Recalling the lessons of the COVID pandemic to ensure our economy is never caught short, and under-resourced, again
If the Australian Government really believes in resiliency and making sure Australia doesn’t have the same vulnerabilities that became blindingly clear during the COVID years, the only way is to even out the procurement playing field.
Harrison Manufacturing Company’s CEO Julie Harrison says the Australian Government needs a market mechanism to strengthen homegrown manufacturing against globalisation, and in preparation for the next inevitable disruption.
I can’t be certain, of course, but I’ll hazard a well-educated guess that there aren’t many manufacturing companies like Harrison Manufacturing operating in Australia today. Here’s why:
- We are a fourth-generation, 100% family-owned company. Our founding father, A.S. Harrison, identified a problem and then provided a solution when he began manufacturing and distributing raw materials for the rubber industry in 1923.
- Last year we produced 7000 tonnes of grease alone; that makes us Australia’s largest (and oldest) independent developer, manufacturer, and distributor of lubricants including grease, oil, release agents, and speciality additives.
- Our products and know-how are vital cogs in critical industries and applications. At home and globally, in manufacturing, logistics, agriculture, shipping, mining, food production and other sectors such as copper smelting and metal refining, we keep wheels turning.
The Harrison Group germinated in the post-World War era when Australia’s sovereign manufacturing was seriously depleted. For 100 years, we have navigated the business waters of wars, geopolitical crises, financial crashes, and global pandemics. Little wonder then that Harrison Manufacturing and its 80 employees wear our longevity, resilience, and Australian Made status as a badge of great pride
Australian manufacturing revenue in stark contrast
The reality is that Australia is a big player on the global economic stage. Figures from the US’s National Association of Manufacturers NAM show this in stark reality. In 2021, the total output from manufacturing in the US was $US2.5 trillion or $AUD3.69 trillion. Compare that to figures from the Australian Bureau of Statistics; in 2021-2022, the manufacturing industry’s revenue was $7.6 billion. We are competing against super economies, some of whom do not factor in issues important to Australian standards, like taking a stand against modern slavery or boycotting Russian raw materials in opposition to the war against Ukraine.
80% of the base oil ingredients Harrison requires for 80% of our products are, by necessity, procured overseas through international suppliers. We do not have a choice in this. The last base oil refinery closed in Australia in December 2021.
That’s business. Business is pivoting, being agile and resilient. We get it. But currently, Australian companies like Harrison Manufacturing are not playing on a level playing field because we simply do not have the size of purchasing power to procure raw materials at reasonable prices to hold the line against our international competitors.
This is because we do not have the economies of scale, unlike multinationals out of the US, India, China, and Europe, whose costs of procuring their raw material imports to sell to Australian mining and other critical industry sectors are so much lower.
COVID and the call for homegrown supplies
This, of course, was not the case during COVID. Our customers were delighted that Harrison Manufacturing was able to meet their needs when they couldn’t get what they needed from overseas.
This clearly proved the importance of local manufacturing because Harrison breached the gap during that time for many new customers as well. We rationed, and in some cases, we said no, we can’t make that for you, because we supported our existing customers to ensure they still had their supply lines.
Indeed, during Covid, consumers in the Australian industrial and mining sectors, as well as the Federal Government, became alarmingly cognisant of the importance of having home supplies, and sovereign manufacturers producing them, to keep their high-performance machines and infrastructure operating.
We hear a lot today about the resilience of the Australian economy. But we haven’t a hope in hell of ensuring resilience for the entire economy when the next global disruption arrives if we haven’t learned anything from the last one.
If the Australian Government really believes in resiliency and making sure Australia doesn’t have the same vulnerabilities that became blindingly clear during the COVID years, the only way is to even out the procurement playing field. In practice, this means making opportunities for sections of our industry to be supported through a market mechanism.
Whether by financial encouragement or quotas to industry, we need incentives for all businesses, including large Australian mines and companies, as well as international players operating here, to buy Australian products.
Only then can we be assured stalwarts such as Harrison Manufacturing will still be around in another 100 years to guarantee Australia is not found sorely wanting again.