Page 13 - Climate Control News Magazine June-July 2020

Construction industry rethinks reliance on Chinese imports
THE COVID-19 PANDEMIC has had a huge impact on the supply of imported building prod- ucts in Australia.
One example is local EPS (Expanded Polysty- rene) manufacturer Foamex which recently won a sizeable contract because its Chinese competi- tor couldn’t deliver in the required time frame.
Foamex general manager, Justin Kelsey, ad- mits the Australian construction industry is very price-driven, but notes that the COVID-19 pandemic is shining a spotlight on the impor- tance of having a trusted supply chain that can deliver on time.
“We originally quoted on a large project in Queensland to build a distribution centre for a major food retailer, and we didn’t win the job in the first instance,” Kelsey said. “But when they couldn’t get the overseas product in time, they came back to us and we’re now their supplier.
“This is a direct result of the COVID-19 pan- demic but the issue is bigger than just the cur- rent situation.
“A lot of companies will be looking at their supply chain reliability as a result of the current crisis and we hope that we’ll gain more custom- ers as a result.”
Since the COVID-19 pandemic began about six weeks ago, Foamex has experienced a spike in sales, from not only the construction industry but also for food packaging and medical supply pack- aging. To handle the extra work Foamex is employ- ing more casual labour and increasing its capacity.
“The building and construction industry, in particular, is ramping up. We’re certainly quot- ing more, and delivering more,” he said.
“We expect there will be a slowdown in build- ing, particularly the residential sector later this year due to unemployment rising and other
knock-on effects from the COVID pandemic.
“There are lots of peo-
ple talking about the Aus-
tralian manufacturing
sector and how we are too
reliant on overseas manufacturing, particularly China, and perhaps this crisis will lead to some changes in the market.”
On a regional level a shift in manufacturing is already underway, according to JLL’s head of in- dustrial for South East Asia, Stuart Ross.
He said manufacturing has moved from China to South East Asia and this is set to continue.
“Manufacturing wages in China are now more than three times those in Vietnam,” Ross said.
“It is the reason why companies such as Ko- rean electronics giant Samsung have moved manufacturing from China to Vietnam.” ✺
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