stokes wetrac gets caterpillar nsw, page-2

re:update on stokes caterpillar gough & gilmour de Stokes ploughs ahead with Caterpillar tractor dealership

Kerry Stokes is striking out on his own in the lucrative NSW tractor business after abandoning talks to buy out a competitor.

Mr Stokes's private business, Westrac, which earns him more money than his 37 per cent stake in the Seven Network, said yesterday it would assume the authorised Caterpillar dealerships for NSW and the ACT from April next year.

Westrac - which already holds Caterpillar dealerships in Western Australia and China - stands to earn hundreds of millions of dollars in sales and servicing of Caterpillar equipment from the new deal.

The private company had been involved in lengthy negotiations with the existing NSW Caterpillar dealer, Gough & Gilmour, to buy its 20 branches but those talks appear to have fallen through.

However, Westrac faces an entrenched competitor, with Gough & Gilmour expected to continue selling and servicing second-hand Caterpillar equipment.

Gough & Gilmour principals Harcourt Gough and Tony Gilmour were in court for more than 2 years over a contractual dispute with the US-based Caterpillar manufacturer.

A judgement handed down in June in the NSW Industrial Relations Commission gave Gough & Gilmour until September to decide if they wanted to sell the dealership to Westrac.

If they decided not to sell or if there was no suitable offer, they could hold onto the dealership until April next year.

Mr Gough and Mr Gilmour told The Herald yesterday they had not heard from Mr Stokes or Caterpillar about the sale recently but said, theoretically, negotiations could be resumed.

They would not comment on how much Westrac had offered for their business in the past; nor would they say what they now planned to do.

However, in a letter sent to Gough & Gilmour customers this week, they said if there was no sale to Westrac, they would continue in the business in NSW and the ACT as an independent supplier of Caterpillar service, parts, rental machines and equipment.

Westrac's chief executive for NSW and the ACT, Ray Romano, would not say whether negotiations with Gough & Gilmour had been abandoned.

However, he said the company had been forced to prepare for that possibility and was planning a new network of purpose-built facilities and infrastructure.

Westrac does not comment on its sales but Mr Romano said the NSW and ACT business had the potential to overtake its WA dealership. That business has 1200 employees and is expected to sell between 350 and 400 units this year.

Westrac is believed to have sales worth about $1 billion.

Mr Romano said the NSW branch could exceed 1000 employees within two years.