Michael Grainger is the Chair of the Brand Tasmania Council. He is also the Managing Director of Hobart-based Liferaft Systems Australia (LSA). He spoke to William Poole.
AMT: Let’s start with Brand Tasmania. When was it established and what are its aims and objectives?
Michael Grainger: The Brand Tasmania Council was formed in the early 1990s. It was established by a group of like-minded individuals who were exporting and promoting Tasmanian product all over the world. It became affiliated with the State Government not long after that and has grown over the years to represent Tasmania in many different aspects – for example, food & beverages, tourism, manufacturing, education and the arts are all pillars of our organisation. We share a fairly broad and equal range of promotion.
AMT: What sort of activities does it engage in to achieve its objectives?
MG: We engage really with the Tasmanian companies that are represented by Brand Tasmania to promote what they do, encourage and stimulate growth in the economy, create employment and just promote all things that are Tasmanian. We attend trade shows, we have our eFriends mailing list, a very big subscription for our Tasmanian Stories newsletter, we have the website obviously. And we work pretty closely with Government on promotion in speciality areas – for example if the Tasmanian State Government is promoting various events, we will assist them, we’ll do videos and so on. But it’s basically all to do with living and working and visiting Tasmania I guess.
We have approimatley 700 members companies – or partners, as we call them. And again that’s across a very diverse range of industries all in Tasmania. The website and eFriends are probably the key areas that we’re promoting. We send out Tasmanian Stories once a month, and that goes out worldwide.
AMT: It’s an interesting initiative – I think all states should run something similar. So what proportion of Brand Tasmania’s member companies would be in manufacturing?
MG: Probably around 20-30%. Certainly the food & beverage sector is probably the biggest – that would encompass agriculture, aquaculture, wine, and so on. So food and beverage is the biggest, followed by tourism, and I think manufacturing would sit under that pretty closely.
AMT: What does your role entail as Chair of the Brand Tasmania Council?
MG: Really, it covers anything that’s strategically focused, having that advice and strategy in place for the executive team, and making sure we cover all the different sectors as evenly as we can. And it’s making sure we are working closely with Government to make sure that the funding the Government provides is spent properly and just keeping up those levels of diligence and governance.
AMT: You’re also a manufacturer in your own right – tell us about Liferaft Systems Australia.
MG: We started the company 25 years ago in September 1992. We’re a designer and manufacturer of marine evacuation systems, which encompasses inflatable evacuation slides and large-capacity inflatable liferafts.
When we started the company in 1992, it was primarily to supply Incat with a new generation of evacuation system. We were the first company in the world to have a system that evacuated people directly from a vessel dry shod into an inflatable liferaft. We were the first company in the world to have an inflatable liferaft designed, manufactured and internationally approved that was larger than a 50-person capacity – our first product was a 100-person inflatable liferaft. No-one had done that before. We were also the first company in Australia to have the system approved by the EU in accordance with the Marine Equipment Directive.
And we’ve grown from Incat being our only customer, to a situation today where Incat makes up just 5% of our business and we export all over the world. We have service agents in 27 countries. The UK and US Navies are good customers. Primarily our market is medium-to-large passenger ferries, naval ships and mega yachts.
AMT: That’s impressive. It’s interesting in that, given Tasmania’s separation from mainland Australia, you’re kind of a case study of how Australian manufacturers more broadly need to find ways to overcome that “tyranny of distance” and crack global markets.
MG: Well, Tasmania seems to have that inherent capability I guess. It probably comes from just our very nature of being an island state and having to work things out for ourselves, so to speak. But there are some very good niche manufacturers in this state who punch well above their weight from similar-sized sectors in mainland Australia. We’re just one company, but there are many many other companies involved in manufacturing who are doing that low-volume, high-margin sort of niche manufacturing, Incat probably being the highest profile.
Advanced manufacturing is very big in Tasmania, as is marine manufacturing. Precision, low-volume, high-margin stuff… really that sort of niche manufacturing is what Tasmania seems to do very well. And there are a lot of world-beating products being manufactured in this state.
And it’s going very well. The economy is positive at the moment. The global economy and the Australian economy being where it is have been a big driver of success in a state the size of Tasmania. So all those exporters – particularly to the US – are doing well because of the foreign exchange rate at the moment. We’re in a good space right now.
AMT: What are the big trends affecting the manufacturing sector there?
MG: The foreign exchange rate would be helping. Tasmanian manufacturers are really not as diverse as their counterparts in other locations are, but they target specific markets. Particularly in marine. There’s not only us. There’s a company called CBG Systems for example, who have a very specialist structural fire protection business, which again they developed through Incat, but they now sell their systems and install them on vessels all over the world.
Elphinstone is another one, in the north of the state, which manufactures specialist mining equipment and export their products, such as specialist mining trucks and things like that. So it’s really those niche markets that we seem to do well. I think the foreign exchange rate drives these exports, plus the innovation that comes out of Tasmania drives it as well.
AMT: You mentioned how there’s been a significant shift into advanced manufacturing. What has driven that transition?
MG: Mainly innovation, just being world-leaders in those niche markets. The Tasmanian Maritime Network is a classic example. The members of the network were bumping into each other at international airports on a regular basis, and we thought: ‘Why don’t we get together and form an association?’ Which we did. We called it the Tasmanian Maritime Network and again we promote all the maritime businesses that Tasmania has to offer through that network, which goes internationally. We exhibit as a group in international trade shows, defence shows and things like that. Because of the size of Tasmania, everyone knows what everyone else is doing. It’s a small community. You can get a lot of assistance from your neighbours to achieve the common goal.
AMT: So having a very good collaborative culture among local manufacturers has been important?.
MG: Absolutely.
AMT: Do you think Government has been effective in helping promote the sector and encouraging innovation and collaboration?
MG: They’re certainly trying. They’re being proactive. The State Government has set up a number of initiatives to assist SMEs in particular to achieve their export goals. I think the existing Government has been proactive in promoting that capability, but like any Government I guess they commit to a lot, but at the end of the day I’m not sure how much real assistance they provide. But there are certain products through Government that will assist SMEs in particular to expand and employ more people and things like that. So I guess the short answer is yes, the Government is proactive and they do assist a lot of companies in Tasmania.
AMT: What are the biggest challenges facing manufacturers in Tasmania at the moment?
MG: I guess the geographical location could be a challenge, however it doesn’t really challenge us as such. We have 20-foot and 40-foot containers picked up in our carpark once every four or five weeks, and those containers are full of our products which are exported all over the world. And I mean to all parts of the world, even the extreme Northern Hemisphere, northern Alaska, northern Norway, into Asia and North America. There is a cost to that I suppose, and our mainland counterparts probably don’t have the same sort of burden. We have to get our product to the mainland. It’s rare to ship directly from Tasmania although there has been some improvement over the last few years. I guess there are some challenges in getting the product to the major ports – it’s an additional cost that our mainland counterparts don’t necessarily have.
Looking at the bigger picture, apart from Asia, Australia is a long way from our predominant markets, so that’s a bit of a disadvantage, but we make it up in many other ways. We have the quality of the product and the customer base we have and the reputation we have for making a decent product in a good, clean, green state that’s renowned for quality.
AMT: You’ve got a strong brand in that sense, I think that applies to manufacturing in Tasmania in general. What are the other key strengths of Tasmanian manufacturing?
MG: I guess it’s that collaborative approach and that mentality – the island mentality – which sees us build great relationships in all parts of the world, and that very high-level brand of quality, niche manufacturing in particular. The whole Brand Tasmania thing is globally recognised as being very high-quality and very responsible, which stands us in good stead all over the world. With communications the way things are today, it doesn’t take long for all the good news stories to reach all corners of the globe. The flip-slide is if there was a less than positive story, it reaches the same audience, but the response that Brand Tasmania gets from eFriends and from all over the world is always very positive. We just need to continue to build on our reputation.