COVID pandemic has silver liner for local manufacturing as customers turn to Australian manufacturing

Bosch Australia is no stranger to adaptation.

It was once a key supplier of spare parts and assembly lines to the Australian automotive industry.

But when this industry was shut down for the past decade, it pivoted.

A word we’ve all grown used to since COVID-19.

“We ended up with a very talented team of engineers who were very knowledgeable about manufacturing and production engineering and at that point we decided to use that skill set externally and work with others. customers, ”Peter Hook, Managing Director of Bosch Australia Manufacturing Solutions, mentioned.

The team has started making parts for other industries that have really taken hold since the pandemic.

They pivot again, just like their customers.

Bosch had worked with Ellume to make home flu test kits, but they quickly adapted these for COVID-19 home testing kits.

“We are building a number of production lines for them which will be delivered to their Brisbane plant and also to the United States,” said Mr. Hook.

Will the revival of manufacturing last?

It is this rapid change and desire to shorten supply chains that many hoped to boost Australia’s manufacturing sector after the pandemic.

Until the last confinements, it increased exponentially.

IHS Markit’s analysis for its Manufacturing Purchasing Managers Index shows that after the initial shock of the pandemic last year, manufacturing grew at its fastest pace in five years, through May of this year.

Growth has been in sub-sectors such as medical technology, space, robots, and food and beverage.

In the June quarter GDP figures, manufacturing output rose 0.9%, bringing annual growth to 9.6%.

But the current blockages have suddenly put an end to this trajectory and caused this growth to fall.

“The extension of COVID-19 restrictions through September continued to dampen conditions for doing business in the Australian private sector, although the slight easing of restrictions was noted in the latest IHS Markit Flash Australia Composite PMI, seeing the ‘Overall composite production index to contract at a slower rate in September,’ wrote Jingyi Pan, associate director of IHS Markit economics.

As supply chain issues and labor shortages begin to put cost pressure on Australian manufacturers, most remain positive about the outlook.

“The employment index, meanwhile, showed higher labor levels, which was a positive sign after the drop in August, driven by severe disruption from COVID-19,” said she observed.

“General optimism among manufacturers nonetheless continued in September, with business confidence reaching its highest level since June.”

The government’s helping hand

The government is encouraging growth in six areas of manufacturing: resource technology and critical mineral processing, food and beverage, medical products, recycling and clean energy, defense and space.

This is exactly what Sydney-based manufacturer Romar Engineering has done, 50 years after the company was founded by husband and wife team Robert and Marion Wilson.

“We are mainly involved in the manufacture of medical devices, but in recent times, [we’ve moved] in manufacturing high quality bespoke equipment for the space industry, ”Managing Director Alan Lipman told The Business.

“A lot of the parts that we are asked to design and manufacture from scratch are parts that cannot be purchased overseas for various defense reasons. “

This shift from a maker of products for the IVF industry to space parts means they just received $ 5.85 million from the federal government to create more technology for space.

“It’s one for one, so they’re providing us with $ 5.85 million over three years and we have to find our own $ 5.85 million to grow this business,” Lipman said.

Multi-billion dollar investment

Even before the pandemic, investments to increase manufacturing were on the rise.

In fiscal year 2019/20, $ 4.8 billion was spent by the industry on research and development (R&D), making it the second-largest contributor to R&D in Australia.

It accounted for 26% of all R&D investment in 2020/21, according to data from the Australian Bureau of Statistics.

After four years of R&D, the Perth company Nexxis created ‘magneto’.

“This is the next generation of robotics and is designed for hazardous area inspections in the confined space industry,” said Jason De Silviera, Founder and CEO of Nexxis.

The spider-like device has magnets on its feet, a camera on its body, and is controlled by a game console.

“It does inspections where we shouldn’t be placing humans and it works using electromagnetism and ultimately gets the information inspectors need without [them] go inside, ”De Silviera said.

Nexxis targets the oil and gas industry which performs regular safety inspections in hazardous and confined spaces.

“Testing can kind of start pretty early and we really hope that early 2022 is when we really should start production,” De Silviera told The Business.

Supply chain disruptions have forced many Australian customers to wait long periods for goods.

Mr De Silviera said this has been a boon for local manufacturers who can deliver faster.

“For us, engineering, designing and sending it overseas and then picking it up and modifying it doesn’t solve the problems fast enough,” he said.

It is this demand for quick fixes that the industry hopes to put it back on track for rapid growth at the end of the current bottlenecks.