C.J. Ham & Murray – Robin Hocking

CMPA Honorary Voting Member, ROBIN HOCKING recalls an earlier life and his progress into the valuation profession and his subsequent interest in quarrying.

ROBIN Hocking was born in Castlemaine in 1936 and spent the last three years of schooling at Wesley College in Melbourne. He commenced work at the Commercial Banking Company of Sydney in Castlemaine in 1953 where he spent several years on the relieving staff and worked at 36 branches throughout Victoria.

Robin joined Graham Fowles Auctions in 1966 and learnt the art of auctioneering. Those very hard nosed professional dealers who regularly attended the auctions provided a most valuable insight into human nature.

One memorable auction at Graham Fowles was the General Average sale of the whole of the steel cargo of special rollings from BHP when the MV Beltana hit Corsair rock and nearly sank in the mouth of the Yarra.

Joined Stockdale and Leggo Real Estate in 1964 and continued in that industry with several firms until joining C.J. Ham and Murray Pty. Ltd. in 1983. Robin had completed his valuation studies in 1971 through RMIT.

C.J. and T Ham (now Ham and Murray Pty. Ltd.) commenced in 1853 – only 48 years after the Battle of Trafalgar. Records indicate the brothers, Cornelius John and Thomas Ham, came from England and took up a pastoral lease at Lalbert in 1851. I can well imagine that 18 months at Lalbert would have been a shock to the system, and in 1853 the brothers moved to Melbourne and commenced the real estate firm of C.J. and T. Ham.

C.J. and T. Ham had an absolutely outstanding real estate business. Properties for sale were listed in bound hard cover volumes with land for sale in Victoria, New South Wales, Tasmania and New Zealand.

All sales were recorded in superb copper plate hand writing in bound leather volumes and notable properties included a dwelling occupied by Mother Mary McKillop in Brighton, a subdivision of Como, and an auction of the large portfolio of the Estate of Watson which included the Leviathan Building in the city, and Labassa at Caulfield.

The company represented many absentee landlords, and slowly, and as the first one hundred years went past, the majority of the properties under management were sold to investors and owner/occupiers.

A changing environment is inevitable but what a wonderful period it would have been for real estate in the 1800s and early 1900s, including the era of the land boomers.

I became a partner with Ian Murray, a highly respected valuer. Ian’s experience as a navigator in the Australian Air force provided him with many skills including the ability to produce hand drawn pen and ink maps and title plans showing very accurate bearings and measurements. Ian had for many years carried out all the valuation work in Victoria for Boral, with a full review of all Boral’s properties every three years as required by Sir Eric Neal. This was a very valuable introduction for myself into the extractive industry, and the strengths and weaknesses of many quarry operations.

Ian Murray died in 1985 when we were about to commence a Boral revaluation. I was on a huge learning curve and spent many long days and nights completing some 140 property reports at a time of typewriters and shorthand, and prior to computers and dictation machines. All valuation calculations were completed manually with the assistance of an early Hewlett Packard calculator.

I remember my first quarry inspection was at Boral-Lysterfield – the day after several hundred accident free days were lost because of a back injury. In those days there was an employee bonus scheme in place for an unbroken injury free timetable, and that particular employee was not a popular gentleman. It is interesting to look back on an earlier method of addressing an Occupational Health and Safety program, and hopefully the industry has progressed.

The Boral Lysterfield Quarry is the only quarry controlled under Victorian Legislation. That Legislation requires the land to be reclaimed under a set royalty and reclamation fund, and in accordance with pre-determined plans, with the intention of creating a public reserve with several water bodies.

I also inspected the nearby Pioneer Quarry which had recently been opened. I had an interesting geological lesson into the formation of granite and hornfels. Somewhere in my files I have a photograph showing a very clear, almost vertical, line of demarcation between the granite and hornfels.

The valuations for the major companies throughout Australia represented a rare opportunity for any valuer. The work provided me with access to all financial and geological reporting and I had the pleasure of meeting Jim Rowlands, State Manager for Pioneer. Jim had probably forgotten more about quarrying than most operators learn in a lifetime. It was during this period that Pioneer purchased the substantial Bacchus Marsh sand resource from Oupan Resources.

My introduction to quarrying had started with a rush and I was on that very steep learning curve for the first few years. Some people say it was not steep enough, but hopefully I still learn something during every site inspection.

It has been interesting to see the industry go through a period of relative stability for probably 15 years leading up to 2000, albeit at a time when ex-bin prices remained virtually unchanged, but with slowly increasing costs – particularly costs relating to Legislation and compliance issues. It is well documented that an application for a Planning Permit and an Extractive Work Authority will almost certainly end in an appeal to VCAT and/or the Supreme Court, with a cost not less than $450,000 and more likely in excess of $850,000.

There is no doubt the industry must meet these demands, and I suggest the only way forward is through Associations such as the CMPA who are able to offer the facilities to present clear and logical arguments to the legislators. I fully agree that logic does not appear to be a strong attribute of politicians and departmental officials, but in saying that the industry has to be capable of viewing problems from both sides. I still see too many quarries under capitalised and operating on a shoestring, with many years of neglect in relation to not only the environment and the community, but also in general visual presentation.

The valuation of a quarry is somewhat unique when compared with the valuation of other properties. There are often arguments and debates about resource volumes, return rates, amortisation, weighted average cost of capital, discount rates and net present value periods. I suggest that all of those matters need to be addressed separately and independently for each quarry. I find there has never been one quarry that can be classified as being identical to another quarry. There may be similarities, but that in my opinion is where it finishes.

Again, there are often owners, generally relating to Greenfield sites, who get excited about volumes and decide that they have something like 50,000,000 tonnes of first class stone and that it is very valuable because when they go to the local garden supply depot they have to pay $25.00 plus per m3. The owner will often then say that even if it’s valued at $1.00 per tonne it must be worth $50,000,000.

It is often difficult to explain that the location of such a site may only have a demand for 30,000 tonnes per annum which would provide for a life of 1,666 years. Even at increased rates of 300,000 tonnes per annum the quarry would have a life of 166 years. The problems are obviously not the life of the stone, but the ability of an operator to make a profit, and the willingness of the operator to pay for 160 years of stock in advance.

As a point of interest, a quarry life of 25 years at a rate of 300,000 tonnes per annum will only require 7,500,000 tonnes of stone and in the above example there could be 42,500,000 tonnes which is unsaleable and without an economic value.

It is my experience that quarries are not easy to sell and on occasions not even recognised by some banks as good security. The industry operators are usually very cautious, and “blue sky” is not a part of the experienced operator’s philosophy, or on the operator’s radar.

Twelve years ago I was invited to join a group in setting up an association of quarry operators and interested parties. My experience with the CMPA has been rewarding and its progress has been fascinating. The time with the CMPA members has been most enjoyable and I look forward to a continuing association.

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