The economic conditions of late have dramatically reshaped the Australian landscape of FMCG manufacturers. Numerous small and medium-sized businesses (SMEs) have exited the market and the number of administrations, liquidations, closures, and sell-offs continues to rise.
Packserv MD Nathan Wardell is saddened by the outlook.
“It’s just heartbreaking to see so many local Australian brands leave the market. I think we are experiencing more than double the FMCG SME businesses exiting compared with last year,” he said.
While a Future Made In Australia was a cornerstone of the Federal Budget 2024, Wardell agrees with commentary that more can be done for high-achieving manufacturers scaling from small to medium.
“We need to be doing more to support the onshoring of manufacturing,” he said.
As a strong advocate of Australian manufacturing, Packserv has always championed buying local. In these uncertain times, manufacturers are exploring how to do things differently to keep production lines running in a tough economic environment.
Packserv stands out as one of the only packaging machinery manufacturers offering a flexible business model to help local manufacturers. It offers short and long-term hire, rent-to-buy and purchase. Packserv also offers leasing options through its finance partner, Finlease.
“Our rent-to-buy option means our customers can gain immediate access to equipment, securing speed-to-market. We have seen a significant rise in businesses hiring machines on a short or long-term basis and opting for rent-to-buy solutions,” Wardell said.
“These options can help customers preserve cashflow, while still having the benefit of immediate access to packaging machinery.”
Packserv’s flexible model is a lifeline for many struggling FMCG manufacturers enabling businesses to stay agile and responsive in a volatile market. This adaptability is crucial for maintaining operations without the immediate financial burden of purchasing new equipment outright.
The pandemic highlighted the vulnerabilities of relying on international supply chains, prompting many businesses to reconsider their sourcing strategies. While the initial response was a push towards onshoring, Wardell points out that recent economic pressures mean that some companies are going back to importing machinery.
“Businesses wait months for machinery built overseas that ultimately doesn’t work when it arrives. Packserv’s commitment to local manufacturing offers a reliable alternative, with immediate availability of equipment, ensuring Australian businesses aren’t at the mercy of long lead times. We are often called upon to help manufacturers whose operations are at a standstill due to issues with imported equipment,” Wardell said.
The importance of preserving local manufacturing capabilities isn’t just about economic resilience, it’s also a way to maintain a robust national industry.
“Our goal is to support local manufacturers by providing them with the tools and options they need to succeed,” Wardell said.
“By keeping production local, we can ensure that Australian businesses remain competitive and resilient in the face of global challenges.”
Read the article on Industry Update website or you can see the digital magazine.