From car makers to confectioners to construction: CME’s drive to diversify

The looming end of Holden, Ford and Toyota is a huge issue for the companies’ suppliers specifically and manufacturing generally. Brent Balinski spoke to one auto parts maker whose “diversity beats adversity” attitude sees it well-placed to adapt.

A long-time, Tier 1 supplier to Holden and Ford, Composites Materials Engineering has a proud history of success in the auto industry.

Nearly two decades ago, however, it decided to seek markets other than automotive, and its diversification into other markets, offering lightweight, technical solutions, has proven an intelligent move.

“Brian [Hughes, who has run CME since 1989] the managing director has always been very conscious to ensure we are progressing with the times and developing our new products as well,” Bryce Cameron, CME’s sales manager, told Manufacturers’ Monthly.

“So we’ve really identified industries here in Australia which we can supply and [in] which we can be competitive.”

Cameron said the half-century-old company has had great success in supplying the construction and logistics industries in the last few years, and been able to compete with imported products by offering solution based proposals.

CME has five main brands – CME Compression Moulding, CME Coatings, Akril, Barrington Roof Tiles and CME Trays. These brands cover industries including building and construction, food manufacturing, pharmaceutical, automotive, electrical, solar, rail and defence.

It manufactures at three sites – Bayswater North, Bayswater and Dandenong – and is in the process of consolidating operations at the two non-Dandenong locations. It employs roughly 80 people.

“We have been supplying the electrical and industrial markets for a long time with a range of different products, but in the last four years we’ve had a real push into building products,” said Cameron.

Last year a profile on CME’s diversification successes said that within a decade it had moved from being 98 per cent automotive-oriented to 50 per cent.

It is currently well-placed to survive and prosper despite the end of car manufacturing in Australia in 2017.

However, it remains a valued supplier to Holden, earning GM Supplier Quality Excellence Awards in the past two consecutive years, 2013 and 2014. It can also boast the title of the only composites OEM supplier to the local auto industry.

One of the major successes with GM Holden has been the spare wheel tub in the back of Commodore vehicles. This replaced pressed steel and reduced weight – an increasingly large role for composite materials in carsby 5 kilograms.

It was the result of an estimated $8 million investment by CME and a world-first for General Motors.

“As well as offering a weight reduction, CME could incorporate many features into the moulding that could not be done with steel. The end result also included fitment of the jack package, which was then supplied directly to General Motors production line for installation into their vehicles,” explained Cameron.

Other solutions where composites have provided a lightweight, corrosion-free alternative to steel include in underbody shields, and three-panel SMC (sheet moulding compound) tailgates on the HSV Maloo ute, and structural load floors in the Ford Territory SUV.

Composites’ properties have been successfully applied in the other industries in replacing materials including metals, concrete and timber.

As a replacement for timber, the CME Starch Tray product has seen international success, exported (mainly to confectioners operating high-speed automation lines) to over 35 countries. The trays are very accurate dimensionally, will not splinter, and have significantly better heat resistance than timber.

“The products we manufacture for the food industry would be our largest export item with year on year growth” noted Cameron.

In recent years, the firm has been aggressively pushing its construction and industrial offerings, which, in the current environment, obviously have stronger long-term prospects than automotive.

Hughes has said before that the business operates with a cycle of diversification and upheaval every four or five years.

Cameron, who has been on-board for almost five years, says this is accurate, and has seen the shift into industries such as building and construction in his time at the business.

CMEs Akril offerings, a substitute for painted glass, last year released at least one new product every quarter. They even threw in a kitchen sink (literally. In the fourth quarter. And a BBQ.)

Although not a major factor, the dollar’s drop in recent months has been a relief in particular for CME’s export business.

Though it's a mixed blessing, with the company importing raw materials, the decline in the AUD is a net positive.

Another plus is that the housing boom doesn’t look to be slowing any time soon, following the February 3 interest rate cut by the Reserve Bank.    

“We anticipate a very busy year ahead with the launch of new products into the building industry and logistics industry, as well as continuing the growth of our CME Trays business,” he said.

Leave a Reply