2020 CEO Survey: Zlatko Todorcevski, Boral

Despite uncertainties, there’s ground for optimism about Australia’s medium-term recovery from the pandemic, says Boral chief Zlatko Todorcevski.

What are the three enduring lessons or changes to flow from COVID-19?

From a Boral perspective – collaboration, innovation, and planning for the unknown.

Our people are enormously resilient and in times of disruption collaboration proved key. Knowledge sharing between our teams across all geographies – Australia, North America and Asia – particularly around safety measures, delivered tangible benefits to our workforce and our customers.

The pandemic also reinforced the need to be flexible and innovative in designing solutions. We have adapted quickly to doing things remotely and finding ways around travel restrictions. For example, our safety teams fast tracked cost-effective solutions so that we can now undertake key health, safety and environmental risk management assessments and controls remotely. Even my own recruitment process was largely a virtual one. It was only the night before the announcement of my appointment that our chairman, Kathryn Fagg, and I met in person.

You have got to always have a Plan B. Sometimes, it means taking the tough decisions upfront, such as temporarily closing plants but if you are open and straight with your people, they will understand what we are trying to do – and why.

How would you rate the shape of the Australian economy as we head into the new year?

We are operating in a very uncertain market environment. Demand is variable but generally down on the prior year. While we continue to bid for infrastructure work, major projects are slow moving into the execution phase.

Despite this, I am generally optimistic about where we are headed in the medium term in Australia as we recover from the pandemic. Low interest rates, increased government expenditure and raising consumer confidence are good signs for the economy.

What three reforms are needed to sustainably grow the economy?

Construction is a large employer and further initiatives to support activity (both single dwelling and multi-residential) would provide confidence to employers and the broader community. The federal government’s stimulus funding for infrastructure in the budget is encouraging, but it will take time for the benefits to flow through to activity. While the quantum of funding is increasing, projects themselves are very large and complex, so, will take time to come through. To help smooth the pipeline, smaller and discrete packages would be beneficial, as would earlier engagement between industry and government.

Tax reforms proposed by the NSW Treasurer are positive and further reforms at the federal level would help attract investment and support the recovery.

Immigration decline has been an understandable outcome of travel restrictions and people wanting to be closer to family. However, reinvigorating immigration at the right time would be a strong impetus to the economy.

What are the three best growth opportunities for your company in 2021?

Right now, we are less focused on top line growth and more focused on growing our bottom line. In Australia, we have been prioritising opportunities to improve margins and returns through a leaner, more nimble organisation, and in North America we have operational improvements and enhanced go-to-market strategies under way.

We have also identified adjacent growth opportunities in Australia that are potentially attractive extensions of our existing business and deserve further examination. This includes extensions of our recycled concrete and asphalt products as well as further development of low carbon products including supplementary cementitious materials.

In North America, product innovation is also an important area of focus with a series of projects in the pipeline, particularly in Roofing and Stone with some close to launch.

What impact will digital transformation have on your company?

Data is used in many ways to deliver value throughout the business, particularly as it relates to supply chain planning, and monitoring plant efficiency. Our commitment to customers is to always put them first – and the use of technology is helping to improve the customer experience. For example, through the Boral Connects customer portal, customers can place, modify, confirm, cancel, and track concrete orders online.

We capture data across our entire scope of business activities from traditional sources such as core transactional systems to more modern platforms that include internet of things (IoT) sensors and mobile applications. A global data repository, or “data lake”, is used to consolidate this data and make it available for other systems, advanced analytics, and machine learning platforms.

How would you rate state and federal government performance this year?

The National Cabinet approach worked well and demonstrated what can be done when there’s a common purpose.

I have been very impressed with how the PM has managed through a very uncertain environment. Equally, the NSW approach strikes a great balance between getting the right health outcomes, the right social outcomes and keeping the economy stimulated and open as much as possible.