The beginning of the return of Australian manufacturing
Release Date:2018-11-22       Number of hits:847       

       Based on a decade-long boom in Australian commodity exports, there is a widespread view that the Chinese and Australian economies are complementary. The derived view that Australia can only export resources and import manufactured goods, and the rapid decline of the car manufacturing industry portends the decline of Australian manufacturing, further exacerbated this impression.
Arrium's steel mills suffered huge losses and fell into a debt crisis, which seems to confirm Australia's view of a manufacturing downturn. In stark contrast, however, the early divestment of BHP Billiton, the mining giant, has led to remarkable growth through investment in Chinese plants.

  ACBNewsLast month, Bosch Steel reported that earnings before interest and tax for the first half of fiscal 2016 were A$ 23m, up 35 per cent from the same period last year, the highest since the second half of fiscal 2010. Thanks to rising sales of Chinese steel structures and the acquisition of a full stake in North Star Steel, Bosige's sales revenue in the first half of the 2016 fiscal year reached A$ 4.43 billion.
Bosch is a leading producer of high-tech flat steel and Australia's largest single investor in China. Bosige is headquartered in Shanghai and has branches in Tianjin, Xi'an, Suzhou and Guangzhou. In China, Bosige has a total of 1,500 employees.
China's steel industry has a huge overcapacity as infrastructure, real estate and other sectors slow, producing 819m tonnes of crude steel last year, compared with 7.07 tonnes of domestic demand. In fact, since 2014, China's steel consumption has experienced negative growth, and the global steel market is in a state of oversupply.
In this case, the Chinese government has to resort to credit expansion to maintain economic growth. The ministry of industry and information technology issued a statement in the middle of last year, saying that China needs to speed up "going out" of quality production capacity and push it to countries with insufficient production capacity, such as along the Belt and Road, in order to achieve a win-win situation.
When most steel producers suffered losses due to reduced market demand, Bosige succeeded in focusing on product innovation and marketing strategies through modest cost savings. Bernie Landy, president of Bothg Steel Group China, said that Bosige's main battlefield is the industrial and commercial construction market. The customers encountered are sensitive to prices and the industry is very competitive. What Mr Bosige is doing is taking advantage of his core competencies and minimizing his exposure to commodities.
In China, Australia and other parts of Asia, there are rivals that want to penetrate the high-end steel market, with Chinese steel production growing by 145 per cent in the past five years.
After many years of practice, Randy said that in theory, Bosigechenggong's approach is to adopt "high-quality, high-end brand positioning," while "adapting to the market" is crucial: Bosige has been in the Chinese market for 20 years. Has gone from an attempt to a long-term business. In addition, the correct identification, hiring and retention of talents are also very important skills.
Rowan Callick, an Australian market observer, believes that the success of Bosch Steel Group provides a viable business model for Australian manufacturing. This model begins with corporate executives discovering a market with potential, and then maintains market share through investment and operations in the market. In this process, local investment in China is a crucial link in providing key market information that is not available from other sources.
Australia has free trade agreements with three major export markets: China, Japan and South Korea. Although China's growth target has been cut to 6.5 %, Japan's economy is in a slump and South Korea's growth is only at the same level as Australia's, callick points out that free trade agreements can provide new avenues for Australian companies to exploit opportunities. This is because it is the market data for a particular product that really matters, not the macroeconomic data.
Thanks to the low Australian dollar and the reduction of trade barriers, the competitiveness of Australia's manufacturing product market, which has undergone baptism and transformation, has risen rapidly. At the same time, export credit and insurance companies also support small manufacturing enterprises to export commodities through, inter alia, microcredit.
Although Australian manufacturing can not recover its past glory, it is already returning from many perspectives, and Australian manufacturing will grow in a larger market, heading for China and Asia.