Two proudly Australian industrial companies, Mumme Products and Recoila, share their thoughts on the importance of sourcing from local suppliers.
"We face the same problems as our customers"
The companies that perform well in the difficult environment for local manufacturers have often done so due to emphases on value, an understanding of and closeness to their customers, and adaptability.
Mumme Products has been making hand forged and other tools since the 1930s, and are quick to mention that, being manufacturers themselves, they are aware of the challenges their industrial clients face.
“In-house research and development is ongoing,” Chris Mumme, the company’s business development manager, told Manufacturers’ Monthly.
“We face the same problems as our customers and are constantly developing new products for our own use, so we often already have the solutions to a customer’s problems.”
The company enjoys significant exports, with about 20 per cent of its products sold overseas, including destinations such as North and South America, Asia, and even, they proudly note, Antarctica.
The family-owned business is in its third generation, and has remained in Adelaide for the last 78 years.
It has grown in the last generation through acquisitions in 1989, 2001, 2002 – and last year gained a partnership to distribute US electrical tools specialist Klein’s products in Australia.
In the local environment, inexpensive imports and the higher dollar have meant highlighting points of superiority are more important.
“For us to remain viable in this climate, we have to spend time and marketing dollars,” managing director Adam Mumme told Manufacturers’ Monthly.
“We use first grade materials, our tools are consistently high quality, and first and foremost we are manufacturing in Australia, keeping Australians in jobs. It’s all about educating the customer and remaining innovative.”
The company offers a range of hand tools, such as chisels, digging tools and hammers, and has customers in industries including mining, manufacturing, defence and utilities.
A deep understanding of the needs in its domestic markets is another point of difference compared to cheap imports.
Consistent quality and flexibility were things importers do not address effectively.
“Both of which we address, unlike some of our overseas competitors,” said Adam Mumme.
“In particular we have the ability to address site-specific issues, because we can do small production runs.
“We can customise products to suit a particular application, such as making a longer or shorter version of a product, or adding a hanging loop or safety collar to an existing product for a particular safety issue on a site.”
Mumme is currently developing a new range of wrecking bars for release later in 2014.
Its newer products include busting chisels, a wedge with chisel handle, and a pit bar.
“Used for splitting cases, flanges and mating surfaces (similar to our fox wedges), the head of the chisel-type handle is normalised for safety and the blade is finely tapered and ground,” explained Chris Mumme of the bursting chisels.
“The Pit Bar is a digging tool used for trenching, squaring up holes and cutting through tree roots. Available in standard or heavy-duty models, it has a wide, sharp, loaded blade for great penetration even in hard, compacted soils.”
Value not price
Recoila is another manufacturer serving industrial clients, and cites similar reasons to Mumme when explaining how it has stayed competitive.
A thorough understanding of its clients and the environments they operate in is quickly mentioned.
“We constantly strive to produce products that have not just the application in mind, but also the operator: the person in the field who will be using the reel on a day to day basis,” Michael Pawson, Recoila’s managing director, told Manufacturers’ Monthly.
He concedes that an Australian product will rarely be cheaper than its imported competitor, but this doesn’t take into account other reasons for making a purchase.
“If you compare solely on price, 9 times out of 10 an Australian product will lose, however what is not taken into account is the after sales service, warranty, local support, replacement parts, and specialist staff to back up the product,” he said.
Being local, quick responses to requests such as for customisation is another strength the company has.
“We can customise most of our reels to provide a product that is truly fit for purpose, and being a smaller company we have the agility to identify and adapt quite quickly.”
Recoila’s history goes back 35 years, and has lived through times when local manufacturing was far less exposed to cheaper imports and employed many more than it currently does.
Pawson is passionate about the need to maintain an Australian industrial base. To do so, he believes that there’s a need to spread greater awareness of what buying Australian made goods means, as well as a better definition of what “Australian made” means.
“Consideration needs to be given to the fact that buying Australian made or for that matter to a lesser degree buying within Australia supports growth, employment and the greater community,” he said.
Pawson was also critical of the current laws allowing companies to claim their products were Australian Made if these products contained only 40 per cent local content. Furthermore, there were ways of fudging this figure.
“This 40 per cent component is allowing some companies to claim items such as tools used in assembly and the mere cardboard packaging and overhead expenses within the framework of the definition, so this is where the process is, in a way, open to abuse,” he said.
“Some companies are meeting the bare minimum requirement to qualify, however we believe that isn’t in the spirit of supporting a truly Australian made future.”
What Recoila makes is sold all over Australia, with particularly successful applications on oil and gas platforms of late.
It exports an estimated 25 per cent of what it makes “and growing”, serving a broad-based market.
What it makes is theoretically useful “basically anywhere there is a length of hose or cable in use” long enough to require being put on a reel.
The recent strong dollar has not impeded business, and according to the company it saw a “marked increase” in exports last year.
Locally, Recoila’s market hasn’t jumped on cheaper imports, with the main concern being quality.
Every now and then there has been a flood of cheap products, though the results of this haven’t always been the best.
“Widespread failures occur, then consumers swing back towards a high quality product,” said Pawson.
“These upswings can occur regardless of the state of the dollar, as quality becomes the primary driver, not price.”
In general, Pawson believes that there should be a broader effort to buy locally. The consequences extend beyond picking up a bargain when the dollar is high.
“As a nation we have always been quick to help in the time of a disaster,” he said.
"If we do not make more conscious buying decisions it will spell disaster for Australian manufacturing."