Local builder pulls the pin as crippling supply chain challenges hit home

Local builder Anthony Lococo has been ‘on the tools’ for more than 25 years, and proudly running his own building company Lococo Build for the past seven years but has now decided to close his business in the face of crippling supply chain shortages that he says have just about broken him.

“It’s been a heartbreaking decision to make, but after two years of struggling to get materials and trades, and costs continually blowing out and eating into anything that even looked like a profit margin, I decided at Christmas that I just couldn’t face another year of it,” he said.

“I’m drained and I’ve had enough.”

Based at Torquay, the 42-year-old father-of-two said one of the hardest parts of making his decision was knowing that he would also be putting his seven staff out of a job.

“My wife and I built this company from the ground up and I put in a huge amount of time in educating myself and really pushing myself to make sure we had a well systemised business and, until COVID hit, I thought we were really starting to kick goals,” he said.

“I know I’m not alone in the industry with these challenges, but it just seemed that no matter what we did, we were consistently going backwards because of materials constantly being delayed, struggling to find trades when we needed them, prices going through the roof and no positive end in sight.”

Mr Lococo said he got to the point where he couldn’t even face the thought of going into the office.
“Having to let my team go is devastating, but I don’t realistically have any choice.

“And sadly, I know of two other builders in my area who have also decided to close their businesses in the past year for exactly the same reasons.”

A survey last year on material shortages by Master Builders Australia revealed that 98 per cent of Victorian builders had been affected by delays and price rises, with wait times for some materials blowing out to six months.

According to MBV acting CEO Tristan Moseley, the plight of Lococo Homes is not an isolated case.

“Unfortunately, we are hearing that many of our members are really struggling to keep their heads above water at the moment because of these ongoing challenges with materials and trades,” he said.

Last week, the Victorian Government released its response to an investigation by the Better Regulation Commissioner, Anna Cronin where it supported nine out of 10 key recommendations in her ‘Addressing Supply Chain Challenges Final Report’

However, it stopped short of agreeing to a recommendation by the Commissioner to insert ‘cost escalation clauses’ into building contracts under $500,000 to allow builders to share some of the financial impacts of contract cost blowouts.

Anthony Lococo has committed to finalising all his current projects but admits picking an end date for his business will be a challenge.
“We’ve got one project that we thought – even allowing for some serious time blowouts – would have been finished well before Easter, but Easter has been and gone and we’re still waiting on some materials and trying to lock in trades, so it could possibly take at least another month to get it finished,” he said.

“You just can’t run a successful business like this, you’re just belting your head against a brick wall.”

Despite his decision to walk away from his business, Mr Lococo is keen to stay involved with the building sector, hoping to now take on a training and assessment course at TAFE and becoming a teacher to young tradies.

“I’ve learnt a lot over the past 25 years and I’m hoping I can share some of that with young tradies and help them avoid some of the pitfalls I learnt the hard way,” he said

“I love the building game, it’s just a pity that COVID has made it so tough to run a business.”