Pest Management Sector Snapshot

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1 Pest Management Sector Snapshot Sources: N7312 Building Pest Control Services in Australia Industry Report, IBISWorld, Oct 2014 Moderate industry revenue and value added growth in recent years New forms of pest control techniques are being developed, contributing to industry development Industry growth is being driven by larger firms and franchised operations There has been more emphasis on integrated pest control systems in recent years IBISWorld, Oct 2014 Job Roles: Consult with clients to identify pests, assess pest management options and apply a range of treatments depending on the type of pest, its location and client requirements. Work closely with equipment and chemical manufacturers to improve pest control services, treatment methods, equipment and newer technology in chemicals. Companies provide industrial, commercial and domestic pest control services, including weed control services, to clients. Products and services segmentation ( ) 10% Lawn and plant pest control services 16% Termite control services 8% Other pest control services 29% Ant, insect and spider control services Total $1.3bn 17% Weed control services 20% Rat and mice control services Source: CPSISC - ENVIRONMENTAL SCAN : APPENDICES 197

2 Number employed Employment in growth or decline? Majority employed in small / medium or large businesses IBISWorld reports 10,770 are employed in this sector. Employment in this sector is growing as services are growing in demand. Employment is forecast to grow by an annualised 2.0% in the five years through to 11,920 people. Industry revenue is forecast to increase by an annualised 2.2% to reach $1.5 billion in Growth in this sector is driven by: Continued growth in housing numbers and further demand from commercial, industrial and government sectors Outsourcing as part of broader contract management systems for major property managers Continuing stringent health regulations for food and related industries Integrated pest control management systems that proactively seek to control factors that encourage pest invasions Rises in both residential and non-residential construction activity Increased demand from a wide range of client industries Competition remains high, due to the industry s highly fragmented nature and high number of enterprises, and some declines in industry profit are expected with IBISWorld forecasting industry profit will decline from 13.6% of industry revenue in to 12.2% in Industry enterprise numbers are forecast to increase by an annualised 1.6% over the next five years, to 3,106 businesses. Franchised operators are lowering costs associated with treatment controls and staff training and are meeting regulatory requirements and capital equipment costs for entry to the industry. Outsourcing will continue during the next five years as part of a broader contract management system for major companies that incorporate cleaning, security and general maintenance services. Future employment and revenue growth over the next five years includes integrated pest control services and strategic alliances with major property service companies. This will contribute to attractive tenders for total building management service contracts, incorporating security, catering, cleaning maintenance and pest control. The majority of operators in this industry are small, private companies, the majority of which are owner operators, and two of the three largest companies are moderate in size and are owned or associated with major foreign firms. 198 CPSISC - ENVIRONMENTAL SCAN : APPENDICES

3 Majority employed in regional and remote or urban areas Proportion male to female workers Proportion full-time to part-time workers Proportion of industry that have completed Certificate III or IV Current economic impediments for this industry The pest management sector provides services in urban and rural environments. Climatic conditions and population size greatly influence the geographic spread of companies operations, with most located in the warmer, more humid and tropical climate areas of NSW, QLD, WA and the NT. Demand is also high in NSW due to the high share of population and stock of residential and non-residential buildings. In TAS, NSW, VIC and SA, there is higher demand when seasons change from warm to cold, and pests and rodents tend to move indoors and into residences. During years of high rain, pest and rodent activity can increase, as can weed control demand. sectors, the majority of workers are male, 73.2% full time and 9.3% part time. 13.2% female workers are full time employed and 4.3% female workers are part time. sectors, the majority of workers are male, 73.2% full-time and 9.3% part-time. 13.2% female workers are full time employed and 4.3% female workers are part-time. The DoE reports that in 2013 an ABS survey found that 20.7% of Other Farm, Forestry and Garden workers achieved their Certificate III or IV. This industry classification includes pest control as one of its three sectors. The cost of establishing businesses must prepare for economies of scale, capital intensity, industry regulations and required licenses. Only some of the larger firms benefit from scale economies to minimise marginal costs. Licensing can only be attained after appropriate experience and training in the safe and storage of pest and weed control substances is undertaken. Potential operators, however, can enter the industry through a number of high-profile franchised companies. This lowers the initial cost of equipment required and ensures that all training and registration requirements are met. As the industry is skill and knowledge intensive, capital requirements are low if entry occurs through a franchise. During weak economic growth, clients may cancel contracts or request less frequent or reduced service levels and prices. Many also renegotiate service charges or fees. Some new chemicals used in termite control that require less frequent applications will also influence future demand for industry services. Also significant to the intensity of demand are factors relating to increasing regulation, necessity, types of pests being controlled and the ongoing building and construction activity. Fluctuations in residential and non-residential construction determine demand - particularly relevant to retail, commercial, food service and tourist accommodation. CPSISC - ENVIRONMENTAL SCAN : APPENDICES 199

4 Impact of globalisation Impact from technology Ageing workforce concerns Impact from population growth and / or demographics Licensing and regulation The industry services only the needs of Australian residential and nonresidential markets. Most companies are Australian-owned and earn most of their revenue from domestic activity, and there is some foreign ownership of the major companies (e.g. Rentokil s parent company is located in the UK and owned by a Dutch company. Flick Anticimex is also foreign-owned). Foreign-operated companies are predicted to expand their existing operations in Australia, and domestic firms are forecast to expand verseas, into Asia and New Zealand. Technology relates mainly to the development and use of new chemicals. Low level of technological change in recent years with some improvements in chemical technology. Hot water or steam-based weed control systems have been introduced and used extensively in the past five years. Software estimates the spread of pests and diseases and can be used for pest control and quarantine purposes - identifying which pests and diseases are the greatest threat and determine possible expenditure required to control certain pests. For major operators this indicates changes in demand for services, and helps targeting geographic areas for marketing and promotion. It also assists establishing good cashflow for seasonal pest and weed control. sectors, the median age of a worker is years (24.8%), with 15.4% aged years, and a rapid loss of this workforce from 60 years on past 65 years with a total of 4.8%. This reported only 1% at 60 years, indicating retention beyond this age is difficult. As the population grows, more buildings and homes are built, and the more likely these will be affected by pests and weeds and therefore require industry services. Pest control operators require licensing in each state and territory, usually with the state health department. There is little conformity in legislation, and training requirements differ considerably, and one may need to register to operate in another due to varying rules. In some states, a trainee licence may initially be granted, although this only permits operation under supervision until the required and recognised training is undertaken and a full licence is obtained. Trainees must have actual supervised experience in pest control application and must maintain a concise logbook of such experience. Once obtained, full licences may remain current for up to five years from issuance. 200 CPSISC - ENVIRONMENTAL SCAN : APPENDICES

5 Changing profile of the learner at work Current and emerging skill gaps Ways boost skill levels to meet any skill shortages Workforce priorities Anecdotal notes on workforce development needs Upskilling of the workforce is required for application and management of less toxic pesticides, and new control methods such as hot water or steam spraying of weeds, implementation of newer industry techniques, (e.g. use of pheromone traps, creation of O2 starved environments, and the use of thermal, motor and sonic detection equipment), learning about integrated pest control management. Addressing the increasing consumer awareness of health, safety and environmental issues and the increasing demand for environmentally friendly chemical products. Remaining abreast of advances in equipment and techniques. Need to better understand climate change and what this could potentially mean to the pest management industry. Compliance training for licensing and Workplace Health and Safety (WHS). Identified needs: Units of competency to reflect the different pest types across the nation Diagnostic procedures for the identification of pests To reflect the complex skill levels required in fumigation and timber pests Demands for WHS compliance by clients and ability to meet requirements of recognised standards Appropriate use of emerging techniques including pheromone traps Improving access to training by RTOs through convenient times and locations for face-to-face training has been raised as a concern. More flexible delivery or quality E-Learning training would help better training participation, particularly for existing workers. There is potential for the identification and use of skill sets to reflect regulatory requirements. Pest management training demands focus on the importance of understanding environmental risk plus meeting increasing demands for WHS compliance and new technologies. WorkSafe requirements also apply across each state and territory. Training in risk analysis and identification of work hazards is required, and the understanding of manual handling and hazards in transporting and carrying large and heavy chemical containers. Regulations govern pesticide storage, use and transport, as well as the storage of chemicals. Due to the occasional hazardous nature of the work arising from potential exposure to dangerous pesticides, larger companies provide in-house training. CPSISC - ENVIRONMENTAL SCAN : APPENDICES 201

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