No manufacturing business 'immune' from economic challenges
The CEO of one of Australia's most progressive manufacturing companies has urged SMEs in the industry not to rest on their laurels too early in the new government term.
Tony Panrucker of Sevaan Group believes that every company is still somewhat of a moving target while Australian industry falls into place under a government that claims it will once again re-energise Australia's manufacturing sector and the mining industry.
Until then, he says, don't forget that every SME in the manufacturing supply chain is a potential moving target for a downturn unless it makes strong alliances with other companies in its supply chain to maintain strength and momentum in numbers.
"We should not rest on our laurels just yet as what has been touted at Federal decision making level is not yet bedded in, so I urge all SMEs in manufacturing to be frugal to the greater extent until the economy generates some momentum," Panrucker said.
"For Sevaan Group, we were quite fortunate that our strategy of joint ventures during the last five or six challenging years proved a period of growth not just for us but also the companies who formed ventures with us.
"But for the majority of Australia's manufacturers it almost proved the death knell and at a time when the economy is showing signs of a revitalisation, they are quite stretched and may consider going into an unfeasibly high level of debt to gain momentum with the rest of the market.
"This is the ideal time to put on the brakes somewhat, be gradual in growth rather than sudden, and thus help to proof your business against any unforeseen downturns in the near future until all policies are set in stone and the economy is visibly on an upward curve."
In recent years, Sevaan Group has amalgamated several longstanding engineering companies, invested in its own powder coating, sandblasting and painting facilities and has made joint venture arrangements with clever companies armed with product patents which alone they couldn't step up to the next level.
Rather than conducting ruthless takeovers, Sevaan Group saw it as more beneficial to all parties to come in as a strong venture partner to help the associated business reach the new level.
In turn, Sevann Group itself sustains more growth as it uses any of its large range of technologies, facilities and highly trained staff to uptake more contract work.
This, according to Panrucker, created a solid future-proofing for itself and showed just how tactful a manufacturer must be to grow in the Australian market and eventually become an exporter to the world.
"But we never rest on our laurels either," said Panrucker. "We know that regardless of how powerful you might feel today, no matter how much business is coming through the door, the important thing is to keep innovating at the management level.
"This is often as simple as admitting that under the current structure, your business may be at its maximum potential and to take it to the next level and give it groundwork to continue growing may require partnering.
"Remember, as manufacturers we are always a moving target at the end of the barrel of the economy.
"Only by making strong, sensible decisions along experienced people can you help future proof your business."
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