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The gulf that separates consultants & manufacturers

By: Peter Gosnell
31 August, 2010

Feature of the week: Keith Monaghan was not impressed. The president of the Plastics Industry Manufacturers of Australia (PIMA) had just picked up the phone. A consultant was on the line. He wanted to trawl Monaghan's brain. For free.

"I said, 'Hang on. If you want my knowledge it's one hundred and fifty dollars an hour'," Monaghan said, recalling the conversation.

Monaghan didn't make $150 an hour for his advice. Nor did the consultant get his wisdom gratis.

There's sometimes a gulf separating external consultants and manufacturers in specialist sectors like plastics processing and injection moulding, a gulf characterised by a dearth of the required technical expertise on the consulting side, and a lack of money and will from business.

Despite this, regulatory pressure from state and federal governments on energy efficiency and carbon mitigation issues will put more pressure on consultants and business owners and operators.

Kevin Frayne, from BGF Consulting Group said uncertainty over climate change made it difficult for consultants and industry alike.

"The big users, for example would be caught by things like the Victorian government's efficiency program to improve the energy efficiency of their processes, but the smaller ones would not," Frayne said.

In 2008 Victoria's EPA introduced Environment and Resource Efficiency Plans (EREP) as an adjunct to its Industry Greenhouse Program.

According to the EPA Victoria, there are 250 major energy users participating in EREP and of these, 169 are manufacturers.

EPA Victoria has also reformed its Licensing Program covering about 600 businesses whose operations are designated scheduled premises as a result of their capacity to pollute.

According to an EPA Victoria spokeswoman, plastics companies such as Qenos, BASF and Australian Vinyls already have, or are about to undergo, the reform.

The licensing program has been reformed and began being rolled out in March, 2010.

But Frayne said the myriad small-to-medium sized plastics processor and end-users face more challenges.

"One of the things manufacturers and end users need to do is get all the information on their process together and that's quite a task," he said.

"Big chemical and plastics manufacturers would have the resources to do this in-house, small-to-medium sized end users don't have the knowledge and financial capacity," he said.

Tight finances however won't slow the momentum.

At the sixth Australia-New Zealand Climate Change and Business Conference in Sydney in August, attendees heard there is huge potential to improve energy efficiency in Australian business.

"The Australian economy is only about 10% efficient – this means that 90% of the energy in the fuel we dig up is lost in the supply chain and end uses," Jonathan Jutsen, executive director of Energetics said.

The conference was also told that no carbon price was needed for industry to reduce carbon-based emissions through operational efficiencies.

Methods cited at the conference included heat recovery; process efficiency through switching fuel from briquettes to gas-fired power, or if suitable, alternative energy from bio-gas, solar, thermal and wind power.

The conference heard that even more important was government assistance, in the form of reduced bureaucracy, and improvements to energy supply contracts to encourage industry to self-generate and sell into the national grid relief for industries disadvantaged by a carbon price.

Ultimately, implementing environmental regulation into the operations of SME plastics processors could cost their owners plenty. Consultants calling with cost-effective advice will be the ones who'll impress.

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