirements between the states in Australia and the provinces in Canada, made it next to impossible to achieve economies of scale in the accommodation business.