Less imports lead to boom in manufacturing opportunities for essential services

During the COVID-19 pandemic, many manufacturers must keep running to provide essential services. The Institute of Instrumentation, Control and Automation’s Peter Veron shares his observations on how the process engineering market has been operating.

As countries continue to reduce exports during the COVID-19 shutdown, Australian-based businesses have been given opportunities to manufacture locally.

The Institute of Instrumentation, Control and Automation (IICA) has seen growth in the production of essential products such as food, pharmaceuticals and services such as electricity.

Chairperson of the IICA’s Sydney branch, Peter Veron, said domestic manufacturers are currently experiencing opportunities that would have previously been outsourced in favour of cheap labour overseas.

“Other countries are now retaining their production for local requirements, so that leads to the short supply in Australia, which in a way, is positive for local manufacturers,” he said.

“I think because COVID-19 is a global problem, every country is trying to protect their own people, so they’ve closed their borders to exporting some essential products needed to fight the virus and basic essential staples.”

Veron said process engineers are managing supply chains well during uncertain times, and there has been a “net positive effect” in the supply and demand equation across most of the industry.

“In our industry, there are a few sections that are actually booming at the moment,” he said. “There are certain pockets of our industry that are perceived as essential services or supplying essential basic materials for food products, and within the health sector and they are pumping.”

Veron said there is still a high demand for instrumentation from manufacturers, as many manufacturing plants have increased their capacity.

“From our point of view, there has not really been a slowdown since the start of this year because of COVID-19,” Veron said. “It has just changed the focus into some niche industries.”

Veron believes Australians have realised the importance of domestic production instead of relying on lower production costs from imports, at the expense of supply security and quality control.

“We need to be independent again and support local production, and not rely so heavily on the cost of the product and rely more on the supply security of the product that we get,” he said.

“The independence and security of our country has sort of been exposed, because we rely so heavily on imported products and foodstuffs.”

Many instrumentation companies have been developing their technology with their sensors and the advances have led to improved production yields and lower operational costs.

With remote monitoring and smart devices, there is better visibility of process parameters and reports can be generated through the internet about device health. These include expected life span of the instruments helping to reduce maintenance costs.

“Many of the new process control instruments perform self-diagnostics, so you can actually predict how long the instruments are going to perform accurately on-site without actually having to be on-site,” Veron said.

Support for member organisations

Companies such as WIKA Australia, VEGA and Endress+Hauser are seen as providers of essential services, which supply instrumentation to manufacturing plants during the COVID-19 crisis.

“We’re still trading. Most of the instrumentation companies have gone onto a two-shift or a skeleton staff, so we don’t overlap, and if COVID comes into one of our facilities, it will not spread to all staff,” Veron said.

The IICA is about networking, connecting and educating people by putting industry together with suppliers of technology to assess quality and improve processes.

“At the moment, because there’s an isolation across the country, it’s very hard for us to integrate anything,” he said.

IICA is currently providing resources for members through online activities through their website. Its main events are the technology expos, where the IICA showcases the latest products to the industry, which it is hoping to restart in 2021.

All association activities and courses have been postponed due to social distancing measures.

Oil and gas industries

Over the last 10 years, there has been a decline in oil and fuel production locally, so it is important that Australia produces its own downstream products or takes measures to secure supply of these essential services and products.

Veron said most of Australia’s refineries have been scaled back or closed, and the country tends to import the majority of its finished oil products from Singapore. To add to the issue, Australia does not have its own reserves.

“We no longer have the ability to manufacture locally,” he said. “If something disrupts our supply lines, we would be stuck without diesel fuel to transport products around the country. I think the government has identified that this could be a potential problem, and they have now invested in more fuel reserves. The government noticed our vulnerability to overseas reliance and took measures to acquire reserves of fuel oils, however our capacity to store these locally is limited and these will be stored in America!”

The other issue is that Australia does not possess the capacity to store these reserves locally. Hence, they are stored in the US. Older fuel sites like the BP site at Clyde are currently undergoing decontamination and remediation in preparation for requirements to support future residential growth.

“(The government) is trying to clean industry out of the Rose Hill precinct, and they don’t want to use it to store petroleum,” Veron said.

“Even though they were identifying a problem on one side, they are not really putting a solution forward that is practical or sustainable.

“We bought the fuel, and it is stored in America, so if there is a transportation issue, we still can’t get our hands on it.”

The IICA fully supports local manufactured products and the time has come to consider Australian Made to guarantee our future supply chain security.