By Patrick Avenell
GUD Holdings, the listed company that owns the Sunbeam brand, has attributed its profit growth to offshore manufacturing, whilst at the same time announcing that it is too dependant on China for products.
At the company’s annual general meeting today, GUD chairman Clive K Hall spoke of how closing Australian manufacturing plants and moving production overseas had been instrumental in revitalising one of the GUD brands.
“Similar to other GUD businesses before it, specifically Sunbeam, Victa and Ryco, Oates was reconfigured from being heavily reliant on product it manufactured at uncompetitive costs, to a business that focuses on product development and brand marketing, while relying on external suppliers to provide quality, cost competitive products…,” said Hall.
Whilst Hall is enthusiastic about moving production offshore to minimise costs, leaving GUD to focus on branding and marketing, managing director Ian A Campbell was more troubled by the group’s increasing reliance on overseas manufacturers, especially those based in China.
“One of the most important issues we now face is an ever-increasing reliance on China and how we reduce that risk inherent in that reliance,” he said. “There is no doubt that we are concerned that we are too dependant upon China and have commenced a program to actively seek suppliers in emerging economies who have the potential to supplement Chinese supply over the next three to five years.”
Campbell’s answer, to find other countries that can make products cheaply, whilst still maintaining sufficient quality for the Sunbeam name, seems to delay solving this problem rather than tackle it. Whilst ever supply is offshore, the group will always be beholden to external, and often unforeseen, pressures and challenges. Should the group find a suitable plant at suitable costs in another suitable country, there is no guarantee that within three to five years, the GUD AGM calls this arrangement unsuitable.