Blundstone regrets shifting production base overseas
02 Feb '07
3 min read
Over the past several years Blundstone have been faced with the pressure of keeping our production facility viable in Australia against the background of a changing world.
Long after the rest of our industry had relocated most, if not all, of its manufacturing offshore, we have been trying our darnedest to make a fist of local manufacturing - at the expense of profitability.
The decision to relocate has been made for three key reasons:
1.Competitiveness - the Australian market is being opened up to all corners of the globe as a result of the removal of trade barriers. This means that the shops are full of our competitors products manufactured offshore. These products offer greater retail margin than ours and we have seen these products take over some of the retail space over the last few years. Consumers have shown that they are not willing to pay more dollars for product that is of comparable quality and features just because it is Australian made.
2.Consumer shift - we are a bulk manufacturing operation in Hobart relying on long run products with simple design, i.e. minimal labour content in a maximised efficiency operation. That is what has given us a competitive advantage for the last 20 years and for many years we have served up to the consumer the type of products it has wanted to buy so the match has been perfect. Unfortunately, many consumers behave differently these days. They buy the products that have the bells and whistles that can only be added with a lot of extra labour content - exactly the sort of product that we cannot make efficiently in Australia.
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