Small regional manufacturers aiming high

In regional Victoria a couple of smaller manufacturers in diverse industries are demonstrating the benefits that can flow from a strong focus on customer service, lean and innovative operations, and business plans based on continuing growth.

Longwarry Food Park is a relatively small dairy processor in Gippsland that produces milk powder, employs 34 people, and exports around 90% of its production to more than 30 countries.

In 2001 the company bought the former Bonlac factory which had been shut for several years causing significant job losses to the town of Longwarry. Managing director, Rakesh Aggarwal, says the plant, which was recommissioned for milk powder production in 2005, has been converted to a modern, energy-efficient, computer-controlled and highly-automated operation.

"This is a good example of turning around a sick and obsolete plant. Plant capacity has been increased from 2.3 tonnes per hour to 4.0 tonnes per hour, product recovery is in excess of 99%, energy cost is down by 38%, water cost has reduced by 40%, and packaging material usage has reduced by 40%," Aggarwal told Manufacturers’ Monthly.

These initiatives have resulted in a 23% reduction in greenhouse emissions on a unit production basis, and additional savings of $391,000 have been achieved through other resource conservation measures.

"Longwarry Food Park has recorded an outstanding 423.4% average growth over the past three years. Turnover has increased from $1.3 million in 2002-03 to $47 million in 2009-10. The volume of milk processed has escalated from 38 million litres in 2005-06 to 120 million litres in 2009-10 and the number of farmers supplying milk to the company has increased from 38 to 95," Aggarwal said.

"Updating the plant and increasing capacity has also resulted in increased efficiency. We measure effectiveness in a very mercenary manner. For example, energy costs are tracked by software that analyses the costs, usage per unit of production, and environmental impacts."

According to Aggarwal, a major factor in the company’s success is the strong focus on customer needs.

"We visit our customers regularly to understand their needs and changing environment, and we invite them to company presentations and plant tours. The aim is to ensure continuing repeat business, so we are in constant touch with our customers and tailor our product to suit their requirements," he said.

"Looking ahead, key objectives include expanding our product range by entering the domestic market with bottled milk and UHT milk, and reducing energy and water consumption by a further 10%.

There are also plans to install a second spray dryer for powdered milk production, increase overall plant capacity, and expand our farmer suppliers to 250 by 2013-14," Aggarwa said.

Focus on growth

A structural steel fabrication company with 40 employees in the Victorian regional centre of Wodonga is taking on the big boys in successfully bidding for million-dollar contracts.

Kiewa Valley Engineering (KVE) was established in 1979 in response to demand for steel fabrication in the construction and agricultural industries. The company has been involved in projects as far afield as the Lihir Gold Mine in Papua New Guinea where 884t of fabricated structural steel was supplied.

Other major projects have included the design, construction and erection of support steelwork and walkways for the wine industry.

KVE managing director, Andrew Robin, says that as a reputation was developed for consistently delivering on time and within budget, the company progressively obtained contacts in a wider range of industries, including the Olympic Dam mining site in South Australia and the Australian Grand Prix in Melbourne.

"We are focussed on growth, particularly through developing and maintaining long-term relationships with suppliers and strategic clients," Robin said.

"Our new purpose-built facility in Wodonga provides 1000m2 of workshop area, all under five-tonne cranes, that is equipped to handle in excess of 40 tonnes of throughput per week. State-of-the-art technology includes a Kinetic K4000 plate processing machine to cut, drill and tap plates all in the one function.