Is Australia's manufacturing sector in decline?

There has been a long-held belief that Australia’s manufacturing sector is in decline and is incapable of making anything beyond simple clothes and textiles, building materials and packaging.

Paul Cooper FCPA is convinced this is a fallacy. As chair of Advanced Manufacturing Growth Centre (AMGC), he believes he is in a position to make that judgement.

Australia, Cooper says, not only has the capability to manufacture some very high-tech products considered best-of-breed around the world, but can always find the capacity to do so if needed.

Yet, all of this will only happen if the right companies are given the opportunity and pointed in the right direction.

AMGC is supported by the Australian Government’s Department of Industry, Science, Energy and Resources. It is an industry-led organisation, and its mandate is to advance and transform manufacturing in Australia to develop “Industry 4.0” capabilities – the use of artificial intelligence and robotics – and entrench them into the Australian way of making things.

Cooper’s journey says a lot about his belief in transformation: he seems to have done to himself what he feels the country needs its manufacturing (and many other sectors) to do.

In 2011, he sold his Brisbane-based accounting firm. Since then, he has taught himself computer coding and worked extensively in the manufacturing sector. In addition to his role as chair of AMGC, he is director of finance at electronics manufacturing company Rinstrum. He has also served on various government boards and has become an important advocate for Australian manufacturing.

The result is that yesterday’s busy city accountant is today’s industrial matchmaker, as well as an exporter and distributor, and an audit and risk expert for health authorities – with all the computer skills to match. 

“I firmly believe that data is central to decision-making – that’s why I’m now writing DAX and M code. I am 60 soon, and five years ago these skills did not exist in my portfolio,” he laughs.

Building capability and capacity

The role at AMGC is one in which Cooper helps to advance the technical capabilities of Australian business – both in finding government grants and helping to match businesses with market demand around the world.

Is the goal then to get Australian-made products out into the world? Not quite, he says. “It’s more around building capability of Aussie manufacturing to do just that,” Cooper says. He offers a recent example.

“Australia has its own sovereign capability in making masks – but it may not always have the capacity. We were tasked to come up with a manufacturing solution to the COVID-19 issue. And so we did.”

AMGC also has its own manufacturing “academy” register to ease pandemic-driven supply gaps by providing a platform that enables Australian manufacturers to register their products or expertise and customers looking for those supplies or services.

“We now have 2500 companies on this register, partnering buyers and sellers, and people providing solutions so that they can step in and solve the manufacturing issues.”

As Cooper puts it, many of the “phases” needed to make Australian companies make again are all there. In the mask-producing case, he says AMGC was able to partner with firms that pivoted directly into the manufacture and production of masks.

“We had sovereign capability, which fixed the sovereign capacity issue. We then found capacity to meet demand. We had all the engineering talent to pivot in and solve the issues,” he says.

Leap of faith

After Cooper sold his practice in 2011, he felt that he had much more to offer than pure accounting. He liked one of the businesses he was working with so much that he bought it.

He was helping the owner of Rinstrum (which manufactures components for the weighing industry) to deal with succession and planning issues and decided that this was where his future lay – with a niche operator that can fill a market gap and that has the capability of selling its wares around the world.

Cooper admits it was quite a leap of faith to go from the pure accounting arena straight into manufacturing, but he had done so much consulting to manufacturing businesses in his role as accountant that it just seemed to be the natural next step.

Cooper regards his CPA qualification as among his most valuable tools. It has allowed him to move from industry into government circles and back again, and to remain relevant to all those he works with.

 

“What I’m saying for Australia is, make Australia make again. We can take the left and right-hand sides of value chains and provide that value. There’s no reason why we can’t compete on this – it doesn’t have to always be about cost.”

 

“It’s given me a ticket to play in so many areas. I see it almost like an honour that creates a network of understanding between those who have it. It’s like any post-graduate study – the core skills you get from the study are important, but so are the networks and respect you get from the additional study.”

Cooper says that when he meets a CPA anywhere in the world, he knows what to expect. He has a CPA firm working for his company in the US. He has another working for him in Sri Lanka. It’s an international network that has respect for its own brand. Cooper also served on the board of CPA Australia from 2006 to 2010.

His step outside accounting wasn’t just towards the business world, but also a move into government circles. He has found yet another niche as an audit and risk expert for health organisations, mostly in the government sector.

When still working as an accountant, he was asked to join the board of a Medicare Local, the predecessor to the current Primary Health Networks, as it was looking for someone with strong accounting and business skills.

He took that position, which then led to more healthcare-related positions, and he is now on the board of the Children’s Health Queensland Hospital and Health Service – he chairs its audit and risk committee and is a member of its health service executive committee. He is also chair of the Queensland Health’s audit and risk committee.

If there is a will, there is time

Where Cooper finds the time – between advocacy for the manufacturing sector, working for the health sector and as a manufacturer and exporter – remains a mystery.

It doesn’t finish there either. He is also director for Vadain Australia, a Dutch-owned company that has Australia’s largest manufacturing facility for custom-made curtains.

“If you’ve got the will and the ability to do things, you’ll find the time,” he says.

It was Rinstrum, however, that has been Cooper’s big foray into the business world, and he has not looked back.

“We have production facilities in Sri Lanka, which we bought in 2013. We have a business in Michigan, which distributes for the US market, and another distributor in Germany, which looks after Europe, Northern Africa and Russia. We also bought a related business in Illinois, which installs truck and rail weighing scales.”

Cooper wants to get Australian businesses to re-think their role and believe that they too have a ticket to play in areas that they might once have thought were outside their remit.

Cooper is adamant that Australian industries can be right in the mix of Industry 4.0 and its technological leap of faith.

Controlling the value chain

He gives the example of the Apple iPhone. As he says, it’s without a doubt made by Apple, but not in all its phases.

The high value-add is in the research and development side owned by Apple, meaning the design is vigorously defended. The logistics require bringing the components into the production setting, which is sub-contracted to a manufacturer in China.

Then there is delivery – the built product goes from the factories to the Apple stores to meet sales. Last but not least, there is the “servitisation” phase, and that’s where the highest profit lies – in controlling the Apple ecosystem.

“Once you’re in Apple, you’re in Apple for life,” Cooper says. “And nobody disputes that Apple makes the iPhone – but it doesn’t produce it.”

Australian companies, if they work through all the phases of the value chain, can do much the same, Cooper says. Products don’t have to be physically made here, but in all the other areas Australian companies can control many parts of the value chain, which starts with design and ends with sales.

“What I’m saying for Australia is, make Australia make again,” Cooper says.

“We can take the left and right-hand sides of value chains and provide that value. There’s no reason we can’t compete on this – it doesn’t have to always be about cost. And there are plenty of companies here who can take up the challenge.”