Liveris plan to boost food and chemicals manufacturing

Former Dow Chemical chief Andrew Liveris is looking at ways to boost Australia’s manufacturing capacity in response to the crisis.

Former Dow Chemical CEO Andrew Liveris. Picture: Lyndon Mechielsen

Former Dow Chemical chief executive Andrew Liveris is looking at ways to boost Australia’s packaged food industry and encourage the development of a local petrochemical industry — as well as a coastal shipping service — as part of his role as head a new ­federal government manufacturing task force.

The ideas are part of many being developed by the task force, which was set up late last week by the Darwin-born Liveris as part of the commission headed by former Fortescue Metals chief executive Nev Power to look at ways to help the economy deal with the shock of the COVID-19 crisis.

Mr Liveris, who retired as executive chairman of the merged DowDuPont company in the middle of 2018, was appointed to the National COVID-19 Co-ordination Commission last week ­following an interview with The Australian.

Mr Liveris is also a director of IBM, Saudi Arabian oil giant Aramco and listed energy and chemical industry service company Worley.

Speaking from his apartment in Sydney’s eastern suburbs, where he has been based for several weeks because of travel restrictions, Mr Liveris said his goal was to use the “burning platform” of the COVID-19 crisis to help look at ways to grow the Australian manufacturing industry.

“We want to use the manufacturing task force to help revitalise and grow the manufacturing industry in Australia as it comes out of the crisis,” he said.

He said the crisis was a wake-up call about the dangers of Australia putting all its eggs in the China basket and the need to develop more local manufacturing, particularly in some key strategic areas, for security reasons.

Options being considered were ways to add value to Australian-produced commodities, food, defence materials and the energy and natural gas sector, he said.

Other members of the newly established task force include the chief executive of the Australian Industry Group, Innes Willox, the chief executive of the Advanced Manufacturing Growth Centre, Jens Goennemann, the chairman and chief executive of Manufacturing Australia, James Fazzino and Ben Eade, and the national secretary of the Australian Manufacturing Workers’ Union, Paul Bastian.

Mr Liveris, who headed Donald Trump’s American Manufacturing Council, said he would like to see Australia emerge from the crisis developing more locally packaged foods for export, rather than just exporting agricultural products.

“Australia should become the No 1 packaged food exporter in the world,” he said. “We have all the raw materials.

“Of course we should be exporting fresh food, but we have expertise with paper and plastic packaging and we have plenty of food. Why don’t we marry those two sets of expertise?”

Mr Liveris said he believed the market for packaged goods in China was set to “explode”, particularly as its government moved to put more stringent controls on wet markets.

The wet market in the Chinese city of Wuhan is believed to be the source of the coronavirus outbreak, which began in December.

Mr Liveris said Australia had the potential to compete with other packaged food centres around the world such as Switzerland, France, the US and Japan.

He said another idea was to develop a more efficient Australian coastal shipping service to provide an alternative to delivering goods by road. “We are looking at ways to help develop the competitiveness of domestic freight,” he said.

“How can we get shipping around the coast to be as competitive as shipping from overseas? How can we have freight costs such that we can build supply chains on water as well as land?”

Mr Liveris said he was particularly interested in helping to develop Australia’s petrochemical industry. “Petrochemicals should be a no-brainer for this country,” he said. “We have all the raw materials for it. And it is a job multiplier. For every one job in terms of energy input, you can get an output of eight jobs in the industry.”

Mr Liveris said developing a low-cost supply of energy, particularly natural gas, would be critical in encouraging the development of a local manufacturing industry.

“One of my passions has been how do we get natural gas domestically priced in Australia to enable the manufacturing industry to have energy input costs which are comparable with other energy-competitive nations.”

Mr Liveris has long been an advocate of Australia developing a domestic reservation policy for natural gas, which would require a proportion of locally produced gas to be kept in Australia and not sold for export, as is the case in the US.

He said his ideas included the development of an east coast pipeline network for gas to help develop a supply of low-cost energy.

“We want to help bring back some of the manufacturing industry that had been starting to shut down because it was no longer energy competitive,” Mr Liveris said.

He said other ideas included the development of lightweight materials for the defence industry.

Deakin University had achieved some “breakthrough technologies”, while the University of Queensland was working on the development of new lightweight ­materials for the car industry.

He said one idea developed when he headed the US manufacturing task force was a national apprenticeship scheme based on a German model. This involved developing technical educational programs that trained people not only in trades such as plumbing, carpentry and electrical trades but also more “digital trades” such as working in robotics, automated process control systems and artificial intelligence.

He said these training courses would be a more practical option than some of the current four-year degree programs that did not equip people with the skills needed for modern industries.

Mr Liveris said the COVID-19 crisis was leading to a new debate around the world about the strategic importance of developing their own industries rather than relying on imports.

“Australia has been quite comfortable as a nation exporting our commodities and having tourism and education helping to support the Australian lifestyle,” he said.

“But what is happening now is that every government around the world has realised COVID-19 is going to change that model.

“The need for security of supply has accelerated a new wave of economic nationalism.”

Mr Liveris said he believed the COVID-19 crisis would be “around for most of the year”.