Tooling and General Heat Treatment (TGHT) is a South Australian business providing heat treatment services of metal components for a variety of mining, manufacturing, and tooling applications.
TGHT came together in 1987, with the amalgamation of Tooling Heat Treatment and General Heat Treatment, which had been operating since 1975. The two companies listened to their customers and realised that they needed to invest in new equipment and processes, so they joined together to pool resources and purchase a major piece of equipment – a $750,000 vacuum furnace.
The partnership was successful, and over time, newer and more advanced equipment was purchased, including a sealed quench furnace in 1991, along with a second vacuum furnace in 1994. The business has grown steadily over the years and has always provided excellent returns to their shareholders.
Today, with a team of six employees headed by metallurgist and current owner Andrew Jordine, the company offers heat treatments for a range of materials including steels, stainless steels, cast iron, aluminium and copper alloys. Customers come primarily from industries such as mining, automotive, manufacturing, hydraulics, plastic moulding and tool making.
Challenges along the way
With a decades-long history, Andrew says that the biggest challenges faced by the company have been in finding experienced employees, managing energy cost increases, and finding good subcontractors.
“When it comes to employees, hire the best possible people that you can find,” he says. “Look at different ways to find people, too, such as word of mouth and LinkedIn.”
With energy costs, he says it’s necessary do your homework and understand your costs first, then explore ways to save.
“Prioritise your energy cost reduction and attack the low hanging fruit,” he explains. “Talk to other companies to find out what they’ve done and engage professionals to help – companies like 2XE or energy brokers.”
He says it’s also a good idea to talk with other firms about subcontractors and ask other businesses who they use and have had a good experience with.
“Support local businesses when you can, and be clear about what you need,” he adds.
Building a great business
Andrew says, “To me, a great business is about people and communication – having good people who are committed to doing the best job every day, and making sure we communicate consistently with our customers. That’s what has made us successful.”
He believes it’s also been important for them to have a solid group of sub-contractors and support services, as well as having a strategic plan and reviewing it regularly.
Accru Harris Orchard Director Chris Marshall says, “TGHT has excellent systems in place and an enviable reputation, backed by quality service and high barriers to entry. Their long-term commitment to the heat treatment industry has served them well.”
Accru Harris Orchard’s role in the journey
TGHT has been working with Accru Harris Orchard for over 40 years, as they were initially a client of the firm’s founding partner Dean Harris.
“We’ve been associated with the company since its beginnings,” says Chris Marshall.
Over the decades, Accru Harris Orchard has helped the company in numerous areas of accounting, tax and business advisory services, as well as assisting with the review and selection of ERP systems. However, one key area addressed on several occasions has been succession planning and transfer of ownership.
Chris explains, “The business has had a history of transferring equity to employees who have demonstrated an acumen and passion for the business.”
Accru Harris Orchard managed the process of transitioning ownership to numerous shareholders on many occasions over the decades, and this has allowed the business to prosper whilst also ensuring the selling shareholders received a fair outcome.
Chris says, “TGHT is an excellent example of succession planning, through the promotion of internal staff to management and eventually ownership. Transferring ownership of a business is a complex undertaking, and we have assisted the company with succession planning strategies on many occasions through negotiating share values and all matters associated with the transfer.”
The original owners transitioned their shareholdings to family members, and as the business increased, employee shareholders have been introduced.
“With each transition of shares, there are complexities around both valuations and finances,” explains Chris. Andrew says, “The help from Accru Harris Orchard has been invaluable, and it begins at the fundamental level of financial advice and accounting services. Their assistance during ownership transitions – and the calm guidance of Chris Marshall – has been a benefit to both the departing and the remaining owners.”
Future of the business
Over the next few years, the company hopes to continue with its track record of steady, sustainable growth.
“Our main goals are to maintain consistent and reliable performance for our customers, upgrade equipment through improvements and acquisitions, and continue to grow by targeting key sectors in our industry, such as Defence,” says Andrew.
To learn more, visit the Tool and General Heat Treatment website.
Want to learn more about how Accru Harris Orchard can help you build a great business? Contact our team today.
