Rode Microphones, whose products are better known in the US and Europe than Australia, took out Austrade’s prestigious Manufacturing Export Awards. Alan Johnson reports.
Peter Freedman, founder and MD of the iconic pro-audio company, advises other manufacturers to focus on exporting and to forget the local market – “It’s too small.”
“The major reason for our success is that we concentrate all our efforts on being an exporter rather than what many manufacturers do and focus on the local market, then do a little bit of exporting,” Freedman told Manufacturers’ Monthly.
“So when things turn bad, such as the high dollar, or they become uncompetitive because of tariffs, they are in trouble,”
“We had no protection to the high dollar, but still managed to grow. We did that by investing in highly efficient production techniques such as computer aided machinery, the best IT tools and software, because we are competing with some very serious companies.
“We have the best technology here, equal if not better to anywhere in the world. We have invested heavily in top quality machines and are able to machine consistently in microns, measuring down to nanometers.
“Plus we have a very strong marketing team here in Australia, in fact we spend millions of dollars every year on marketing. You have to tell the world what you have to be successful.”
The Austrade award tops off a record year for Rode, which has now expanded to a total of 108 global markets, won multiple international product design awards and released a number of exciting new products including the recent NT1, M5 and VideoMic GO microphones.
The company recently doubled the size of its manufacturing plant and company headquarters in Silverwater, Sydney, significantly increasing its capacity to meet the rapidly-expanding international demand for its products, as well as further vertically integrating its operations.
“We have around 130 employees at the moment, but I expect to expand that number by 25% this year as the company continues to grow.
“We would have continued to grow even with the dollar at $1.10,” he said.
Freedman says the Australian dollar falling in value against the US dollar has not had any impact on his business today.
“It will take a year or two to have any impact,” he said.
“You don’t just turn it on, for example we are just about to take delivery of a production machine that has taken two years to design and build.
“But of course I’m very happy the dollar is falling. We are making more money now, another 20% profit thank you very much.
Freeman explained that, once you have been exporting for a while, you get used to being a bit of a risk taker.
“We are not adverse to risk, and export well over 95% of our products all over the world. We have our own distribution company in the US, but in other countries we use distributors,” he said.
Interestingly Freedman is not a great fan of using patents to protect the company’s IP.
“We do have some patents and design registrations, but for me the best way to protect yourself is to manufacture a product that everyone wants, at a price that is incredibly competitive and sell the ‘crap’ out of it.
“That way people can’t come under you – there’s no opportunity for them.
“You can come up with a patent, but that is just the beginning. Patents can take ages to produce and cost a fortune. But then you have to protect them, which can be very expensive,” he said.
Freedman explained that the vast majority of the company’s manufacturing is done in Australia, but admits that some plastic moulding and casting, and a little bit of toolmaking work is sent to China.
“But all the high tech work, the plating, the assembly that’s all done here. It’s only work that’s got no IP we send off-shore,” he said.
Regarding the finished products, Freedman said they sit in the ‘sweet’ middle of the market, with the line between top and middle blurring. “And we are one of the companies that made that happen.”
“Because of our production volumes and the quality that we are able to achieve through economies of scale, the products we produce are far better than many of the high end products. It’s a myth that hand-made microphones are better, that’s rubbish,” he said.
Freedman said the Austrade Award was the highest compliment that Rode has been given in more than twenty years of business.
“We’re proud to be Australian; designing and manufacturing the world’s very best microphones right here in Sydney and shipping them to every corner of the globe.”