Manufacturing News

R&D investment pays off

TAKING the plunge and investing $2m in research and development was a calculated risk that has paid off for a Victorian high precision manufacturing company.

Ballarat-based company Miric Industries has been producing pressed metal components for the automotive industry since 1990, and counts Holden, brake manufacturer FMP, Bridgestone and Mitsubishi among its clients.

But company owner Rick Schulz could see that Australian manufacturing would one day be a different ball game, so started making plans to diversify into a more sophisticated offering.

He scoured the world for the next big thing in manufacturing, and came across high precision manufacturer Ceramet Technologies in Singapore, which he purchased in 2001. He then relocated the entire company and a large number of its staff to Ballarat in 2003.

Schulz said while manufacturing is a tough game, the decision to buy a business that’s the only one of its kind in Australia has given him a leg up into the potentially lucrative international market. It has also enabled him to diversify outside the automotive sector, which in turn has created new revenue streams.

“I decided to purchase Ceramet because I could see opportunities for new technology,” Schulz said.

“The automotive industry was struggling under relentless cost-downs and manufacturing operations were heading offshore in droves.

“China was able to copy what we were doing very cheaply. I knew no matter how good Miric could be, it might not always have a future in Australian manufacturing,” Schulz told Manufacturers Monthly.

The highly specialised metal injection moulding company uses a process to combine the versatility of plastic injection with the strength of machine pressed parts.

The process involves combining fine metal powders with plastic binders, which allow the metal to be injected into the mould. The binders are then removed and the metal part is sintered at temperatures up to 1400°C.

And the technology has attracted some pretty big international players. Schulz counts German exhaust company Gersfelder Metallwaren, manufacturing giant Bosch, mineral processing equipment company Gekko Systems, tactile path manufacturer Pathfinder, shearing systems company Echidna and solar energy company Solar Systems among his clients.

And the future is looking rosy – the global injection moulding market was worth $382m in 2004 and is expected to grow by 8.4% to $571m by 2009. Ceramet turns over $5m a year, and that figure is growing.

Both Ceramet and Miric Industries have recently gained TS16949 quality certification, which means both companies are preferred suppliers to the international automotive industry. Schulz hopes the move will result in the much-needed growth that he needs to sustain the high cost of R&D required to service his current clients.

Schulz says there are huge pressure on Australian manufacturers to constantly reinvent themselves.

“You can’t continue to make the same widgets for 30 years in the manufacturing industry. Companies have to constantly reinvent themselves to be able to remain competitive, but if you’ve got great staff then you can produce an entirely different product line overnight.”

Schulz says that while he has immense faith in his advanced technology, it can take a long time to prove its worth to potential clients.

In fact, he has been showcasing his technology to German-based electronics giant Siemens for the past 18 months at great personal cost in the hope it will land a contact, but says there are no guarantees.

“You have to be prepared to showcase your technology to a client for an extended period of time before they will necessarily consider giving you a go. It can be a long and exhaustive process, and involves a lot of international travel.”

And while large numbers of sophisticated manufacturers have moved off-shore after finding cheaper markets, Schulz said Australian manufacturers continued to offer him huge opportunities to grow the business.

“To be able to compete with international players you’ve got to have a unique offering. And you’ve got to be able to offer potential clients something more than just a cheaper price. You’ve got to be able to solve problems to be a player on the world market,” Schulz said.

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