There have been a lot of bad news stories about Caterpillar Underground Mining shifting its manufacturing from Burnie to Thailand. Brent Balinski spoke to Southern Prospect’s Lee Whiteley about where local industrial opportunities lie in the future.
Southern Prospect got started in 2006 after wind turbine-maker Vestas ended production in Wynyard, north-west Tasmania, shedding around 60 jobs.
Vestas’ then-managing director in Australia, Lee Whiteley, formed the business to maintain and service installed turbines. It employed around 15 – 20 and has since looked for ways to expand, and where the skills in the north-west coast might be put to use.
“We call it Southern Prospect because when we set it up we didn’t know what we were going to do, and it was about generating new prospects for the people that have lost their jobs in the other business, and in the community,” explained Whiteley.
The need to identify and exploit new prospects is regularly discussed in the region, with mining giant Caterpillar to end its manufacturing operations in Burnie, where underground mining vehicles have been made since 1975.
Cat announced in April it was doing away with 280 jobs and sending production to Rayong, Thailand. A Transition Taskforce, which Whiteley is a part of, was formed soon after the news.
Whiteley also has a long history with the mining manufacturer, beginning his career as an electrician at Caterpillar Elphinstone.
Caterpillar winding up its manufacturing is of course horrid news for an area with already high unemployment and its share of difficulties in recent years transitioning from traditional manufacturing.
However, there are successful companies, a talented base of local skills, plenty of opportunities with the right approach, said Whiteley.
SP has taken on a number of long-term unemployed in the region, winning a Mission Australia national award in 2013 for training and placing 16 candidates over 12 months.
Identifying opportunities has been the goal since the beginning, for Southern Prospect, according to its managing director.
“We think you need to have control of a product,” he said.
“If you’re just supplying someone else who controls the product and they decide to pack up and move it, then where’s that leave you? We’re very focussed at the moment on looking where are product opportunities and what kind of products might we be good at.
“We obviously have a lot of mining experience, we’ve got some energy experience. So what might the products be that go with those kind of industries and that kind of skill set?”
Currently the company’s output is split roughly evenly between what it calls its special projects – including custom-made generators and temperature control units – and creating wire harnesses for mining applications.
“So today we supply more [wire harness] product to the Thailand factory than we do to the Burnie factory,” Whiteley told Manufacturers’ Monthly.
“And we think that will obviously increase again. So we really need to keep our eye on that and retain as much business as we can.”
Special project work received a boost earlier this month with further work for Hydro Tasmania.
SP earned a contract to supply three modular enclosures for a Diesel Uninterruptible Power system for the Flinders Island hybrid energy project.
The units are part of $4 million in contracts to provide hybrid solar/wind/diesel power to the island.
In future, renewable energy will continue to create work, Whiteley believes.
The company started out servicing wind turbines, and more maintenance opportunities could emerge as wind farm owners take back the operation of their assets from OEMs.
“And when that starts to happen across the country then there’ll be opportunities to do service work for those wind farm owners,” he said.
For the region, the end of Caterpillar Underground Mining’s operation will leave a “fairly significant hole” in the economy, said Whiteley.
It would wrong to call it a bonus, but a positive aspect is that it’s forcing local suppliers to rethink what they do well, and how they might apply their skills in other areas and with other customers, said Whiteley.
“How will we apply that? Maybe we apply that to a new product,” he offered.
“Maybe we actually decide to develop a product for ourselves that maybe we just didn’t need to before, because there was plenty of [existing] opportunity.”
Whatever happens, he said, it would be a mistake for suppliers to throw in the towel because a major source of business has decided to leave the area.
“We really can’t afford that to happen,” he said.
“Because you start to unpack that capacity that has grown here since 1975, then that’s not a good thing.
“So making sure we work together as suppliers to make sure we keep the whole package together that then makes it attractive maybe for somebody else to come into the region.”