Australian Financial Review - by Ronald Mizen
Domestic manufacturers of critical medical supplies during the COVID-19 pandemic say creating a national order book for government procurement is "a no-brainer".
Industry Minister Karen Andrews says it's “on the table”.
Detmold in South Australia and Grey Innovation in Victoria were both praised by Ms Andrews during a keynote speech on Wednesday, in which she said they and other manufacturers were critical to securing economic sovereignty moving out of COVID-19.
Minister for Industry, Science and Technology Karen Andrews says Australia needs to build national manufacturing capability "to ensure economic sovereignty". Alex Ellinghausen
“Just as we’ve dedicated ourselves to an effective pandemic response, we need to put no less importance on building national manufacturing capability to ensure our economic sovereignty,” she said.
“Procurement is one area that has been suggested to me as a lever.”
Alf Ianniello, chief executive of Detmold Group – which is manufacturing 145 million surgical and P2 masks for the government – told The Australian Financial Review a national order book would provide a greater level of certainty across the domestic supply chain. “We’ve been heavily committed to localising the whole supply chain for masks, not just the manufacturing. We need to give these suppliers a level of commitment over time,” Mr Ianniello said. “If we had the ability to have 30 per cent of your production locked down year-in year-out because we have government contracts, that helps. “To create a long-term sustainable business model, having seed volume from government really makes it highly sustainable.”
Sascha Detmold Cos and Alf Ianniello from Detmold Group are making 145 million medical masks for the government.
Jefferson Harcourt, executive chairman of Grey Technology – which has co-ordinated the domestic production of about 2000 ventilators during the coronavirus pandemic – said a national order book was “a no-brainer”. “Government is a fantastic customer and should see itself as an important customer more than it does. Buying local will drive investment and create new high-tech exporters. It’s a no-brainer – the locals have shown they can deliver,” Mr Harcourt said. “Imagine how many industries could have been created if NBN’s products were locally made. The fact this doesn’t happen is crazy. The fact that it's not even discussed is just sad. “All we need to do is define the needs and then align local capability to supply."
Ms Andrews said Australia’s success in building domestic capacity to manufacture critical medical supplies during COVID-19 “was done mainly through procurement contracts.” The Industry Minister said the idea of a national order book had been raised during at the regular co-ordination meeting of state and territory industry ministers but “in the first instance” was encouraging states and territories to work together on procurement. “We would obviously, as the federal government, be happy to play a part in the co-ordination through hosting more conferences, more round tables, to share ideas and bring things together,” Ms Andrews said. “Nothing is locked in at this point in time, but it has been raised as an option, and it is being explored by a couple of states and territories.”
Western Australia's Minister for Jobs and Trade, Alannah MacTiernan – who sits on the national manufacturing co-ordination group – said a national order book was needed to ensure the demand built up during COVID-19 could be maintained. “What we want is a national order book to build up resilience in domestic manufacturing,” she said. “We need to encourage certain states to focus on certain areas … without creating an anti-competitive model.”