15 December 2012
John Durie’s Chief Executive Survey 2012
The Australian
Rob Sindel, CSR
Key Theme - "Building communities around manufacturing as the Germans have done will lead to long term social benefits for Australia."
What will be the three key themes from your sector next year?
Increasing productivity, passing on price increases to cover escalation in labour and energy costs, industry capacity rationalisation.
What would you like and expect from Canberra?
The underlying benefits of the manufacturing sector are far more important than just jobs. Factories tend to be in outer suburbs and regions and often form the basis of a community, with real jobs close to where people live. Building communities around manufacturing as the Germans have done will lead to long term social benefits for Australia. The impact of the constant changes in policy including energy, carbon pricing, business regulation means that it is much easier just to outsource production.
What are your top three priorities?
Driving cultural change through investment in people and much greater employee engagement, the best people are the key difference as our competitors have similar technology and assets to us.
Innovation and product development. We need to take the next step in term of construction systems in Australia particularly as it relates to offsite construction.
Restructure those businesses that are undergoing irreversible structural changes due to the globalisation of manufacturing. Make them competitive by repositioning their product and distribution offer despite the high Australian dollar and Asian impact.
What were your three key challenges and achievements this year?
Impact of globalisation and high Australian dollar on our Australian manufacturing base. Cost pressures driven by higher energy and labour costs. Underlying benign housing construction environment driven by low consumer confidence.
Maintaining the profitability of our building products and aluminium businesses through decisions taken in the last 12 months. The cultural change program that we have introduced at CSR is driving a much higher level of employee engagement and leadership development.
Mike Kane, Boral
Key theme - "Industry players will be keeping one eye on government efforts (globally) to stimulate market growth."
What will be the three key themes from your sector next year?
Capital Returns: As an industry, building and construction materials suppliers around the globe have been troubled by their inability to consistently get sufficient return on assets through cycles. This issue is made more difficult by cycle variability, peak/depth and duration, timing of capital investment relative to cycle points, currency movement and the mix of fixed versus variable costs in their portfolio. This theme returns again and again and threatens capital availability, sector attractiveness and management credibility.
Managing through a cyclical trough into recovery. Both the US and Australian housing sectors face similar issues (albeit very different contexts). As demand returns, businesses that have adjusted to lower demand must simultaneously retain their market position without spending ahead of the demand. This is no easy trick.
Government Stimulus: Industry players will be keeping one eye on government efforts (globally) to stimulate market growth, making sure that any effort to help don't create unexpected problems and, conversely, that efforts to address other issues don't adversely impact recovering markets.
What would you like and expect from Canberra?
The Australian housing sector and manufacturing in general are facing considerable challenges. Canberra has an important role to play in facilitating growth and productivity within a stable and predictable fiscal and IR framework.
What are your top three priorities?
Right-sizing the business for current market conditions and improving underlying earnings through cost reduction initiatives, sales and margin management, and ratcheting back discretionary capital.
Exiting non-strategic assets and building a team for the long haul to lead Boral to a better competitive position.
When the above measures are underway, begin to invest more deeply in innovative technologies that address long term strategic issues like product carbon content, product recycled content and improved product performance.
Ken MacKenzie, Amcor
Key theme – “Growth in emerging markets."
What will be the three key themes from your sector next year?
Customer Focus with an emphasis on innovation, service and speed to market.
Sustainability: continuing to create innovative and responsible packaging solutions that reduce waste.
Growth in emerging markets.
What would you like and expect from Canberra?
Genuine progress to ensure the ongoing viability of the manufacturing sector in Australia.
What are your top three priorities?
Safety is always number one. We will relentlessly pursue our goal of ‘No Injuries’.
Ensuring customer satisfaction, listening to our customers and working hard to create value for them.
Disciplined growth through innovation and emerging markets.
What were your three key challenges and achievements this year?
Achieving record safety and financial performance.
Completion of Amcor’s first full, global co-worker engagement survey, affirming our strong performance culture and safety as our highest rated engagement area.
Successful commissioning of the new mill at Botany in NSW.
Paul O'Malley, BlueScope
Key theme – “Encourage Australian domestic demand."
What will be the three key themes from your sector next year?
Continue our global growth in steel building products and building solutions with prudent investment opportunities.
Encourage Australian domestic demand – in particular residential/non-residential starts.
Ensure successful implementation of anti-dumping trade actions and policy reform.
What would you like and what do you expect from Canberra?
Continued improvement in policy settings that allow productivity gains for manufacturing.
What are your 3 top priorities?
Ensure a safe working environment – continuing our journey to zero harm.
Continue the transformation and turnaround of our business with a return to profitability.
Accelerate the growth and leverage the potential from our global building solutions portfolio and our new building products joint venture with Nippon Sumitomo Metals.
What were the 3 key challenges and achievements this year?
Challenges:
The high Australian dollar.
Weak domestic demand in Australia.
Approximately $100m injury from dumped imports.
Achievements:
Creating a $1.3bn joint venture in our Asian and North American building products markets with Nippon Steel.
A sound balance sheet, very low net debt free once the JV completes by March.
Restructuring BlueScope into four new market-focused businesses: Global Building Solutions (our custom engineered buildings business); Building Products (including the Nippon JV); Australia and New Zealand, & the North Star BlueScope Steel (our mini-mill in the US).
James Fazzino, Incitec Pivot
Key theme - "Need recognition of the damage to the nation’s long-term future from the high $A."
What will be the three key themes from your sector next year?
Productivity, Australian dollar, loss of access to cheap materials.
What would you like and what do you expect from Canberra?
Recognition of Australian dollar impact, cut red tape, vision.
What are your 3 top priorities?
Zero harm, business excellence, strategy execution.
What were the 3 key challenges and achievements this year?
Cost of being a manufacturer, mitigation of impact of volatility, Moranbah plant, strong cashflow growth, explosives success.