Training is an essential ingredient for the food manufacturing industry

AUSTRALIANS are ­getting used to cheaper goods. Supermarket ­prices in each of the past three years have fallen.

Ross Greenwood talks at the Inner West Small Business Expo at West Ashfield.

AUSTRALIANS are ­getting used to cheaper goods. Supermarket ­prices in each of the past three years have fallen. The strong dollar has held down the price of ­imported goods and, in turn, has put enormous pressure on local manufacturers.

As a result, many ­manufacturers have moved their operations offshore or simply closed. But some of the goods and services we need are not easily replaced by overseas goods — fresh food being foremost among them.

Across Australia a range of small to medium-sized food manufacturers have emerged. With their tighter cost margins they are able to compete with the larger branded manufacturers. They have been helped by the big supermarket giants, which are keen to expand their range of generic branded goods. The supermarkets have also worked with the new manufacturers to improve quality — and boost sales.

In turn, these new food manufacturers, if they can fulfil the supermarkets’ demands and prices, are enjoying rising sales. You can see it from the astonishing increase in the amount of pre-packed, prepared food on the shelves. In almost every instance there is a small or medium-sized processor behind the scenes.

But even these companies must be careful to maintain their skill levels. Rocketing demand for skilled workers like engineers, electricians, food quality specialists, butchers and mechanics means that if wage costs start to rise something has to give.

So far that has not happened because the many skilled workers who have lost their jobs in other areas provide a ready source of labour. But at some stage that will stop and the resulting wages increases will work their way through into food prices.

Supermarkets will resist this, meaning manufacturers will have to make more use of training facilities like TAFE to develop apprentices and keep a ready supply of skills to keep wage pressures in check.

As Rhys Graves, this week’s case-study, points out, there is plenty of work for smaller manufacturers but demand for skills from mining companies could create shortages elsewhere in the economy.

Providing certainty for those going into skilled trades is also part of the solution as many will worry about a lack of jobs after they finish an apprenticeship.

Unless Australia has a ­co-ordinated approach to skills training and employment, the time might come when you can kiss that cheap loaf of bread goodbye.

WILLINGNESS TO LEARN IS THE RIGHT TOOL FOR SUCCESS IN BUSINESS

SIX years ago Rhys Graves was a rock-star — in his mind. He was bass player for Burn The Drama, an aspiring Sydney band that was having moderate success. But he put the guitar back in the rack to become a businessman.

Actually, he says being a cash-strapped musician was probably a good lesson for setting up his own business.

“We did it tough. We worked Saturday and Sunday and we weren’t getting paid. I was single and Dave was just married. Three months after starting I met my now wife.”

The other lesson was about trade skills. “There is a buck to be made being a tradesman, which is a myth that should be dispelled,” he says. Because that’s how Rhys and his partner David Newell’s business, Empire Industrial Engineering in Chipping Norton, started.

Both were on the tools as contract engineers for big manufacturers.

Dave Newell and Rhys Graves, partners in Empire Industrial Engineering, at their Chipping Norton factory. Picture: Melvyn Knipe

For Rhys it was a matter of keeping enough money coming in until the band finally broke.

But life takes people in different directions. A chance came up for the two men to create their own business.

“Your growth has to be sustainable. If you bite off more than you can chew you will be broke in six months. One trick is learning how to knock jobs back without losing that client in the future,” he says.

The businessdoes project management, installations, pipe work, welding and base fabrication. Clients include Colgate Palmolive, Qantas, Swire Cold Storage and Coca-Cola Amatil.

Rhys is conscious of the shrinking skill base in Sydney — exacerbated by the mining industry luring away tradies.

Now with around 20 staff, he tries to bring through apprentices, using TAFE to enhance their skills.

“It’s about the right people. Someone can be young and green but absolutely willing to learn.