The liquid tanker trucks each carry between 15,000 to 20,000 litres of AdBlue, but some have been used to also store supplies. Mr Speedy said the AdBlue market had now stabilised and a crisis had been averted. “I think things have settled down”.
He said it was an example of SCF being able to use its national network to resolve an issue for a customer. “We’re problem solvers,” he said.
Australia’s trucking network narrowly avoided a shutdown from a shortage of AdBlue in December when there were only six weeks of supplies left. The federal government established a taskforce to help ensure more supplies, and companies such as ASX-listed DGL Group were able secure more urea from countries such as Indonesia. Urea is one of the main components of AdBlue, a diesel exhaust fluid automatically injected from a separate small tank into a vehicle’s exhaust system to help reduce nitrogen oxide emissions.
SCF is owned by UK-based asset manager Intermediate Capital Group, which has hired investment bank Jefferies to pursue a potential sale of the business. SCF has a national network of depots and 13,000 shipping and transport containers in its stable. SCF leases out containers to transport customers including Toll, Linfox, K&S and Northline, and to a variety of other players in the property, mining, infrastructure and construction sectors.
SCF is chaired by Bob Allan, a former chief executive of shipping containers group Royal Wolf that was listed on the ASX from 2011 until 2017.
Mr Speedy said
There was strong demand for containers in domestic freight and the infrastructure sector, Mr Speedy said, adding that one product in high demand is “container rooms”, shipping container structures that have re-engineered to have windows, kitchens and toilet facilities depending on specifications.
“There’s a huge demand for our container rooms,” he said.
They are built and engineered near Shanghai, and are used on building sites and in infrastructure projects. They can be stacked vertically on small footprint sites in CBD and suburban sites.
SCF itself has felt the pinch from a sharp jump in international shipping costs in transporting the container rooms to Australia. Mr Speedy estimated sea freight costs had risen between 40 per cent to 50 per cent, and said there had been “some delays” because of the broader disruptions affecting all industries in the pandemic.
SCF, which is projected to generate earnings before interest, tax, depreciation and amortisation of about $30 million in the year ending June 30, employs 78 people.
“We’re a lean, very productive machine,” he said.
Mr Speedy said increasing problems are rising labour costs and labour shortages, which would feed into higher inflation. “Some of this is going to be ingrained,” he said.
He said it was fortuitous the business went all-out on a $50 million-plus capital investment plan in mid-2019, before COVID-19 hit.
“It was off the back of our strategic plan. Our timing was good. Our competitors had turned off the tap,” Mr Speedy said.
