Formula Chemicals: winning formula


One of the country’s largest manufacturers of chlor-alkali products, it’s fair to say Formula Chemicals has got the right business mixture

Formula Chemicals: winning formula
Leigh Smart with daughter and CFO Kimberlie

 

As someone who admits that science at school wasn’t his strong suit, Formula Chemicals director Leigh Smart has done well since starting his business in a garage with the $1,000 borrowed from his father some 46 years ago.

With the business expanding across four factories and employing more than 40 staff and a fleet of its own, Smart has become more than just a dangerous goods operator but an outstanding contributor to the trucking industry.

Seated in his West Ryde office in Sydney, Smart is a humble man who is happy with the things he’s achieved and the fortune he’s made.

Aged 70, he says he’s got few regrets, and hopes that his children will continue on with the business.

The company blends up to 15 million litres of various products at the site and resells various chlor-alki raw materials such as sodium hydroxide and sodium hypochlorite.

Some of its main customers are IXOM Australia (formerly Orica Chemicals), Research Products, Redox Pty Ltd, Caltex Australia, Sealed Air Corporation and Applied Chemicals.

Formula has been blending for these companies for over 30 years, ranging from windscreen wash concentrates to bulk detergents, degreasers, body washers, truck washing compounds and general purpose detergents for the food and meat industry.

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It also makes surface coatings and a full range of laundry chemicals.

Along with blending, the company also provides a repacking and labelling service, and is able to screen, blend and crush semi-hard products. It also dilutes concentrated products, such as powders into liquids in varying concentrations.

Toll blending represents 30 per cent of Formula’s business, with the remainder divided up equally between cleaning detergents and sanitisers and raw materials.

The company also manufacturers a limited range of products for the

New Zealand and New Caledonia market and has recently gained a large degreaser contract for the Western Australia market.

Because it purchases high volumes of raw materials and packaging, Formula Chemicals is able to offer competitive prices.

As a wholly-owned Australian business, it prides itself in buying locally-made raw materials – which at times has disadvantaged the business financially according to Smart.

"We believe in the long-term our philosophy to be correct and we only use raw materials and packaging from approved sub-contractors and fully support quality endorsed companies," Smart says.

"With written supply agreements in place and long-term contracts we are able to place forward orders to ensure stability in pricing."

FLEET

Formula Chemicals uses Hino trucks for local and country New South Wales deliveries.

It has three 15-tonne trucks, one of seven tonne and a purpose-built Omni Tanker unit. It also has three one-tonne trucks suitable to carry urgent deliveries.

Formula Chemicals was the first company in Australia to purchase a Hino Hybrid truck.

"Although the truck has restrictions in power and weight, once the technology is refined for the trucking industry, we believe the technology would work in small to medium trucking applications," Smart says.

"We had a major issue with the Environment Protection Agency [EPA] as one of their inspectors claimed that we could not carry dangerous goods on a hybrid truck.

"After discussion with senior management at the EPA, we were granted the approval to use this truck for the carriage of dangerous goods as the regulations had not kept up with technology."

Smart believes in upgrading the fleet every three years, with all trucks fully-serviced by Mobile Fleet Services.

Four of the trucks are purpose-built with a bunded tray to prevent leakage.

All are fitted with telematics, 24-hour surveillance and are used for deliveries for up to 6,000 litres, both in packaged and bulk loads.

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Formula also delivers into the Australian Capital Territory, Albury Wodonga, Wagga Wagga, Bathurst, Orange, Cobar and as far as Taree in the north.

A member of the TruckSafe Program, Formula is also a member of the Australian Trucking Association and Road Freight NSW.

The company owns seven Clark S Series 2.5 tonne forklifts, which are updated every three years and regularly maintained under an agreement through Clark Forklifts Australia.

Each of the truck is fitted with a Mag Drive Pump for pumping all classes of dangerous goods and has chemical recovery bins on board.

The Omni Road Tanker was purchased last year and is made of two 4,000-litre independent pods, which are able to transport products in non-compatible classes such as hydrochloric acid and sodium hypochlorite.

The Formula warehouse is located at 88 Hermiate Road, which stores packaging materials and metal drums. The company doesn’t carry stock but only makes to order.

"It is a comfort to most of our customers that Formula manages their business from inception of order to the final stage when product is delivered into their warehouse in east state, cost included," Smart says.

"This includes the purchasing all raw materials, packaging, containers, labels, palletising, quality control and transport.

"The customer ends up with one final invoice covering all these functions. They are then aware of their exact costs and it is then a simple matter to determine the eventual price and profitability."

HUMBLE DAYS

After graduating from Hawkesbury Agricultural College in 1969 and initially working in the food and dairy industry in various roles, from chemist to quality control manager, for major companies such as Dairy Farmers, Peters Milk, Bega and Applied Chemicals, Smart started his own business at the age of 24.

Working out of his brother-in-law’s garage for 12 months, he only had a car and a trailer, spending his mornings on manufacturing then delivering goods in the afternoons.

Most of his bread and butter came from breweries, which used bottle washing liquid.

"I was only very young and had no money, being married," Smart says.

"I was scratching around trying to make ends meet. I was renting a house and the owner of the property was a really nice bloke in his 80s; he owned the other half of the factory.

"He said to me ‘I know you work really hard and you’re doing it tough, I’m old enough to sell my properties’.

"So he wanted $160,000 for the whole site and I only had $1,000 so I went and saw my parents and borrowed $10,000 and borrowed the rest from the bank at a 22 per cent interest rate.

"We worked at our rate and paid off the loan and then grew and bought different factories, with the total site now worth $12 million, but with the redevelopment happening in this area it’s probably worth $18 million, which will all go to my kids," he adds.

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His three daughters work in the business, with Kimberlie Smart by his side as CFO.

She’s been with the company since 1999 and has made a significant contribution to the business, being recognised as a finalist for the 2017 Women in Industry Awards.

"The girls will take over one day, it just depends on what they want to do," Smart says.

"It’s a good business [and] it’s still profitable, [though] we do struggle nowadays as most of the business has gone off-shore to China.

"Our biggest advantage is that the majority of the product we make is water-based, so when the product is 80 per cent water it still makes it economical to make it here."

It was very early in his career that Smart realised he needed to diversify.

"We are fairly lucky in as much that we’re not relying on one or the other, so when you have a downturn in one area you pick it up in the other, so you go around the roundabouts."

BP is one of its major customers of 40 years but when they decided to build a plant in China some 10 years ago, they took all the product off Formula Chemicals for two years.

"That brings you down to your knees for a little bit but we managed to get through it and then after two years they found that things coming out China just don’t have the quality to them," Smart says.

DRIVER SHORTAGE

With one of his daughters formerly married to a Fijian, Smart has made strong ties to the Fijian community, being heavily involved in charity work such as WOWS Kids Fiji, which is a not-for-profit organisation for children with cancer. Most of his drivers are also from Fiji.

Smart says that’s the only way he can get drivers to carry dangerous goods, and has been advertising locally for a driver for more than 12 months.

"At present, we have three Pacific Island truck drivers and they struggle with the laws as well.

"We had an incident just recently where the highway patrol pulled over one of our trucks near Bathurst because he had gone over the centre line.

"The police officer thought he was fatigued. He had only gone six hours of the day and wasn’t tired but the police officer instructed him to leave the truck on the side of the road in the heat with 10,000 litres of dangerous goods on the truck.

"So I had a meeting with Road Freight NSW [to gain support] and I said to them we’ve got our OH&S rules we need to abide by; you wouldn’t put a dog in a truck and leave him on the side of the road whereas you leave my driver."


Read about industry's recognition for Smart's achievements, here


Lisa Dolan joined Formula Chemicals in 2016 as HR manager, having implemented safe work practices within the organisation.

"We now overtrain everyone here to make sure they are fully compliant," Smart says.

"These kids are coming out of Fiji and they haven’t got any schooling, so it’s really hard to get them up to speed.

"The HR manager spends hours going through the questions trying to give them the right answer and showing them what to do. She then takes them out on a practical course day."

By having the trucks equipped with telematics, Smart has full visibility of their location and the speed they’re travelling at.

But being a dangerous goods carrier is not easy, especially in urban areas as the trucks aren’t allowed to travel through tunnels or stop in public spaces, making it hard for drivers to rest up.

"I’m going to the meetings all the time and putting up our voice; we’re asking Transport for NSW to give us one year and one tunnel and see how we go," Smart says.

"In my knowledge, all the years I’ve been working for 46 years, I’ve never had a problem with a tunnel.

"If you’re going from Botany out west, we can’t take the tunnel so we pass a shopping centre and everyone is exposed to it if there is a leak.

So, see how clever that is with the thinking?

"Wouldn’t you rather reduce the risk and get it through the tunnel that could be contained and looked after than put in on the main street near a shopping centre where you’d have 10,000 people affected by the spill?"

The company has never had an incident or leakage during its time.

Every year the fire brigade visits the company for a check-up of its systems.

RECOGNITION

Smart was crowned the outstanding contributor to the trucking industry for his diligence and safety in the transport of dangerous goods at this year’s Australian Trucking Association’s awards.

Smart is a mentor in the WorkCover ‘Safe Business is a Good Business’ program and was accredited WorkCover consultant for 15 years.

A generous contributor to the trucking industry, involved in the ATA Truckweek events in 2014 and 2016, Smart has been a passionate industry representative and advocate for many years, particularly in the road transport of dangerous goods.

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