Supply chain diversity helps buffer business from risk

Chris Comley from Oreflow speaks to the CCIWA outside the ‘Business Pathways to India’ event in Perth.

WA-based mining equipment supplier Oreflow Australia used to get all its steel conveyor rollers made in China.

But by the time Coronavirus hit, the company was on the verge of a new deal with an Indian manufacturer that would ensure it was buffered from local conditions in the world’s most populous nation.

The timing couldn’t have been any better.

Since early February, worldwide supply chains have been seriously affected, with manufacturers around the world hitting delays or being entirely unable to access parts from China.

Oreflow Australia National Sales Manager Chris Comley said he had been negotiating with Indian manufacturer Velocity Rollers since October, and placed his first order with the company this week.

He expects the rollers to arrive about the same time, or even before, the rollers he ordered from China in February.

He said he had started looking for a supplier outside of China when changes to the galvanising industry started to affect supply timelines last year. He was then introduced to Velocity Rollers by the Chamber of Commerce and Industry WA.

Mr Comley said it was more important than ever for Australian businesses to have more than one supplier for anything that was crucial to their operations.

“Life must go on,” Mr Comley said. “And business must go on. And that’s why I’ve taken steps to ensure that we can get a continued supply and it doesn’t affect our lead times.”

Mr Comley said the family company’s relationship with its Chinese suppliers was as strong as ever, but having suppliers in India ensured the business could always compete on both price and quality.

“I think it’s very important because, especially in the conveyors side of our business, it is so competitive,” he said.

Velocity Rollers Managing Director Nitin Patkulkar.

Velocity Rollers Managing Director Nitin Patkulkar said his Pune-based company already had contracts with companies on the east coast, but was now looking to supply to other WA companies.

He hoped to move some of the company’s manufacturing operations to either Perth or Kalgoorlie, and expected to employ about 15 local workers.

Mr Patkulkar encouraged local WA mining suppliers to look to India to diversify their supply chains.

“India has a very big potential and good intellectual property, good intellectual people. Definitely they can come here and invest or some do some business here.”

CCIWA chief executive officer Chris Rodwell told Thursday’s breakfast information session with the Premier, jointly hosted by the Australia India Business Council, that it was critical WA businesses diversified their markets.

CCIWA’s International Trade and Investment Centre Manager Michael Carter, who is also the WA President of the Australia India Business Council, said India is a well-established world class manufacturing hub of South Asia.

He said it was well placed to supply WA mining suppliers and mining companies with an extensive range of mining equipment and engineering components.

“It makes sound business sense to have diversified market sources to safeguard against supply deficiencies or bottlenecks, adverse global or regional conditions and exchange rate fluctuations.” he said.

“It’s about balancing that risk. As well, I think enabling in this case WA mining suppliers and importers an opportunity to spread that supply risk across complementary markets of supply.”

CCIWA offers a suite of bespoke trade services through International Trade Consulting.

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