70 years of trust: Will Saunders continue its success story in 2022?

The year 2021 was full of challenges for several organisations operating in the resources and energy space. The industry had to modify its modus operandi due to the pandemic-induced restrictions and lockdowns. Commodities such as iron ore, copper, coal, and lithium raced to new highs during the year, which saw the global economy striving to free itself from the clutches of the pandemic.

Thanks to ongoing efforts, industrial activities witnessed a remarkable rise in 2021. To maintain the balance, the mining sector also ramped up its activities, as it is the primary supplier of raw materials to various industries.

Increased mining and industrial activities led to a surge in opportunities for specialised companies engaged in providing technical solutions and support services.

Saunders International Limited (ASX:SND) is one such company that witnessed a busy period throughout 2021, providing innovative and cost-effective solutions to several industries across Australia. The long order book of the Company included projects from the energy, mining, water treatment, infrastructure, and defence sectors.

During 2021, SND also entered its 70^th year of commitment and services to the Australian industries. The Company took on the challenges posed by the pandemic and converted them into opportunities.  

Good read: A quick glance at Saunders International’s 2021 projects

Saunders completed and delivered several key infrastructure and defence projects during the year. Track replacement work on the Sydney Harbour Bridge, construction of water reservoirs and tanks, and cybersecurity solutions are just some of the numerous projects that the Company delivered successfully in 2021.

Let us look at few other high points of Saunders achieved in 2021, which add lustre to its 2022 outlook.

Major defence project win

During the last quarter of 2021, the Company secured a defence contract worth AU$165 million. The project scope includes the construction of 11 jet fuel storage tanks in the Darwin region. Besides, the Company will also provide engineering, procurement and construction management (EPCM) services for the project.

The project, which would be completed in around two years, will be the largest fuel storage project in the Northern Territory. The project is strategic in nature for the US military and its Pacific operations.  

Related read: Saunders International (ASX:SND) riding high on $165M defence contract  

In September last year, the US Defence Logistics Agency-Energy awarded a multi-year contract for the provision of fuel management and storage services for Pacific military operations to Crowley Solutions, which then subcontracted the designing, construction work and EPCM services to Saunders.

Strong order book

Saunders’ diverse operational services in mechanical, electrical and civil engineering have built a strong foundation that ensures on-time delivery of projects. This has resulted in a strong and diverse list of happy clients.

At the beginning of FY2021-22, the Company had an order book of AU$83 million. The latest defence contract has boosted the order book significantly.

Moreover, the acquisition of industrial automation technology company PlantWeave Technologies back in 2021 is enabling Saunders to provide value-added services to new as well as existing clients.

Related read: Here’s how Saunders International (ASX:SND) is tapping Australian defence space 

Opportunities in the infrastructure sector

The Federal Government’s Bridge Replacement Program and NSW Government’s Fixing Country Bridges program provide ample opportunity for Saunders to grow its service offerings and create value for its shareholders.

The Company has already managed to secure a preferred contractor status for several tenders it has been participating in.

‘Boosting Australia’s Diesel Storage Program’ is another Federal Government initiative that is expected to offer a major opportunity for growing Saunders’ revenue base. The federal grant for the initiative is AU$260 million, which will translate into AU$600+ million in construction for the period FY22-24.

Image source: Company website

Related read: Saunders International (ASX:SND) set for excellent FY22 with strong order book  

Saunders International has become a brand of trust and innovation. The Company, with its strong service portfolio, continues to contribute to the growth of Australian industries. The brand value of the Company is such that it has managed to retain some of the clients since its inception, i.e., for the last 70 years.

SND shares were trading at AU$0.990 midday on 12 January 2021 with a market capitalisation of AU$105.55 million.