A Federal Government taskforce is looking at opportunities to grow Australian manufacturing in the wake of COVID-19 – perhaps it should look at Adelaide company Entech Electronics.
The 34-year-old business manufactures electronics, including Internet of Things (IoT) devices, for medical, mining, aerospace, agriculture and communications customers, among others.
It has continued to do so while sidestepping recent global supply chain problems, assisting customers even while other manufacturers went into lockdown.
That’s been possible because Entech Electronics has a factory in Adelaide and an Australian-owned and operated facility in Shenzhen. It’s not a typical arrangement in this field, according to the company, but it’s enabled uninterrupted production during a major crisis.
During the initial phase of the lockdown in China, “there was very little communication coming out of China,” says Entech Group Executive Director Jason Reeves.
“The main epicentre [of the pandemic] in China was Hubei province, but of course the entire country had an extended Chinese New Year holiday that in some cases went on for several weeks and in some places for several months,” he explains. Manufacturers in various other countries, including New Zealand and Malaysia, also went into lockdown.
Entech Electronics factories continued to operate throughout this period, giving local and foreign organisations a way to maintain supply if their manufacturers in New Zealand, Australia, China or elsewhere couldn’t.
Having people based in China proved valuable. “We served our customer base by acting as a conduit of information for people that had other sources in China. We were able to give them direct insight into what was happening in China during that lockdown phase, because we’re on the ground there.
Where factories were completely off-line and not responding we were able to communicate with them and tell them, ‘Our factory is still running, our supply chain partners are still communicating with us’,” Reeves says. The company also helped customers by sourcing custom-made mechanical components.
Reeves predicts the pandemic will result in organisations re-thinking where they get products manufactured. “I think people will really consider the risks involved with offshore manufacturing in the future. Particularly where their offshore manufacturer only has one factory,” he comments. Many manufacturers in Entech Electronics’ market rely on one factory, he says.
But he recognises that not all local companies can switch to Australian manufacturing. “I don’t think we’ll see people just bringing production back to Australia or New Zealand. I think they will consider what their Plan B is going to be. They may go from a single-source manufacturing solution to a dual-source manufacturing solution,” he speculates.
Entech Electronics Business Development Manager Yaser Darban stresses that the company would do all its work locally if it was possible. But he says that wouldn’t meet some customers’ needs.
“Of course, we’d love to do everything locally,” he says. “But at a certain point clients grow and the cost of labour becomes a concern for them. They need to compete in the international market and if their products do the same thing as competing products, then customers will look for the best price. In that case, we have to get it done elsewhere otherwise we won’t be competitive.
We love Australian-made products. We want everything to stay here. We just offer customers offshore manufacturing if there is no choice.”
Entech Electronics is spending on automation technology, with the aim of improving the competiveness of its Australian operations. The goal is to continue producing products in Australia, Darban says, using the Shenzhen plant when customers won’t use the Australian factory. Since the pandemic, it has also spent significantly on machinery for its Adelaide plant.
Almost 30 percent growth in Entech Electronics’ production volumes is expected in the next 12 months, according to another of its Business Development Managers, Andrew Trusiewicz. He supports clients in New South Wales, Western Australia, South Australia, the Northern Territory and the Australian Capital Territory.
Internet of Things opportunity
Some of the products Entech Electronics manufacturers are being used in COVID-19 response efforts.
The Adelaide company has seen an increase in demand for medical devices. “Some of our medical device customers were scrambling. They were placing more orders and asking to have their production brought forward because their products were in higher demand,” Reeves says.
Telemedicine is a growth area. “We’re seeing a huge increase in demand for at-home use of electronic devices so people can monitor their own health. So, people have connected sensors they can connect to smartphones and share that information with their healthcare professionals,” Reeves explains.
In Reeve’s opinion, Australia is well-placed to meet local and overseas demand for IoT products: “I think Australia has the intellectual and manufacturing capacity to do whatever we need to do in Australia. And we certainly have the capacity to export.”
Entech Electronics is a sponsor of this COVID-19 discussion hub.
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