The importance of Australia’s manufacturing industry

With intensifying competition from global markets, Australia’s manufacturing industry is facing extreme pressure to remain competitive.

Given Australia’s abundant and critical natural resources, the country is well positioned to strengthen its standing and become an indispensable part of the global supply chain.

Over the next decade, the Federal Government will invest $22.7b to build a ‘Future Made in Australia’ to secure Australia’s place in the changing global economic and strategic landscape as well as bring new jobs and opportunities to the workforce.

As part of this, a Future Made in Australia Act will be created to establish a National Interest Framework to guide the identification of priority industries.

The Australian Mining Review speaks with Advanced Manufacturing Growth Centre (AMGC) managing director Dr Jens Goennemann about the importance of Australian-made products and the Future Made in Australia Act, plus Australian Made Campaign Limited (AMCL) chief executive Ben Lazzaro about the iconic green logo that all Australian-made products display.

Established in 2015, the AMGC is an industry-led, not-for-profit organisation that aims to transform Australian manufacturing to become an internationally competitive, dynamic and thriving industry with advanced capabilities and skills at its core.

Through the delivery of State and Territory funding programs, provision of world-leading research, workshops and ground-breaking projects, AMGC aims to develop a highly skilled and resilient local manufacturing industry that delivers high-value products to domestic and international markets.

“The Future Made in Australia Act is music to the ears of the AMGC and its members,” Dr Goennemann said.

“For decades, manufacturing in Australia has been underserved, underappreciated and underutilised.

“Any provisions, policies, funding programs or initiatives designed to support our highly capable but currently subscale manufacturers in growing and competing on a global stage are a promising start.”

Manufacturing in the mining industry

With Australia hosting an abundance of natural minerals and resources, the AMGC has worked with a number of local mining and manufacturing companies to engage in value adding to Australia’s manufacturing capabilities.

Doing so means that Australia benefits not just from the extraction of the raw commodities, but the value-added component of manufacturing these materials into something greater.

For example, Alpha HPA (ASX: A4N) received a $300,000 co-investment from AMGC to prove its novel process of producing high-purity alumina and high purity aluminium salts from aluminium ore was able to produce at a commercial scale.

Not only are these essential components in semiconductors, lithium-ion batteries, LED lighting and synthetic sapphires, but the value of the base alumina hydrate also increased around 10,000% from 35¢ a kilogram to $35kg.

Other companies AMGC has worked with include EQ Resources (ASX: EQR) to commercialise a large-scale X-ray sorting operation for tungsten recovery from low-grade
ore and mine waste, and Process Plants International which has developed a proven proprietary anti-block sparge for the minerals processing pressure oxidation autoclave industry.

Challenges facing Australia’s manufacturing industry

Australia’s overreliance on exporting items of low complexity was laid bare in data released by Harvard Kennedy School in July 2023.

This data revealed Australia’s Economic Complexity Index (ECI) rating has plummeted to 93rd, down 12 positions in the past 10 years.

The report stated that ‘Australia has seen a troubling pattern of export growth, with the largest contribution to export growth coming from low and moderate complexity products, particularly ores, slag, ash, mineral fuels, oil and waxes products.’

Dr Goennemann echoed this comment, saying Australia-made products mean very little unless the product is globally competitive.

“As a prosperous trading nation, Australia must emphasise competing on value rather than merely on cost to enhance our global relevance and safeguard our standard of living,” he said.

“To remain competitive, Australian-made goods must provide unique advantages that customers cannot find from nearer or cheaper alternatives.

“This necessitates that local manufacturers fully leverage available tools and collaborate to ensure their offerings are superior to those of international competitors.

“Without this focus on superior value, the label ‘Australian-made’ becomes just a sticker, not a meaningful differentiator.”

Benefits of Australian made products

Not only do Australian-manufactured products fare better in the country’s harsh environment, to remain competitive they are often more superior to those from other countries and can withstand years of repetitive use.

“I believe it is crucial for a nation to have a diverse and highly capable manufacturing industry that produces things the world needs,” Dr Goennemann said.

“When these products offer superior value, are better suited to specific environmental conditions or enhance customer productivity, it makes strong sense to choose and utilise them.

“If these superior products happen to come from an Australian manufacturer, that’s even better.

“There are numerous Australian manufacturers that are highly respected for the quality, durability and reliability of the products they make and as a result, they are highly successful both locally and abroad.

“By prioritising being better over being cheaper, these manufacturers are able to charge more for their products because they deliver greater value to their customers.

“This in turn breeds resilient and globally competitive companies that employ more Australians in highly skilled manufacturing roles.”

The Australia Made logo

No matter if it’s for the mining, oil and gas, food or clothing industries, all products that are created in Australia must display the iconic green and yellow ‘Made in Australia’ logo.

As a registered certification trademark, the logo can only be used on products that are registered with the AMCL and meet the criteria set out in the Australian Consumer Law and the Australian Made Logo Code of Practice.

“The famous Australian Made logo is the true mark of Aussie authenticity,” Mr Lazzaro said.

“It’s Australia’s most trusted, recognised and widely used country of origin symbol.

“It’s underpinned by a third-party accreditation system which ensures products that carry the logo are certified as genuinely Australian.”

A product can be described as ‘Australian made’ or ‘made in Australia’ it if underwent its last substantial transformation in Australia, or if the end product is fundamentally different from creation as a result of one or more processes carried out in Australia.

If a product meets these requirements, then it can be licenced to carry the Australian Made logo.

The Australian Made logo is a registered trademark in a range of countries all over the world such as China, the EU, New Zealand, Singapore, the UAE, the USA, Indonesia and the UK.

Furthermore, legal proceedings have begun to register it in additional countries, including Japan and Canada.

“Overseas, the Australian Made logo is a global icon,” Mr Lazzaro said.

“Instantly recognisable and well regarded, the green and gold kangaroo is internationally known as a market of genuine Australian Made products made to Australia’s high standards.

“When you buy Australian Made you know what you’re getting – products made to the highest manufacturing standards and that are made for local conditions.

“Australian products have a reputation for being high quality, safe, high performing, reliable and robust.”

The future of Australian manufacturing

With consumers becoming more aware of where and how products are manufactured, Australia’s manufacturing industry shows no signs of slowing down.

“We continue to see a strong growth in Australian manufacturing, with much of this growth in the heavy industry and industrial sectors,” Mr Lazzaro said.

“In recent times, AMCL has seen a greater awareness and value placed on local manufacturing in industries where reliability, safety and performance are paramount, such as the mining sector.”

Even though Australia has a strong manufacturing industry, there’s still room for growth.

“Australia’s future prosperity resides in adding value to our abundant natural resources and the capability to do so,” Dr Goennemann said.

“What we must seek to do is move from the old model of digging and shipping – be it in mining, food or other commodities – to also processing and adding more value before exporting.

“If we do, we might secure our nation’s treasures for generations to come and if we don’t, we might find ourselves being disrupted.”