Diversification, innovation, reinvestment and skilled recruitment has enabled Tasmanian manufacturer Penguin Composites to succeed and grow in both Australian and global markets. By Carole Goldsmith.

In October Penguin Composites had a major win for the business and for Tasmanian manufacturing when it signed an three-year, $8m contract with Thales Australia to produce bonnets and other components for the Hawkei protected mobility vehicle. The deal represents the company’s first major defence related contract and it is expected to create around 15 jobs at its factory in the town of Penguin. Christopher Pyne, the Federal Minister for Defence Industry, congratulated Penguin Composites on the contract and said it would provide a significant boost to Tasmania’s share of the nation’s defence investment.

“This contract will not only create new jobs in Tasmania, it will also involve the upskilling of existing personnel to help deliver this work,” said Minister Pyne. “This is a textbook example of how Australian small-to-medium enterprises are building their capabilities and contributing to our sovereign defence industry capability.”

Thales signed a $1.3bn contract in October 2015 to supply 1,100 Hawkei vehicles and more than 1,000 trailers, and is now ramping up for low-rate production. Penguin Composites was engaged after Thales identified a number of Australian suppliers who could provide components it required. Penguin Composites’s capabilities include design and engineering of moulds and plugs, fibreglass and composite component manufacturing, in addition to specialist composite product manufacturing.

Penguin Composites’s owner, CEO and founding director John van der Woude is very excited about winning the Thales contract: “We have been working on the manufacturing moulding process for the Hawkei parts and are manufacturing the bonnet and the 18 other parts, including the guards, sidesteps and rear guard for the Hawkei protected vehicle. These components will be made of a fibreglass composite using Light Resin Transfer Moulding, a vacuum-assisted closed moulding process.”

Van der Woude explains how his company secured the contract: “We tendered to Thales for the project as they were looking for someone to get it done quickly and they had a short lead time. It took three months to get the contract and nine months to sort out the details and sign it.”

The Hawkei project is expected to add 15 more employees to Penguin Composite’s current workforce of 40 people. Van der Woude adds: “We will need a couple in management, engineering and drafting, a couple of painters, and around eight process workers. Some employees will be new and some will be taken off the current manufacturing work, so we will need to replace them to do our existing projects.

“Recently, we’ve also had to upskill our administration for our entire plant; that is where the biggest changes are occurring. An enterprise resource planning (ERP) software was implemented around five years ago, and now we are refining that to the n-th degree. That system runs the entire business, and it’s a big learning curve for any business that goes from being a simple jobbing shop to move on to become a well-run enterprise.”

According to van der Woude, involvement in the Hawkei project will help the company’s business growth: “It will open up other doors for future defence projects. Once we have ISO 9001 in place, other Defence Primes will be interested. We are still working on the ISO 9001 implementation.”

From making kayaks on the beach to diverse manufacturing

Penguin Composites has been progressing in leaps and bounds since van der Woude started out in business just over 40 years ago. At that time, he was building kayaks and surfing gear at Penguin beach, on the picturesque north coast of Tasmania.

“I was also paddling kayaks, heavily involved in surf lifesaving, and living on the beach,” he recounts. “I expanded the fibreglassing into a watersport and surf retail shop. Then we diversified, establishing kayak shops in Devonport, Burnie and Launceston, and ended up having just the one big shop in Devonport, which we sold four years ago.”

In 2003, the business changed its name to Penguin Composites. Located in Penguin’s industrial area, the company’s factory and office space of 3,500 square metres spreads over two sites 100 metres apart. The business specialises in manufacturing composite components from various polyesters, isothalics, vinylesters and epoxies, combined with composite products of various fibres and core materials.

“In the early days, we were a jobbing industry and people would come along and ask if we could build this or fix that, and we still get these requests today,” says van der Woude. “Over the last few years we have been getting more people with specialised skills. Five years ago, we employed our first engineer and recently recruited two draftsmen/programmers. As we are getting into CNC routing, we’ve acquired a large Multicam CNC machine. Now we can cut out panels like the joinery shops do, with the computer-controlled patterns.”

As well as busily preparing for the Thales contract, the company’s product range is highly diverse. It has two subsidiaries. Composite Poles Australia makes power and telecommunications poles. Meanwhile, after the most recent downturn in the mining industry, the company diversified and took on Islander Campers, which produces a range of campervans, caravans and motorhome vehicles. The team at Penguin Composites has been redesigning the Islander Campers range over the last three years to cover many vehicle options.

“Within our own product range, we want to expand sales of Islander Campers within Australia,” says Van der Woude. “If someone buys one they usually come down for a holiday and pick it up.”

In addition, the company product portfolio ranges from CNC router panels for architectural projects and chairlift components bound for airports worldwide, through to heat shields for underground mining machinery, and igloo accommodation units for polar field operations.

“Initially, our main industrial products were for the mining industry,” says Van der Woude. “We have been making engine heat shields for Elphinstone underground mining vehicles for many years now. These engine heat shields are also now exported to global Caterpillar clients.”

Made out of fibreglass, the igloo accommodation units are mainly used in satellite camps away from main bases in Antarctica.

“We ended up building Icewall One igloos for Antarctica and other places for our client Wallhead and Associates (Malcolm Wallhead & Associates, a local manufacturer of polar field equipment), and that work is ongoing. We have also made them for mining sites, and for Google’s offices in Zurich. There’s four in Europe used for interview booths in Google colours. New York University ordered a couple recently and I think that they will be used for research areas.”

Van der Woode voices particular pride regarding some of the architectural projects his company has been involved in: “We have just supplied large louvre covers for windows in Hobart’s Parliament Square. We also made panels for under a building’s balcony at Barangaroo, Sydney’s new waterfront destination.”

Building the business

Van der Woude says that he has grown the business through innovation, perseverance, a commitment to the best technology, and the recruitment of key staff: “We are always trying to invent new products and improve production. Perseverance is the key to success.

“The engine heat shield for Elphinstone underground mining trucks is probably the innovation that we are most proud of. We worked on that for a while, to determine the best composites for the job. Eventually we developed the stainless shield heat shield, for the underground mining trucks. The shield encases the turbo and manifold and lowers the engine’s external temperature. You can service the engine while it is running with the heat shield on it, as it was originally designed for fire control.”

Regarding Penguin Composites’s commitment to technology, van der Woude explains that as things improve in the fibreglass industry, new technologies have been employed, such as Light Resin Transfer Moulding and drafting. He adds that reinvestment is the key to a business’s survival: “You don’t take money out of the business; you borrow safely and invest in the business’s cashflow.”

Penguin Composites has always done marketing through business-to-business networking and via its website. It also uses Facebook for news and promotions. The company has been involved with the Australian Industry & Defence Network (AIDN), the peak industry association for SMEs in the defence and security sectors, over the past ten years, and is part of the Tasmanian Polar Network, a group of businesses and scientific organisations based in Tasmania that serve commercial and scientific activity in the Antarctic, sub-Antarctic and Southern Ocean.

Van der Woude believes manufacturing in Tasmania is going very well: “All the guys I am speaking to, are very busy. “The State and Federal Governments have been very active supporting Tasmanian businesses over the past few years. The national Government’s defence projects are being tapped in Tasmania now and we are getting a lot more exposure to the defence project opportunities.

Speaking on Penguin Composites’s future business plans, van der Woude says: “We want to improve technical skills, business processes, drafting and the engineering side of the business. Production control needs improvement and once you have that in place you can cope with any work that comes along.

“Our company has a very solid diverse clientele, great contacts and a secure skilled workforce. We will be around for a long time.”