Crushing It In Construction

#64 How To Turn A Niche Market Into A Sustainable Cashflow With Chris Hazell

• Jordan Skinner

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Welcome back to the Crushing It In Construction Podcast.

Tuning in from Tasmania this week is industry veteran Chris Hazell, General Manager of Business Development at Spectran Group.

With over 45 years experience in the construction and transport industry, Chris knows a thing or two about what it takes to succeed - with Spectran now employing over 200 staff to manage an ever-growing customer base.

Specialists in demolition, recycling and material reprocessing, he reveals the importance of their environmentally-friendly ethos - providing solutions for local businesses to help them stay green.

In his own words, it's a niche market - but Spectran are growing from strength to strength and it's doing only good things for their local community and their bottom line.

Let's dive in!

CONTACT DETAILS

Chris Hazell
LinkedIn: https://www.linkedin.com/in/chris-hazell-5a819740
Website: https://spectrangroup.com.au/

Jordan Skinner
LinkedIn: https://www.linkedin.com/in/jordan-skinner-685439178/
Website: https://moonshotmedia.com.au/

Is your company attractive to potential employees? Take the scorecard: https://moonshotmedia.com.au/scorecard

Hello, everybody. Jordan Skinner here with another awesome episode of the crushing it in construction podcast, a podcast that is dedicated to the construction industry, where I interview amazing guests from within the industry that all share their experience, their wisdom and their insights that will help you, the listener either grow within your career or grow within your business. So. No matter where you are, there is always something valuable to learn from the stories of our guests and how they've got to where they are. And this week is no different. I'm actually chatting to Chris Hazel, the CEO of at spectrum and group, which is based out of Tasmania now. Chris has been in the industry for a very, very long time. He's family actually started Hazel bros, out of Tasmania as well. And about 20 years ago, he actually decided to break off from the family business and start his own thing. And that's aspect rain group was actually born. And in that time, the business has gone through a whole heap of evolutions. They started out just doing civil construction and demolition, But in the later years of the business, Chris has really put a focus on recycling and making sure that when a demolition job has been done, That they can take those materials into their business, recycle them and give those materials as second life. This is an area he plans to focus on heavily moving into the future. And it's something that I actually have some experience with myself in my old man's business. We do something very similar and I think it's great. It's really interesting. And I do get sidetracked to end this episode talking about. stuff that quite a lot of people would probably find boring, like specks of materials and all that sort of stuff. But anyway, Let's get into this episode. There's a lot that we can learn from Chris and his many years of experience in this industry, let's get into it.

Jordan:

gday. Chris, how's your day going?

Chris:

Very good. Thank you.

Jordan:

that's good. Not too many fires to put out or anything like that on a Friday afternoon.

Chris:

no, it's been a good day. Um, business has been ticking over and all the jobs are going well.

Jordan:

Awesome. Well, so for everybody that doesn't know you yet, you just take 30 seconds, introduce yourself and let us know who you are and what it is that you do.

Chris:

Right. Well, my name's Chris Hazel. I run a business called Spectrin Group in Tasmania. we specialize in, uh, demolition and environmental type projects along with civil and transport. Uh, the things we've done in the last, I've done for the last 15 years is we've done a lot of demolition work and then turned from that and developed into recycling and doing a lot of material. Reprocessing for example, when we do a demolition job, we look to return the material we take from the demolition back into a value added product. And hence, we have developed a reprocessing facility, Hobart. And now we take both our own material and materials from our numerous clients throughout Southern Tasmania.

Jordan:

So what are some of the most common materials that you're out able to recycle out of a, normal demolition job?

Chris:

So recycling is a business where believe the first thing you gotta do is really identify how you can reuse it and the fact you can afford. To achieve a reuse within the costs that you can get doing the project in the first place. The one that we've really developed very well is concrete. So we take concrete our own projects, we take concrete from councils, we take concrete from other builders, and we take concrete that's left over from freshly poured concrete sites. So any ready mixed truck that's got. Concrete leftover, they'll bring it to our yard and we will put that in with our recycling material. So we take that concrete and we turn that into a road based material. we've now achieved the gradings required for what they call Vic Road standards, and that's a national road standard that is required to, supply. high quality, tier one building sites. So our product now is equal to any alternative product in the state, and that allows us to supply that as a beneficial reuse to builders and also to developers.

Jordan:

And let me guess that recycled concrete goes down like

Chris:

It goes in like concrete. It's uh, it's what I tell the clients and, when they use it, they actually discover it's true.

Jordan:

old man's company does something similar. We recycle concrete, and as soon as you crush a, rubble or a, based outer concrete, can't hold onto it long enough. It goes out the gates quick as you can put it on the ground.

Chris:

No, and what, it's a very funny thing. Um, getting people to accept recycled materials, even in the days climate of where there is this green wave of enthusiasm to get major builders and major, developers to wanna accept it has been very, very hard. And we've had to really, in Tasmania, in Hobart, we've had to really work very hard to get that level of acceptance. But it's funny, right now the quality of our product is starting to sell itself. every time we take it to a job site, we have, client saying just how well that product is received in terms of its compatibility.

Jordan:

Yeah, and I mean, with a typical road base, just the way rubble and, aggregates lay out, the stone typically groups together, and if the stone groups together, you than it should. That's how you develop potholes because the cars run over it and all the rest of it, it typically just pulls it straight out over time. So, Stuff like crushed concrete. You don't have any of that problem.'cause once it goes down, you put enough water with it, and like you said, it goes down exactly like concrete. So a lot of ways it outperforms a typical rubble.

Chris:

Well, we had one case, it's it's been down for 10 years. Uh, we put a base layer down of our concrete and 10 years ago our product wasn't as good as what it is today. the client reluctantly allowed us to use it because I was pushing for it. Uh, used it. It's been down for 10 years. He was gonna put a surface on it and do all the. the things that people ought to do to a finished job that never happened. It stayed as a base for 10 years on the side of a hill. not been one pothole and not one erosion. Any natural quarried material by now would've had wash marks, erosion and probably been rebuilt three times. So it's been a real testament to the product that that's been achieved.

Jordan:

you touched on a pretty important point, I think just before where, you know, everybody's got this green enthusiasm, but, people to actually accept it is a challenge and it's a particular bugbear of mine. Uh, I think you and I had this conversation where we were doing the pre-interview, but you know, industry talks about you need, to be more sustainable, we need to be more environmentally friendly. But then when actually Push comes to shove and they've got a chance to do exactly that. Not many people are willing to put their balls on the line, and it's pretty hypocritical Feel free not to answer this'cause I, I'm able to slag, industry off as much as a, like, it doesn't affect me. But, you know, do you think that is?

Chris:

part of it is the national, You've got some of the national builders and they've been burnt with, contaminated materials in recycled materials. And, there's been a case of that, you various places. So what we've gotta do is make sure that we have a facility that manages that risk and we identify with our pre sorting, uh, we do. Very well. So I say that quite clearly that is absolutely critical. Um, in saying that, a lot of good green people around and there's a lot of that take shortcuts. So if someone in recycling industry takes a shortcut and you end up with a bad recycle product, it affects the good guys too. So then that puts that taste in the building industry and everybody shies away from it. But we have, for example, utas here in Tasmania and they're doing some new works, uh, Hobart area, and they are. Really, really totally and absolutely supportive of ensuring that all of their sites have a green carbon footprint and they go out of their way to introduce like us with our materials to their, uh, contractors.'cause they wanna see that material used. So you get two or three of those in the marketplace, it starts to turn everybody. And we just really appreciate that type of client.

Jordan:

Yeah, absolutely. Well, we've gone a little bit off track'cause you I always do that from time to time. I, I get curious and go off on tangents, but let's take it back a step. Tell us a little bit about yourself. what did you do, if anything, before coming into the construction industry?

Chris:

Well, I've sort of grown up in the construction industry, so I've been in the family business, now for, 55 years. Started off working with my father and uncle, uh, then with my brothers. And then, um, I've had a mojo in my mind to go right into recycling materials about 15, 20 years ago. So I branched out in my own right. about 20 years ago now, I guess it would be. I haven't encountered, and, started to develop my business around environmental services. So today we employ. Around about 240 people, of which we would have around about 160 people within our business undertaking, environmental type services for customers, whether it be in the construction industry, whether it be in the, farm industry. we do a lot, recycling and reuse as a fertilizer product of fish farm waste. We do a lot of that within the whiskey and the, brewery trade, uh, all their yeast materials and that we have, um, ag signs, gentlemen working with us and we can talk to all of our organic type suppliers and we can identify with their material that is a byproduct and we can actually, identify a location and turn that into a liquid material with some maceration and take that out and spread that on farms as well. So our business is really centered around environmental outcomes. To go a step further, we then have launched into asbestos management. So we probably have the largest workforce of asbestos people in the state. So when we go and do a demolition, we're able identify with not just the building demolition, but the asbestos as well. And then to take it a step further, we also handle and remediate a lot of contaminated soils. So we may do a demolition, uh, that demolition as is asbestos. Within the footprint is hydrocarbon soil. We can handle all that for the one client. undertake remediation for soil, uh, dispose of asbestos, undertake the demolition, and recycle all the materials with remediation and rehabilitation.

Jordan:

Yeah. So. you said, you grew up in the industry, you came from a family business, and you much like myself, the easy option for most people when they're in a family business is to stay in that family business. did the entrepreneurial side of you start that? what was it that sparked the, whatever it was inside of you that said, right. I'm, I'm bugger this. I'm going out on my own.

Chris:

two or three things when you're in a family business with brothers. people are good at certain areas of the business and, my brothers are very, very good at what they do. and of the nature of the family business and the relationship we have with other people, some of the environmental work that I wanted to do, Would be in confliction with some of our other partners within the family business. So for example, the old people like that. So, when I did what I did, uh, I didn't have any ties to any other existing waste service provider and therefore I was free to undertake what I wanted, undertake without any third party, uh, relationships.

Jordan:

was it a scary move? Like, did you have to think about it Long

Chris:

think it's scary every day of the week. Uh, not nothing's changed. every day is a scary day. When you employ people, you are trying to run your business, you're trying to manage your risk. Uh, trying to identify with the best way of doing things, and you're trying to provide a service to the client that is outside what others do. Because in, when you do environmental work, you are. Working in a field where you are exploring, options for clients that they haven't used in the past.

Jordan:

yeah,

Chris:

I don't use the word scary. I use it exciting. and that's, we enjoy doing and our workforce and our management challenge themselves in these areas.

Jordan:

Yeah. And so, what year did the company, did you actually go out on your own? Can you remember?

Chris:

No.

Jordan:

Okay. Well, so, since that day, whenever it was, what are some of the different stages that the company's actually gone through to get to where it is today? Employing 240 people and you of the biggest companies in Tassie? Like what are those three main stages that you've gone through?

Chris:

I guess the first stage is developing a client base. So number one is you build your business and as you build your business, you have a client base that's not stable, so therefore that really creates ups and downs in your business. So, You have a month where you're flying and you have good work and good opportunity, then you go for three months without anything at all, that's gonna create any sort of profit. So the real scary part has been for 15 years is having, a stable, client base that gives us, if you use the word, a 70% fixed revenue type income stream. so that's been the scary thing. That's been the hard thing and that's given us ups and downs where we certainly have had some very, very hard times with our business. we've had to reinvent the business, in terms of where we are, how we doing it. And get out a certain area and refocus another area. And we've also had to learn how to actually undertake recycling. That does create an end dollar return rather than recycling that is emotionally driven.

Jordan:

And so in those early days, like you said, the recycling side of things is something that you've been focusing on in the later part of the business. But what was it that you actually started doing? What was the main focus when you kicked off?

Chris:

Uh, it's always been construction, transport, logistics. So we've always been involved in, undertaking heavy haulage with transformer moves, civil projects and subdivision developments. a lot of building site work with major builders. So we've done that all of our lives within all of our businesses. now these days we don't engage in. Tier one major roadworks. the big boys are in the state, and they do that very, very well. if they have an environmental problem, it will well be that they would talk to us and we would help them. we focus on what I call the, niche market type work. And then the trick has been building that niche market work into a sustainable cash flow with a sustainable level of work.

Jordan:

yeah. And so, okay, so those early stages were developing, you cashflow, developing regular work. What was the next stage after that?

Chris:

The next stage was really learning in environmental sense, how we could actually, develop things. So for example, with organic waste, and you talk about fish farms, their byproduct. talk about, you the breweries and thereby product, it really was understanding that that material, which was at that stage a waste, that that material could be reused. And that the E P A. the councils, through the property owners, and through our ability to understand what equipment we needed to manage the outcome, that we could develop a system that allowed us hours a day, seven days a week, and 52 weeks of the year allow us to reuse that product to a beneficial outcome. that was a major bit of work.

Jordan:

I remember one of the other things that you mentioned to me when we were having the pre-interview is that, you of the biggest challenges that you've had is, making it sustainable, making the recycling part of the business sustainable and that it comes down, um, In a large part to population and the size of your market and in Tassie, you it's not a big, state. Do you ever see yourself going outside of Tassie, expanding into Melbourne or any, anywhere like that with the recycling side of stuff to make it more sustainable?

Chris:

Oh, I don't myself. We've got a management team now, and the last 12 months has been about in our company, really putting a management team in that allows me to slow down and get out of the place or retire. Um, various descriptions for that, but um, got a management team now. We've got a c o O on board, don't have a board, but we have myself and some advisors and we are forming the board in order to have a management team running the business and myself and, board members where we are really understanding the strategy and reviewing it. So it's gonna be interesting to see over the next five years what the company does want to do, If I use the word a better management than what I've been able to provide, I'm tended to be an operational manager looking at the problem and doing it with the team myself. Now we're having a much better and a much level of staff with the qualifications to really achieve all the outcomes, uh, a lot more technical support.

Jordan:

Yeah.

Chris:

So it will take us places and yes, there is opportunity around. The main thing is we know there's a lot of opportunity in Tasmania and we know Tasmania, is developing. We're very excited with where the agriculture industry's going. In Tasmania, we've got wonderful irrigation being developed around the state that's driving a lot more of the farmers want a value add, and that's allowing us to work with farmers and with organic. suppliers to really develop product and increase that level of work.

Jordan:

Yeah. one of the other things that you mentioned when we were having a conversation a few weeks ago is you're concerned around the construction industry and I suppose the low margins that are, you generally fairly common. what in your opinion, do you think the industry can be doing to lift profit margins? I mean, you've been in the game for a long time. What do you see needs to change?

Chris:

Look, been very, very hard outta covid for anybody in the building industry, whether you are a subcontractor to a builder themselves, and more importantly, whether you are the developer in his own right. everybody has really had a severe impact with costs. So therefore, just by. economics, can we afford to do the building in the first place? Can we make the building stack up to have a financial return? So the developers had a real problem that's been translated onto the builder, and that's been translated down to the subcontractors. So I guess the last six months now is seen, there's an understanding that we're in a world now that is different. Three years ago. It is not gonna go away. So therefore, we've all gotta learn how to fit into that cost structure and the cost that we have in the business area. Um, I think the building trade always is a very, very tough game. we respect any builder that's out there working. They work hard and if we are working for them, we know that we have to do the same thing. Um, what we are looking at is not so much doing more work for the builders, but doing work with the builders where. Our productivity gain through our ability to manage their materials, can give them cost savings, but let us maintain a margin. So where we have a building site and this contamination issues, you know, can we turn that waste contamination issue from being a certain cost to being 50% of that cost because we can remediate the material. So we are looking at doing that. We need a job for authority. six months ago, us it was an$800,000 job. Uh, without it being remediated, it would've been a one and a half million dollar cost. So we can save that, client. a lot of money, but maintain a margin for ourselves. so our attack to where we wanna be in the building trade and with everybody else is to identify how we can actually work with them. I take their problems and create a margin from their problems that still gives them a cost saving.

Jordan:

Yeah, absolutely. And you said, you've been in the game for a long time, so I mean, the margins at the minute the worst you've ever seen them? Have they been drastically better say 15 or 20 years ago, or like, I'm just trying to get a sense for myself too.

Chris:

I think they are hard on where they been, but to be honest with you, I don't know the building work we are doing at the moment. We've got several building jobs on at the moment, we're working as a subcontractor, and each of those jobs have a very specialized aspect to why we are there. And each of those jobs we have got a margin that we are comfortable with because the nature of what we are doing there is so specialized that we can do a very good job for the builder and for the client. We can make a margin and at the same time, can still be, afforded. By the client and by the builder to be there. So we are not doing what you and I call the everyday job. We don't work around our sites, uh, we don't work around the small sites where, a good owner operator can leave us for debt in terms of cost efficiency.

Jordan:

Yeah. And I think you might've just hit the nail on the head. At the end of the day, it's trying to figure out, uh, a niche into something where you can't be copied by every Tom, Dick and Harry with a bobcat. Uh, if you can figure out how to do that, then you're gonna be able to just, out margins that reflect your value. I suppose this leads us into another point that I think you made that was really, really good is as well, that you feel that there's maybe needs to be a little bit more regulation in the industry about how backyarders or, entering the industry actually come into the industry. Um, start undercutting everybody on price. Um, this was an interesting point. Are you able to explain a little bit more what you mean?

Chris:

Oh, look, I don't call them backyards either. I, um,

Jordan:

sorry. I'll put words in your mouth. That's what I call'em.

Chris:

no, look, the environmental costs are increasing for anybody in the construction industry. because now we have tip fee levies, we have landfill levies. makes it a lot harder for people. So there is the tendency for some to identify where they can tip it, that doesn't cost money. And we set up a recycling facility that really needs that material for us to survive. So yes, we would like all that material to come to our facility and we can recycle it and we can turn it into product and we get enough volume that allows us to be profitable. One of the things I'm really pleased about is e p A and Tasmania now, are really understanding that there is a level required to identify in the marketplace. So we are hearing and seeing the e p a being a lot more active, and I think that's a helped everybody. There's not a builder in Tasmania that wants to do things incorrectly. They all wanna do it correctly. it's up to all of us in the industry, at whatever level we are, be an owner operator or be a tier one contractor. up to all of us to, participate in providing the right outcome. always gonna be somewhere that says, well, look, it's gonna cost me 200 bucks to take this load into a recycling facility. If I take it at my mate's place, I can tip it down the back for nothing. I can charge my client a hundred bucks and, and I'm a hundred bucks in my pocket and he's saved a hundred bucks. Now that does happen and that's nature and it always will happen. we've got to, um, the mechanism where it's happening less and less, and I feel that that is coming in. The next thing is, of course, to public. Being environmentally conscious and we, we all are, we're all greenies. It's just what shade of green we are, but everybody's a greenie. and in that category, it's very important that everybody really does understand that if material is being disposed in a location that the fueler shouldn't be. That that is identified because nobody really knows what's in that material these days. And we all understand so much now about what type of contamination can be materials. There's a lot of contamination around Hobart from Old Town Gas, uh, asbestos, from fryable, asbestos, uh, from hydrocarbons. There's a lot of contamination.

Jordan:

Even old, spray seal and bitumen has contaminants in it now.

Chris:

well, hot mixes is a level four contaminated material, so everything's gotta be handled properly. Um, so therefore it's beholden everybody to know if something's being dumped somewhere, that material may be problem for someone's child later on in terms of health. So we need to all participate in that.

Jordan:

Yeah, absolutely. Well, this has been, great fun. I've had a good time chatting to you about all things construction. thing I wanna end with is, you you've been around the game for a long time. You've seen a lot of stuff. What single piece of advice would you give a young business owner coming into construction today trying to get their own business off the ground and, and it into something similar to what, what you've got size-wise?

Chris:

Well look, think outside the square. you've gotta actually identify what is a client's problem and how can you fix it? So in terms of say, environmental contamination or whatever, our clients, they have a problem, have some contaminated material. It's a problem. Our motto is, we'll fix that problem for you. We'll provide you with the outcome. Now, yes, we've got Hundreds of thousands of dollars worth of licenses just for our blokes to be trained and be certified for our company to have a license for our facility, to have a license and for all those things to happen. But anybody can talk to a client and work out and provide'em with an outcome. And if you do that, the client wants you to be that person that he uses. And it can be that that young bloke starting comes to a company like us and we help him with that problem. cause we here to help everybody. we don't need to do the work. if we have a client that is a, competitor of ours and he's doing the work in the field and we are handling his remediation, we're as excited by that as doing it ourselves. So my advice is to anybody he, with anything, you identify with what is gonna be the problem sold for your client, and you identify with that and you work with your client to achieve that for.

Jordan:

Yeah. Absolutely. Alright, well this has been great fun. Like I said, I, I really appreciate your time. Where can people reach out to you, learn more about Spectre and, and generally get in touch if they wanna learn more?

Chris:

Well, the SPECT group is on the website, spectre group.com au. we have links to our Reprocesses facility and we have links to some of the jobs we're undertake and what we do. got our website, email address and. We welcome anybody making an inquiry, and we welcome providing assistance to anybody with any challenge they have within that part of their business or that part of what they are looking to achieve.

Jordan:

All right, awesome. No worries. Well, thanks very much for your time, Chris. You have a good rest of your week and a good weekend.

Chris:

Thank you. The same to you.