Export market heating up for Aussie oven manufacturer
Manufacturing
Electrolux, the home products manufacturer with a factory in Australia, is eyeing up more global export markets on the back of their first-ever shipment of ovens to the United States.
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The Swedish company started manufacturing built-in and table-top ovens out of Adelaide, South Australia in 2001. Last week, the factory sent its first shipment of 30,000 gas and electric 60 cm ovens to the United States, with its 90 cm range expected to head overseas next year.
The plant employs about 400 people at its suburban Adelaide site, and the company has invested more than $30 million into the manufacturing operations since it opened.
Electrolux Dudley Park general manager Phillip Saloniklis said the market in the United States was about 14-times larger than the Australian market, providing the opportunity to tap into 350 million potential customers.
Saloniklis said the shipment was a “major milestone” for the company, and it was now looking at other export markets for further growth.
The factory already ships products to New Zealand, South Africa and parts of China, but Saloniklis said they were looking to sell their ovens to parts of Europe and Southeast Asia.
“The Australian market is a really strong market for us so growth within Australia is harder,” Saloniklis said.
“The US market is where we see our growth; that growth reinforces the presence we have here in Adelaide, and it also benefits the Australian market. However, there’s still opportunity for us in our own region, such as Southeast Asia.
“Our 90cm range isn’t produced anywhere else, except for Egypt, so we have an opportunity to sell that not just to America, but Europe and so on.”
The first shipment of ovens was witnessed by South Australian Premier Peter Malinauskas, who said the company has gone from “strength to strength” and signalled an “exciting” day for the state’s manufacturing sector.
“As more South Australian businesses open to overseas markets, this creates greater confidence in our export sector and provides opportunities for others to follow suit,” Malinauskas said.
Electrolux is on track to build 360,000 ovens this year. He said that that number would reach 400,000 by 2025 and 500,000 by the end of the decade.
The plant, situated in Adelaide’s inner north suburb of Dudley Park, was built in the late 1930s but has undergone many changes, including introducing a robotic production line.
“Additional volume is critical for our competitive advantage,” Saloniklis said.
“It also safeguards us against those cost pressures because obviously, your fixed cost structure gets spread further along more products.
“We’ve been investing in this facility to try and get us to a position where we can grow up for volume, and then that volume will allow us to invest even further, so it’s a really, really good position to be in.”
While Electrolux has factories in the United States, they are high-volume, low-complexity manufacturers. The Electrolux plant in Adelaide, South Australia, on the other hand, is low-volume but can produce highly complex appliances.
South Australian Trade and Investment Minister Nick Champion said the export deal meant jobs would continue to grow at the company.
“Growing our export markets through South Australian businesses open to overseas markets, this creates greater confidence in our export sector and provides opportunities for others to follow suit,” Champion said.
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