Growth phase for Nanotek

Shine: Jim Cornish is bullish about the benefits of a high dollar.

The chief executive of mobile car wash franchise Nanotek, Jim Cornish, is bullish on the benefits of a high Australian dollar. “It’s been the perfect time for Australian businesses to expand overseas,” he says.

The company, which was originally founded in 2004 as Ecowash Mobile, now operates in 12 countries across Europe, the Middle East and North America, as well as at home.

“Because we don’t want to bring the money back to Australia, it’s made us focus on these regions, more focus than we’ve ever had,” Cornish says.

The simplest way for Cornish to naturally hedge against a strong local currency is to not convert his revenue from overseas operations into Australian dollars.

Instead, he has invested in his Middle Eastern operations. Although the core service is mobile car washing, Nanotek has built a flagship fixed site – about the size of a suburban Woolworths, Cornish says – in Al Khobar, Saudi Arabia. The total cost was about 1.5 million Saudi riyal ($410,000). Without a high Aussie, Cornish “probably would have just continued to market and develop the system as we had it”.

The company has made a similar play in Greece, building smaller fixed sites and creating alliances with car park operators. Cornish concedes it might not be the best time for Greece but is confident about his model.

“We’re going to see more results out of our Middle East and European markets as a result of [the recent investments],” Cornish says. “The high Australian dollar is a really positive thing.”

The company also benefits because it uses a spray-on liquid polymer product that it buys from France. Cornish’s principal trading currency is the euro.

“In that respect, the exchange rate has been great for us,” he says. “We’ve been building up our product reserves and holding money in euros.”

Cornish has identified these natural hedging opportunities but he hasn’t always been so savvy. “[The high dollar] has really changed the way we do business. In the past if we made money overseas we were really keen to bring it back as quickly as possible.”

Now Cornish is more considered in his approach. He has changed banks, because his previous bank would convert incoming revenue as soon as it hit the account, with no concern for the exchange rate. Now with National Australia Bank, Cornish’s bank manager calls when large euro deposits come in and discusses if or when the conversion to Australian dollars should take place. “By moving banks, our control over international transactions has completely changed.

“It does all add up,” Cornish says. “It might seem a lot of fuss to save $3000 or $5000, but do that three or four times in a year and it does become a significant part of your business.”

BRW

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