CompanyGraph
Wesfarmers Limited
WES · ASX · Australia
Runs large hardware stores across Australian and New Zealand suburbs and makes sodium cyanide and ammonia from natural gas in Western Australia.
Wesfarmers runs two distinct businesses under one company: a chain of large-format hardware stores called Bunnings Warehouse spread across Australian and New Zealand suburbs, and a chemical plant at the Kwinana industrial estate in Western Australia that converts natural gas into sodium cyanide sold to gold miners. Bunnings grows by replicating the same store blueprint into new suburban locations, but each new store requires a discrete zoning approval from local councils before construction can begin, so the pace of expansion is set not by capital or ambition but by how quickly those councils release land for warehouse-style retail. Once a store opens, local contractors begin routing their purchasing through the PowerPass trade account system, which embeds Bunnings into their day-to-day buying workflows and makes switching away a matter of rebuilding those habits from scratch. The Kwinana plant is harder to grow — it works because industrial land, a natural gas pipeline, and the Port of Fremantle all converge at that one location, and no alternative site in Western Australia currently offers the same combination, which means WesCEF's chemical business cannot be replicated elsewhere the way a Bunnings store can.
How does this company make money?
Bunnings earns money each time a consumer or trade customer buys something in one of its stores. WesCEF earns money through ongoing contracts to supply sodium cyanide and ammonia to mining and industrial customers. The company also brings in revenue from lithium processing services.
What makes this company hard to replace?
Contractors who use the Bunnings PowerPass system have built it into their day-to-day buying process — switching away means rebuilding those purchasing workflows somewhere else. Gold mining operations that want a different sodium cyanide supplier must first complete a formal technical requalification, which takes time and carries risk at a mine that runs continuously. Bunnings also holds exclusive distribution arrangements with certain tool and hardware manufacturers for the Australian market, which means some products simply cannot be bought elsewhere.
What limits this company?
Every new Bunnings store needs a separate planning approval from the local Australian council before construction can start. The store design, the supplier relationships, and the money to build are all ready to go — but nothing moves until that approval arrives, and councils set their own pace with no requirement to match Bunnings' plans.
What does this company depend on?
WesCEF cannot produce without natural gas delivered through the pipeline at the Kwinana industrial estate. Exports from Kwinana depend on the Port of Fremantle remaining open and operational. Bunnings stores in New Zealand rely on Trans-Tasman shipping routes to receive stock. New stores anywhere cannot open without large-format retail zoning approvals from Australian suburban councils. And every product sold in Bunnings stores must meet Australian building code compliance certifications before it can reach shelves.
Who depends on this company?
Australian gold mining operations use WesCEF sodium cyanide continuously in ore processing — without it, gold extraction stops until a replacement supplier can be found and formally approved. Manufacturers at the Kwinana industrial precinct rely on WesCEF ammonia as a feedstock for their own production. Contractors in New Zealand use Bunnings as their main trade supplier in many areas where no comparable alternative exists, so a loss of Bunnings supply would leave those contractors without a ready source for materials and tools.
How does this company scale?
The Bunnings store format and its supplier relationships can be copied efficiently into new Australian suburban markets once a site is approved — the blueprint is ready to repeat. Chemical manufacturing at Kwinana cannot follow the same pattern. Any expansion or equivalent facility would require finding another Western Australian location with the same combination of industrial land, pipeline access, and port proximity, and no such alternative currently exists.
What external forces can significantly affect this company?
Where Australian suburbs grow — and how fast residential development spreads — directly affects how many suitable Bunnings sites become available. The price of natural gas on the Western Australian gas market moves WesCEF's production costs up or down regardless of what WesCEF does. And Trans-Tasman trade regulations govern both Bunnings' retail operations and WesCEF's chemical shipments across the Australia–New Zealand border, so changes to those rules could affect both sides of the business.
Where is this company structurally vulnerable?
If Western Australia's natural gas supply to the Kwinana pipeline were cut off for long enough, WesCEF could not make sodium cyanide. Mining customers who cannot wait would be forced to go through the requalification process to find an alternative supplier — and once they have done that work and switched, the very barrier that normally keeps them with WesCEF has been cleared, making it easy to stay away permanently.