THE EMPLOYMENT STATISTICS leave no doubt: traditional Australian manufacturing has hit rock bottom. The sector has lost 123,000 jobs in the past decade and now accounts for just 7.9% of Australia’s total employment – an all-time low.
Blue Scope Steel closed shop at Port Kembla in 2011; in 2014, aluminium producer Alcoa shut down its Point Henry smelter near Geelong, with more closures to follow; and Holden, Ford and Toyota have announced plans to cease Australian manufacturing operations by 2017.
The demise of our century-old automotive industry will result in the loss of several thousand jobs. Many more will be threatened in the 160 or so businesses involved in the engineering, design and manufacture of automotive components.
“We face a dramatic challenge,” says Ian Christensen, CEO of the AutoCRC, explaining that ‘made to print’ manufacturing – which involves no local innovation or design input – “now faces a bleak future”.
But Christensen is convinced there will be opportunities for smart operators, suggesting two options for component manufacturers to remain viable. For one, they could apply their expertise to other sub-sectors in Australia, such as the manufacture of biomedical devices. Or, they could find a way to develop technologies for offshore automobile manufacturers, most likely in Southeast Asia, and partner with an overseas manufacturer to produce the components.
“To be successful at all, we must focus on value-adding and innovation,” Christensen says. “We have to aspire to dominate global niches that are technically demanding. And we must have a deep understanding of customers’ needs now and into the future.”
Minister for Industry Ian Macfarlane agrees that manufacturing in Australia is transforming rapidly. “If the country is to remain globally competitive in this area, it must continue shifting from a reliance on traditional heavy industry to a focus on specialised, high-end manufacturing in areas of competitive advantage,” he says.
Part of this shift will be driven by research and science, he adds. In October 2014, the government announced the Industry Innovation and Competitiveness Agenda to “reset industry policy to put science at the centre of industry policy”. Advanced manufacturing is one of five sectors that the agenda will address.
CRCs across Australia are working hard to carve out these niches and developing sophisticated new products based on advanced manufacturing processes. These include lightweight composites for the construction industry and biotechnologies that will help deliver new therapies for a range of illnesses.
Industry players say they are hopeful that expertise in high-tech areas, coupled with an aptitude for innovation, will help manufacturers overcome traditional obstacles such as the high Australian dollar, high labour and energy costs and geographic disadvantage.
A large number of companies in Australia are adapting and evolving to meet the needs of a global economy, according to Brad Dunstan, CEO of the Victorian Centre for Advanced Materials Manufacturing (VCAMM). “The real status of Australian manufacturing is one of cautious optimism,” he says.
Here are some examples of where a vibrant new Australian manufacturing sector might be headed.
Plant fibre bio-composites
THE DEFENCE, automotive, aerospace and oil and gas industries are all showing a strong appetite for advanced composite materials here and around the world. And Australia’s composites industry is well-positioned to take advantage of that, according to Professor Murray Scott, CEO of the CRC for Advanced Composite
Structures (CRC-ACS). Scott says this is because the Australian industry is composed predominantly of ‘agile’ small-to-medium enterprise businesses, able to quickly explore new market opportunities.
“Australia has a fantastic opportunity to continue leadership in composites, particularly their application in new areas,” he says.
A notable achievement of CRC-ACS has been developing technology with Boeing Aerostructures Australia, which manufactures the wing trailing edge devices for the Boeing 787 Dreamliner – work worth an estimated $4 billion to the Australian economy over 25 years.
One new area of focus is the development of bio-composite materials that use natural plant fibres instead of glass. This allows for an environmental impact reduction of 15–50%, says Dr Andrew Beehag, CRC-ACS General Manager.
Over the short term, CRC-ACS has focussed on developing lower performance bio-composites that can be used as wood and fibreglass alternatives in the building and construction industry. Researchers have already developed a process to manufacture composites made from 2 mm-long plant fibres. This, says Beehag, represents a significant improvement over the immediate market competitor, which has only achieved reinforced lengths of around 0.1 mm and a much weaker performance.
“Laboratory trials have shown that a 30–40% increase in strength may be achievable with our approach,” Beehag says. And that would come with only a 10% higher cost. This gives CRC-ACS flexibility to develop a premium product with increased performance, or to achieve cost savings while maintaining current performance standards.
Two companies are already trialling these next generation building products. Based on the timing and success of these trials, CRC-ACS and its spin-off ACS Australia should be in a strong position to accelerate commercialisation activities, Beehag says.
Carbon to revitalise auto manufacturing
LIGHTWEIGHT CARBON fibre composites are becoming crucial to automotive manufacturing around the world as companies strive to reduce vehicle weight. Reduced weight translates into lower fuel consumption costs.
Australia already has one success story with Carbon Revolution – a company that has developed a one-piece carbon fibre wheel for sports cars, which is 40–50% lighter than aluminium alternatives.
But manufacturing carbon fibre composites affordably, at the volume needed to keep pace with automobile production, poses a considerable challenge. Dunstan says to be acceptable to mainstream manufacturing, the composites industry needs to show that it can produce one part per minute at a cost of about $14 per kilogram. Once that challenge is met, he says, the floodgates will open.
To address the problem of affordable mass production, the AutoCRC is supporting a project investigating a novel epoxy resin system. It’s hoped that tailored resins will be more adept at achieving faster curing times, ultimately increasing the rate of production as required.
This work is taking place at Carbon Nexus, a $34 million research and pilot manufacturing facility in Geelong. It’s been developed by Deakin University in partnership with VCAMM, with support from the Victorian and Australian Governments.
“If we can create new, globally relevant intellectual property at Carbon Nexus that helps meet this grand challenge of high-rate composite manufacturing and license it to Australian industry, then those Australian companies are in the box seat to manufacture parts in high volume for a burgeoning market,” says Dunstan.
High performance plastics offer another option to reduce vehicle weight and improve fuel efficiency in the automotive and aviation industries. The global market for injection-moulded plastics is expected to reach about $319 billion by 2020. The creation of millions of plastic components for transport and other industries begins with a single mould. However, developing moulds requires highly specialised experts in the design stage and many prototypes. This generates waste and makes the process time-consuming and expensive.
To solve this problem, the AutoCRC, along with the Victorian Partnership of Advanced Computing and the Malaysia Automotive Institute, have developed a new software toolkit known as vMould. This software application intelligently optimises mould design and development. It eliminates the need for specialists, allows for more accurate component designs with fewer flaws – meaning fewer prototypes and less waste – and improves overall production speed.
Cell building – the biotech path
ANOTHER INNOVATIVE path for Australian manufacturing is biotechnology, particularly cell therapies. Cell therapies use living cells to replace, repair or regenerate damaged or diseased tissue.
The $59 million CRC for Cell Therapy Manufacturing (CTM CRC) was set up to develop cost-effective manufacturing methods for cell therapies and create the pathways to put them into clinical practice.
“The cell therapy industry is the fastest growing sector of the regenerative medicine market,” explains Dr Sherry Kothari, the CTM CRC’s Managing Director.
Despite regulatory and cost hurdles, there is already intense international competition in the area due to the industry’s strong growth potential.
“Australia has the potential to become a world leader in the development of cell therapies,” Kothari says. “We have the chance to establish ourselves as a leader in the field, grow a new manufacturing industry, create jobs and, above all, transform healthcare outcomes.”
One of several promising research projects already underway at the CTM CRC aims to improve islet cell transplantation. Transplanted islet cells from donor pancreata have significant benefits for people with type 1 diabetes by potentially enabling them to survive without insulin injections. But the process of isolating and transplanting these cells is fraught with technical difficulties, high costs and low accessibility.
One of the most critical issues is the extensive cell death that occurs during donor islet processing and after transplantation. CRC researchers have been working to improve cell survival during lab-to-hospital transfers, and are engineering ‘scaffolds’ and coatings to promote islet cell survival before and after transplants.
Kothari says this will make currently prohibitively expensive cell therapies far more accessible to a greater number of people living with diabetes in Australia and elsewhere.
World-first cell manufacturing industry
WITH GEELONG STILL reeling from the decline of traditional manufacturing, there’s probably no better place for Australia to experience the potential of a new style of industry.
A cell therapy innovation has resulted in an exciting new partnership that will see an advanced manufacturing plant set up in Geelong within the next 18 months to manufacture short nano-fibres. These are used in high-tech applications, including as a medium for cell growth.
Working with the Advanced Manufacturing CRC (AMCRC) in a large collaborative project involving Deakin University, Monash University and VCAMM, Australian biotechnology startup Cytomatrix has developed world-first technology that enables the commercial-scale manufacture of haematopoietic stem cells. These are used in bone marrow transplants and to treat people with leukaemia and other cancers, and help restore red and white blood cells destroyed by high doses of chemo- and radiation-therapy.
Andrew McLellan, CEO of the AMCRC, says the technology could significantly shorten hospital stays for transplant recipients. It’s a great example, says McLellan, of an innovative Australian organisation operating in a high value, high knowledge-based niche.
“These organisations need to be celebrated and seen as being the leaders of what can happen in the future.”