Beca steps into its second century
Auckland, January 27, 2020
The largest New Zealand owned and headquartered professional services business, Beca, is about to enter its second century with a global reach and staff in offices from Myanmar to the Pacific Islands.
Enter Auckland’s Southern Motorway at the city’s Hobson Street on-ramp and a substantial building with a famous old name stands out: Beca.
By-and-large, Beca is not a high-profile household name but look closely on signs at development sites for buildings, from hospitals to hotels, airports, bridges, roads, and power, manufacturing and water plants across New Zealand and in the Pacific, Australia and parts of Southeast Asia and you will see that name.
Still employee-owned, this once small Auckland engineering firm, now the country’s largest international professional services business, turns 100 this year.
Landmark works over the years
Its name might not always be up in lights but the results of Beca’s work could not be more prominent in Auckland, the city where it all started. It was Beca that helped create the Sky Tower.
It was the forerunner of Beca, just a year or two old, that brought the Auckland Museum to fruition. Beca worked on the new Auckland Hospital, Auckland International Airport, the Auckland Harbour Bridge, the Viaduct Harbour, Britomart station, and the Waterview tunnel.
The list of major landmarks and pieces of regional and national infrastructure around New Zealand bearing the Beca imprint and expertise is also long: Christchurch rebuild projects, the Otira Viaduct in the South Island, and the ‘engineering miracle’ of its day that is the South Rangitikei Viaduct south of Taihape.
It has been operating in Australia for 50 years – the company’s single biggest project over its century of life is the Victoria desalination plant at Wongthaggi – and has been operating almost as long in Asia, starting in Indonesia and Singapore in the early 1970s.
A rare Kiwi company
The company is rare in that, unlike so many of our engineering, infrastructure and construction consultancy firms, it did not get gobbled up by the waves of Australian and then international takeovers over the decades.
Even our old Ministry of Works has been sold, taken over, and absorbed in its time in private ownership. It might be its Kiwi heritage or its staff of self-effacing technical types but Beca is a company that prefers its work to speak for itself.
Its chair, 32-year veteran of the firm David Carter, and CEO Greg Lowe, consider themselves ‘guardians’ for future generations of owners. Lowe, a 15-year Beca staffer, says: “With the nature of the sort of work we do, we would rather be judged for what we achieve than what we say. Rather than promoting ourselves we reflect on the things we achieve.”
Into the Second Century
Today’s business began life as an Auckland engineering practice started by William ‘Arthur’ Gray in 1920. Gray had returned from World War I with a damaged arm but with a tenacity that saw him draught one-handed as he built a clientele.
In 1954, that firm, Gray & Watts, took on the young George Beca, a World War II pathfinder pilot, and his name was later added to the practice before Ron Carter also joined in the 1960s to help form Beca & Carter. A merger with Wellington firm Hollings & Ferner in 1968 formed Beca, Carter, Hollings & Ferner which in 1972 became a limited liability company.
Various mergers and acquisitions regionally and internationally led to the Beca Group of today.
From its genesis as an engineering firm, Beca now incorporates 75 professional and disciplines across its advisory, buildings, industrial, utilities, and transport & infrastructure divisions.
Teams among the 3300 staff provide services across all facets of the economy, including project strategy, digital and technology, defence and security, transport, education and health infrastructure, leisure and tourism (from stadiums to hotels), brewing, mining, urban transformation, airports, and land development.
David Carter says: “I knew George as a teenager and I am not sure whether he would have conceived that a company with his name would be [employing] 3300 people and delivering projects all over the world. I do think he would be proud that it has gone on to be employee-owned.
“They [the founders] would be proud of where we have got to. We feel a sense of gratitude for those who have gone before us and we are conscious that we have a guardianship role.”
Auckland Museum, a milestone
The original major project, the Auckland Museum, remains a milestone for Beca.
“We often mull over how we would have done that. Our early founding partners were actually technically superb.”
A non-physical milestone was a change pioneered by George Beca in the 1950s when he led a campaign against architects having the lead on all projects, at a short-term cost to his company’s revenues. Beca then developed its own project management skills on enormous industrial jobs such as the Tasman pulp and paper mill at Kawerau and the New Zealand Steel plant at Glenbrook.
The Sky Tower is the company’s highest achievement.
“We did the engineering – the ‘how do you make it stand up?’ bit,” says Carter.
“It was made beautiful by [architect] Gordon Moller but then how do you make it work internally?”
After the Sky Tower’s completion, Beca won a similar project in Macau. “[Casino magnate] Stanley Ho came and said: ‘Can you do one of those?’”
$4 billion Victorian Desalination Plant
The company’s biggest job was the $4 billion Victorian Desalination Plant, a private-public partnership for which it had 750 people engaged.
Asked if they could identify values that might have endured down the years within the Beca organisation, Carter and Lowe nominate two in particular: partnership and tenacity.
“As practitioners, we can only deliver what we deliver as a team. No one person or organisation owns all of the knowledge,” Carter says. “And that’s why Beca teams up with others in New Zealand and internationally to deliver for our clients.”
Lowe adds: “We exist as a collaborative enterprise. Our roots are in engineering but our business is today 75 different professional disciplines and, more and more, those skills need to come together to deliver a good client or community or social outcome.”
The partnership ethos extends beyond project delivery. Beca has multiple long-term partners in New Zealand.
“Some clients we have worked for, and continue to work for, for more than 50 years. Lion, for example, has inducted us into their supplier Hall Of Fame. Carlton United Breweries is another we have worked for continuously for 50 years. Three generations of their people and three generations of our people have worked together. One of the things we really emphasise is to get our people to understand why we are doing what we are doing for clients and their business.”
Tenacity is illustrated by a historic example – of Arthur Gray with his damaged arm draughting one-handed and George Beca’s decorated World War II flying service.
“George was a pathfinder in the war. That took quite a bit of tenacity,” Carter says, adding generations of Beca’s people have continued the tradition
Growth and Ownership
How does a Kiwi firm grow to such a scale – and still avoid the attentions of regional and global conglomerates that have taken over many local engineering and related practices? Lowe points to the 1980s as a pivotal period for the engineering profession in New Zealand. “One of the great transformations that happened in New Zealand and in Australia in the 80s was the privatisation of engineering. Before the Lange government, 85 percent was in the public sector.” Not just the Ministry of Works, but telecommunications, energy and infrastructure.
“That privatisation process has brought tremendous efficiencies in terms of how project work is delivered.”
Carter says that one specific advantage for Beca was in the opening of roading project work.
Beca had developed roading expertise in Australia and was able to use that rapidly when opportunities arose in this country.
Now the country’s “largest professional services company,” Carter has seen Beca grow its reach into Southeast Asia and Asia-Pacific, and lately to clients in Europe and globally through several new and in digital services and products.
With such a diverse range of services, there is the usual tension between the overall brand and specialist areas of the business.
The Beca Brand
“How do we balance giving all of these their individual brand instead of referring it to a Beca brand?”
For its first 50 years a partnership, Beca became a limited company in 1972. It is employee owned, the concept based on a George Beca philosophy of “the ‘we’ is stronger than ‘me’”, says Carter. As Beca had been trusted with partnership by the Gray & Watts leaders, he then offered a young Ron Carter the same part ownership.
“Shares are offered to employees on a select basis, still. We make an assessment of staff’s contribution to the success of the company.” Executive directors on the Beca board – including Carter and Lowe – hold less than 5 percent, David Carter says, and there is a set transition policy – “intergenerational transfer” – for older staff to start selling down their shares to ensure the incoming staff are brought into ownership.
Lowe said that there is added energy in the business from staff ownership.
“Energy for innovation, energy for diversification, energy for international activity.”
Both men believe that ownership structure has kept Beca independent, where other names of yesteryear such as Kingston Reynolds Thom & Allardyce, have been absorbed into broader entities. The Beca way has been to remain locally owned and bring in international experts where necessary as partners. “Bring the capability to New Zealand when it is needed.”
“There’s a lot of talk about the benefits of international consolidation,” says Lowe. “Mostly the root cause of that consolidation has been financial performance or ownership changes.”
New Zealand infrastructure
Once again, the Government has plans to accelerate spending on major infrastructure.
At the end of 2019, Finance Minister Grant Robertson announced increased spending of $12 billion on such projects, but will not specify until coming months, exactly which ones the coalition wants to advance.
Lowe says that the sector has the capability to carry out such major projects but needs certainty. “We can grow that capacity through New Zealanders and with people from around the world.”
If businesses had brought equipment to this country they would not want a hiatus between rounds of projects, or could be otherwise tempted to move the machinery back overseas.
He believes the Government and Auckland Council and others see the big picture. “I think the intent is there, but you need to make all aspects work.”
Carter says that many businesses invest with an eight to 10 year payback.
“I think markets can absolutely adapt to deliver these projects. There’s a lot of projects that will come to completion in the next one to two years. We don’t want to lose that capacity to the Australian market.”
Lowe nominates Auckland’s growth northwards as a potential focus for infrastructure investment. “One exciting concept over the next 20 years is taking the ‘golden triangle’ of Auckland-Hamilton-Tauranga and extending that and putting Whangarei in there. It’s not just about the port debate, but Auckland growing to the north, the economic revitalisation of Whangarei and the surrounding beautiful surrounding. Look at what the growth of Tauranga has done to Hamilton and the growth of Hamilton to Auckland.”
Carter believes that the benefits for the Northland community could be great.
“No Kiwis like to see a part of the country left behind.”
While the pre-1970s public works can be questioned in some ways, he says that there were some good aspects from the Ministry of Works days that have been lost, such as national infrastructure planning.
“The Waterview Tunnel was conceived in the 1970s by the Ministry of Works, 40 or 50 years in advance of it being completed. We need to think long term with infrastructure projects.”
Some hits and misses
Beca’s size and market presence does not, of course, mean it dominates all big projects.
Last year the consortium it was a part of missed the contract for the substantial, second phase of the City Rail Link underground rail project.
Carter says that was an obvious disappointment.
“Do you want it to hurt? Yes, because if it doesn’t hurt you are not sufficiently vested in it. If you are one of the bigger players, inevitably the chance of winning them goes up, but if you do not win them the pain is greater.”
But he and Lowe say on such projects the allocation of risk is a major issue.
“You have to stand by the product you design and the price you commit to.” Businesses taking on too much risk through the tendering process was one of the country’s building sector’s biggest concerns. “Pushing the risk to the wrong party can have big economic impacts,” Carter says.
The future of Beca
With 50 years and now 500 staff in Australia, Lowe says Beca sees that market as “really important” for growth. “We are a very small proportion of a very competitive market but significant growth in Australia is in our plans, including on the East Coast, and, for example, a rapidly growing defence business in Canberra.”
The company is in Thailand, Myanmar, Indonesia and in the technology hub of Singapore where it runs a Digital Innovation Hub in partnership with the Singapore Economic Development Board.
Because of its expertise in seismic engineering and digital technologies, Beca has a project in the Netherlands assisting in assessing and securing properties after a depleted gas field caused damage to 25,000 homes.
It won a digital project in 2018 for one of the world’s largest manufacturing companies after its work was noticed from the Philippines via Singapore and picked up in London.
Lowe says: “We came up with a solution and then they wanted us to manage that solution and partner with Microsoft. It is the first time in 100 years that we have helped to deliver projects in 100 countries and 275 locations. Digital solutions are taking us to geographies entirely different to those available in the past and challenging us and our thinking on how we reach the world.”
Tim Murphy is the Co-Founder and Co-Editor of Newsroom. Beca is a Foundation Supporter of the new Auckland Section of Newsroom. The above Report and Pictures have been published under a Special Arrangement.