Australia’s reputation of being one of the most expensive manufacturing
industries in the world, Keech Australia CEO, Herbert Hermens, says the
Bendigo-based company is able to successfully compete on a global scale, and
others can do too.
Being competitive in the tough global
market is important for Australian businesses. Equally important addressing the
perception that Australian business cannot compete.
International clients often have a
preconceived idea about Australian business. They think we are going to be too
expensive, and they are surprised that we can value add and make our products a
viable option for their companies.
It’s hard to break through that barrier.
The only option is to constantly knock on
doors and travel the globe to introduce Australian products into new markets.
The opportunities are there for the taking, but it’s vital to have that direct
contact with prospective clients.
The perception in the market that
Australian businesses cannot compete on price has driven some manufacturers to
send production off shore, while others have simply accepted they can’t get
into particular markets, and this is a great shame.
Australian industry has a lot to offer and
we need to promote it.
At Keech, we can – and we do – supply parts
that offer value at every level. To be globally competitive we are
manufacturing reliable and consistent products. We are up against the world, but
we’re able to offer clients the best overall package with a balanced price and
a consistent product.
Customers want to know what they are
getting will meet their expectations. Australian industry has an advantage over
some of our competitors in that regard. We can offer consistency and quality
assurance through rigorous QA programs and guarantees that we’ll manufacture to
Australian and ISO 9001 quality standards.
Adaptability is key to competitiveness.
Yes, price matters, but it’s our ability to quickly adapt to our clients’ needs
that keeps businesses competitive not only in Australia, but on the global
At Keech, we don’t just focus on one
particular part of our company, we work to grow each area of our business and
that’s part of the reason Keech remains competitive. We employ 160 people and
we purposely seek out and work closely with local suppliers in the Bendigo
region where we are headquartered.
We are committed to keeping the
manufacturing industry alive in Australia, and therefore, we need to look for
things that allow us flexibility, profitability, viability and the ability to
rise to global demand.
Since the global financial crisis in 2008,
we have made an aggressive strategic push into the global economy. With many
such fluctuations in demand and product supply, moving into the global market
was just good business sense.
The stark reality of globalisation has set
in. There is a fundamental need to accept we are competing against every part
of the world and not just other Australian companies for local and overseas
Keech cast components are exported to
world-wide markets including Japan, Russia, North America, South America,
Indonesia and Papua New Guinea.
Most of the talk about overseas opportunity
has centred on China and South East Asia, but there is a growing and untapped
market in developing nations such as the Eastern Bloc countries of Central and
Eastern Europe. Booming mining industries in countries like Mongolia and
Kazakhstan represent strong opportunities for Australian rail infrastructure
We have an absolute commitment to
innovation in our company and we are increasing our competitive edge four-fold
via product, strategic, management and process development. We continually
review every element of our company and ask: can we do better?
The reality is that our industry does have
to be price competitive. The bottom line will always be a key factor in any
business. We continually monitor costs and drive price. But having the lowest
price is not the be all and end all of the matter and Australia can certainly
deliver to a world-class quality standard.
This means adjusting existing structures to
maximise efficiency of invested resources. It is important to utilise fixed
capital on a more consistent basis and introduce a flexible labour force to
slot into that.
Manufacturers need to think outside of the
box in order to overcome cost barriers without reducing individual wages or
sending it off shore. This could be anything from adjusting the flexibility of
foundry production hours or daily procedures to investing more revenue in
research and development or staff training.
It is essential for Australia to invest in
capital and lead with the world’s best equipment, most skilled labour force,
and efficient processes – in the eyes of other countries, these are our calling
cards. This is not an area where money should be saved or corners cut.
There are new paradigms in the
manufacturing industry that bring lower production costs and higher efficiency.
Many component manufacturers worldwide, including Keech Australia, have
introduced smaller foundries where they can test new processes and invest in
new technology prior to implementing at a larger, main site. This helps to keep
costs down, but also assures the manufacturer is capable of serving the global
As in any industry, Australian
manufacturing must be able to differentiate its products from rival products in
order to become and remain competitive and this too requires investment.
Keech Australia is a third-generation
Australian manufacturer of castings. The company originally produced hand
tools, axes and small parts at its foundry. The 80-year-old company has steadily
expanded its business to cater for railway, mining, construction, agriculture,
industrial, defence and the medical sector. Keech’s versatility has
incorporated advanced manufacturing techniques alongside its traditional
Rail has been a significant part of Keech
Australia’s design and manufacturing business for more than 40 years. The
company designs and makes high integrity passenger, freight and locomotive
rolling stock castings including coupling components, axle boxes, pedestals,
centre plates, brake shoes as well as ballast shovels and links.