Australia’s top 100 manufacturers have been announced for 2019. Manufacturers’ Monthly found out why some companies triumph over others in consumers’ minds.
CALTEX Australia sits on the top of the podium as Australia’s top manufacturer for 2019, based on a list compiled by IBISWorld. The company’s rank is followed by the Fonterra Co-Op group, Perth Mint, BP Australia and Viva Energy.
The compilation of Australia’s Top 100 Manufacturers is based on data gathered through primary research of ASIC-lodged company reports for the previous financial year, submitted by manufacturers operating in Australia.
Based on the list, large companies with a global presence are valued by consumers in the $383.2 billion manufacturing industry, which employs more than 791,000 Australians. With a projected growth rate of 1.2 per cent over the next five years to $405.8b in 2023-24, companies strive to stay high- ranking on this list. Part of staying ahead of the rest is recognising which location is best suited to a company and making use of the opportunities and resources available in Australia.
A Viva Energy spokesman said it differentiates itself from similar companies by being purposely located at the Geelong Refinery, which is the second largest and most complex refinery in Australia. He explained that the refinery supplies more than 11 per cent of Australia’s total fuel requirements. It also owns or has access to 23 import terminals with pumpable capacity in excess of 1.2 billion litres, five inland depots and more than 290 kilometres of key pipelines across Melbourne, Sydney and Brisbane.
“Our main competition in our refining business comes from larger modern international refining complexes who are manufacturing fuel and importing it into Australia. These have the advantage of larger scale, more flexibility, modern technology, and often operating in jurisdictions with lower cost bases and occasionally direct government support,” he said.
“Although this competition presents some challenges, our refinery has some unique advantages which differentiate us. Our refinery is strategically located in one of Australia’s largest and fastest growing markets, and through associated pipeline and terminal infrastructure, it supplies around 50 per cent of Victoria’s fuel requirements,” the spokesperson explained.
With a strong focus on safety and sustainability, Viva Energy’s commitments give it the fifth spot on the top 100 list. “Our number-one commitment remains to the safety of our people and the communities in which we operate. We continue to pursue ‘Goal Zero’ – Viva Energy’s objective to cause no harm to people or the environment,” he said.
As the company that operates Australia’s largest refinery, BP Australia competes with Viva Energy – trumping them for the fourth spot on the top 100 list for 2019. The company accredits some of its success to providing continued secure, reliable and competitively priced fuels. When speaking to Manufacturers’ Monthly a BP spokesperson highlighted fuel costs, safety and teamwork as key points in helping the company succeed.
“At maximum capacity, BP’s Kwinana Refinery can process up to 152,000 barrels of crude
oil per day, producing a range of products including LPG, petrol, diesel, kerosene, jet fuel and heating oil. With this volume, we provide about 80 per cent of fuel to Western Australia, and supply refined products to South Australia and Tasmania. We do it with safety, respect, excellence, courage and one team, at the fore,” the spokesperson said.
“In 2019, BP celebrates its centenary of operations in Australia. We have a proud local history with origins in refining. Our first joint venture with the Commonwealth government paved the way for Australia’s first ever oil refinery, built in Laverton in 1924, and we’ve played a key role in fuelling the country ever since.”
But, while the company has helped pave the way for oil refineries in Australia, it is faced with struggles such as competition from new market entrants and external market conditions. The BP spokesperson said this puts pressure on the industry.
“Operators, including BP, are constantly analysing the market, modifying and transforming the way we work and, more recently, adopting leading-edge technology to optimise operations.
“In the current landscape, we are competing with new, larger and highly cost-effective refineries across Asia. In order to remain relevant and competitive for the future we
are leveraging our global strength to employ best-in-class systems, processes and digital innovations,” the spokesperson explained.
Digital solutions drive success
Digital innovation and modern technology is helping companies across the sector including, BOC South Pacific, which ranked 61 on the top 100 list – up one from the previous IBISWorld list. The industrial gas manufacturing company is investing heavily in robotics and automation technology and developing digital solutions to make it easier for customers to interact with BOC.
BOC South Pacific managing director John Evans told Manufacturers’ Monthly that by introducing these strategies, the company is able to help customers monitor gas levels in real-time, provide virtual reality for engineering services, and offer apps for quick re-ordering from devices.
“We are also collaborating with education institutions and industry associations to support
the development of new emerging technologies and industries including hydrogen – as well as with Weld Australia and TAFE on the new virtual-based welder education and training systems,” he said.
Advice for smaller companies
Education also comes in other forms as Evans explains that talking to suppliers and communicating the needs of a business will help Small to Medium Enterprises (SMEs) increase their performance. While the IBISWorld list of top 100 manufacturers features many large companies, he indicated that there is scope for all companies to engage in new technologies and products that will build capacity for growth.
“Start with what you are trying to achieve or solve, to ensure you get the right solution for your business – everyone’s journey is different.
“When we talk gas, this could be improving weld quality by using different mixtures of welding gases, extending the shelf life of a food product by changing the gas mixture for modified atmosphere packaging – or creating more space on the factory floor by switching gas storage options,” said Evans.
The Viva Energy spokesman said there are always factors out of a company’s control that impact performance – no matter if they are SMEs of large companies, so keeping that in mind is paramount.
“To grow a successful business, it is important to focus on the things that are within your control, such as tight cost control, so that your business is well positioned for when it experiences more challenging operating environments.
“The other area that often gets overlooked when growing a business, is investing in your company’s culture. We empower our teams to stretch themselves and for individuals to act as if this business was their own, demonstrating creative thinking and accountability,” he said.
Additionally, companies, no matter what size they are, can experience the challenge of finding suitable people that not only feel empowered to work at a company, but that are in fact qualified to do so.
The Viva Energy spokesman said that access to both skilled and unskilled labour is an increasing issue for manufacturing companies across Australia. Just like the rest of the manufacturing industry, these large enterprises are battling against a decrease in skilled labourers and dwindling interest in the manufacturing industry by generations entering the workforce now. According to data from the 2016 Census, the number of manufacturing workers in Australia fell 24 per cent over the five years to 2016. The data shows a decline in the manufacturing workforce from 902,829 in 2011 to 683,688 in 2016.
To address this, Viva Energy invests heavily in its people through customised, internal training programmes that can often take several years to complete. “We have also adapted our recruitment and employment practices to reflect the changing labour market conditions. That means offering more part time working options and flexible contracts, to attract and retain the best talent,” he said.
To foster the next generation of employees, each year Viva Energy recruits a team of interns to spend 12 weeks working across different parts of the business.
“Apprenticeships provide opportunities for young people to follow their passion and develop their skills, setting them up for a rewarding career in manufacturing.
“The apprenticeship model has been around for a long time and Viva Energy is a strong supporter, currently employing nine young apprentices from the Geelong region at the refinery,” the Viva Energy spokesman said. Similarly, Evans said BOC provides training to employees to help them grow within the company. He said building a workforce for the future is important. “[It’s] understanding what skills are required, then hiring and upskilling accordingly, while building new skills into our engineering and service teams.”
BOC’s core values are safety, integrity, community, inclusion and accountability, which help develop employees. “We have been in the industrial gas business for over
80 years in Australia, with safety at the heart of everything we do, for our staff, partners, customers and communities that we work in,” said Evans.
Exports focus strengthens business
While education and technology are some factors helping these companies gain spots on the top 100 list, IBISWorld senior industry analyst Liam Harrison highlighted that the leading industries of this year’s list are also reflective of Australia’s largest contributors to trade and exports.
“Australia is renowned for its strong agricultural exports and mining, energy and resources industry.
“Australia is a large exporter of commodities, with the nation benefiting from coal and iron ore prices staying relatively high year-on-year. While there is a large propensity for volatility amongst Australia food product manufacturers, the demand from China for products, such
as infant formula, does provide opportunities for Australian manufacturers, who are able
to capitalise on this demand and expand their international offering,” said Harrison.
“Despite the ongoing uncertainty of global trade partnerships and relations, manufacturers who respond quickly and export their products to new markets will do well if they open up to markets, where tariffs on other nations’ products exist or are introduced,” he said.
In forecasting where the largest changes to Australia’s leading manufacturers could occur over the next 12 months, Harrison highlighted the ongoing trade uncertainty globally, China’s demand for Australian agricultural produce and commodity prices as having the largest impacts for the country’s manufacturing companies.
Despite these challenges, these 100 companies, and many others in Australia, have proven their success nationally and overseas. The list of Australia’s Top 100 Manufacturers 2019, powered by National Manufacturing Week, highlight just a few of the companies overcoming challenges and celebrating successes in manufacturing sectors that span from food and beverage, to pharmaceuticals.