The Future of Home-grown Manufacturing

With a tough economy and unfavourable currencies, will this country maintain its marine manufacturing, or has a shift to overseas production already started?

According to a recent report in The Sydney Morning Herald, the Asian economic boom is expected to create 1.5 million jobs during the remainder of this decade, but also force a shift which could see a drop in Australian manufacturing. Federal Government modelling shows Australian manufacturing will prosper less than other sectors as the Asian boom draws on different sectors unequally.

The Herald reports federal Government forecasts the value of output in mining is expected to surge by 65 per cent, construction by 48 per cent and services by 35 per cent, while manufacturing output is projected to grow by only 6 per cent.

Treasurer Wayne Swan said: “The weight of global activity is shifting rapidly to our region, and that means high demand for our commodities but also our services and higher-end manufactured products as the Asian middle class expands, not just in the next few years but in the next decades.”

What does this mean for the Australian marine sector and the future of manufacturing? Australia has a proud history of marine manufacturing and many in the industry believe keeping manufacturing alive in Australia will not only save jobs, but is crucial to the marine industry to further develop and prosper. Boating Alliance of Australia chairman Darren Vaux told Marine Business how important it was to keep manufacturing strong in Australia.

“We build very good boats in Australia and some innovative designers and good manufacturers and skills. If you compare our workmanship to other industries and actually look at the quality that we achieve in this country, it’s something we have to try and protect. Price is important, but so is quality, so it’s very important that we try and support our manufacturing here in Australia because it’s a key element of ensuring our industry remains strong,” he said.

Increased competition brought upon by the strong Australian currency, together with economic pressure, has forced some Australian marine companies to look at manufacturing offshore. Marine Business Online reported two major developments earlier this year with Queensland-based tinnie company Telwater announcing its own line-up of Chinese-built outboard engines while iconic Aussie brand Whittley announced a range of Chinese-produced tinnies.

Whittley Marine Group released a statement to dealers in May which outlined details on its Clearwater AL range of Chinese-built aluminium boats.
The statement said Whittley has been establishing its own manufacturing plant in China over the past 12 months where it will be “producing very high quality aluminium boats”.

“Whittley Marine has spent a lot of time and money ensuring that the product is worthy of being badged a Whittley and we believe that our boats are as high quality, if not better than most of the locally produced boats,” said Alan Whittley.

Whittley said there was a transport advantage over locally built boats being shipped direct to the dealer’s yard instead of being manufactured and shipped from Queensland.

This, Whittley said, would offer the company a competitive price advantage over its competitors.

Telwater, on the other hand, has said its decision to launch the Vortex range of Chinese-built outboards is to maintain jobs in its boat manufacturing plant in Queensland. Speaking to Marine Business, director of sales and marketing Damien Duncan said Telwater is confident there won’t be quality issues with the Vortex outboard range.

“There’s been some concerns with the longevity of the engines, but we’re backing it with a three year Telwater warranty. We feel confident and wouldn’t launch a product with the names of our brands otherwise.”

Telwater executives had been travelling to China for the past decade and settled on supplying its range of Vortex outboards through Chinese outboard giant Genovo Power because of its reliability, parts and future technology developments. Telwater has maintained that fitting Vortex outboards to its range of Australian-built aluminium boats will keep costs lower and help the industry with more sales across the board.

“The biggest problem for Australia is boating is too expensive, it’s not good value for money, we’re hoping to make boating more attractive to everyone by making it more affordable,” Duncan said.

Marine Business contacted an established Telwater and Mercury dealer who wished to remain anonymous. The dealer was optimistic Telwater would succeed in the Vortex brand, however, he did raise some reservations in four-stroke developments on the back of imminent tougher emission standards.

“At present I think 30 hp is the largest clean engine they make, If they decide to make bigger clean engines, then, yes, they could hurt the main players and force them to adjust prices,” he said.

“However the price to me is not such a big saving.”
Damien Duncan said Vortex is well advanced in clean technology and confirmed larger horsepower outboards are in development.

Stay tuned to www.marinebusines.com.au for further updates.

By Scott Thomas