Government grants $4.8m to component firms

TEN Australian automotive parts-makers have received $4.8 million in federal government grants to boost investment in the local manufacturing industry as Ford prepares to close its factories in October this year and Toyota and Holden follow suit in 2017.

Ranging from $101,691 to $1 million, the grants are from the third round of the federal government’s Automotive Diversification Program (ADP) that allows automotive manufacturing businesses to diversify into other industries before local car production ceases.

Four of the 10 successful applicants are from South Australia, and four are from Victoria – the two states hit hardest by the manufacturing exit of the three car-makers.

Robert Bosch and Maxiplas Injection Moulding each received $1 million, bringing their total grants to $6.2 million and $2.5 million respectively.

Robert Bosch received the funds to develop and install a high-precision assembly line to produce diodes “for export, new customers and new applications”, while Maxiplas will commercialise a range of space-efficient stackable and foldable solutions for the transport logistics market.

ZF Lemforder was granted $603,500 for production of a side-tipping option for large transport machines in the mining, construction and agriculture industries, Harrop Casting Technologies (in a joint venture with Australloy) received $516,970 to establish a full production facility for copper heat-exchanger castings, and Luna Nameplate Industries received $441,122 for purchasing equipment to produce various new products for export to Asia, Europe and the United States.

Premcar received $300,000 to buy a five-axis milling machine to make low-cost tools and parts, Backwell IXL received $345,000 to manufacture components for new-generation wide-screen gas log heaters, Multislide Industries was granted $259,100 to help introduce product-forming capabilities, “enabling local designers to produce high-end furniture efficiently and at practical volumes”, and Quality Plastics and Tooling received $230,000 to design and make packaging for the food industry.

Finally, Orbital Australia received $101,691 for compliance testing of its defence propulsion system.

In announcing the grants at Multislide’s factory in Adelaide this week, federal industry and innovation minister Christopher Pyne said the $4,797,383 in government support would generate a total of $15,052,619 in investment.

To date, the ADP has supported 31 diversification projects and, according to the government, is expected to drive almost $50 million investment in Australian manufacturing.

“This investment enables our manufacturers to move to a new model that’s characterised by the kind of innovation and spirit the government is fostering through its new National Innovation and Science Agenda,” Mr Pyne said.

“This is key to our commitment in ensuring a strong and sustainable high-value, globally competitive manufacturing industry in Australia.”

The Victorian Automobile Chamber of Commerce (VACC) said most of the money was industry investment and not a government handout. Applicants investing in their businesses receive grants on a dollar-for-dollar basis.

“The government’s $4.8 million grant has been more than matched by the successful applicants collectively investing over $10 million from their own funds,” said VACC executive director Geoff Gwilym.

“I want to make this very clear – this is not a government free kick.

“All successful grant applicants are making significant investments in Australian manufacturing.”

Mr Gwilym said the funding will assist Australian companies build new lines of business in local and international markets.

“It will leverage the considerable competencies they have developed in the technically demanding and cost-competitive automotive supply sector,” he said.

He also called for the government to boost the available funding to component manufacturers and allow the ADP to have individual company submissions, without the current system of batching.

The ADP, which will run for four years ending in 2017/18, is part of the $155 million federal government’s ‘growth fund’ that was established to support employees, businesses and regions affected by the closure of Australia’s car manufacturing industry by 2017.