The received wisdom is that Australian manufacturers should aim to produce specialised products in small quantities, and that the country’s businesses are unable to produce anything in large volumes.
While Textor’s non-woven healthcare fabrics are IP-heavy and the company’s focus on innovation high, producing on a large scale is also a feature of its success.
Years ago it decided to focus on low-margin output at high-volumes. It might seem unusual in an Australian context, but it works. And volumes have been building.
“In a week we can ship 24 40-footers overseas,” Phillip Butler, the company’s director, told Manufacturers’ Monthly.
“So that’s not just local product, that’s overseas.”
Also, this statistic is for one product, found in Huggies premium line of newborn nappies.
The fabric for the nappies, known as UltraAbsorb, was introduced only last year, and has proven so popular that Textor is looking to increase capacity for the material – 35-fold – to keep up.
It is all made-to-order, with a lack of warehouse space making a just-in-time approach the only option.
“It’s not rocket science,” explained Butler.
“The automotive industry’s been doing it for decades. So it’s really a very simple case of understanding the need and it’s important to do just in time, it saves capital, it improves your balance sheet, but most importantly it means that you don’t have to double-handle the product.”
The method is one of many steps taken by the company to deal with the high Australian dollar and high local costs.
The company runs a 24/7 operation. While the family-owned Textor has invested in sophisticated machinery and in its staff, it has not added to its headcount of about 50 in the expansion.
The recent growth of Textor’s revenues and massive (a recent figure of $17 million given by the company is less than what will be the actual case) investment in increased productivity are “all to do” with the popularity of UltraAbsorb.
The super-absorbent, 3D material was developed in “open collaboration” with CSIRO and the Australian subsidiary of Kimberly-Clark, Textor’s sole customer. The arrangement was possible due to the trust that had been built up between the three organisations.
Textor’s relationship with the personal care giant goes back over a decade, and the Tullamarine-based SME was named Kimberly-Clark’s Supplier of The Year in 2011.
How UltraAbsorb is made involves “a lot of industrial secrets”, and it has six global patents attached to it.
Much of it makes its way to Kimberly-Clark’s Ingleburn nappy plant, but it is being rolled out in Kimberly-Clark’s nappies around the world.
Initially exported to just Asian countries, Textor’s product has moved into markets, including
“Russia, Mexico, America, South America, Costa Rica, Colombia,” noted Butler.
Butler often describes Textor’s move towards collaborative innovation as its “journey”, and the journey began about three years ago, when it was one of the first companies to participate in the Researchers In Business program.
Having a CSIRO researcher embedded in the business for a year did not bring immediate results, but began the R&D process that led to UltraAbsorb.
“And that’s from the initial inception through to creating and building the new equipment, all the design work associated with redeveloping the product,” said Butler.
Again, it's all to do with the high dollar.
The strategy to cope is two-pronged: invest in the most productive equipment in the world – which has actually been assisted by the dollar’s strength – and match this with a technologically advanced product. The latter was enabled by R&D investment.
Butler credits the R&D tax incentive as a major help in the process, and advises other businesses to explore the option, with the paperwork surprisingly straightforward.
“We decided to put in our first application and we were surprised at how easy it was to make those applications,” he said.
According to Butler, “the results speak for themselves,” and all that was required was a bit of discipline.
“And what will keep us afloat is on a longterm basis is more investment in research and development.”
It’s all necessary, he believes, to stay relevant through innovation. UltraAbsorb might be a successful product, but Textor is already thinking about generation two and three. And then there's the massive upgrades to the plant, which should be finished in March next year.
“The most important incentive is survival,” said Butler.
For an introduction to Manufacturers' Monthly's Australian Hidden Champions series, click here. Part one, featuring PWR Performance Products, can be seen at this link, part two, featuring Anatomics, here, part three, Nobody Denim, here, and part four, Rinstrum, here.
(Slider image: CSIRO. Other images supplied.)