07 November 2014
DEVONPORT, TASMANIA - Businessman John White said opening a new Delta Hydraulics factory in Thailand has protected 110 jobs at the factory in Devonport.
Mr White said when mining equipment maker Caterpillar warned two years ago of its plan to move Burnie manufacturing operations offshore to Thailand, Delta Hydraulics bought the land next door to Caterpillar in that country to build a factory which opened in January with seven employees.
Delta Hydraulics, the Devonport company founded in 1975, designs and manufactures hydraulic cylinders, used globally in power generation, processing, transport, mining and defence industries.
Mr White said Delta Hydraulics would continue manufacturing the rods and tubes it supplied to Cat from Devonport and ship them to Thailand for processing.
"Our intention is for Delta Hydraulics Devonport to service the Australian market," he said.
Mr White said Delta Hydraulics' Thailand factory was not as high- tech or skilled as the Devonport operation and did not have the capacity to duplicate "the $50 million spend in Devonport".
He said Delta Hydraulics wanted to maintain the Devonport site at 3 to 5 per cent growth a year, and saw growth in Thailand happening about 25 per cent a year.
"Caterpillar's decision to set up a world-class manufacturing operation in Thailand was made two years ago and all they have done is bring forward what they clearly said they would have to do if the Labor government continued to add costs to doing business," Mr White said. "There was no option other than to go offshore."
Mr White said crippling freight costs, penalty rates and new occupational health and safety regulations enforced by unions, rising electricity and water and sewerage costs, were all major obstacles working against businesses trying to survive in Tasmania.
"The non-competitiveness and lack of productivity in all those areas is like death by a thousand cuts," Mr White said.
"These are all cost burdens when you are trying to make a quid here - and until we get the reform needed, it's not going to change."
Mr White said it required a change of government at the March state election and for Prime Minister Tony Abbott "to have the backbone to return flexibility to the workplace".
"So those people who want to work will work," he said. It all comes back to making the reforms to get back to being internationally competitive. It's about output, and being able to be productive."
Mr White said the skill level here was still in front of Thailand and Asia.
He said Delta Hydraulics' freight costs alone went up by $250,000 to $300,000 a year since losing the direct international shipping line.