Despite tough times caused by the departure of the major car manufacturers and competition from China, Australia’s metal cutting and processing industry is holding its own.
Australia’s metal processing and fabrication industry appears to be in good shape, despite the departure last year and earlier this year of the three big automotive manufacturers: Ford, General Motors Holden and Toyota. While this is estimated to have cost about 50,000 jobs – mainly in Victoria, historically Australia’s main manufacturing center, and in South Australia – laser cutters and metal benders were not heavily dependent on the car makers and have continued in what many of them told me was “a reasonably healthy state”.
One of the principal factors in this has been, perhaps ironically, the relatively small size of the Australian industry, but it has been a long battle. Australian manufacturing took a beating from China and, more recently from Vietnam, because industrial production in Asia enjoyed low wages and a global market. While China’s industrial size and strength have not diminished, wages paid to its workers have risen considerably. But Australia’s metal processing and fabrication industry has found advantage in China’s sheer size; it is often less willing or able to handle smaller orders. Australia has been able to step in, winning through higher quality and greater attention to detail. Investment in newer and more efficient technologies has also allowed Australian companies to compete on price as well as superior quality. Australian companies importing goods from China have also found difficulty with quality control in China along with production delays, apparently caused by smaller orders being pushed aside for bigger ones.
Need for involvement with customers
However, it has still been hard for many companies and some in the laser-cutting, bending and welding sectors have gone to the wall, partly, says Adrian Boden, chief executive of the South East Melbourne Manufacturers Alliance, because they failed to adjust to technological changes in the industry, or decided not to invest in the new equipment needed to meet the challenge.
“The successful ones today value-add for their clients, and for the customers of their clients, and that often means suggesting, and helping implement, improvements to the customers’ products,” Mr Boden says. He exhorts all his members, including the “metal bashers”, to become closely involved with their customers and the work they do, suggesting design changes and alternative processes.
Getting the value-add message across
Though it is far from laser cutting, he frequently quotes a small Australian company that was importing, from Germany, a high grade dental paste used by dentists. The Australians felt the paste could be improved, developed a new method of making it, and are now selling the paste in Germany, and other countries. Mr Boden says he is getting his value-add message across to all sectors of industry here, but more slowly than he would like.
Broadly speaking, successful companies here, like Digga, a Bystronic customer based just outside Brisbane, hold their markets, locally and internationally, on the quality of their products, the depth and rapid response of their service and their close relationships with their customers.