The multiplier effect of local manufacturing

Crusader Hose

The custom reel system is noted for its rapid dewatering.

Crusader Hose has manufactured layflat hoses in Australia for more than three decades. After struggling to profit during the first 15 years of its life, the Aussie battler has lasted in a highly competitive market and is proud of its unwavering commitment to local manufacturing. 

The impact of Crusader Hose’s commitment is more than just keeping jobs in Australia. It boosts the Australian economy as a result of the multiplier effect. 

The multiplier effect is the proportional amount of increase in final income that results from an injection of spending. 

Therefore, the money spent cycles through the economy and has a larger impact than the initial dollar amount. 

Studies in the Australian automobile industry found that for every dollar spent, the economic benefit was multiplied by up to $18. 

The weakening of Australia’s automobile industry has been well publicised, as factories move offshore, and jobs are made redundant. The domino effects of these shutdowns are still causing economic and social hardships. 

Although we are still buying cars, these multipliers are now being enjoyed by companies overseas and foreign investors. 

In the long run, the more we import, the more money Australia theoretically loses. This makes it all the more important to support and promote Australian manufacturing. 

Crusader Hose managing director Francois Steverlynck says the company is constantly seeking to strengthen the mining industry with reliable products.

“Part of our efforts is not only to assist the mining sector in its profitability and efficiency with our world-class products, but also to remind them of how important it is to support Australian manufacturing,” Steverlynck tells Australian Mining. 

“Not only are they helping us keep jobs in Australia, but also supporting the multiplier effect by keeping the funds here in Australia.”

Layflat hoses are used across a variety of sectors and industries, bolstering Crusader Hose’s ability to strengthen the local economy. 

Steverlynck says the multiplier effect was first described to him around the turn of the century, when retired Major Rod Gooding from the Australian Army explained how Crusader Hose could become a valuable asset to its customers. 

“When tendering for a contract with the Australian Army some 20 years ago, Major Rod Gooding impressed me with the concept of the multiplier effect,” Steverlynck says.

“He said the value of the $1 million contract will have a multiplier of 10. That is $10 million dollars’ worth of other business being generated by purchasing from us.” 

Local manufacturing not only supports the national GDP (gross domestic product) but has many flow-on effects. 

It brings about technology transfers, research and development, lean manufacturing techniques and approaches, advanced labour skills and improved manufacturing techniques. 

Local manufacturing also presents an opportunity to offer high-paying jobs in technology, engineering and management. By supporting Australian manufacturing, winners are found in abundance.

The effect of the pandemic on the supply chain has been a wake-up call for many industries. The reliance on imports for some every-day and industry-specific products is a cause for concern. A re-evaluation of the importance of supporting Australian-made goods has been long awaited. 

Steverlynck says, however, that the pandemic has perfectly illustrated the reliable nature of local manufacturing. By buying locally-made products and services, customers across industries can mitigate supply chain risk and get on with progressing their own businesses.

“We appreciate that more and more customers see manufacturing as a vital and significant contributor to the Australian economy,” Steverlynck says.

“With our goal of becoming a world-leading manufacturer, Crusader Hose is working with the mining sector to have hose and reels to increase their efficiency and profitability.

“With our culture of continuous improvement and investments to support the growth of the business, Crusader Hose is stronger than ever. We are proud to be boosting the Australian economy.”  

 

This article appears in the August edition of Australian Mining.

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