Electrical Connection Autumn 2017

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SAI Global has accepted a take-over
offer from Hong Kong-based private
equity firm, Baring Asia Private Equity
worth some $1.1 billion.
Now, you and many of your industry
colleagues on Standards Committees have
worked hard over the past decade or so to
increase the value of this organisation (value
creation is one of those great phrases these
global bankers love to drop in conversation)
– most likely at the expense of personal
business time, effort and family... But, I’m
not sure that your effort and value-add was
ever really taken into consideration.
The world of Standards Australia and SAI
Global is a complex one and I am constantly
amazed at how few senior people across
the building and construction sectors really
know how it all works.
Standards Australia is controlled by
75 member organisations, such as NECA,
Master Plumbers Australia, Australian
Window Association, HIA, etc… and
is responsible for the creation and
development of all Standards documents
across all industry sectors.
Hark back ~15 years and the Australian
Government took advice (probably from
a merchant banker) to split the roles of
Standards development (the boring hack
work) and the marketing of the Australian
Standards that were produced or updated.
That all sounded great when the public
float took place.
Standards Australia received funds from
the equity-raising to invest, and then re-use
the dividends to assist with funding the
ongoing business of developing relevant
Standards documents across Australia’s
societal and business needs.
SAI got a sweetheart deal and gained
the exclusive marketing rights with the
obligation of a small commission on sales
paid back to Standards Australia.
SAI also set the retail price of the
Standards for the market.
Everyone was pretty green at the time
and Standards documents were still mainly
published in print back then.
But, SAI started to grow an international
base, which eventually outgrew the core
business, somewhat aided by takeovers.
In more recent times, local industry
has come to realise that the marketing
‘clip’ being passed back to Standards
Australia is not within cooee of what similar
arrangements are in other countries. In fact,
it’s probably 75% belowwhat is accepted in
similar schemes globally.
That means things may get a bit messy
given the current marketing deal between
Standards Australia and SAI reaches its
sunset in 2018. (SAI has a five-year option to
renew at ‘market rates’ but it may be a rocky
conversation.)
No doubt the new SAI owner has taken
this into account – and there is a suggestion
that they may well hive-off the Standards
publishing side of the business.
Fortunately, Standards Australia already
anticipated the need for change.
In recent months it has announced a
large investment in a digital platform that
will ensure better use of members’ time in
developing/updating Standards and help
put the organisation back in more control of
the marketing of the Standards documents,
whatever form that might take.
Standards exist for the common good.
Hopefully that’s not forgotten in all the
hubbub of a handover.
8 E L EC TR I C AL CONNEC T I ON AU T UMN 20 1 7
EDITORIAL
Jeff Patchel
THE FUTURE OF
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