Interview: Coates diversifies with new HVAC & Power business

Coates Power & HVAC in Australia offers a range of custom-built equipment and end-to-end turnkey solutions. (Photo: Coates)

It’s been over two years since Australia-based Coates dropped Hire from its name to reflect its increasing focus on engineering services and industrial shutdown support.

While the move (which is linked to a target of increased growth in the segment) won’t dilute its equipment hire business, it has brought about several changes with the aim of diversifying its wider offering.

Last year the company did just that with the creation of its specialist temporary power, heating, ventilation, and air conditioning (HVAC) services business.

Coates Power & HVAC in Australia offers a range of custom-built equipment and end-to-end turnkey solutions, backed up by four anchor hubs across the country and a network of regional branches.

The company, which has been owned by Seven Group Holdings since 2017, says the creation of the business comes following customer demand and covers assessments of requirements to the demobilization of equipment and everything in between.

This will see it offer customers logistics & installation, system design, commissioning, maintenance & monitoring of air compressors & quality air equipment, HVAC, power generation and power distribution equipment right through to demobilization of equipment from site upon completion of the job.

“It’s not a ‘drop and run’ dry hire service – we’re not just talking about the rental of equipment,” says Kurt Edwards, power & HVAC manager at Coates speaking to IRN via video link. “That’s part of it, but the diversification for the business [Coates] comes from the installations and add-on services.

“When the customer has a problem, whether it’s a power issue, temperature control problem or all of the above, we’ll work through that with the customer and design a best-fit solution based on the equipment that is most suited to their project or site requirements.

“Then we present that to the customer and work through the commercial aspects, ensuring we’re aligned with their expectations before mobilizing the equipment. While the equipment is in use, we will service and maintain it then remove it at the end of the job.”

Fleet utilization

“We’ve had the HVAC equipment for close to 12 months,” Edwards tells IRN. “We’ve been working with customers in this space to perfect the concept and prove it before we launched.”

Edwards tells IRN to expect the company to continue to add to the product range. (Photo: Coates)

This customer-led approach is one of the reasons the company is expecting high demand and significant interest, particularly within the industrial, engineering, mining, oil & gas and manufacturing sectors.

Of course, there is also the added bonus that the move represents its entry into the temperature control segment, of which its fleet consists of fluid chillers, air conditioning, heating and ventilation products and air conditioning units.

Edwards, who joined the company in 2022 to head up the new division following a career in refrigeration and air conditioning with the likes of Trane & NHP, says the company is particularly excited about the new temperature control offering, which is suitable for various types of applications from commercial through to manufacturing and industrial.

Edwards says, “We are a well-established power generation and compressed air business, what we didn’t have was temperature control.

“We’re expecting the buzz to be around the HVAC offering because the other product categories were existing; we have just begun to build on them. What we find exciting is the delivery aspect and provision of end-to-end solutions for compressed air, power and heating and cooling systems.”

He continues, “If a customer has a temperature control requirement and it’s temporary, it’ll benefit them because we can design a system and engage local teams to deliver, install, commission and maintain the equipment on-site, anywhere in Australia. We already have an existing customer base with demand in that area.”

Edwards adds that the temperature control solution is designed for manufacturing, industrial spaces and major infrastructure projects, which aligns with the company’s established relationships in these sectors, presenting an opportunity to offer an additional service alongside their existing ones.

Kurt Edwards, power & HVAC manager, Coates

Elsewhere, its power generation fleet consists of generators ranging from 3.5kVA to 1250kVA, while it also offers battery and hybrid powered solutions such as Battery Energy Storage Systems (BESS) and power distribution systems that it says will “ensure the power reaches all corners of your site without compromising quality or stability.”

Options from the likes of Pramac, JCB and Kubota are all available through Coates Power & HVAC.

Meanwhile, its compressed air segment offers air-operated tools such as drills, hammers, grinders and wrenches, as well as various air system options manufactured by Atlas Copco, Sullair and more.

Branch placement

The company has taken what Edwards describes as a “measured approach” to branch placement, with strategically placed anchor hubs in Perth, Brisbane, Sydney and Melbourne.

They will be propped up by smaller satellite hubs supporting regional territories. “The satellite branch locations will be prioritized on regional opportunity,” Edwards reveals.

“We’ll leverage our existing national network for that so that we don’t have to set up a branch where we already have one. It’s about adding capability to that branch and building on it.

“The opportunities by region in Australia differ on climate and mineral resources, so we look at that region and what industries they have, whether they’re in primary production, mining or manufacturing and then we will align our business model with the branches closest to the locality.”

At the time of writing there are no plans to open new specialist branches for power and HVAC, with the expectation being that the existing network will be able to keep up with demand.

Group level growth

Coates has of course already established itself as the largest rental company in Australia and announced double-digit growth in profit for the 2023 financial year.

It will be interesting to see how Coates Power & HVAC impacts growth for the Group, especially on the backdrop of its customers looking for energy efficient options, but Edwards says the focus is on growing the business in the short term.

Its power generation fleet consists of generators ranging from 3.5kVA to 1250kVA. (Photo: Coates)

Instead, he says it will act as an important diversification tool, both in its customer offering and its revenue stream, but also a tool to expand capability and build deeper relationships with customers.

As for what the future holds, he isn’t ruling out further product expansion, although he admits that it is still early days.

He tells IRN that the company will “continue to add to the product range” and to expect “some movement in other areas” potentially in dehumidification ventilation equipment.

“Short term for us is about establishing a national power and HVAC footprint, we can then grow on that by region in the long-term,” he says.

“The plan is to build on the state hubs and increase our presence across the Coates business network.”

One thing is for sure, the business is certainly one to keep an eye on as Coates continues on its path to diversify its offering.