Packaging Machinery Manufacturers Institute

Australian Packaging Machinery Market Research Report

The Findings of a Market Research Study Conducted by POLYMEX Consultants, exclusively for the Packaging Machinery Manufacturers Institute November 2001

© Copyright 2001. Packaging Machinery Manufacturers Institute, Inc. All rights reserved. The information contained herein shall not be distributed or shared by the recipient. No parts of this document may be reproduced without the express written permission of PMMI.

TABLE OF CONTENTS Page

I. EXECUTIVE SUMMARY 1 1. THE AUSTRALIAN MARKET ENVIRONMENT 4 1.1 AUSTRALIA IN BRIEF 4 1.2 ECONOMIC / POLITICAL / FINANCIAL ISSUES 6 2. AUSTRALIA'S PACKAGING MACHINERY MARKET 8 2.1 MARKET SIZE AND POTENTIAL 8

2.2 PACKAGING MACHINERY TRENDS 8

2.3 BEST PROSPECTS FOR IMPORTED MACHINERY 9

2.4 DOMESTIC PRODUCTION VERSUS IMPORTED MACHINERY 9

2.5 ORIGIN OF IMPORTED MACHINERY 11

2.6 EXPORTS OF PACKAGING MACHINERY 13 2.6.1 US Trade Balance 13 2.6.2 Total Exports by Destination 14

2.7 CUSTOMER'S EVALUATION OF IMPORTED PACKAGING MACHINERY AND SERVICE 15 2.7.1 Technology 15 2.7.2 Service 15

2.8 MARKETING TECHNIQUES AND PRODUCT EXPOSURE 16 2.8.1 Trade Exhibitions 16 2.8.2 Trade Magazines 16 2.8.3 Distribution 17 2.8.4 Use of Internet 18

2.9 EQUIPMENT FINANCING 18

2.10 SWOT ANALYSIS FOR NORTH AMERICAN IMPORTS 18

2.11 STRATEGIES FOR NORTH AMERICAN MANUFACTURERS TO SUCCEED IN AUSTRALIA 19 2.11.1 product Development 19 2.11.2 Pricing and Pricing Flexibility 20 2.11.3 Distribution and Marketing 20

2.12 MARKET DRIVERS - FACTORS THAT INFLUENCE PURCHASE DECISION 20

2.13 REGULATORY FRAMEWORK 21

2.14 IMPORT DUTIES AND TAXES 21

TABLE OF CONTENTS (Continued)

3. THE FOOD INDUSTRY 23 3.1 INDUSTRY OVERVIEW 23

3.2 KEY PLAYERS 23

3.3 FOOD PRODUCTION 24

3.4 FOOD EXPORTS 27

3.5 PACKAGING PRACTICES 28

3.6 OTHER INDUSTRY FACTORS 29 3.6.1 New Food Standards Code 29 3.6.2 National Food Industry Strategy 30

3.7 COMPANY PROFILES 32 ANGUS PARK 32 ARDMONA FOODS L IMITED 34 ARNOTTS BISCUITS L IMITED 36 BARTTER ENTERPRISES 38 BEGA CO-OPERATIVE 40 CEREBOS AUSTRALIA L IMITED 42 DAIRY FARMERS 44 DOUWE EGBERTS AUSTRALIA 46 FRISKIES PET CARE 48 GEORGE WESTON FOODS L IMITED 50 GREENS G ENERAL FOODS PTY LTD 52 GOODMAN FIELDER BAKING 54 GOODMAN FIELDER MILLING 56 HEINZ WATTIES INDUSTRIES 58 KELLOGG (AUSTRALIA ) PTY LTD 60 LANES BISCUITS 62 MURRAY-GOULBURN CO-OP COMPANY L IMITED 64 MEADOW LEA FOODS 66 NATIONAL FOODS 68 PAULS DAIRY FOODS 70 SAN REMO 72 SMITH SNACK FOOD COMPANY 74 SNACK BRANDS AUSTRALIA 76 SUGAR AUSTRALIA 78 UNCLE TOBYS 80

TABLE OF CONTENTS (Continued)

4. THE BEVERAGE INDUSTRY 81 4.1 INDUSTRY OVERVIEW 81

4.2 KEY PLAYERS 82

4.3 BEVERAGE PRODUCTION 83

4.4 EXPORTS 85

4.5 PACKAGING PRACTICES 85 4.5.1 Soft Drink, Cordial and Syrup 85 4.5.2 Beer 85 4.5.3 Wine 85 4.5.4 Spirits 86

4.6 COMPANY PROFILES 86 BERRI L IMITED 87 BRL HARDY 90 CADBURY SCHWEPPES 92 CARLTO N & UNITED BREWERIES L TD 95 COOPERS BREWERY 98 DE BORTOLI WINES 100 LION NATHAN L IMITED 102 MCWILLIAMS WINES 104 ORLANDO WYNDHAM 106 SOUTHCORP HOLDINGS L IMITED 108 5. THE PHARMACEUTICAL INDUSTRY 110 5.1 INDUSTRY OVERVIEW 110

5.2 KEY PLAYERS 110

5.3 PRODUCTION 111

5.4 EXPORTS 111

5.5 OTHER INDUSTRY FACTORS 112

5.6 COMPANY PROFILES 113 ASTRAZENECA PTY LTD 114 BAYER HEALTH CARE 116 FH FAULDING 118 GLAXO SMITH KLINE 120 HAMILTON LABORATORIES 122 MERCK SHARP AND DOHME AUSTRALIA PTY LTD 124 PFIZER 126 SCHERING-PLOUGH 128 SIGMA COMPANY LIMITED 130

TABLE OF CONTENTS

(continued)

6. THE PERSONAL CARE INDUSTRY 131 6.1 INDUSTRY OVERVIEW 131

6.2 KEY PLAYERS 132

6.3 AUSTRALIAN PRODUCTION 132

6.4 PACKAGING PRACTICES 134

6.5 COMPANY PROFILES 134 BRISTOL-MYERS SQUIBB AUSTRALIA PTY LTD 136 CARTER HOLT HARVEY TISSUE AUSTRALIA PTY LTD 139 COLGATE PALMOLIVE PTY LTD 141 COLGATE PALMOLIVE PTY LTD 143 LEVER REXONA 145 RECKITT BENCKISER 147 SARA LEE 149 S C JOHNSON 151 7. THE PACKAGING MARKET IN AUSTRALIA 151 7.1 INDUSTRY OVERVIEW 151

7.2 KEY PLAYERS 151

7.3 AUSTRALIAN PRODUCTION 153

7.4 OTHER INDUSTRY FACTORS 154

APPENDIX - IMPORT STATISTICS FOR PACKAGING MACHINERY 158

This report has been prepared for the client to w hom it is addressed. In accordance with our standard practice, Polymex Consultants, its servants and agents disclaim responsibility to any third party for anything arising out of the report.

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I. EXECUTIVE SUMMARY

i. Introduction This report was commissioned by PMMI and produced by Polymex Consultants, a leading business-to-business marketing consulting practice in Australia. The report describes the packaging machinery market in Australia and focuses on opportunities for purchases over the next three years within the industry segments of food, beverages, pharmaceutical and personal care. The report is presented in seven sections. The first describes the Australian market environment and its implications for packaging machinery sales. The second describes the packaging machinery market in detail covering its market size and structure, imports, local production and exports and the position of American sourced equipment in the market. Sections three to six of the report outline the size and structure of the food, beverage, pharmaceutical and personal care industries in Australia. These sections also give a detailed description of selected end-users including the main equipment they have installed and their likely needs over the next three years. The final section of the report briefly describes the packaging material industry in Australia.

ii. Australian Market Environment

The Australian economy was looking stronger than those of the US or Europe until the recent terrorist attack in the US. It is still likely to show some growth but the world outlook has now become most uncertain and Australia will not be shielded from the world economic trends. A most significant factor in the prospect for imported goods is the weakness of the Australian dollar. As this report is being written the A$ is almost at a record low against the US dollar and this is making and will continue to make imports from the US particularly expensive.

iii. Australian Packaging Machinery Market

Domestic consumption of packaging machinery is currently running at about US$175 million per annum with about two thirds of this met by imports and the balance from local production. Local production is concentrated on lower speed packaging machinery and does not cover the full breadth of equipment needed to service the market. Europe dominates as a source of imports with over 75% of the imports by value in 2001. Key countries of origin in Europe are Italy with 32% and Germany with 21% of total imports. US imports are running at about 12% by value of the total and this has fallen from 17% in the last three years.

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iv. Best Prospects for Packaging Machinery Sales 2002- 2004

The industries with the highest demand for packaging machinery are: • the wine industry • other beverages • the pharmaceutical industry • food products targeting export markets.

The types of machinery in greatest demand are likely to be:

• equipment specifically designed for the beverage and pharmaceutical industries

• faster, more flexible filling equipment • faster more flexible cartoning equipment • faster more flexible form, fill and seal equipment • more sensitive, faster inspecting equipment • faster code printing and marking machines • equipment to automate case filling and palletising.

v. Factors that Influence Purchasing Decisions

Key factors are:

• service support and spare parts availability locally • proven suitability for the application • reliability, ease of maintenance • previous experience/ compatibility • price.

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vi. Strategies for North American Companies to Succeed

The study suggested that the following strategies would facilitate greater penetration of the Australian market: υ Product development leading to equipment that is: • more flexible with faster change over time • more innovative • lower priced (ie not over engineered for the task). υ Pricing stra tegies and flexibility to more aggressively attack the share of market

held by Italian and German machinery υ Appointing or establishing strong, highly service-oriented local agents to distribute υ Selective marketing to target customers which offer the best sales opportunities

(many of whom are identified in this report).

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1. THE AUSTRALIAN MARKET ENVIRONMENT

1.1 AUSTRALIA IN BRIEF

Australia comprises a land area of about 7.9 million square kilometres. This area is about as great as that of the United States of America excluding Alaska, about 50% greater than Western Europe, and 32 times greater than the United Kingdom.

Australia's current population is just over 19 million with an annual population growth of about 1.3% (the same as the overall world gro wth rate). Australia is highly urbanised and 83% of the population live within 50km of the coastline. Over 60% of the population live in the five major capital cities. The population of the main states of Australia and of their capital cities is set out below.

TABLE 1.1 POPULATION OF THE MAIN STATES AND CITIES OF AUSTRALIA

Resident Population in 2000

Source: Australian Bureau of Statistics

State Population million

Capital City Population million

New South Wales 6.4 Sydney 4.0

Victoria 4.7 Melbourne 3.4

Queensland 3.5 Brisbane 1.6

South Australia 1.5 Adelaide 1.1

Western Australia 1.8 Perth 1.3

Rest of Australia 1.1

TOTAL 19.0

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A comparison of GNP and GNP per capita places Australia as a small but highly developed nation within the OECD.

TABLE 1.2 INTERNATIONAL GNP COMPARISONS 1998

Source: UN

Country GNP US$billion

GNP / Capita US$,000

Australia 387.0 20.6

Canada 580.9 19.2

France 1,465.4 24.9

Germany 2,179.8 26.6

Italy 1,157.0 20.1

Japan 4,089.1 32.4

UK 1,264.3 21.4

US 7,903.0 29.2

Australia is an important trading nation and its main merchandise imports and exports are set out below.

TABLE 1.3 AUSTRALIAN MAIN MERCHANDISE EXPORTS AND IMPORTS

1999-2000 Source: Australian Bureau of Statistics

US$conversion at 0.629c per A$

Merchandise Category Exports US$,000m

Imports US$,000m

Food, Beverages and Tobacco 11.6 3.2

Metalliferous Ores 7.1 1.2

Mineral Fuels 11.4 4.8

Chemical and Petroleum Products 2.6 7.9

Manufactured Goods 6.4 8.6

Machinery & Transport Equipment 7.3 32.2

Total Merchandise 61.2 69.2

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1.2 ECONOMIC / POLITICAL / FINANCIAL ISSUES

By the end of the 1999 -2000 financial year, the Australian economy had completed its ninth year of continuous growth, the longest economic expansion since the 1960s. Over this period, the growth of output averaged just over 4% and that of real per-capita income just under 3%. The upswing was accompanied by solid employment gains and a substantial reduction in unemployment to a low of near 6%, which is close to the OECD estimate of the structural unemployment rate.

There was also a marked pick-up in the trend growth of labour and productivity over this nine year period. The expansion of the economy took place in an environment of significantly lower inflation than in the preceding two decades, the underlying rate of price increase being in the region of 2%. GDP growth was fuelled by strong domestic demand, which also contributed to a widening of the current account deficit up to mid-1999, but the external deficit has since contracted as growth has become more export-oriented.

The economy slowed abruptly in the fourth quarter of 2000 and there was a marked shift in perceptions about the strength of the economy. This was due, in part, to the negative impact of higher world energy prices and to the weakening of the US economy which also depressed the Australian business climate. The profile of growth was heavily influenced by the Sydney Olympics and by the introduction of a new tax system on 1 July 2000, the goods and services tax (GST).

Until the terrorist attack in the US, the Australian economy was on the rebound and Australia was expected to recover more strongly and quickly than the US and Asia. This was evidenced by a first quarter 2001 real GDP growth, quarter on quarter of 1.1% which continued into the second quarter.

As can be seen in the table, the Economist Intelligence Unit prior to the terrorist attack was forecasting that GDP growth would rise to 4.6% by 2005.

TABLE 1.4 AUSTRALIAN SUMMARY FORECASTS

Source: EIU

Key Indicators 2000 2001 2002 2003 2004 2005 Real GDP growth (%) 3.8 2.3 3.7 3.8 3.9 4.6 Consumer price inflation (av; %) 4.5 3.9 1.8 2.2 2.9 3.4 Budget balance (% of GDP) 0.4 -0.6 -0.9 0.1 0.7 1.6 Current-account balance (% of GDP) -3.8 -2.5 -2.8 -2.9 -3.0 -3.6 Commercial banks prime rate (av; %) 8.8 8.0 8.5 9.0 9.4 9.8 Exchange rate A$:US$ (year-end) 1.72 1.90 1.83 1.71 1.65 1.61 Exchange rate A$:Y100 (av) 1.60 1.54 1.49 1.43 1.41 1.61

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Australia is not immune from movements in the economies of major trading nations. One immediate reaction to the terrorist attack has been a further fall in the Australian currency due to international perceptions that demand for commodities is likely to be weak and Australia is more dependent on commodity exports than other OECD countries.

Australia faces a federal election in late 2001. The result at this stage is too close to call with conservative reactions to the current unsettled economic situation likely to favour the current Liberal-National Party coalition government. The policies of both major parties are likely to be similar; the Liberal Party more likely to offer tax cuts and the opposition Labour Party more likely to increase taxes to fund social programmes. Prior to the terrorist attack the strengthening of the economy made it unlikely that the overnight cash rate would be cut much further, although this was dependent on further cuts in the US. There was even some chance that rates might rise if either government started to cut too far into the budget surplus. Pressure by the government to regain/gain votes has already led to erosion of budget balances. However, the tragic terrorist attack in the US and the consequent lowering of interest rates there means that a fall in rates in Australia is now likely.

Until the recent events in the US and their effect on the world economy, the overall general economic environment in Australia has been favourable to a growth in demand for packaging machinery equipment and this has been supported by a strengthening of demand for consumer goods and a favourable export climate due to the low Australian dollar. However, at the time of writing this report world economies are in a great state of uncertainty.

The steep fall in the Australian dollar in the last 12 months, which shows no sign of recovery, makes it more difficult for US sourced imports in relation to imports from Europe where the Australian currency has lost less value than against the USD. The unfavourable exchange rate against the US dollar has already slowed the import of goods from the United States, including packaging machinery.

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2. AUSTRALIA'S PACKAGING MACHINERY MARKET

2.1 MARKET SIZE AND POTENTIAL

There are no hard statistics on the total demand for packaging machinery in Australia. It is probable that domestic consumption in 2000/2001 was of the order of A$320 million (US$175 million) with about one third met from local production. Most of the Australian production relates to less sophisticated product categories of equipment. There are also no hard statistics on market growth with some conflicting influences restraining growth such as continuing industry rationalisation and some movement of manufacturing offshore. It appears as though the market is stable, but not showing much growth. Some particular influences and potential for specific types of equipment are described in the next section, Packaging Machinery Trends.

2.2 PACKAGING MACHIN ERY TRENDS

There are several trends taking place in the market which are influencing the demand for and types of packaging machinery requirements. An important negative influence on demand is rationalisation of plants and mergers and acquisitions both on a local and global scale. This often leads to plant closures and also provides equipment for the second hand market. Offsetting this however, is that many companies are looking to upgrade their packing lines to make them faster, more efficient and less labour intensive. This is leading to increased demand for more technologically advanced and faster equipment. There is also continual upgrading of packing lines needed to support better quality control which translates to a demand for more sensitive and faster inspection equipment. More and faster printing equipment is also needed for date and batch identification. Another positive trend in Australia is that some food processing is being targeted to specific export markets eg pet foods for Japan. Changes in package design and labelling for marketing purposes is a further important driver of demand for new packaging machinery. Often changes in package design that are considered desirable to achieve product recognition and differentiation, create a demand for new packaging machinery.

Some of the trends in types and specifications of equipment are as follows:

• demand for more flexibility in terms of the range of pack types and sizes that can be handled and faster change over times

• demand for greater reliability and higher speeds • more variety in bottle shapes and sizes • more variety in label shapes and sizes • greater need for batch and date coding driving demand for faster

and better printers • more sophisticated inspecting machines to control and automate

quality • more automation (robotics) for case loading and palletising.

The buyers in the market are becoming better informed and more critical in their selection of equipment. As equipment becomes more technologically advanced the need for high quality local support increases. Thus the quality and skills of the local distributors or agents for imported equipment is becoming a more critical factor in the purchase decision.

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There is also a recognition that technological advances in packaging machinery are coming quite fast. So buyers in high volume packaged goods industries are critically evaluating suppliers and not necessarily remaining loyal to old suppliers. Such buyers want to take advantage of new technology and will support suppliers who are more innovative and putting more effort into product enhancement. (This appears to be working in favour of European sourced equipment over North American which is seen by some customers as more conservative and less technologically advanced.)

2.3 BEST PROSPECTS FOR IMPORTED MACHINERY

Much of Australian demand for packaging machinery is met by imports. Within the specific industry categories covered in this study, the highest growth areas for demand appear to be:

• the wine industry • other beverages • the pharmaceutical industry • food products targeting export markets.

In terms of types of equipment greatest demand is likely to be for equipment of the following types:

• equipment specifically designed for the wine/beverage industry. This includes filling, labelling, orienting, case filling and palletising equipment.

• Faster, more flexible filling equipment • Faster more flexible cartoning equipment • More sensitive, faster inspecting equipment • Faster code printing and marking machines • Equipment to automate case filling and palletising.

2.4 DOMESTIC PRODUCTION VERSUS IMPORTED MACHINERY

Total Australian imports of packaging machinery excluding parts under the relevant codes in the harmonised tariff were A$187.8 million (USD$102.4 m). No hard statistics of total local production are available, but production of food packaging machinery was valued at A$83.2 million (US$52.2m) in 1998-99).

Summary imports for the last four years are set out in Table 2.1

TABLE 2.1

IMPORTS OF PACKAGING MACHINERY EQUIPMENT

HT Code Description Imports US$,000 1998-99 1999-00 2000-01

842220024 Cleaning & drying machinery 3,551 3,066 2,226

842230043 Machinery for filling, closing, sealing or labelling.

69,152 48,492 49,663

842240028 Combined Moulding & Wrapping

575 480 1,237

842240029 Other packing or wrapping 52,101 57,097 49,240

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TOTAL 125,375 (A$199,840)

109,135 (A$173,478)

102,365 (A$187,826)

Note: HT Code 842230043 also includes aerating machinery, thus the figures are overstated to the extent of aerating machinery imports.

A full analysis of imports is set out in Appendix 1.

Production statistics for food packaging machinery available from the Australian Bureau of Statistics are set out in Table 2.2. No production statistics are collected for other packaging machinery.

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TABLE 2.2

PRODUCTION OF FOOD PACKAGING MACHINERY


Code Description 1995-96 1996-97 1997-98 1998-99

286323 Food packing or wrapping machinery; food or drink canning, bottling and sealing machinery; food or drink can or bottle washing machinery

55.0

35.8

112.8

83.2

2.5 ORIGIN OF IMPORTED MACHINERY

The leading sources of imports of packaging machinery are Italy, Germany and the US with 32%, 21% and 12% respectively by value of imports in 2000/2001.

An analysis of imports by country of origin and region is set out in Table 2.3. This illustrates a substantial fall in imports from the USA between 1998-99 and 2000-01.

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TABLE 2.3

AUSTRALIA'S IMPORTS OF PACKAGING MACHINERY BY COUNTRY OF ORIGIN 1998-2001


COUNTRY OF ORIGINUS$'000 % US$'000 % US$'000 %

ASIA JAPAN 4,947 3.9 4,834 4.4 4,179 4.1 TAIWAN 1,950 1.6 2,810 2.6 1,743 1.7OTHER 1,412 1.1 2,281 2.1 1,866 1.8

TOTAL ASIA 8,310 6.6 9,924 9.1 7,789 7.6

EUROPE DENMARK 1,872 1.5 1,617 1.5 467 0.5 FRANCE 9,747 7.8 3,955 3.6 2,712 2.6

GERMANY 21,958 17.5 19,998 18.3 21,044 20.6 IRELAND 1,569 1.3 1,041 1.0 601 0.6

ITALY 23,977 19.1 24,454 22.4 32,750 32.0 NETHERLANDS 7,269 5.8 6,784 6.2 3,749 3.7

SPAIN 1,495 1.2 3,134 2.9 3,522 3.4 SWEDEN 2,539 2.0 771 0.7 3,074 3.0

SWITZERLAND 10,500 8.4 6,494 6.0 4,753 4.6 UNITED KINGDOM 9,318 7.4 4,043 3.7 3,496 3.4

OTHER 1,683 1.3 2,466 2.3 1,265 1.2TOTAL EUROPE 91,928 73.3 74,758 68.5 77,433 75.6

NORTH AMERICA CANADA 241 0.2 1,288 1.2 443 0.4

UNITED STATES OF AMERICA 21,235 16.9 17,642 16.2 12,401 12.1TOTAL NORTH AMERICA 21,476 17.1 18,931 17.3 12,844 12.5

OTHER NEW ZEALAND 2,530 2.0 4,073 3.7 3,395 3.3

OTHER 1,131 0.9 1,448 1.3 904 0.9TOTAL OTHER 3,661 2.9 5,522 5.1 4,299 4.2

TOTAL ALL COUNTRIES 125,375 100.0 109,135 100.0 102,365 100.0 Notes: 1.The HT code 8422300043 also includes the category of aerating machinery so the total imports may be slightly overstated 2. US$ figures have been converted from AU$ using the exchange rates of 0.627, 0.629 and 0.545 for the years 98-99, 99-00 and 00-01 respectively

98-99 99-00 00-01

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2.6 EXPORTS OF PACKAGING MACHINERY

2.6.1 US TRADE BALANCE

The Trade balance between Australia and the United States in packaging machinery has changed substantially over the last three years as illustrated in Table 2.4. Largely under the influence of the strong decline in the Australian dollar, imports from the United States have declined sharply. At the same time, exports from Australia to the USA have shown a substantial rise. The rise in exports from Australia has been influenced by the favourable exchange rate as well as a few Australian manufacturers becoming more aggressive in targeting export markets.

TABLE 2.4

US AUSTRALIAN TRADE IN PACKAGING MACHINERY EXCLUDING PARTS


Trade 1998-99 A$,000

1999-00 A$,000

2000-01 A$,000

Imports 33,846 28,044 22,754

Exports 6,031 10,948 15,902

Trade imbalance A$,000 27,815 17,096 6,852

*US$,000 17,451 10,755 3,734

* Exchange rates 1988-99 A$ = 0.6274 USD, 1999 -00 A$ = 0.6291 USD 2000 -01 A$ = 0.545 USD

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2.6.2 TOTAL EXPORTS BY D ESTINATION

The total exports of packaging machinery excluding parts in 2000-2001 are set out in Table 2.5. This shows that in that year the United States represented over 50% of total Australian exports.

TABLE 2.5

EXPORTS OF PACKAGING MACHINERY EQUIPMENT IN 2000/2001 EXCLUDING PARTS


Destination A$,000 % of Total

United States 15,902 52.7 Asia

Philippines 868 2.9 Malaysia 837 2.8 China 808 2.7 Thailand 645 2.1 Bangladesh 641 2.1 Other 1,561 5.2

Subtotal Asia 5,360 Europe

United Kingdom 3,002 9.9 Other 1,068 4.6 Subtotal Europe 4,070 13.5

Oceania New Zealand 2,737 9.1 Other 663 2.2 Subtotal Oceania 3,400 11.3

Other 1,393 4.3 Grand Total 30,188 100.0

Exports of Australian manufactured packaging machinery are known to involve a range of categories including palletising machinery, inspection equipment, pharmaceutical tablet and liquid filling, cartoning, vertical form fill and seal and closing equipment.

Probably the leading manufacturer for export is TNA which makes vertical form fill and seal equipment which they are exporting around the world. Other important exporters include R L Windsor which manufactures cartoning equipment and palletisers and Romaco Bosspak which specialises in equipment for the pharmaceutical industry. Specific research into exports from Australia lay beyond the scope of this project.

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2.7 CUSTOMER'S EVALUATION OF IMPORTED PACKAGING MACHINERY AND SERVIC E

2.7.1 TECHNOLOGY

Generally customers see the best packaging machinery as coming out of Germany (or Switzerland). This applies across all the particular industry categories covered in this research.

After Germany, Italy is recognised as offering good technology, often superior to that available from the USA particularly in specific industries such as wine and pharmaceuticals.

USA equipment is seen as good but not particularly innovative in technology. It is also seen as less flexible than European.

Generally Asian sourced equipment is little known with Japanese equipment having a reasonable reputation and other Asian sources being seen as suspect in terms of quality, reliability and technology.

Australian equipment is generally seen as less technologically advanced than European and being limited in the range of types of equipment available. Australia has succeeded best at the shipper case assembly and packing end of packaging lines and in depalletising and palletising.

2.7.2 SERVICE

Service is a critical issue for imported machinery which is almost always purchased via a local agent. Many respondents claimed that service from agents was indifferent and could change when principals change their agents. The problem of unsatisfactory service appeared to be greater for USA sourced equipment than for European sourced equipment.

Australian-made equipment, where available, is often favoured because of the better service thought to be available from a local manufacturer. Australian equipment has also become relatively cheaper than imports due to the decline of the Australian dollar.

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2.8 MARKETING TECHNIQUES AND PRODUCT EXPOSURE

2.8.1 TRADE EXHIBITIONS

Almost all organisations surveyed attend the specialist Australian packaging machinery exhibition AUSPACK. They nearly all also attend their own specific relevant industry trade exhibitions held in Australia such as exhibitions relevant to food processing, wine, pharmaceuticals, etc.

Attendance at overseas exhibitions is less common and tends to be irregular. Where the company is overseas based, attendance at relevant international trade exhibitions may mainly be done by company representatives based overseas rather than by local Australian staff.

Where overseas exhibitions are attended, the major ones are:

• Interpak

• Drinktec (beverage manufacturers only)

• Pack Expo

Other exhibitions mentioned were:

• Interbrau (beer manufacturers)

• International Bakery (bakery products)

• ACIMA

• MATPAK (materials handling exhibition Australia)

• PRINTPACK.

2.8.2 TRADE M AGAZINES

Most respondents only seemed to see the local packaging trade magazines and local relevant industry trade magazines.

The three key local trade magazines are:

• Packaging News (PKN)

• Packaging

• Food and Pack.

Prominent local industry trade magazines of relevance are:

• Food Management News (FMN)

• Food and Pack which incorporates a previous title Food Processor

• Grape Grower and Wine Maker

• Manufacturers Monthly

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• FEN (Factory Equipment News)

• Pharmaceutical Engineering

• Bulk Handling

• PACE (Process and Control Engineering).

Other trade magazines mentioned by a few respondents were:

• Packaging Digest UK

• Can Filler and Bottler

• Blow, Fill, Seal

• What's New in Packaging

• Krones (wine producers only)

• Plant Line

• Beverage World

• International Bottler and Packer

• Food Processing.

2.8.3 DISTRIBUTION

Packaging machinery equipment is all distributed in Australia direct to the customer or, in the case of imported equipment, usually via a local agent. For international companies sometimes equipment purchase may be negotiated direct by an international office rather than through a local agent, but this is not common.

Australian companies like the ability to be supported by a local agent rather than deal direct overseas. Quality of local support is a key purchase decision criteria.

For major purchases of imported equipment, often the principal (the manufacturer) will be involved as well as the agent. For commissioning of such equipment the manufacturer will also usually provide direct staff support rather than or as well as the local agent.

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2.8.4 USE OF INTERNET

Most of the respondents for this study make regular use of the Internet to assist with keeping up -to-date with packaging machinery suppliers and their technology and capabilities. This is seen as time saving and a useful support for the other 'search' processes involved in finding suitable solutions to packaging equipment needs. Some are also using the web to look for suitable second hand equipment.

2.9 EQUIPMENT FINANCING

Almost all packaging machinery was purchased outright by the companies surveyed in this study. Vendor finance was not sought or provided.

Some vendors are prepared to put equipment on trial to help secure an order. Alternatively, they may offer a heavily discounted price for the first order of some equipment that may be required in quantity. This type of approach was much more likely from Italian (and sometimes Japanese) suppliers than others.

2.10 SWOT ANALYSIS F OR NORTH AMERICAN IMPORTS

Strengths of American Equipment

In the Australian market the strengths of American sourced equipment are:

• a good reputation for quality

• known expertise in high volume, highly automated plants

• well known to US based global companies, many of which are established in Australia

• known expertise in quality control (inspection equipment).

Weaknesses of American Equipment

American equipment is generally seen as:

• more expensive (than any alternative source)

• less flexible than European with slower change over times

• less technologically advanced particularly in some industries such as wine and pharmaceuticals

• not particularly well represented or serviced in Australia

• less flexible with pricing - less willing to negotiate.

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Opportunities

The key opportunities lie in the following areas:

• specific solutions for beverage and pharmaceutical markets

• growing demand for speed and automation

• growth of USA owned companies in Australia

• lack of awareness of American equipment, lack of support for American equipment.

Threats

The main threats are:

• high US dollar makes imports from America more expensive than from other countries

• growth of domestic packaging machinery manufacturing

• greater flexibility of other suppliers with respect to pricing and terms

• European R & D and technology appears to be moving faster than American

• global downturn may effect Australian demand.

2.11 STRATEGIES FOR NORTH AMERICAN MANUFACTURERS TO SUCCEED IN AUSTRALIA

2.11.1 PRODUCT D EVELOPMENT

The study suggested that North American manufacturers would be more successful in Australia if their products were seen as:

• more flexible • with faster change over time • more innovative • lower priced (ie not over engineered for the task).

20

2.11.2 PRICING AND PRICING FLEXIBILITY

North American products are at a disadvantage because of the high value of the US dollar. However, suppliers from other countries are also more willing to be flexible with pricing. To gain market entry and further market share North American companies are going to have to become more price competitive vis a vis alternative suppliers such as from Italy and to become more flexible with their pricing by offering incentives to trial equipment etc.

2.11.3 DISTRIBUTION AND MARKETING

Many agents for imported packaging machinery in Australia are not seen as particularly competent with respect to technical capability and support or customer service. Greater penetration of the market by North American suppliers will require careful selection of local agents and more attention to their training and support and the availability of spare parts. The market can not be supported direct from North America, a competent local agent is essential. The main vehicles for promotion are the local trade shows and magazines as described elsewhere in the report (Section 2.10) and the Internet which is growing in importance all the time. Direct marketing will clearly be an important part of marketing strategy as the main target customers are easily identified in each industry sector and most of these are already listed in this report for the particular industry segments covered.

2.12 MARKET DRIVERS - FACTORS THAT INFLUENCE PURCHASE DECISION

In every case, equipment has to be proven able to reliably meet the task and specification for which it is required. Assessment of this may be done by:

• visiting the factory

• seeing plant in action at a customer's site

• reputation of supplier and knowledge of customer base (in Australia particularly)

• past experience with supplier

• checking with existing customers

• actual trial.

21

Once a potential customer has become satisfied that a particular equipment /supplier can meet his required specification, other key issues for a customer buying imported equipment are:

• Service available from local agent

• Reliability of equipment

• Price/value for money

• Compatibility with existing equipment (where relevant).

Some other issues are often relevant including:

• Availability/delivery time

• Occupational health and safety issues

• Speed of equipment

• Ease of maintenance

• Recommendation/selection by offshore international organisation.

2.13 REGULATORY FRAMEWORK

Australia is a relatively sophisticated market for packaging machinery equipment with requirements for hygiene and safety similar to those of other developed countries in Europe and North America.

Electrical equipment has to conform to the European standard, CE, or the Australian equipment which is C.

The Australian and New Zealand Food Authority (ANZFA) regulates standards of food quality and safety in Australia. Australian food manufacturers are encouraged to use the internaionally recognised Hazard Analysis and Critical Control Points (HACCP) System to ensure food quality and safety. Thus manufacturers of food packaging machinery would be wise to follow the HACCP system and give warranties in that regard where relevant. Adoption of the HACCP system has been legislated in Victoria, but not as yet in other states of Australia.

Occupational health and safety is an important issue in Australia with some aspects relevant to the design of packaging machinery being mandatory. These cover safety issues such as guard rails, protection at pinch points, noise limits, etc. Manufacturers of packaging equipment need to carry out their own risk assessments for their equipment and its application and customers also will often have their own risk assessment people who may request additional safety features.

2.14 IMPORT DUTIES AND TAXES

Most packaging machinery imported to Australia is subject to a maximum import duty of 5% or 4%. Imports from New Zealand are free of duty

22

under a cross Tasman free trade agreement and some items are also free from Canada.

The full list of tariffs for the relevant STC codes is set out in Table 2.6.

TABLE 2.6

AUSTRALIAN CUSTOMS TARIFF SCHEDULE FOR PACKAGING MACHINERY EQUIPMENT

Reference Number

Goods Description Tariff Rate

8422.20 Machinery for cleaning or drying bottles or other containers

5%, DCS 4%

8422.30 Machinery for filling, closing, sealing, or labelling bottles, cans, boxes, bags or other containers; machinery for capsuling bottles, jars, tubes and similar containers; machinery for aerating beverages

5%, DCS 4%

8422.40 Other packing or wrapping machinery (including heat-shrink wrapping machinery)

Free

8423.20 Scales for continuous weighing of goods on conveyors

5%, DCS 4%, Canada Free

8423.30 Constant weight scales and scales for discharging a predetermined weight of material into a bag or container, including hopper scales.

5%, DCS 4%

There are no changes to the above tariff rates planned.

The total landed cost of packaging machinery is calculated from the FOB value for duty by adding the import duty. When a product is sold by the importer it is subject to a goods and services tax (GST) of 10%. This is an input tax to the buyer (packaged goods manufacturer) which can be offset against the GST it collects on behalf of the government on the goods (packaged materials) it sells.

Goods and services tax is not payable on most food products so food producers have to absorb any GST paid and it becomes an additional cost of production. When the GST was introduced in July 2000 the Government carefully supervised prices to ensure that manufacturers did not increase prices beyond any additional costs. The GST replaced the former wholesale sales tax, which applied to many goods including packaging materials (but not packaging machinery).

23

3. THE FOOD INDUSTRY

3.1 INDUSTRY OVERVIEW

The food processing industry in Australia, excluding beverages, is worth over US$25 billion in revenue and accounts for over 18% of total manufacturing turnover.

Australia's food requirements are mainly met from local production with imports being less than 10% of total production. However, processed food products are an important export, particularly meat, dairy products, seafood and sugar.

Whilst there are many small producers, food manufacturing is a highly concentrated industry with the supply of most processed food items dominated by a few key producers. Many international global companies are also prominent in the Australian market and many leading domestic manufacturers and brands have been acquired by international companies in recent years.

3.2 KEY PLAYERS

The top ten packaged food manufacturers in Australia are set out in Table 3.1.

TABLE 3.1 The Top Ten Packaged Food Manufacturers in Australia

Source: Polymex Research

Rank Company Owner-ship

Approx. Annual Sales A$,000m

Key Products

1 Goodman Fielder LL 3.2 Flour, bakery products, cereals, edible oils

2 Nestle Foods LO 2.1 Ice cream, tea, coffee, confectionery, frozen & other packaged foods

3 George Weston LL 1.6 Flour, bakery products, meat products

4 Australian Co-operative Foods / Dairy Farmers

CL 1.5 Dairy products

5 Effem Foods (Mars) PO 1.4 Pet food, confectionery, spices

6 Murray Goulburn Co-op CL 1.4 Dairy products 7 Bonlac Foods CL 1.2 Dairy products 8 National Foods LL 1.0 Dairy products, fruit juices

9 Unilever Foods LO 0.9 Edible oils, canned & dried foods, other packaged foods.

10 Arnotts/Campbells LO 0.9 Biscuits, snack foods, soups. Notes: 1. This list excludes some meat and stock feed producers that are in the top ten food producers, but

not the top ten packaged food producers. 2. Ownership codes: LL listed local, LO listed overseas, PO private overseas, CL Co-operative local.

24

A more comprehensive list of leading packaged food manufacturers in Australia is set out in Table 3.2 on the next page which also indicates the food categories in which the business is represented.

3.3 FOOD PRODUCTION

Overall statistics for food production are set out in the table which follows. Meat and dairy products are the most important food product categories (but not necessarily most important as a market for packaging machinery because large volumes of these products are exported in bulk).

TABLE 3.3 FOOD MANUFACTURING INDUSTRY STATISTICS AUSTRALIA

July - June 1999 Source: Australian Bureau of Statistics

(A$ converted at 0.627 USD)

Industry Code

Description Employment at end June Thousand

Turnover US$,000m

% of Total

21 FOOD, BEVERAGE AND TOBACCO mfg

211 Meat and meat product mfg 2111 Meat processing 30.0 4.31 16.9 2112 Poultry processing 13.2 1.51 5.9 2113 Bacon, ham and small goods mfg 7.5 0.88 3.4 Total 50.8 6.70 26.3

212 Dairy product mfg 2121 Milk and cream processing 6.0 1.76 6.9 2122 Ice cream mfg 2.7 0.43 1.7 2129 Dairy pro duct mfg n.e.c. 8.2 2.74 10.7 Total 16.9 4.92 19.3

213 Fruit and vegetable processing 11.2 2.22 8.7

214 Oil and fat mfg 1.7 0.66 2.5

215 Flour mill and cereal food mfg 2151 Flour mill product mfg 2.2 0.80 3.1 2152 Cereal food and baking mix mfg 5.9 1.31 5.2 Total 8.1 2.11 8.3

216 Bakery product mfg 2161 Bread mfg 9.4 0.82 3.2 2162 Cake and pastry mfg 9.3 0.67 2.7 2163 Biscuit mfg 4.7 0.65 2.6 Total 23.4 2.14 8.4

217 Other food mfg 2171 Sugar mfg 6.7 1.56 6.1 2172 Confectionery mfg 5.9 0.92 3.6 2173 Seafood processing 4.0 0.70 2.8 2174 Prepared animal and bird feed mfg 4.5 1.59 6.3 2179 Food mfg n.e.c (includes tea, coffee, snack

foods, spices, etc) 15.2 1.97 7.7

Total 36.3 6.75 26.5

GRAND TOTAL 148.4 25.56 100.0

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TABLE 3.2 LEADING PACKAGED FOOD MANUFACTURERS IN AUSTRALIA

(excluding beverages) (Source: Polymex Consultants Research)

FOOD CATEGORIES

Dairy Products Flour milling and cereals Bakery Products Other

Company

Ow

ners

hip

Milk

&

Cre

am

Ice

Cre

am

Oth

er

Fru

it /

Veg

etab

le

Pro

cess

ing

Oils

& F

ats

Flou

r

Cer

eals

Bre

ad

Cak

e &

Pas

try

Bis

cuits

Suga

r

Con

fect

ione

ry

Sea

food

P

roce

ssin

g

Pet

Fo

od

Oth

er

Arnotts Limited (subsidiary of Campbells) LO X X Berri Ltd PL X X Bonlac Foods CL X X Cadbury Schweppes LO X X CSR LL X Dairy Farmers CL X X X Effem Foods PO X X X George Weston LL X X X X X X Golden Circle CL X Goodman Fielder LL X X X X X X Heinz Australia LO X X X X Kellogg LO X X Kraft Foods LO X X X X X McCain Foods LO X X Murray Goulburn CL X X National Foods LL X X Nestle Foods LO X X X X X X Parmalat/Pauls PO X X X Peters & Brownes CL X X X Sanitarium PL X Simplot LO X X X X Smiths Snackfood (subsidiary of Pepsico/Fritolay) LO X Snack Foods LL X X Unilever Australia LO X X X X X Ow nership code: LL Listed Local, LO Listed Overseas, PL Private Local, PO Private Overseas, CL Co -operative Local Note: There are several large food manufacturers not listed in this table because they are not significant users of packaging machinery. This applies particularly to meat and poultry producers.

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Production statistics for the leading packaged food products within their broad industry category are set out in Table 3.4.

TABLE 3.4

PRODUCTION STATISTICS FOR LEADING PACKAGED FOODS

Source Australian Bureau of Statistics

Description 1995-96 1 9 9 6 - 9 7 1997-98 1998-99

A$,000 A$,000 A$,000 A$,000

Meat productsSmallgoods 604.2 596.3 502.4 792.5

Dairy products

Liquid skim milk, not concentrated or sweetened n.p. n.p. 216.8 165.6Flavoured mi lk dr inks 225.1 261.5 300.8 382.8Liquid mi lk, pasteurised n.p. n.p. 1463.8 1416.1

Cream 179.8 188.9 207.2 202.1Sour cream, yoghurt and other cultured milk products 415.1 310 459.3 367

Ice cream and frozen confections 631.8 649.6 661.4 648.6Butter 284.9 301 333.8 293.3Cheese and curd 1287.2 1681.7 1609.8 1959.5

Milk based food preparations 5 4 0 498.4 475.4 675.8Products consist ing of natural milk consti tuents n.e.c. 2 1 5 n.p. 366.2 156.8

Fruit & vegetable processing

Jams 141.6 125.2 103.4 103.9Fruit juices - Single strength 274.5 256.8 353.4 270.9

Fruit juices - Reconstituted single strength 459.7 455.1 512.1 452.3Fruit juices - Concentrated 100.3 119.4 67.5 154.4

Fruit - prepared or preserved 369.8 403 392.7 492.4Vegetables, frozen 539.1 550 590.1 642.2Vegetables, prepared or preserved (incl dried or shelled) 323.5 263.8 173.2 216.5

Soup and homogenised food preparations n.p. 165.2 173.6 118.3Sauces (excl worcestershire and apple); vinegar 235.4 263.4 287.1 319.9

Oil & fat mfg

Margarine 283.7 265.9 259.8 318.4Flour mill & cereal foods

Cereal foods (incl breakfast foods) 7 1 2 818.5 n.p. 693.2Pasta (excl canned) 352.1 175.1 254.4 282.6

Bakery products

Bread (excl unleavened) and bread rol ls 1281.2 1359.5 1056.8 1320.5Meat pies 335.1 236.9 268.5 297.4Cakes, pastries, crumpets and pies (excl meat pies) 590.9 696.3 860.9 755.3Biscui ts and related products 8 2 4 681.1 987.6 976.6

Other food mfg

Refined sugar in solid form 453.2 395.9 408.2 558.5Chocolate confectionery 767.3 900.3 1063 1060.2Chewing gum, white chocolate and other confectionery 388.7 351.9 336 369.8

Dog and cat food (excl canned) 328.9 436.1 483.3 523.3Dog and cat food, canned 458.9 534.4 489.2 472.7Coffee and tea, including substitutes 399.2 492.4 460.2 384.7

Potato crisps and flakes n.p. 570.9 561.7 531.4Prepared meals (incl TV dinners), containing meat 478.4 491.2 463.6 735.7Mixed condiments and seasonings 55 .2 75.2 200.5 134.4

Refined salt (exclude cooking or table salt) n.p. 36.6 n.p. 127.4

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3.4 FOOD EXPORTS

Meat and dairy products are the most important export food products in Australia as can be seen in Table 3.5. This table excludes bulk minimally processed foods.

TABLE 3.5 AUSTRALIAN FOOD EXPORTS

(Substantially and elaborately transformed only) Source: Australian Bureau of Agricultural Research Economics (ABARE)

1992-93 A$m

93-94 A$m

94-95 A$m

95-96 A$m

96-97 A$m

97-98 A$m

98-99 A$m

99-00 A$m

Meat and Meat Products 3,816 4,121 3,744 3,366 3,027 3,795 4,071 4,539

Seafood 707 786 751 671 636 731 769 1,005

Dairy Products 1,137 1,322 1,450 1,707 1,795 1,952 2,291 2,466

Fruit & Vegetables 561 585 467 563 659 605 591 769

Oil and fat 63 66 82 95 104 167 170 131

Flour mill & Cereal Foods 401 544 516 590 598 704 719 739

Bakery products 52 61 75 91 103 103 97 105

Confectionery 87 149 149 194 170 162 176 230

Food nec 281 351 387 437 520 524 545 576

Total* 9,004 7,984 7,620 7,713 7,611 8,742 9,428 10,659

* excludes sugar

The leading export countries for processed food and beverages are set out in Table 3.5.

TABLE 3.6 TOP TEN DESTINATIONS FOR PROCESSED FOOD

AND BEVERAGE EXPORTS Source: Australian Bureau of Statistics

Country Ranking

99-00 99-00 A$m

% Share of processed food

exports

% growth 99-00 over 98-99

Japan 1 3,174 25.8 16.4 United States 2 1,905 15.5 24.1 United Kingdom 3 773 6.3 12.5 New Zealand 4 556 4.5 8.4 Taiwan 5 496 4.0 1.0 Philippines 6 401 3.3 2.9 Singapore 7 392 3.2 37.5 Korea Rep 8 373 3.0 10.7 Hong Kong 9 362 2.9 6.8 Malaysia 10 300 2.4 11.1 Other 3,551 28.9 9.0 Total 12,283 100.0 13.2

Note: These figures include some products that are sold in bulk such as processed meats and sugar.

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3.5 PACKAGING PRACTICES

The main types of packaging used for the leading packaged food products are set out in Table 3.7.

TABLE 3.7

PACKAGING OF MAIN FOOD PRODUCTS IN AUSTRALIA

Key Product Food Products & Their Usual Primary Packaging

Cheese Plastic wrap, grated in bags (some zip) and sliced in plastic wrap.

Milk Mainly 1L and 2L plastic bottles including PET, still some paperboard cartons and glass

Bread Plastic bag sealed with plastic clip or tape.

Chocolate confectionery Blocks & bars wrapped in foil and printed paper or laminates. Single chocolates in boxes

Dog and Cat Food Cans and some sachets for wet food, cartons or bags for dry food.

Small goods Plastic wrap

Cakes, pastries, etc Plastic wrap

Biscuits Plastic wraps, cartons

Fruit juices Rigid packs in cartons, plastic or bottles

Cereal foods Bag in box

Frozen Vegetables Plastic bag

Ice Cream and frozen Plastic tubs assorted sizes, cups plastic or paperboard

Refined sugar Paper bags, plastic bags

Potato crisps Laminate bags, some paperboard boxes with inner bags

Prepared fruit Cans, tubs

Flavoured milk Cartons, plastic bottles

Coffee Beans in foil laminate bags, plastic bags. Ground in vacuum sealed bags, foil laminate bags

Sour cream, yoghurt Plastic tubs, plastic bottles

Confectionery Paper wrapped inside cartons

Sauces Glass / plastic bottles

Margarine & butter Plastic tubs

Pasta Plastic bags

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3.6 OTHER INDUSTRY FACTORS

Two important influences on the food manufacturing industry in Australia over the next few years are the implementation of a new Food Standards Code and the development of a National Food Industry Strategy.

3.6.1 N EW FOOD STANDARDS CODE

The Australian New Zealand Food Authority (ANZFA) has developed a new draft joint code to apply to food products in Australia and New Zealand. By late 2002 it is intended that the joint Code will become the sole code applying in Australia and New Zealand. The new code will force changes in labelling and drive some investment in packaging machinery particularly for the printing of dates and lot numbers. The essential elements of the code are summarised below: Date Marking and Lot Number - The Joint Code requires most foods to carry a 'best before' date and a lot number. Where health and safety is a factor in storage/use, foods must carry a 'use by date'. Name/description of the product - Under current food and fair trading laws, suppliers must present foods honestly. It is illegal to mislead or deceive consumers - a product called 'strawberry jam' must therefore contain strawberries. The joint Code requires food to be labelled with its prescribed name or a description indicating its true nature. Characterising Ingredients - The Joint Code has a new requirement for listing characterising ingredients (in this case, strawberries) as a percentage of the product. Supplier's Address - In the rare event of a recall, access to the manufacturer or importer's address, and the product's lot number, protects consumers by making the identification and notification process more efficient. Use or Storage Directions - The Joint Code requires manufacturers to inform consumers how to safely store and/or use a product. This is not required under the current code. Country of Origin Label - The requirements remain unchanged in Australia and New Zealand, ie country of origin must be stated. Food Additives List - Requirements remain the same, additives must be identified by their internationally recognised food additive number. Ingredients List - The joint Code has similar requirements for ingredient listing as the current regulations. Ingredients must be listed in order of ingoing weight.

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Nutrition Information - The current code requires nutrition information panels on special purpose foods with added vitamins and minerals, or on those foods where a nutrition claim such as 'low fat' has been made. The Joint Code requires manufacturers to provide consumers with basic nutrition information about fat, protein, energy, carbohydrates and sodium on nearly all packaged food, and more extensive information may be required when a claim is made. Legibility Requirements - The current code sets a minimum size for type on labels. The Joint Code requires labels to be legible, prominent, in English and distinct from the background. Warning statements must be printed in type which is at least 3mm high. The new code is yet to be finally agreed by all parties, ie state and national governments, but this will be achieved. One beneficial outcome for food manufacturers is that one common standard will apply and it will no longer be necessary to have different labelling for the same product to satisfy different regulations.

3.6.2 NATIONAL FOOD INDUSTRY STRATEGY

The Federal Government announced in March 2001 that a National Food Industry Strategy would be developed. The aim of this strategy is to establish a food "Action Agenda'' for the growth of a sustainable, innovative and globally competitive Australian food industry. The key elements to be reviewed in the strategy are as follows:

Building a Supportive Business Environment

• Infrastructure

• Workplace Relations

• Food Regulation

• Investment

• Competition Policy

• Electronic Commerce Leveraging Science and Technology Building an Export Strategy

• Export Culture

• Market Access

• Trade Facilitation Developing Competitive Advantage Building Supplier Power.

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As part of the development of the Strategy, extensive research and consultation is being undertaken with relevant food industry participants and associations. The development of the National Food Industry strategy continues an earlier action plan for the Australian food industry initiated by government which was termed 'The Supermarket to Asia Strategy'. Asia is already the most important region for Australian food exports. The relevance of the Strategy to the packaging machinery market in Australia is that the government clearly sees the food industry as very important to Australia and is determined to assist it to grow and develop.

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3.7 COMPANY PROFILES

Angas Park

Industry: Food Products Sub Industry: Fruit and Vegetable processing Location: Angaston, SA Purchasing Potential: Next 3 years about A$60,000

1. Company Description

Angas Park is the largest processor of dried fruits in Australia. The operation is owned by Chiquita Brands of the USA and has a turnover in Australia of over A$200 million.

2. Main Products Produced and How They are Packed Angas Park dried fruit is mainly packed into HDPE pillow packs but some product is also packed into resealable stand-up HDPE packs.

3. Installed Packaging Machinery

Current Machinery Used Approx. No. of Units

Origin

Horizontal form, fill & seal for resealable packs

1 Belgium (Volpack)

Horizontal form, fill & seal machines for pillow packs

3 Japan (Kawashima)

Inkjet markers for cartons 8 USA (Markham & Matthews)

Metal detectors 10 Australia (Balis) and UK (Goerring-Kerr)

Laser sorters 2 Belgium (Elbascan)

Carton erectors 2 Australia (Visyform)

Case sealer 1 Australia (Fibre King)

4. Future Packaging Machinery Plans (next 3 years) The company will probably purchase three metal detectors at an approximate cost of A$60,000 in total.

33

5. Key Issues in Purchasing Decisions These are:

• availability of local service and parts • compatibility of existing equipment (this saves duplication of

spares and retraining) • specification, particularly hygiene factors.

6. Attitudes to Suppliers North American and European suppliers are seen as more expensive than Japanese or Australian. This respondent did not distinguish between the technology and service available for the different countries of origin that he is dealing with but made the comment that European sourced equipment is superior to Japanese in terms of 'useability' and that Australian equipment, whilst good, was only available within a narrow range.

7. Contact Information

Company: Angus Park Contact: Stephen Ellis Position: Engineering Manager Address: 3 Murray Street, Angaston SA 5353 Telephone: (08) 85642052 Fax: (08) 85642686 Email: [email protected]

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Ardmona Foods Limited

Industry: Food Sub Industry: Fruit and vegetable processing Location: Mooroopna VIC Purchasing Potential: A $3.5 m in the next 3 years


Ardmona Foods is one of the largest producers of canned fruit in Australia. It is a private company with an estimated turnover of about A$170 million p.a. Recently a merger of Ardmona was announced between Ardmona and the other main canned fruit processor in Australia, SPC.

2. Main Products Produced and How They are Packed In the processing of the fruit it is canned in steel cans and then cooked. The steel canned fruit is then taken from the processing division and packed within the packaging division of the company. This process involves labelling and then placing the cans into cartons or trays for distribution.

3. Installed Packaging Machinery The information below relates to the packaging division and thus does not include the canning and cooking operation.

Current Machinery Used

Approx. No. of Units

Origin

Labelling machines 7 UK (6) USA (1)

Cartoning machines 4 USA (3) Switzerland (1)

Shrink Wrapping machine for trays 1 Italy

Depalletisers 4 Australia

Palletiser 1 Australia 4. Future Packaging Machinery Plans (next 3 years)

The company wants to achieve faster operation and it is planning to replace two cartoners with a new one. The probable total expenditure for the completely new packaging line is likely to be of the order of A$3.5 million.

35

5. Key Issues in Purchasing Decisions

The major issues are seen as:

• reputation of the supplier in terms of history with other users • meeting the specification, particularly speed of operation • service from the local agents. •

6. Attitudes to Suppliers

This respondent leans towards European manufacturers which are seen to have relevant expertise. American suppliers are seen as being more expensive and no better than the Europeans, in fact, somewhat behind. There are not many Australian manufacturers that can meet their needs. This respondent would like to be able to have a turnkey supplier who could give them all the equipment they need, but says that they have not been able to find anyone who can do that competently.


Company: Ardmona Foods Limited Company Division Name: Packaging Division Contact: Les Billings Position: Packaging Manager Address: 196 Young Street, Mooroopna VIC 3629 Telephone: (03) 5833 2211 Fax: (03) 5833 2362

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Arnotts Biscuits Limited

Industry: Food Sub Industry: Baking Products-Biscuits Location: Sydney Purchasing Potential: New packaging line, cost

estimate not provided 1. Company Description

Arnotts Biscuits is the largest manufacturer of biscuits in Australia and is also an important producer of snack foods. The company is now owned by Campbell Foods and its turnover is probably of the order of A$700 million p.a.

2. Main Products Produced and How They are Packed Arnotts biscuits and crackers are mostly packed in polypropylene bags and some are packed in cartons.


Arnotts have 4 production plants, 1 in Sydney, 1 in Melbourne, 1 in Brisbane and another in Adelaide. Their Melbourne plant is due to be closed within the next 3 years and some of the equipment may be moved to other sites. The information on installed packaging machinery in the table below relates only to the Sydney plant.

Current Machinery Used at Sydney Plant


Origin

Vertical form fill and seal machines 3 Australia

Inkjet printers 23 USA - For date (13) - Cases (10)

Check weighers 12 Australia (older ones) Germany (newer)

Metal Detectors 12 UK

Cartoning machines 4 USA

Wrapping machines 7 Switzerland (5) UK (2)

Case packers 4 Switzerland

Pallet forming robots 3 Made in Australia with main components from Japan

Rotary feed systems 4 UK

Tray filling robots 20 Switzerland

37

4. Future Packaging Machinery Plans (next 3 years)

Arnotts is planning to build a new packaging line with ten vertical form fill and seal machines, two cartoners and 1 case packer. Some of that machinery will come from the Melbourne plant which is being shut down. Total budget for new packaging machinery is not known at this stage.

5. Key Issues in Purchasing Decisions The main factor in the purchasing decision is the equipment specification and technology together with delivery time and availability. Of secondary importance are price and service. The company is tending towards the use of robotics and this will guide some of the equipment choice in the future.

6. Contact Information Company: Arnotts Biscuits Limited Contact: Mark Nolan Position: Supply Chain Electronics Engineer Address: 11 George Street, Homebush NSW 2140 Telephone: (02) 9394 3589 Fax: (02) 9394 3500 E-mail: [email protected]

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Bartter Enterprises

Industry: Food Products Sub Industry: Eggs Location: Hanwood, NSW Purchasing Potential: Next 3 years - nil

1. Company Description Bartter Enterprises is a private company and is one of the largest processors of poultry and marketers of eggs in Australia. The company's total turnover across all products is over A$600 million p.a.

2. Main Products Produced and How They are Packed

The information collected relates to the packing of eggs only, which are packed into cardboard cartons of a dozen.




Origin

Egg grader and packer (into cardboard cartons)

1 USA (Diamond)

Ink printers for printing date 12 UK (Rational)

Shrink wrapping machine 1 Not known 4. Future Packaging Machinery Plans (next 3 years)

The company intends to add to its equipment in the future, but the timing for this is unknown and the present equipment is adequate for current sales levels.

5. Key Issues in Purchasing Decisions Key issues are:

• equipment is specific to the egg industry • previous experience with the supplier • price.

39


There is a limited choice of equipment specifically designed for the egg industry. This respondent believes that the North American technology is excellent and service and price are good. The egg grading and packaging equipment from Diamond USA is serviced by Bartter themselves and there is no local agent. This is apparently not a problem because they have good technical people who visit from time to time and they also have direct contact with the people in the USA.

7. Contact Information Company: Bartter Enterprises Contacts: Darrel Moore, Egg Room Manager Paul Bartter, Director Address: McWilliams Road, Hanwood NSW 2680 Telephone: (02) 6961 9700 Fax: (02) 6961 9726

40

Bega Co-operative

Industry: Food Sub Industry: Dairy Products Location: Bega, New South Wales Purchasing Potential: Next 3 years - about A$16 million

1. Company Description Bega Co-op is an important manufacturer of cheese and butter and other milk products. Total turnover of the company in Australia is about A$110 million.

2. Main Products Produced and How They are Packed The interview information relates to natural and processed cheese which is wrapped in nylon or polyester.


The information in the table relates to cheese only and not other products manufactured in other plants.



Origin

Form flow wrap machines with a gas flushing seal

3 Italy 1 (PFM) USA 1 (Hasens) Germany 1 (Molyvax)

Ink jet printers 10 USA (Watermark)

All other processes at present in the factory are manual.


It is intended that the plant be automated and use robotics for cartoning and palletising. The likely expenditure over the next 3 years is estimated at A$16 million.


• technical support and service in Australia • reliability of the equipment • performance and specification of the equipment.


North American equipment is seen as having good technology but is too expensive and offers only average service. By comparison, European sourced equipment is seen as being somewhat less expensive than North American with better service and similar technology. For the requirements of Bega Co-op there is not seen to be much suitable equipment available in Australia.

41


Company: Bega Co-operative Contact: Ron Bell Position: Packaging Engineer Address: PO Box 123, Bega NSW 2550 Telephone: (02) 6491 7777 Fax: (02) 6492 3358

42

Cerebos Australia Limited

Industry: Food Sub Industry: Other food products Location: Sydney, NSW Purchasing Potential: Next 3 years - nil

1. Company Description Cerebos Australia is a wholly owned subsidiary of an Asian group. The company manufactures a range of products including salt, sauces, gravies, seasonings, etc and has a total turnover in Australia of approximately A$160 million.

2. Main Products Produced and How They are Packed The wet sauce products of Cerebos are packed into bottles, either glass or plastic - the glass bottles are 500 ml and plastic bottles range in size from 500ml to 4 litres. Dry powders are packed into bag in 500g box packs or 18 sachets of foil laminate 18g.



Origin

Combined form, fill and seal machines for dry products

5 Germany, USA & Japan

Fill and seal machines for wet lines 4 Australia (2), USA (2)

Fill and seal machines for dry lines including salt

2 France and USA

Pressure sensitive labellers 5 Australia and USA

Inkjet coders 6 France and USA

Metal detectors and check weighers 12 Australia and USA

Unscrambler for bottles 1 USA

Carton erecting machine 1 Australia

Case packers 6 Germany, USA, Australia (1)

Palletisers 2 Australia

Depalletisers 3 Unknown

Case tapers 6 Australia and USA

43


The company is looking for a payback within 12 months for any investment in new packaging. This is considered difficult to achieve and probably Cerebos will make do with its present equipment over the coming 3 year period.

5. Key Issues in Purchasing Decisions The key issues are:

• previous experience for that supplier, eg how many have they already sold in Australia

• technical support • ruggedness, eg gear-to-gear not chain drive • flexibility - ability to cope with a large range of different containers

and rapid change over.


Both North American and German equipment are seen as having excellent technology. However, prices from these two areas are seen as high and service somewhat variable. Australia is seen as a good source for basic low speed equipment which is of reasonable technology, good service and average price. Australian equipment is not seen as good for high speed or intermediate speed operation.


Company: Cerebos (Aust) Limited Contact: Stan Odess Position: Packaging Engineer Address: 92 Station Street, Seven Hills NSW Telephone: (02) 9624 5200 Fax: (02) 9674 2887

44

Dairy Farmers

Industry: Food Sub Industry: Dairy Products Location: Head Office, Sydney Purchasing Potential: Next 3 years - not estimated

1. Company Description Dairy Farmers is part of Australian Co-operative Foods and is the largest dairy foods manufacturer in Australia. Total turnover of the group is approximately A$1.5 billion per annum.

2. Main Products Produced and How They are Packed The information collected related to the Dairy Farmers plant at Wetherill Park in Sydney. This plant manufactures yogurt which is packed into plastic cups and bottles in sizes of 140, 185 and 200 ml. The plant also produces UHT milk which is packed into 500 ml and 1 litre PET bottles and 10 litre plastic bladder packs. A further product of the plant is custard which is packed into Tetrapacks.


The plant at Wetherill Park has machinery as set out in the table below.



Origin

Form fill and seal machines for yogurt

2 France (Arfil)

Fill and seal machines 5 France 1 (Erca) USA 2 (Osgood) Germany 1 (Bosch) Australia 1 (Tetrapak)

Bulk filler for 10 litre bladder 1 Australia (Tetrapak)

Bottle filler 1 Holland (Stork)

Bottle Capper 1 USA (Osgood)

Labeller 1 Germany (Krones)

Date Stamper 1 Unknown

Shrink wrapper 1 Unknown

Case Filler 1 Sweden (Involvo)

Cartoner 1 Unknown

Palletiser 1 Australia (W& D Engineering)

Sleever 1 Japan (Fuji)


The Wetherill Park plant is not anticipating any new machinery requirements at this stage, but this will depend on developments in marketing.

45


• capability of and service from a local service agent • cost of spares and availability of spares • equipment specification.


North America is seen as providing robust equipment with good service but at a high price. Europe is seen as offering the best technology but only average service and price reasonab le. Australian equipment is seen as having average technology and service and a reasonable price.


Company: Australian Co-operative Foods Division: Dairy Farmers Contact: Gary Nielson Position: Engineering Manager Address: 433 Victoria Street, Wetherill Park NSW 2164 Telephone: (02) 9609 9966 Fax: (02) 9609 9951

46

Douwe Egberts Australia

Industry: Food Sub Industry: Other Food Mfg - Coffee Location: Sydney Purchasing Potential: A$250,000 in next 3 years


Douwe Egberts is the second largest supplier of instant coffee and coffee beans and ground coffee in Australia behind Nestlé. It is a wholly owned subsidiary of the Dutch based international company and has turnover in Australia of about $60 million. In Australia, the instant coffee products which are marketed under the Moccona brand are fully imported, but the beans are roasted in Australia and packed either as beans or ground coffee at the plant in Sydney.

2. Main Products Produced and How They are Packed In Australia, Douwe Egberts packs both beans and ground coffee into steel cans, flexible vacuum packs and flexible bags.




Origin

Vertical form, fill and seal machines 2 Germany (1) Italy (1)

Auger fillers 2 UK

Closing machine for lids on cans 1 Germany

Labelair labelling machines 4 USA

Check weighers 3 Australia

Vibrator systems to deliver spoons to the cans

1 Italy

Case packing machines 2 Italy

Shrink wrapping machines 2 Italy


The next requirement would be an additional form, fill and seal machine. The requirement for this will depend on increased demand and may not take place within the next three years.

47

5. Key Issues in Purchasing Decisions The most important factors are seen to be:

• flexibility of machinery • a long term local agent that can guarantee good service and parts

availability • lead time • price.


German technology is seen as the best, followed by Italian and Japanese. However, this respondent's experience is that the service from agents for Italian and German sourced products in Australia has not been satisfactory because they keep swapping agents and delivery and spares support has been adversely affected. He sees the service from Japanese suppliers as being better than that given by European suppliers. However, Japanese equipment is at the more expensive end of the market in a similar category to German. The respondent had no experience with USA sourced equipment with the exception of the labelling equipment, which has only just been procured.


Company: Douwe Egberts Australia Contact: Andrew Lewis Position: Plant Engineer Address: 18 Forrester S treet, Kingsgrove NSW 2208 Telephone: (02) 9502 2555 Fax: (02) 9150 5847

48

Friskies Pet Care

Industry: Food Sub Industry: Pet Food Location: Blayney, NSW Purchasing Potential: Next 3 years - not costed


Friskies is a wholly owned subsidiary of the international food company Nestlé. The company only makes dry pet food and estimated turnover for the business is A$30-40 million pa.


Friskies dry pet food products are all packed into polypacks.


The Friskies plant has 8 packing lines and the equipment is as set out below:

Current Machinery Used Approx. No. of Units Origin

Form fill and seal machines 8 Germany

Date coders 8 UK

Metal detectors 8 UK

Case packers 8 Switzerland


The company is likely to move from manual palletising to automation over the next 5 years and the machinery is likely to come from Sweden. The investment has not been costed at this stage.


The key issues are: • service from a large company which has available backup • reputation and reliability • specification to meet the requirements.


For this respondent North American equipment is seen as utilitarian, works OK with average service but higher price. Italian sourced equipment is seen as having good technology and service and average price. Japanese is seen as high technology but generally lighter built and to offer average service and price. Australian equipment is seen as not being backed-up by large companies and thus not having the product development and support that one could expect out of Europe.


Company: Friskies Pet Care Contact: Tony Kyte Position: Packaging Manager Address: Jarman Crescent, Blayney NSW 2799 Telephone: (02) 6391 7500 Fax: (02) 6391 7650

49

George Weston Foods Limited

Industry: Food Sub Industry: Bakery Products Location: Head Office, Sydney Purchasing Potential: Next 3 years, approx A$5 m

1. Company Description George Weston is a leading flour miller and manufacturer of bread, biscuits, cakes and small goods in Australia. It is a listed public company with a total turnover of about A$1.6 billion.


The interview was in respect to the Bakery Division of George Weston which manufactures bread and bread rolls. These are produced in 10 bakeries around Australia and the products are packed into plastic bags.


We do not have the precise number of units of each type of packaging equipment. However, each of the 10 bakeries of George Western has between 4 and 7 packing lines, so the total numbers in each category are probably in the range of 50-60.

Current Machinery Used Origin

Baggers USA (UBE and AMF)

Cliplock closing machines (1 per bagger) USA

Markers (on the clip lock) Possibly UK

Basket loaders Australian, UK and USA

Basket stackers UK (Turk)

Dolly loaders Holland (KARK)


The company is looking at automating its older basket loading and handling packing lines. This will involve an expenditure of the order of A$5 million.

50


• back up service (a local supplier preferred) • equipment specification and technology • previous experience with this client.

6. Attitudes to Suppliers This respondent felt that service from North America is widely varied and has a similar experience with European suppliers. He feels that the European sourced equipment is better engineered than the North American. Japanese technology in his field is regarded as excellent with good service, but prices are very high. The Fuji flow wrap equipment from Japan is seen as top of the range in technology but very expensive. Australian sourced equipment is seen as offering good service with reasonable prices and average technology.

7. Contact Information Company: George Weston Foods Limited Division: Bakery Division Contact: Jim Boughton Position: National Engineering Manager Address: 52-54 Gibbes Street Chatswood NSW 2067 Telephone: (02) 9415 9300 Fax: (02) 9415 9388

51

Greens General Foods Pty Ltd

Industry: Food Sub Industry: Other food manufacturing Location: Sydney, NSW Purchasing Potential: Next 3 years about A$1.5 m

1. Company Description Greens General Foods Pty Ltd is a private company, which manufactures a range of food products both dry mix lines such as flour, sugar and gravy mixes and wet mix products such as peanut butter, mayonnaise and salad dressings. The company has a turnover of approximately A$140 million.

2. Main Products Produced and How They are Packed The wet mix lines of Greens General Foods are packed into bottles which are either g lass, PET or HDPE. The company also makes water ices that use flexible rewind. The dry mix lines are packed into HDPE bottles, composite cans, bag in box and also flexible rewind.



Origin

Form fill and seal machines 10 Germany, USA, Spain, Japan (1)

Filling machines 4

Filling into cans and bottles 9 Australia under licence to the USA

Capping machines 9 USA, Australia, France

Inkjet printers;

- Character printers 5 Mainly USA

- Large character printers 1 USA

Line Labellers 6 Germany, Australia

Print and apply labellers 2 USA


Container outer pack machine 1 Australia

Fully automated case packing machines

3 Australia, France & Switzerland

Auto depalletiser 1 New Zealand


The company is planning to have more end of line automated machinery ie a case packer and unscrambler for PET bottles and a capping machine and possibly new palletising equipment. The approximate expenditure over the next 3 years is likely to be about A$1.5 million.

52


• proven performance • quality • suitability for the specific applications.

6. Attitudes to Suppliers North American equipment is seen as being very expensive due to the low Australian dollar with good service and average technology. German and Swiss equipment is seen as superior in quality with also reasonable service and price. The respondent feels that the best metal detectors come out of England. The view of Australian sourced equipment is that the service varies, price is reasonable and technology is quite good. The Australian manufacturer TNA is seen as having a good product for packing snack foods.

7. Contact Information Company: Greens General Foods Pty Limited Contact: Arthur O'Neal Position: Packaging Engineer Address: 29 Glendenning Road, Glendenning NSW 2761 Telephone: (02) 9830 9999 Fax: (02) 9832 0498

53

Goodman Fielder Baking

Industry: Food manufacturing Sub Industry: Flour mill, bakery products -

bread Location: Head Office, Sydney Purchasing Potential: A$3 milion


Goodman Fielder Baking is the largest manufacturer of bread in Australia, producing over 450 million loaves per annum from several plants around the country.


Within the Baking Division of Goodman Fielder, the key products produced are bread, muffins, crumpets and pikelets. All of these are packed into plastic bags with plastic tag or tape ties or a seal. After packing into bags, bread is put onto trays for distribution and the other products are packed into corrugated board cartons.

3. Installed Packaging Machinery The approximate number of units in each machinery type for the whole of the Bakery Division of Goodman Fielder across the country is shown in the table below.



Origin

Flow wrapping machines 45 Mainly from Japan

Bagging machines 150 USA and UK

Closing machines 200 Mainly USA (Qwik-lok)

Case cartoning machines 30 Australia 4. Future Packaging Machinery Plans - next 3 years

Upgrading of some of the packaging operations is likely in the next 3 years with the main expenditure being on machines for bagging and closing. Likely expenditure is of the order of A$3 million.

5. Key Issues in the Purchase Decision

The major issues are • service and parts availability, with good local representation very

important

• quality and reputation of the supplier

• price.

54


North American technology is considered as good but prices are high and service is only average. For this end-user industry, European technology is seen as behind that of North America and service below average. Australian equipment is seen as below average in technology with reasonable price and service. Overall, service is regarded as somewhat limited from all suppliers and lead times are not very good.


Company: Goodman Fielder Baking Division Contact: Neil Callaghan Position: Engineering Manager Address: 75 Talavera Road, Macquarie Park, NSW 2113 Telephone: (02) 8874 7377

55

Goodman Fielder Milling

Industry: Food Sub Industry: Flour Mill Product Mfg Location: Sydney, Head Office Purchasing Potential: Unknown


Goodman Fielder Milling is the leading manufacturer of flour in Australia and is a division of the largest food manufacturer in the country, Goodman Fielder. The milling division supplies flour for the baking division of the company and to third parties.

2. Main Products Produced and How They are Packed The product of the milling division is flour and it is packed in bags ranging from 1 - 50 kilograms.




Origin

Combined form fill and seal machines 1 Germany

Weigh and fill machines 4 USA - Single bag from Chronos Richardson

Valve machines 5 USA - St Regis

Carousel machines 3 Switzerland - Buhler

Carousel machines 4 Italy - Pagliarani

Closing machines 30-40 Germany - Union Special

Labelling machines 15 Germany

Inkjet coders 6 Germany - Fischveir

Check weighers 30 New Zealand

Shrink Wrapping machines 20 Australia & New Zealand

Automatic pallet forming machines 8 New Zealand


The milling operation is currently undergoing a major group restructuring which involves rationalisation of several of the mills. This will mean that there will be considerable surplus equipment and there is currently a hold on capital expenditure. This present situation means that expenditure over the next 3 years on new packaging machinery equipment is quite uncertain.

56

5. Key Issues in Purchasing Decisions The main issues are seen to be :

• Reputation for quality and reliability • Price • Specification and technology. •

6. Attitudes Towards Suppliers

This respondent felt that for his industry the technology and service provided by North American suppliers was below average and this contrasted with high ratings for European sourced equipment. Australian equipment, where relevant, is seen as providing good technology and service at a reasonable price.


Company: Goodman Fielder Milling Division Contact: Mr Bill Shannon Position: Engineering Manager Address: PO Box 1, Summer Hill, NSW 2130 Telephone: (02) 9797 3407 E-mail: [email protected]

57

Heinz Watties Industries

Industry: Food Products Sub Industry: Meat processing and

vegetable processing Location: Head Office, Melbourne,

Victoria Purchasing Potential: Next 3 years A$250,000

Wagga Plant Only

1. Company Description Heinz Watties is part of the international H J Heinz organisation. The turnover of Heinz Watties in Australia is in excess of A$500 million.

2. Main Products Produced and How They are Packed The Wagga Wagga plant of Heinz Watties processes corned beef and meat and vegetable mixes and packs them into steel cans.


The information in the table relates to the Wagga Wagga plant. Heinz Watties has a similar plant in Hastings, New Zealand and another processing plant for baby foods in Victoria.



Origin

Canned filling machines 8 France (HEMA) USA (FMC) Australia (Heinz) China

Can sealing machines 16 USA/Australia/China (1)

Label wrapping machines 4 USA and UK

Inkjet printers 16 Australia and USA

Check weigher 1 USA

Case filling machine 2 Australia

Palletisers 2 Australia 4. Future Packaging Machinery Plans (next 3 years)

Most likely requirement is another line for handling different sized cans. An additional requirement will be a palletiser and depalletiser. Total investment is likely to be about A$250,000.

58

5. Key Issues in Purchasing Decisions The key issues are:

• after sales services and parts availability • reliability of the equipment • company preferred supplier (dictated by international) • safety factors • price.

6. Attitudes to Suppliers American suppliers are seen as being very expensive with good technology but service particularly parts supply is a problem. For this respondent French equipment is seen as having excellent technology with good service but prices are somewhat high. Australian equipment is seen as providing the best service with reasonable technology. The French company HEMA is seen as a very good supplier of can filling and closing equipment.


Company: Heinz Watties Australasia Contact: Ray Pletier Position: Plant Engineer Address: Bomen Road, Wagga Wagga NSW 2650 Telephone: (0269) 232 557 Fax: (0269) 232 610

59

Kellogg (Australia) Pty Ltd

Industry: Food Products Sub Industry: Cereals Location: Sydney, NSW Purchasing Potential: Next 3 years, none anticipated

1. Company Description Kellogg (Australia) is part of the inte rnational company and is the largest manufacturer of breakfast cereals in Australia with over 50% of the market by value. The total turnover of Kelloggs in Australia is about A$450 million.

2. Main Products Produced and How They are Packed Kelloggs main product line is breakfast cereals which are marketed in bag in the box packs.

3. Installed Packaging Machinery The Kellog plant at Sydney has 10 operating lines and the main machinery is as listed in the table.



Origin

Vertical form, fill and seal machines 20 Holland

Date coding machines 9 USA (for cartons) Sweden (for cases)

Check weighing machines 20 Japan and USA Australia (1 only)


Case packing machines 20 USA

Palletisers (unitisers) 2 USA


The current equipment at the Kellogg plant is quite new, so they are not expecting to need anything in the next 3 years.

5. Key Issues in Purchasing Decisions Kellogg is very consumer driven and looks for innovative developments in packaging and technology. Other issues of importance are compliance with legislation and regulations and ability to source parts locally.

60

6. Attitudes to Suppliers Products that are distributed from North America are seen to have good technology and service but prices are very high. Europe by comparison is also seen to have good technology and service with prices not quite as expensive as North American. Within the product range that Australian manufacturers supply they are seen to have excellent technology and service with reasonable price levels.


Company: Kellogg (Australia) Pty Ltd Contact: Warwick Ball Position: Packaging Resources Manager Address: Swinbourne Street, Botany NSW 2019 Telephone: (02) 9384 7552 Fax: (02) 9384 7750

61

Lanes Biscuits

Industry: Food Sub Industry: Bakery Products - biscuits Location: Melbourne, VIC Purchasing Potential: Next 3 years, A$6-7 million

1. Company Description Lanes Biscuits is the second largest manufacturer of biscuits in Australia behind Arnotts and has an estimated turnover of about A$110 million per annum. The company is New Zealand owned.


Lanes produces biscuits which are packed into trays and plastic bags.



Origin

Vertical form, fill and seal machines 5 Australia

Horizontal flow wrap machines 12 Switzerland & Italy

Inkjet date coders 3 USA (Videojet)

Check weighers 6 Japan


End load cartoners 6 USA (4) UK(2)

Case packers 3 Sweden (2) Australia (1)

Robotic Palletiser 1 Japan


The company will probably be purchasing more flow wrapping machines. Estimated value of these purchases over the next 3 years is A$6-7 million.


• reliability in continuous production

• proven equipment in the application

• exchange rate at the time

• availability.

62


North American equipment is seen as being behind in technology and service and also very expensive. European equipment is seen as having the best technology with good service and high pricing. Japan, similarly is seen as having good technology, but not quite as good as Europe with excellent service and high pricing. Australian technology is also seen as good with excellent service and reasonable prices.


Company: Lanes Biscuits Contact: Bill Gemmell Position: Engineering Manager Address: PO Box 81 Dallas VIC 3047 Telephone: (03) 9309 1033 Fax: (03) 9309 2110

63

Murray-Goulburn Co-op Company Limited

Industry: Food Sub Industry: Dairy Products Location: Head Office, Melbourne Purchasing Potential: Next 3 years - unknown


Murray-Goulburn Co-operative is the second largest dairy foods producer in Australia and has a turnover of about A$1.4 billion. The company has a total of seven plants and the responses for this survey relate to just one of those.

2. Main Products Produced and How They are Packed The company produces a wide range of dairy products, key ones being milk and cheese. Milk is packed into plastic bottles and fibreboard cartons. The cheese produced by the Kiewa Plant, which was the subject of this interview, is made in 20 kilogram blocks and packed into plastic vacuum bags within a cardboard case.


The details in the table relate only to the Kiewa Plant and there are six other plants for which details were not collected.


(Kiewa Plant)


Origin

Fill and seal machines for milk 2 USA (1), UK (1)

Sealer for cheese blocks 1 Australia or New Zealand

Case erecting and sealing machine 1 Australia (FibreKing)

Milk crater 1 Australian

Crate stacker for milk 1 Australian

Note: Bottles are labelled in another plant


Unknown

64


These are: • compatibility with other equipment so that local spare parts can be

used • suitability to the particular task • ease of maintenance.

6. Attitudes to Suppliers North American equipment is seen as having good quality technology, reasonable service and expensive pricing. One comment on North American equipment is that it is still using imperial measures. For this respondent European equipment is only seen as offering average technology and average service but reasonably high prices. By comparison, the Australian equivale nt is seen as being somewhat behind technically but simpler and more reliable than much that is available elsewhere and having the advantage of excellent service and a keen price.

7. Contact Information Company: Murray-Goulburn Co-op Company Limited Division: Kiewa Plant Contact: Steven Brimner Position: Plant Engineer Address: c/- Post Office Kiewa, Victoria 3691 Telephone: (02) 602 73611 Fax: (02) 602 73416

65

Meadow Lea Foods

Industry: Food Sub Industry: Oil and fat manufacturing Location: Sydney Purchasing Potential: Nil

1. Company Description Meadow Lea Foods is the leading manufacturer of table margarine in Australia and is a division of the largest food manufacturer in the country, Goodman Fielder. Goodman Fielder is a public listed company with major interests in flour milling, bread, convenience foods, cereals and edible oils. The total revenue of the Meadow Lea Foods division is of the order of $A470million, but some of this is made up of bulk cooking and edible oils.


Retail margarine products are packed in plastic tubs. Vegetable oils, sauces and dressings are packed in glass or plastic bottles.




Origin

Bottle rinsing 1 Australia

Filling machines - for pails, drums, bottles, jars and tubs

20 Denmark, Australia, Switzerland

Capping Machines 4 Germany

Labelling 5 Germany

Cartoning machines 6 Australia, US

Stretch wrapping machines 6 Sweden

Pallet forming machines 10 Australia, Sweden (robot)


Probably nil, maybe one filling machine.

66


Major issues are:

• Price

• Service / availability of parts

• Robustness / reliability

• Previous experience.


Respondent had no experience of US or Asian suppliers. Relative perceptions of other suppliers are:

Technology Service Price

Europe (Germany) Good Good High

Australia Good Good Average


Company Division Name: Meadow Lea Consumer Foods Contact: Kevin Lollback Position: National Projects Engineer Address: 514 Gardeners Road, Mascot, NSW Telephone: (02) 9700 6232 E-mail: [email protected]

67

National Foods

Industry: Food Sub Industry: Dairy Products Location: Head Office, Sydney Purchasing Potential: Next 3 years A$500,00 for one

plant only 1. Company Description

National Foods is a publicly listed company and is one of the largest manufacturers of dairy products in Australia. The company also manufactures fruit juices. Total annual turnover of National Foods is approximately A$1 billion p.a. National Foods has many different factories throughout Australia.


The information for National Foods relates only to one milk processing and bottling plant base in Sydney. This plant packs milk into PET and HDPE bottles and into cartons.


The respondent was not prepared to give the number of units of each type of packaging machinery but the machinery types and country of origin are set out in the table.


Volume fillers All USA

Capping machines All USA

Inkjet printers USA (Videojet)

Stretch wrapping machines Australia

Crate packing machine (1) Australia

Debagging machine (1) USA 4. Future Packaging Machinery Plans (next 3 years)

The particular plant for which the data was obtained is most likely to require a new volume filler within the next 3 years with an estimated cost of A$500,000.

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5. Key Issues in Purchasing Decisions Key issues are:

• innovation in the technology • quality and reliability • local parts availability and service.

6. Attitudes to Supplies

North American equipment, which is favoured by this respondent, is seen as having good technology with good service for the particular agents they deal with, but the price is perceived as high. The respondent had no dealings with European and Asian equipment distributors. Australian equipment is seen as having good technology but not particularly innovative with excellent service and reasonable pricing.

7. Contact Information Company: National Foods Limited Company Division: Dairy Division, Penrith Plant Contact: Bruce Cremmer Position: Plant Engineering Address: Castlereagh Road, Penrith NSW 2750 Telephone: (02) 4721 0241 Fax: (02) 4732 1744

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Pauls Dairy Foods

Industry: Food Sub Industry: Dairy Products Location: Queensland Purchasing Potential: Next 3 years, no estimate

provided

1. Company Description Pauls is a leading manufacturer of dairy foods. The business is owned by the Italian private international company, Parmalat and has a turnover in Australia of approximately A$750 million.

2. Main Products Produced and How They are Packed The main products of Pauls are 2 and 1 litre packs of milk and these are packed primarily into HDPE bottles and some Tetra-paks.



Origin

Tetra-pak fill and seal machines 2 Sweden

Filler capper machines 3 USA (Fogg)

Labellers 6 Australia (Tronics)

Ink jet coders 8 USA (Videojet)

Case packing machines 4 UK 3 (OUD) Australia 1 (Pactron)

Crate stackers 2 UK (OUD)


Most likely requirements over this period are a stacker, a drop caser and possibly a filler for plastic bottles. It is expected that there will be a continuing move away from cartons to plastic bottles for milk. The investment in new plant has not been estimated in terms of value.

70


• local representation • inbuilt safety features • Australian made, as far as possible • compatibility with other equipment and previous experience • service including parts availability and price.


North American technology is seen as good, with good service but high price. This respondent did not know much about European equipment other than the UK. The UK is seen as having good technology with good service but reasonably high price. Australian technology is also seen as good with good service and price somewhat lower. The respondent said that fillers bought from the USA have to have added protective guards to meet Australian Occupational Health and Safety Standards. He thought that the American market is not as safety conscious as we need to be in Australia.


Company: Pauls Dairy Foods Contact: Rick Werner Position: Plant Engineer Address: Cnr Pineridge Rd & Gold Coast Hwy, Labrador, QLD 4215 Telephone: (07) 5594 0288 Fax: (07) 5594 0101

71

San Remo

Industry: Food Products Sub Industry: Cereal food and baking Location: Adelaide, South Australia Purchasing Potential: Next 3 years - not stated


San Remo is a private company and is the largest manufacturer of pasta and noodles in Australia. Annual turnover is of the order of A$125 million.


Dry pasta is packed into clear plastic wrap and noodles also in plastic wrap or cups. Fresh pasta is packed into vacuum trays.


Current Machinery Used Approx. No.

of Units

Origin

Vertical form, fill and seal machines 12 Holland

Inkjet date coders 12 UK

Metal detectors 12 Italy

Check weighers 12 Italy

Shrink wrapping machine 1 Italy

Stretch wrapping machine 2 Italy

Case cartoners 12 Italy

Palletising machines 10 Australia/Japan


The respondent expects there to be some investment over the next 3 years, but was not prepared to give any details or suggested budget.


The key factor for this respondent is that suppliers must have specific experience and expertise in their industry which is pasta and noodles.

72


The respondent had no knowledge of American suppliers. Italian technology is regarded as excellent, but expensive and service not particularly good. Australian equipment is seen as having average technology but much better service than imported machinery. The problem with Australian equipment is that it offers a narrow range of types mainly, conveyors and palletising. Italian packaging machinery suppliers are seen as the experts in the field of pasta and noodles (which is not surprising).


Company: San Remo Contact: Richard Cornby Position: Engineering Manager Address: 4 Boden Court, Windsor Gardens SA 5087 Telephone: (08) 8261 0555 Fax: (08) 8261 0265

73

Smith Snack Food Company

Industry: Food Sub Industry: Other Food manufacturing - snack

foods Location: Head Office, NSW Purchasing Potential: Next 3 years, none identified


Smith Snack Food Company is a wholly owned subsidiary of Pepsico USA. Its main product is potato crisps and the total Australian turnover is about A$450 million. The company has manufacturing plants in Queensland, South Australia and Western Australia.


The key product of the company is potato crisps and these are packed into poly type bags.


The information in the table below relates to the West Australian plant.



Origin

Form fill and seal machines 19 USA and Australia

Inkjet printers 19 USA

Everything else in the plant is packed manually. Part of the reason for this is because potato crisps are fragile and need very careful handling.


Currently there are no plans to update the plant over the next 3 years.


These are seen to be:

• equipment specification, particularly increased productivity • price • country of origin (a preference for Australia).

74


This respondent had little knowledge of North American sourced equipment except that it was very expensive. In their field he felt that Australian technology was good with excellent service and reasonable price.


Company: (The) Smiths Snack Food Company Limited Contact: Darren Bowles Position: Engineering Department Manager Address: 38 Bannister Road, Canningvale WA 6155 Telephone: (08) 9366 6000 Fax: (08) 9366 6184

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Snack Brands Australia

Industry: Food Products Sub Industry: Other food manufacturing /

snack foods Location: Sydney, NSW Purchasing Potential: Unknown


Snack Brands is a subsidiary of the Australian publicly listed company, Snack Foods. It is the second largest supplier of potato chips and corn chips. The total turnover of Snack Foods which manufactures both snack foods and confectionery from several plants around Australia is about A$280 million p.a.

2. Main Products Produced and How They are Packed The main products made by Snack Brands at its Smithfield plant are salted snack foods such as potato chips and corn chips. These are packed into plastic bags. (Other plants within the Snack Foods group pack other food products including nuts and confectionery.)


Current Machinery Used Smithfield Plant


Origin

Vertical form, fill and seal machines 25 Australia (TNA Robac)

Date coders 5 Europe

Weighing machines 20 Japan

Automated case handlers 2 Holland (Blueprint)


The company is likely to look at more automation to reduce labour costs in the future. This could include for example the packing of the packets into cases which is currently done manually. The possible expenditure has not been planned or costed at this stage.

76


These are: • local service and support including technical expertise available

locally • previous experience - it is considered important to form a close

partnersh ip with the suppliers and stay with them • functionality of the equipment • price.


North American equipment is seen as providing good technology and service at an expensive price. European is seen as having similar technology and service to North American but at a high rather than very high price. Australian equipment is also not differentiated from North American or Europe in terms of technology or service but the pricing is seen as more competitive.


Company: Snack Brands Australia Contact: Lyndon Screwby Position: Engineering Manager Address: 15-21 Britton Street, Smithfield NSW 2164 Telephone: (02) 9609 0444 Fax: (02) 9609 0484

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Sugar Australia

Industry: Food Sub Industry: Sugar manufacturing Location: Head Office, via Sydney Purchasing Potential: Next 3 years about $130,000


Sugar Australia is a 50% joint venture with CSR, a large listed public company conglomerate in Australia, with the balance being owned by MacKay Refined Sugars Australia, and ED & S Mann of the UK. The company has two refineries, one in Victoria and one in Queensland and packages refined sugar in retail and industrial packs. Retail packs probably have a turnover of the order of A$50 million.

2. Main Products Produced and How They are Packed The only product of Sugar Australia is refined sugar. This is packed into retail packs of mainly paper bags and poly bags in sizes of 1 and 2 kg. Industrial packs are 3 ply paper bags with a block bottom to contain 25Kg.


The respondent did not provide information on numbers of different types of equipment, but the equipment categories in the plants of Sugar Australia are as shown in the table below.


Form fill and seal machines for retail packs Germany and Austria

Fill and seal for industrial packs and some retail packs

Germany and Austria

Inkjet date printers USA

Metal detectors USA

Check weighers USA, Dutch and Italian

Cartoning machine for retail packets Germany

Shrink wrapping machine Australia

Stretch wrapping machine for pallets Thailand

Case packers Australia, Germany & Holland

Palletisers for industrial packs Germany and Australia

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4. Future Packaging Machinery Plans (next 3 years) The business is intending to purchase a new form fill and seal machine for 1kg poly bags and the approximate expected cost for this line is A$130,000.


These are:

• technical support in Australia (which the company considers hard to get)

• other machines operating successfully in Australia

• price

• service. 6. Attitudes to Suppliers

The perception is that European suppliers have the best technology but that the service is poor. The major suppliers to the sugar industry are seen as coming from Europe. North American sourced equipment is seen as being high priced and of only average technology. Australian equipment, where available, is seen as having just average technology, service and price.


Company: Sugar Australia Contact: Peter Byrnes Position: National Packaging Engineer Address: Locked Bag PO Box 3741 Epping NSW 1718 Telephone: (02) 887 64139 Fax: (02) 887 64100

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Uncle Tobys

Industry: Food Sub Industry: Cereal food and baking mix

manufacturing Location: Head Office, Sydney Purchasing Potential: A$1.5 million


Uncle Tobys is a division of Goodman Fielder, the largest food manufacturing company in Australia. This division makes cereal products and a number of other consumer products. The total turnover of the division is probably of the order of A$400 million and the products are produced in several plants around Australia.


The key products of this operation are breakfast cereals, cake mixes and soups. These are all packed in an inner pouch with an outer printed carton.


The details which follow in the table relate to the Sydney plant of Uncle Tobys only which makes and packs cake mixes, soups, baked products and ice blocks. It is not involved in breakfast cereal production.

Current Machinery Used at

Sydney Plant


Origin

Combined form fill and seal machines

3 Australia

Combined fill and seal machines 10 USA

Filling machines 3 Australia

Closing machines 3 UK

Labelling and decorating machines 12 Various sources


Wrapping machines 4 Europe

Automated case erecting and packing machines

5 USA

Semi-automated case erecting and packaging machines

3 Australia

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4. Future Packaging Machinery Plans (next 3 years) Most likely investment in the next 3 years is in automatic palletising equipment. The expenditure on this should be about A$1.5 million. This information relates only to the Sydney plant and other factories will have their own needs in the future.

5. Key Issues in the Purchase Decision The major factors are:

• price • service and parts availability • compatibility with other equipment • delivery time • compliance with safety regulations and noise • high efficiency levels.


This respondent believed that the technology out of Europe is somewhat better than that coming out of North America but both sources are expensive and service is only average. Australian sourced equipment, where available, provides better service and pricing, but technology is somewhat behind.


Company: Meadow Lea Consumer Foods Company Division: Uncle Tobys Division Contact: Alan Orlina Position: Projects Engineering Manager - Smithfield Plant Address: 28 Percyville Road Smithfield NSW 2113 Telephone: (02) 9828 2611 E-mail: [email protected]

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4. THE BEVERAGE INDUSTRY


Beverage production in Australia is estimated to be worth over US$6 billion in revenue and accounts for about 4% of Australia's total manufacturing turnover. (We have elected to include milk with foods under the dairy products heading it is included in Section 3 of the report.)

Most of Australia's beverage requirements are met from local production, but there is a reasonable level of imports of spirits and mineral waters, some of which are bottled locally.

Production of the main beverage products is highly concentrated with each category dominated by two or three manufacturers. In most beverage categories there are few manufacturers with the main exception being wine.

Wine production is a major and rapidly growing export industry and there is a large number of small and medium sized boutique wine producers. Considerable rationalisation has however taken place in the wine industry so that it now has several manufacturers that are large in international terms.

Both the soft drink industry and the spirits industries are dominated by international brands, but other beverages are mainly manufactured by local Australian or Australian and New Zealand companies.

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4.2 KEY PLAYERS

The leading beverage manufacturers in approximate beverage and revenue size order in Australia are set out in Table 4.1.

TABLE 4.1 LEADING BEVERAGE MANUFACTURERS IN AUSTRALIA

IN DESCENDING SIZE ORDER (excluding milk, tea and coffee)

Source: Polymex Consultants Research

Rank

Company

Owner-ship

Soft Drink Cordial &

Syrup

Beer

Wine

Spirits

1 Fosters Group LL X X X

2 Lion Nathan Limited LO X X

3 Southcorp Limited LL X

4 Coca Cola Amatil LL X

5 Cadbury Schweppes (bottlers of Pepsi Cola)

LO X

6 BRL Hardy LL X

7 Orlando Wyndham (parent Pernod Ricard Group)

LO X X

8 Berri Ltd PL X

9 Guiness UDV LO X

10 De Bortoli Wines PL X

11 McWilliams Wines PL X X

12 Coopers Brewery PL X

Notes: 1. Ow nership code: LL Listed Local, LO Listed Overseas, PL Private Local, PO Private Overseas, CL Co-operative Local

2. Coca-Cola Amatil is a local listed company but Coca-Cola USA has a large shareholding.

3. Lion Nathan is a New Zealand company and is the second largest brewer in the company behind Fosters Group.

4. Berri Ltd is the largest manufacturer of pure fruit juices and fruit juice drinks.

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Because wine is such an important growth industry in Australia, the largest Australian producers of wine for retail sale are listed in the table below.

TABLE 4.2 LARGEST BOTTLED WINE PRODUCERS IN AUSTRALIA

IN DESCENDING SIZE ORDER

Source: Polymex Consultants

Southcorp Wines (recently purchased Rosemount Wines) BRL Hardie Mildara Wines (owned by Fosters which recently bought Berringer Wines, US) Orlando Wyndham (owned by Pernod Ricard) *De Bortoli Wines *McWilliams Wines Cranswick Wine Co *Miranda Wines *Riverina Wines *Kingston Estate *Yalumba *Brown Brothers Peter Lehman *Tyrrels

* All these are local private companies and the balance (with the exception of Orlando Wyndham) are local publicly listed companies.

4.3 BEVERAGE PRODUCTION

Overall statistics for beverage production in Australia are set out in the table which follows. The table shows that wine manufacturing is the largest beverage category. Wine has also been a major growth industry over the last 10 years due primarily to the rapid expansion of export markets.

TABLE 4.3 BEVERAGE MANUFACTURING INDUSTRY STATISTICS AUSTRALIA


(A$ converted at 0.627 USD)

Industry Code

Description

Employment at end of June

Thousand

Turnover

US$,000m

% of Total

218 Beverage and malt mfg 2181 Soft drink, cordial and syrup mfg 5.9 1.62 30.0 2182 Beer and malt mfg 2.9 1.58 29.1 2183 Wine mfg 8.7 2.08 38.4 2184 Spirit mfg 0.2 0.12 2.3 Total 17.7 5.41 100.

0

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Production statistics that are available for the four years to 1998-99 are presented in Table 4.3. These statistics show that wine production almost doubled between 1995-96 and 1998-99. The statistics also show the breakdown for beer and aerated beverages between bottled and canned product (but not between glass and plastic bottles).

TABLE 4.3 PRODUCTION STATISTICS FOR BEVERAGES


Description 1995-96 1996-97 1997-98 1998-99A$m A$m A$m A$m

Beer, ale and stout, bottled n.p. 1106.6 1164.4 1221Beer, ale and stout, canned n.p. 549.2 581.5 531.9Beer, ale and stout, bulk n.p. 393.7 416.5 417.9Malt (excl malt extract) n.p. 261.7 280.5 280.3Beer, ale and stout, bottled, canned and bulk and malt (excl malt extract) 2399.7 2311.2 2443 2451.1Cider, perry, mead and wine-based mixed drinks (coolers) 97.2 n.p. n.p. n.p.Cordials and syrups; powder flavours for soft drinks; concentrated cordial extracts 208.1 219.8 388 171.9Mineral waters and aerated waters, sweetened or flavoured - canned 582.7 551.9 558.8 601.5Mineral waters and aerated waters, sweetened or flavoured - bottled 1007.9 976.5 997.6 1137.6Natural and artificial mineral waters and aerated waters (excl sweetened or flavoured) 33.8 46.3 n.p. 79.9Natural water nec 36.6 88.6 125.8 193.5Vinegar, from wine 1.9 9.8 11.6 n.p.Whisky, brandy, rum, gin and fortified spirits 75.4 73.6 96.2 107.3Vermouth and distillation wine 29.3 n.p. 12.8 3.7Sparkling wines and other beverage wines of fresh grapes (incl fortified wines) (excl vermouth) 1665.1 2096.8 2545.2 3200.6Other distilled alcoholic beverages (incl liqueurs and spirit-based mixed drinks) 50.1 n.p. n.p. 96.6Cider, perry, mead and wine-based mixed drinks (coolers); and other distilled alcoholic beverages (incl liqueurs and spirit-based mixed drinks) n.a. 81.2 115.9 n.a.

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4.4 EXPORTS

Historical exports over the eight year period to June 2000 are shown in Table 4.4. The table illustrates the major contribution to beverage exports made by wine and the outstanding growth of this industry.

TABLE 4.4 AUSTRALIAN BEVERAGES AND MALT EXPORTS

Source: Australian Bureau of Agricultural Research Economics (ABARE)

1992-93 A$m

93-94 A$m

94-95 A$m

95-96 A$m

96-97 A$m

97-98 A$m

98-99 A$m

99-00 A$m

Soft drink, cordial & syrup 17 24 31 59 34 28 23 25

Beer and malt 170 170 166 204 215 216 207 213

Wine 293 367 386 474 604 874 1,068 1,372

Spirits 15 22 27 27 29 31 38 55

Total 495 583 610 764 883 1,150 1,336 1,666


4.5.1 SOFT DRINK, CORDIAL AND SYRUP

Carbonated soft drinks are packaged in metal cans, glass bottles or plastic bottles. The trend is away from metal and glass to PET bottles. About 70% of carbonated drinks are packed in plastic or glass bottles.

Non-carbonated drinks are also packed in metal cans, glass bottles or plastic bottles, but are also frequently packed in gusseted cartons and combi block type cartons particularly in the smaller pack sizes.

4.5.2 B EER

Beer for retail sale is generally packed in bottles or cans with about 70% in bottles. Bulk beer in steel kegs accounts for about 17% of beer production. Both the major Australian brewers now also pack a small proportion of beer for retail sale in PET bottles.

4.5.3 WINE

Wine is generally packed in glass bottles with cork seals. Limited experimentation is going on with other forms of seals. Corks are usually covered with a plastic capsule and some wines are moving to a waxed disk covering for the cork instead of a capsule.

Larger bulk wine packs are either glass flagons, casks (bag in box) or plastic bags. The bag in box (cask) form of packaging was originally developed in Australia and is still quite popular.

A small volume of wine is also sold in small sachets (say 75ml).

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4.5.4 SPIRITS

Spirits are packed in glass bottles with screw caps. Spirit mixes are available in cans and bottles.


Berri Limited

Industry: Beverages Sub Industry: Soft drink, cordial & syrup Location: Head Office Melbourne VIC Purchasing Potential: Over A$5 million


Berri Limited is the largest producer of fruit juices in Australia and has several plants, most of them in the irrigation area of South Australia. The company produces both fresh fruit juices and long life juice as well as cordials and other fruit related products. Strictly speaking, pure fruit juice should be classified under foods rather than beverages, but as the company also produces mixed drinks we have included it in the beverages heading. Berri is a private company which started as a co-operative.

2. Main Products Produced and How They Are Packed The key products produced by Berri Limited are set out in the table below.

Key Products Main Packs

Fresh Juice PET, HDPE, polypropylene bo ttles, gable top cartons, combi block cartons

Long Life Juice PET bottles, combi block cartons, glass bottles

Cordial Polypropylene bottles

Fruit Tubs with membrane or metal seal

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3. Installed Packaging Machinery The approximate numbers of installed packaging machinery across all the production plants of Berri Limited are set out in the table. The table does not include the packaging equipment for combi block cartons which is owned by the carton supplier, Visy Industries.

Current Machinery Used Approx. No. of units

Origin

Cooling tunnels 8 Australian

Filler cappers 50 USA (Fogg & Federal), Australian (Schlenker)

Labelling machines 50 Mostly Australian (Imprestik)

Coding and printing machines 50 Many sources

Gable top cartoning machines 10 Mostly USA (Cherry Burrell)

Automatic case packers 5 Australian

Case overpackers 40 Australian & Europe

Automatic palletisers 15 Australian

Depalletisers 3 Australian

Unscramblers 6 USA (Fogg)

Debaggers 10 Australian


The company is looking at more automating, particularly at the end of the line for case packing and palletising. The likely expenditure over the next 3 years could be of the order of A$10 million but this would also include conveyors.


The key issues are local support and service and price. Berri tends to purchase lower cost equipment, ie not at the high end of technology and cost.

As the company moves forward it will be looking to upgrade its equipmen t to faster machinery and quick change overs will also be very important.

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This respondent believes that USA equipment is not very well supported in Australia and is expensive. He feels that lower cost USA sourced equipment has not been available, either because it is not produced or because it is not exported. What Berri is looking for primarily is best value for money. Respondent also believes that Europe is somewhat ahead of the USA in terms of technology.


Company Name: Berri Limited Contact: Blair Keating Position: Process Engineering Manager Address: Level 1, 15 -31 Pelham Street, Carlton VIC 3053 Telephone: (03) 9915 0400 Fax: (03) 9915 0502 Email:

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BRL Hardy

Industry: Beverages Sub Industry: Wine Location: Reynella, SA Purchasing Potential: Next 3 years A$10 million

including conveyors 1. Company Description

BRL Hardy is the second largest wine producer in Australia and has a turnover of the order of A$800 million. It is a local public listed company.


The main product of BRL Hardy is wine. The company also produces some brandy. Wine is packed into glass bottles of various sizes and also into bag-in-box casks. Brandy is packed into bottles.


The information in the table below relates to the main packaging plant for BRL Hardy which packs still and sparkling wines into bottles. The company has another plant which packs bulk wines into bag-in-box casks.

Current Machinery Used at Reynella Plant

Approx. No. of units

Origin

Rinsing machines 5 Italy

Filling machines 5 Italy

Corking machines 4 Italy

Crown seal machines 1 Italy

Stelvin seal and closure machines 1 France

Capsuling machines 3 Italy

Wires machines 2 Germany

Labelling machines 4 Italy

Case sealing machines 2 Italy

Carton over product packers 4 Australian

Carton formers 3 Germany (Kettner)

Depalletisers 2 Italy

Palletisers 2 Italy

Bin & debin machines for terage bottles 2 France

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BRL Hardy intends to install a completely new high speed line to handle 18,000 bottles per hour within the next 3 years. Approximate cost will be about A$10 million including all the conveyors.


The key issues are seen as:

• availability of local service and parts

• reliability of the equipment

• the equipment specifications in terms of speeds and types of products it can handle

• price.


Local agents for offshore equipment have a very mixed reputation for service. In the respondent's view, the United States products that are designed for the beverage industry are not well represented in Australia. In recent years there has been a marked improvement in the service from agents handling the Italian sourced equipment that BRL Hardy has been buying.

The respondent really appreciates the quality of the equipment coming out of Germany but it is considered far too expensive in relation to what is available out of Italy to do a similar task.


Company Name: BRL Hardy Pty Ltd Contacts: Meg Molinaar Position: Packaging Operations Manager; and Andrew Byles Maintenance Manager Address: Reynella Site, Reynel Road, Reynella SA 5000 Telephone: (08) 8392 2274 Fax: (08) 8392 2152

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Cadbury Schweppes

Industry: Beverages Sub Industry: Carbonated Soft Drinks Location: Sydney, NSW Purchasing Potential: Next 3 years, A$5-10 milion

beverages only 1. Company Description

Cadbury Schweppes Australia is a subsidiary of the international company. Recently the business acquired the Pepsi-Cola manufacturing rights and has been rationalising the Schweppes and Pepsi-Cola plants. The total turnover of Cadbury Schweppes in Australia is about A$1.1 billion per annum which includes both its beverages and confectionery lines.


The main beverage products produced are carbonated beverages under Schweppes, Pepsi and other brand names. The company also produces cordials, mineral water and juices. The main packs are as set out below.

Carbonated drinks - PET bottles sizes 390 ml - 2 litre

Aluminium cans sizes 250 - 415 ml Glass bottles 300 - 340 ml

Hot fill drinks - Glass and PET bottles

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Cadbury Schweppes has about eight different plants around Australia manufacturing Schweppes, Pepsi and other brands of carbonated drinks. It also has some still drinks (mineral water and juices). In total the business has 22 filling lines spread through the different manufacturing plants. The main types of packaging machinery and suppliers are set out in the table below.



Main Suppliers

Other Suppliers

Rinsers 22 - W&D, Anderson, Tonko Deanco, Sturt & Gill

Can filling machines 4 Myer Crown, H&K

Bottle filling machines 18 Myer, H&K

O&H, KHS, Cyemsa, Krones

Can seamers 4 - Guerze

Bottle cappers 18 Zalken, Alcoa Whitecap, Capem

Labellers 18 Krones

Can packers 9 - Kisters, Meyer, Riverwood, SMI, Jack-et-Pak, Charger, Fibre King

Bottle packers 18 Kettner Meyer, Mead, Involvo, Ocme, Mitsubishi, Marksman, Fibre King

Depalletisers 22 W & D H&K, Wyard, Ocme, Simanazzi

Palletisers 22 Wyard W&D, H&K, Alvey, Fibre King


Cadbury Schweppes has recently undertaken significant capital investment in its beverages operations as it has been integrating the Pepsi lines in with its others. The packaging machinery investment is now likely to be concentrated on the food side of the business in the next three years. However, it is still likely that total expenditure on packaging machinery for the beverage plants will be in the range of A$5 -10 million over the next three years.

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• after sales service from an active local agent • proven technology • robust offering and good service life.


The United States is seen as being a source for specialised equipment eg capping, but is not considered as advanced as some European suppliers for filling equipment and is expensive. German equipment is recognised as excellent and good support is offered in Australia, but prices are very high. Italian equipment is seen as improving in technology and design (in comparison with German equipment) and to represent good value for money. Australia is thought to offer only a limited range. Service is good being local and the strength of Australian suppliers is in less technical products such as rinsers and depalletisers.


Company: Cadbury Schweppes Division: Schweppes Cottees Division Contact: Alan Beamish Position: Industrial Engineer Address: 42 Orange Grove Road, Liverpool NSW Telephone: (02) 9821 9861 Fax: (02) 9821 4558

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Carlton & United Breweries Ltd

Industry: Beverages Sub Industry: Beer brewing Location: Head Office, Melbourne Purchasing Potential: Next 3 years - A$15 m

1. Company Description Carlton & United Breweries Ltd (CUB) is a wholly owned subsidiary of Fosters Group Ltd, the largest brewer in Australia. Fosters is a public listed company with total revenue worldwide of over A$4 billion. Apart from beer, Fosters is a major wine producer in Australia and recently purchased Beringer, the US wine company. CUB's production of beer in Australia generates a revenue of about A$1.5 billion. The other main beverages in the Fosters Group packed in Australia, namely wine and spirits, have revenues of about A$400 million and A$100 million respectively.


CUB only produces beer. The packs used are as follows:

Bottles 250ml, 330ml, 375ml, 750ml

Cans 355ml, 375ml, 500ml

Fibreboard wrap 4 packs, 6 packs, 12 packs

HiCone 6 pack cans

Shrinkwrap 6 pack, 24 pack

Cartons 12, 24, 28, 30

Kegs 50 litre

95




Origin

Bottle and can rinsers Keg washers

20 USA, Germany

Bottle, can, keg filling 30 Germany

Bottle crowners, 2 piece can seamers

20 USA, Germany, Australia

Labellers 15 Germany

Laser coders, inkjet coders 50 USA, Germany

Fill height, label detection, crown seal integrity

60 USA, Germany

Wrap around box packers 20 Germany, Japan, Italy

Shrinkwrappers, fibreboard wrappers, HiCone application

15 Germany, France, USA

Palletisers 20 Italy, USA


• Multipackers capable of many variations in units or packs per case • Laser coders capable of high speed (1000/minute) coding on

bottles • High speed, multiple label application labellers.

Likely expenditure is about A$15 million.


• local support • response time for spare parts and change parts • proven supplier • robust equipment • flexible range of operation.

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6. Attitudes to Suppliers For the US, equipment supplier mainly dealt with (RA Jones) equipment is seen as excellent and now well supported in Australia. Mead is also a good supplier with equipment now being manufactured in Europe. German equipment is seen as offering excellent technology, with good service but high pricing. Italian is seen as catching up (with German) with better pricing. Australia is seen as providing good service but having less capability in terms of product range. Australian suppliers are considered to be restricted to less complex packaging machinery eg palletising.


Company: Carlton & United Breweries Ltd Contact: Andrew Marshall Position: Manager Operations Capability - Packaging Address: 77 Southbank Boulevard, Southbank VIC 3005 Telephone: (03) 9420 6520 Fax: (03) 9420 6554 e-mail: [email protected]

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Coopers Brewery

Industry: Beverages Sub Industry: Beer Location: Adelaide, South Australia Purchasing Potential: Next 3 years, A$100,000

1. Company Description Coopers Brewery is the largest of the privately owned brewers still operating in Australia. Annual revenue is approximately $110 million.

2. Main Products Produced Coopers Brewery produces beer in glass bottles and in bulk kegs of 50 litres. The company also makes home brewing kits, ranging in size from 1.7 kilogram cans to 300 kilogram drums. Because of the company's relatively small size, it tends to purchase reconditioned packaging machinery and only buys limited amounts of new equipment.




Brand Origin

Can filler 1 Meyer Germany

Bottle filler 1 KHS Germany

Keg Line 1 KHS Germany

Labelling machine 1 Krones Germany

Wrapping machines 3 Mead (2) Doboy (1)

USA Belgium

Packing machines 2 Meypack? Germany

Depalletiser 1 Foodmach Australia

Palletiser 1 Foodmach Australia

98


Coopers have recently relocated their plant and did some upgrading at the same time. Thus, expenditure in the next 3 years will be limited with a reasonable estimate being about A$100,000.


As stated earlier, Coopers is a private company preferring to buy reconditioned equipment rather than new. Its choices are primarily made on the basis of performance, reputation and price.


Company Name: Coopers Brewery Limited Contact: Tom Bullock Position: Operations Manager Address: 461 South Road, Regency Park SA 5010 Telephone: (08) 8440 1800 Fax: (08) 8440 1819 E-mail: [email protected]

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De Bortoli Wines

Industry: Beverages Sub Industry: Wines Location: Bilbul, NSW Purchasing Potential: A$3-4 million


De Bortoli Wines is about the fifth largest bottled wine producer in Australia and has a turnover of approximately A$120 million. It is a private company with its main operations in the Griffith area of New South Wales.


The main product produced is wine which is packed into glass bottles and bag -in-the-box casks.



Origin

Bottle rinsers 3 Italy

Bottle filling and closing machines 4 Italy (3)

German (1)

Bag-in-box cask filling machines 3 Australia

Labelling machines 4 Italy

Laser printer 1 USA

Semi-automatic case closing machines 1 Australian

Depalletisers 2

Palletisers 3 Australian


The wine industry has been growing very rapidly and it is difficult to have visibility beyond about 1 year. Probable requirements are a new rinser, corking machine, wire hooker machine for sparkling wines, labelling machine and case erector and packer.

In recent years the expenditure on new packaging machinery has been about A$750,000 per annum. The likely expenditure in the next 3 years is of the order of A$3 -4 million.

Marketing requirements are an important factor in driving the demand for new packaging machinery, particularly in the area of labelling and bottle shapes.

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5. Key Issues in Purchase Decision

The key issues are seen to be:

• having a proven track record as a supplier in Australia

• value for money

• meeting specification at a price.


Italian sourced equipment is currently favoured because of its value for money and reasonably advanced technology. German equipment is regarded as superior but too expensive and little is known about any USA sourced equipment that is specifically suited to the wine industry.


Company Name: De Bortoli Wines Contact: Andreas Reisinger Position: Packaging Manager Address: PO Box 21 Bilbul NSW 2680 Telephone: (0269) 649 444 Fax: (0269) 649 400

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Lion Nathan Limited

Industry: Beverages Sub Industry: Beer Location: Australian Head Office, Sydney Purchasing Potential: Next 3 years, $7-8 million


Lion Nathan is the second largest brewer in Australia with about 40% of the market. The company is publicly listed in New Zealand and has six breweries in Australia.


Beers produced by Lion Nathan are packed into cans and bottles of different sizes, 5 litre tins and kegs. PET bottles were introduced about 18 months ago, but are still a very small proportion of the total retail packs.


The main packaging machinery items found in the six Lion Nathan plants are set out below.


Origin

Filling machines for cans 4 Germany

Filling machines for glass bottles 15 Germany / Italy

Filling machines for PET bottles Germany

Glue labelling machines 15 Germany / Italy

Self Adhesive labelling machines Germany

Multi packers 7 USA

Wrap packers 12 Germany/Italy and some Japan

Depalletisers 14 Germany / Italy and Australia

Palletisers 16 Germany / Italy

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The most likely requirements in the next 3 years are:

• 4 Wrap around packers

• 4 Multi packers

• 6 Palletisers

• 3 Depalletisers.

The total expenditure on these items and other smaller items is likely to be in the order of A$7-8 million.


The main issues looked for are:

• capability, particularly speed

• reliability

• cost

• service and support.


For the brewery industry, German equipment is seen to be more advanced in technology and speed compared to the other major source which is Italy. The German equipment is also seen as slightly more expensive.

Flexibility of packaging machinery is becoming more and more important as the numbers of different types of packs and their complexity increases. The USA is seen as producing less flexible equipment than say Germany or Italy.

The US is seen as being good for palletising and depalletising equipment but prices are too high. Australia is also in the market with palletising and depalletising but the Australian equipment is not as capable in terms of high speed particularly for palletising.


Company Name: Lion Nathan Contact: Phil Hargans Position: Technical Development Director Address: 29 Nyrang Street, Lidcombe NSW 2141 Telephone: (02) 9647 9647

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McWilliams Wines

Industry: Beverages Sub Industry: Wine and spirits Location: Sydney Purchasing Potential: Next 3 years !A$1 million


McWilliams Wines is a family owned wine business. With revenue of about A$110 million, it is probably the largest private wine producer in Australia and the fourth largest wine company. Whilst it has several wineries in different grape growing regions, all packaging is carried out at one plant in Sydney.


Wine is packed in a range of packs which include standard wine glass bottles, glass flagons, 2 litre casks (bag in box), 20 litre bags and 75ml sleeve sachets. Spirits are packed in bottles.

3. Installed Packaging Machinery:

Current Machinery Used Approx. No.

of units Origin

Filling machine for bottles 5 Italy

Filling machine for 20 litre bags 1 Italy

Fill & seal machine for sachets 1 Italy

Filling machine for 2 litre (bag in box) casks

1 Italy

Cork closing machines 4 Italy

Other closing machines 3 Italy

Case erectors 3 Italy

Automatic packer - bottles in cartons 1 Italy

Pallet forming machine 3 Australia

Pallet wrapping machine 1 Australia

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Probable purchase of one new filling machine for bottles plus small complementary machinery to supplement existing packaging lines. Total expenditure A$1million.


• design and technology / accessibility and ease of maintenance

• service

• price.


Italy is seen as excellent for wine packaging equipment (based on home industry). Technology is good and prices are competitive.

Germany is also seen as having good technology but more expensive.

Service is only average for Italian equipment.

Some printing equipment for cartons and labels is currently being evaluated from France, England and Australia. Likely choice is England as seen as good with inkjet and laserjet technology.

Australia is good for pallet forming equipment.


Company Name: McWilliams Wines Pty Ltd Contact: Tony Elias Position: Group Operations Manager Address: 68 Anzac Street, Chullora, NSW Telephone: (02) 9722 1200 E-mail: [email protected]

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Orlando Wyndham

Industry: Beverages Sub Industry: Wine and spirits Location: Roland Flat, South Australia Purchasing Potential: Next 3 years, A$1 million

1. Company Description Orlando Wyndham is the third largest wine producer in Australia with turnover about A$400 million. The company is owned by the international wine and spirits business Pernod Ricard.


Wine is packed in glass bottles and in bag in box casks, ranging in size from 2 - 20 litre.



Origin

Table Wine Filling machines 3 Italy / Germany

Sparkling Wine Filling machines 2 Italy / Germany

Bag in Box filling machines 3 Italy / Germany

Labelling machines 7 Australian

Carton Erectors 5 Germany, US and Australia

Carton packing machines 5 Germany / US

Palletising machines 10 Australian


The company has recently put in a new high speed line. Towards the end of 2002 more investment is likely to be made into enhancement to the filling and packing machinery. Expenditure on this will probably be up to A$1 million.

106


The key issues are proven performance and good local support.

Unlike some other wine manufacturers, Orlando Wyndham chooses packaging machinery on an individual performance basis and does not go for turnkey systems. They see wine filling moving in the same direction as brewery machinery.


The philosophy of Orlando Wyndam is to buy the best equipment for the task. There are several suppliers to choose from with Germany and Italy favoured. US equipment is too expensive to consider.


Company Name: Orlando Wyndham Contact: Dean Zeunert Position: Technical Manager Address: PO Box 943 Roland Flat SA 5352 Telephone: (08) 8521 3251 Fax: (08) 8521 3247 Email: [email protected]

107

Southcorp Holdings Limited

Industry: Beverages Sub Industry: Wine and spirits Location: South Australia Purchasing Potential: A$1.5 million


Southcorp Holdings is the largest producer of wine in Australia and has many leading brands. It is a publicly listed company which until recently had diversified interests in packaging and appliances as well as wine. However, the company has now decided to concentrate on its wine and spirits business and has sold off or is in the process of selling its other interests. The packaging division was sold in the last twelve months to Pratt Industries, a major carton board manufacturer.

The wine businesses of Southcorp were recently merged with another important wine company, Rosemount Wines which was privately owned. This merger is leading to some rationalisation of packaging facilities.

At this stage Southcorp Wine packaging operations are managed more or less autonomously with separate plants for table wines, sparkling wines, and bulk wines. Total annual wine revenue for Southcorp exceeds A$1billion.


Southcorp wines are packed in glass bottles in sizes ranging between 375ml and 2 litres, bag in box casks from 2 to 4 litres and a 20 litre cask. Sparkling wine is packed into bottles ranging from 250ml to 1.5 litres with 99% being packed in the standard 750ml glass bottle.

108


Information was obtained for 2 of Southcorp's major packaging plants. One being for quality table wine, packed at Nuriootpa in South Australia and the other plant being at Great Western in Victoria for packing sparkling wines.

Current Machinery Used for Sparkling Wines at Great Western


Origin

Bottling rinsing 2 Italian (1) Australian (1)

Filling machines 5 Italian (4)

German (1) Closing Machines - crown seal 2 Italian - corking 4 Italian Labelling machines 4 German/Italian Inspecting machines - level 1 USA - label positioning 1 USA

Carton filling machines 2 German (1)

Australian (1) Wrapping machines 3 Australian Pallet forming machines 3 Australian (2)

New Zealand (1)

Current Machinery Used for Table Wines at Nuriootpa


Brand Origin

Bottle filling machines 3 Seitz BC Bertislaso

Germany Italy Italy

Closing Machines 3 Bertislaso Italy 1 Norton Italy Labelling 8 Krones Germany Case erectors 3 Otor (2)

HMPS France Australia

Case fillers 3 Kettner (2)

HMPS Germany Australia

Palletisers 3 Kettner (2)

? Germany Australia

109


The demand for sparkling wines is stable in Australia, not growing rapidly and sparkling wines have insignificant exports. Thus the anticipation is that there will be no requirements for new packaging machinery in this area in the next 3 years.

In table wines however, the export market is continuing to grow. Southcorp has just finished upgrading its plant at Nuriootpa and the most likely requirements over the next 3 years are equipment for over capping corks with a waxed disk and bottle orientation equipment so that labels can be oriented above the brand name in the bottles. Southcorp sees some growth in brand identification on the bottle for premium wines. A reasonable budget for new and upgraded equipment at Nuriootpa would be about A$500,000 p.a.



• reliability

• flexibility to make changes in the product line

• compatibility with existing products.

6. Attitudes to suppliers

The view is that technology in packaging machinery is moving quite quickly and that all equipment has to be judged on its merits rather than past performance of a particular supplier or country of origin.

In equipment that is specifically designed for the wine industry, Germany is considered to make better, more reliable and excellent technology equipment and the German equipment is well represented in Australia. Australian equipment where it is relevant such as in palletising, is considered to be well priced and well backed-up with service.


Company Name: Southcorp Wines Company Division Name: Sparkling Wine Division Contact: Gary Cameron Position: Packaging Operations Manager Address: Moyston Road, Great Western, VIC 3377 Telephone: (03) 53612 241 Fax: (03) 53612 201 E-mail: [email protected]

Company Name: Southcorp Wines SA and Western Region Company Division Name: Table Wine Division Contact: Scott Keneally Position: Packaging Operations Manager Address: PO Box 21, Nuriootpa SA 5333 Telephone: (08) 8568 9389 Fax: (08) 8568 9350 E-mail: [email protected]

110

5. THE PHARMACEUTICAL INDUSTRY


According to the Australian Pharmaceutical Manufacturers Association (APMA), the Australian pharmaceutical industry turnover of human use pharmaceuticals, both prescription and over-the-counter, totalled approximately A$6.04 billion (US$3.79 billion) in 1998-99. This includes both domestic sales and exports and sales of imported product. Prescription and pharmacist-only medicine sales in 1998 -99 were A$3.4 billion (US$2.13 billion).

Figures of Australian production (excluding imports) of pharmaceutical and medicinal products for the same period 1998-99 according to the Australian Bu reau of Statistics were A$5.90 billion (US$3.70 billion) and employment was 13,939. These figures represent about 24% of total manufacturing industry turnover.

The industry in Australia is dominated by international companies with all the majors actively involved. There are about 200 manufacturers and suppliers with the top ten accounting for about 65% of the prescription pharmaceutical market.

5.2 KEY PLAYERS

The top fifteen suppliers by market share of prescriptions are set out in Table 5.1.

TABLE 5.1 THE TOP 15 PRESCRIPTION PHARMACEUTICAL SUPPLIERS

IN AUSTRALIA (by total prescription cost, year to April 2001)

Source: Australian Department of Health and Aged Care

A$M % of Total % Accumulated 1. GlaxoSmithKline Pharmaceuticals Australia 460.10 10.4 10.4 2. Pfizer Pty Limited 458.11 10.3 20.7 3. Merck Sharp & Dohme (Australia) Pty Ltd 411.73 9.3 30.0 4. Astra Zeneca Pty Ltd 373.70 8.4 38.6 5. Pharmacia Australia Pty Limited 278.64 6.3 44.7 6. Alphapharm Pty Limited 274.47 6.2 50.9 7. Bristol-Myers Squibb Australia Pty Ltd 220.42 5.0 55.9 8. Eli Lilly Australia Pty Limited 162.33 3.7 59.6 9. Wyeth Australia Pty Limited 131.09 3.0 62.6 10. Roche Products Pty Ltd 116.94 2.6 65.2 11. Aventis Pharma Pty Limited 108.88 2.5 67.7 12. Sanofi Synthelabo Australia Pty Limited 107.53 2.4 70.1 13. Novartis Pharmaceuticals Australia Pty Ltd 92.98 2.1 72.2 14. Aventis Pasteur Pty Limited 81.03 1.8 74.0 15. Servier Laboratories 75.06 1.7 76.7

Total 4,433.75

Notes: This table is based on the value of prescriptions under the Australian Pharmaceutical Benefits Scheme. Thus it excludes all pharmaceutical products not sold under the scheme including all over the counter products.

111

All the companies listed in the top fifteen table, are overseas owned international businesses. There is one large domestic manufacturer, F H Faulding and several smaller ones, the largest of which is AMRAD.

5.3 PRODUCTION

Overall statistics for the pharmaceutical and medical products industry are set out in Table 5.2.

TABLE 5.2

MEDICINAL AND PHARMACEUTICAL MANUFACTURING STATISTICS AUSTRALIA

July - June 1999


Industry Code

Description

Employment at end of

June

Thousand

Turnover US$

,000m

254 Other chemical product mfg 2543 Medicinal and Pharmaceutical

product manufacturing

13.9

3.70

The pharmaceutical industry is a high growth industry in Australia, showing an average annual growth of over 10%. This growth has come from both domestic consumption and exports.

5.4 EXPORTS

Pharmaceutical exports have surged in the past decade from A$203 million in 1988-89 to approximately A$1.62 billion in 2000-01. This represents average compound growth of 25% per annum.

The major export destinations are set out in Table 5.2.

TABLE 5.2

AUSTRALIAN EXPORT REGIONS FOR HUMAN USE PHARMACEUTICALS IN 1998-99

Source: APMA Facts Book 1999/2000

Region % of Total Exports

Asia 42 Europe 23 New Zealand & Pacific 21 North America 9 Other 5 TOTAL 100

112


The pharmaceutical industry in Australia is supported by the Pharmaceutical Benefits Scheme (PBS) which subsidises the cost of prescriptions that nominate approved drugs. The PBS accounts for over 90% of prescription pharmaceuticals.

The other key influence on the industry is the Pharmaceutical Industry Investment Program (PIIP) which commenced on 1st July 1999. This scheme is designed to counter the low prices that companies receive for pharmaceuticals under the PBS. Companies may receive grants under the scheme to assist them to increase investment in production capacity and Research and Development activity between 1999 and 2004.

Currently there are nine companies benefiting under the scheme which should result in a considerable increase in their production of pharmaceuticals in the intervening period. The companies participating in the PIIP and funding they have been allocated by the Government are set out in Table 5.3.

TABLE 5.3

COMPANIES PARTICIPATING IN THE PIIP

Company Name Allocated Funding A$million

AMRAD 20.0 Bristol -Myers Squibb 39.0 CSL 60.0 Eli Lilly Australia 19.9 F H Faulding 40.3 Glaxo Wellcome Australia 27.4 Janssen-Cilag 17.5 Pfizer 38.9 Pharmacia & Upjohn 33.9

113


Astrazeneca Pty Ltd

Industry: Pharmaceuticals Location: Sydney NSW Purchasing Potential: Next 3 years A$30 million


Astrazeneca is a major producer and packager of pharmaceuticals in Australia being in the top four. The Australian business is wholly owned by the International company.


Tablets are packed in blister packs and glass bottles. Liquid pharmaceutical products are packed in glass or plastic bottles and ampoules.


There is only one packaging plant for Astrazeneca in Australia. The approximate inventory of key packaging machinery at this plant is listed in the table below.


Origin

Sterilising stills 2 Germany

Form fill and seal machines for ampoules 11 USA, Germany and Switzerland

Fill and seal machine for plastic infusion bags 1 Germany

Liquid filling machines 3 Switzerland (1) Germany (1) Italy (1)

Labelling or printing machines 25 Australia, Germany, Italy, USA

Weighing machines 50 Italy

Cartoning machines 5 Japan and Italy

Casing and palletising machines 3 Germany & Australia

Robotic case and palletising 1 Japan

114

4. Future Packaging Machines Plans (next 3 years) The company will be looking to replace some existing lines, particularly, blister packers, and add to them. The anticipated total expenditure which would include conveyors, is approximately A$30 million.

5. Key Issues in the Purchase Decision The global supply chain of Astrazeneca tends to dictate a range of suppliers to consider. Critical issues in the purchase decision are:

• service and parts availability

• specification of equipment ie suitability for their own processes and their ability to be integrated with internal computer systems

• compliance with regulations.


Germany, Switzerland and Italy are all seen as having high technology, good service but a high price. North American suppliers are seen as expensive also with service not as good and technology somewhat behind. Australian equipment, where available, is seen as being well priced with good service, but the technology is somewhat behind. Japanese suppliers are also seen as having quite good technology and service with better pricing than from Europe or the USA. The Japanese are also seen as having more price flexibility particularly compared to the USA.

The parent company will negotiate on major purchases. Astrazeneca would always like to make a visit to the supplier's factory before accepting any machinery.

7. Contact Information Company Name: Astrazeneca Pty Limited Contact: Carlos Charlan Position: Production Project and Supply Sources Manager Address: Alma Road, North Ryde NSW 2113 Telephone: (02) 9978 3500 Fax: (02) 9978 3700

115

Bayer Health Care

Industry: Pharmaceuticals Location: Melbourne, Victoria Purchasing Potential: Next 3 years, minimal


Bayer Health Care is the pharmaceutical division of Bayer Australia which in turn is part of the international Bayer business. Bayer Health Care mainly packs consumer over-the-counter pharmaceutical products. The total Bayer business in Australia in agricultural chemicals, diagnostics and health care accounts for revenue of about A$360 million. The health care proportion of this could be as high as 50%.


Bayer packs pharmaceutical tablets into blister packs and creams into aluminium and plastic tubes.



Origin

Blister packer 1 Italy

Tube filler and sealer 1 Germany (Iuka)

Filling machine 1 Australia (Bosspack)

Capping machine 1 Australia

Inkjet printers 6 Asia

Metal detector 1 Japan

Cartoning machine 1 Italy (Marcozini)

Shrink wrapper 1 Australia


New equipment has only recently been installed so no requirements are anticipated in the short term.

116


• good technical support and service locally • known performance and capability • instant start-up.

6. Attitudes to Suppliers The respondent felt that there is not much North American blister packaging equipment available in Australia. His overall view was that North American equipment was expensive with average technology and service. By comparison, European sourced equipment is seen as having the best technology with average service and again high price. Japanese technology is good with good service and high pricing. Australian equipment is seen as having average to good technology, with good service. The respondent is particularly pleased with the performance of the Bosspack equipment from Australia.

7. Contact Information Company: Bayer Australia Limited Division: Health Care Contact: Neil Arrowsmith Position: Manufacturing Projects Manager Address: 500 Wellington Road, Mulgrave VIC 3170 Telephone: (03) 9263 2222 Fax: (03) 9263 2200

117

F H Faulding

Industry: Pharmaceutical Location: Adelaide, South Australia Purchasing Potential: Next 3 years - up to A$1

million


F H Faulding is the largest listed pharmaceutical company in Australia. It is currently under takeover from another Australian listed health care company, Mayne Nickless. This takeover is likely to proceed. F H Faulding has a number of business activities in the Health Care market. Apart from manufacturing and contract packing a range of over-the-counter pharmaceuticals, it is also an important wholesaler of pharmaceutical products to both pharmacies and hospitals. The total turnover of the business is about A$2.8 billion but the production of packaged pharmaceuticals is unlikely to account for more than 20% of this.


F H Faulding produces tablets packed in glass bottles, liquids packed in plastic bottles and creams packed in plastic jars and flexible tubes.

3. Installe d Packaging Machinery

Current Machinery Used Approx. No. of

Units Origin

Fill and close machine 1 Germany

Tube fill and seal machine 2 Germany/Italy

Liquid filling machines 4 Australia (3) Germany (1)

Tablet filling machines 4 UK

Capping machines 3 Australian (2) UK (1)

Tablet capping machines 4 Australian

Self adhesive labellers 7 Australian (5) New Zealand (2)

Check weighers 2 Germany (Garvan)

Table inspectors 2 UK 1 (Torledo) USA 1

Dedicated bottle unscrambler 1 Italy (Ronk?)

Cartoners 3 Italy

Shrink wrappers 5 Australia

Case over-packer 1 Australia


The company is likely to upgrade its tube filling and possibly its liquid filling. The tablet packing is in the process of being upgraded at the moment. The total expenditure will be limited and is likely to be up to A$1 million.

118


• local parts availability and local service • flexibility of equipment • quick local retooling availability.


North American equipment is seen as being generally less flexible than other equipment particularly from Europe with poor local service because there is often no local support. Prices are also seen as high because of the Australian dollar. UK equipment is seen as having good technology and service with average price levels and German equipment is seen as having the best technology. German equipment in particular is seen as being very well built. Where Australian equipment is available it is seen as having excellent technology and the best service and price.


Company: F H Faulding Contact: Terry Reese Position: Packaging Engineer Address: 1538 Main North Road, Salisbury SA 5106 Telephone: (08) 8209 2403 Fax: (08) 8285 7186

119

Glaxo Smith Kline

Industry: Pharmaceutical Products Location: Melbourne, Victoria Purchasing Potential: Next 3 years A$4 million

1. Company Description Glaxo Smith Kline is the largest pharmaceutical company in Australia, both in terms of total production and as a supplier to the local prescription pharmaceutical market. Much of Glaxo's production in Australia is exported around the world. The total turnover of Glaxo Smith Kline in Australia is in excess of A$1 billion.

2. Main Products Produced and How They are Packed The pharmaceutical products of Glaxo are tablets and capsules which are mainly packed in blister packs.




Origin

Blister packers 5 Australian (3) German (2)

Labellers 3 Australian (Tronics & Kolamat)

Fully automated cartoners 6 Italian (4) German (2)

Shrink wrapping machines 6 Australian (Pakmatic & Automat)


Over the next 3 years it is likely that 2 new blister packers will be bought, 1 as additional and 1 as a replacement. The total cost of these is going to be of the order of A$4 million.

5. Key Issues in Purchasing Decisions These are seen to be:

• service backup • equipment specification, including security devices for packs • quick change-over, minimising down time • short lead timing on new tooling.

120


In the area of pharmaceutical packaging, German suppliers are seen as offering fast operation but slow change over times and Italy somewhat slower operating but quicker change over. German equipment is also seen as more expensive than Italian. Australian equipment is seen as providing the best service. This respondent did not know of North American equipment in his area of interest. Australian equipment is seen as offering a limited range.


Company: Glaxo, Smith Kline Division: Pharmaceutical Manufacturing Contact: Ms Sharon Manning Position: Packaging Manager Address: 1061 Mountain Highway, Boronia VIC 3155 Telephone: (03) 9721 6000 Fax: (03) 9729 5319

121

Hamilton Laboratories

Industry: Pharmaceuticals Location: Adelaide, South Australia Purchasing Potential: Unknown

1. Company Description Hamilton Laboratories is a small local private manufacturer of pharmaceutical products, mainly for over the counter sales through chemist outlets. Turnover is probably less than A$15 million.

2. Main Products Produced and How They are Packed Tablets are packed into foil blister packs within cartons. Creams and ointments are marketed in tubes. Liquids and lotions are packed into plastic bottles.



Origin

Foil strip packer for tablets 1 Germany

Bottle fillers 2 Australia

Tube filler 1 Australia

Hot tube filler 1 Italy

Cap sorter and placer 1 Australia

Labelling machines 2 Australia (Impresstik)

Cartoner 1 Italy

Case cartoners with taper 2 Sweden (Siat)

Collate, stack & shrink wrap machines

2 Australia


Hamilton's current machinery is over 10 years old. Thus some new machinery is likely to be purchased over the next 3 years, but new investment will be dependent on sales growth.

122


• local service and parts availability • cost effectiveness • specialty specifications to suit the needs of this pharmaceutical

manufacturer.


This respondent has little experience of North American machinery and his view was that it was generally not suitable for smaller company needs. German technology is considered best for the pharmaceutical industry with good service but a high price. Italian equipment also has good technology but service is not considered as good . Australian technology is seen to be improving and has the best service with reasonable prices, where available. One example was Bosspak, Queensland, which makes small throughput flexible equipment that suits their relatively low volume requirements.


Company: Hamilton Laboratories Contact: Gordon Matthews Position: Works Manager Address: 217 Flinders Street, Adelaide SA 5001 Telephone: (08) 8223 2957 Fax: (08) 8232 1480 Email: [email protected]

123

Merck Sharp and Dohme Australia Pty Ltd

Industry: Pharmaceuticals Location: Sydney, NSW Purchasing Potential: About A$10 million

1. Company Description Merck Sharp and Dohme is one of the leading manufacturers and packagers of pharmaceutical products in Australia with a total turnover of the order of A$700 million. It is wholly owned by its international parent.


Most products are packed in blister packs or bottles.



Origin

Form fill and seal machines for blister packs

6 Germany (Auhlmann)

Bottle filler 1 Australian (Bosspak)

Labelling machines 3 Australian (Impresstic)

Cartoning machines 12 All German (Auhlmann/Cam/IWKA)

Overwrappers and case packers for blister packs and bottles

10 Australian (7) (Pacmatic)

German (3) (Pester)

4. Future Packaging Machines Plans (next 3 years) Likely to replace one bottle filler (could stay with the same brand, Bosspak or possibly move to Swiftpack, UK). Will also be adding a blister pack filler. Total expected expenditure over the next 3 years is of the order of A$10 million.

124

5. Key Issues in the Purchase Decision The two major issues are:

• availability of after sales service

• technology of the equipment.


German equipment is seen as having excellent technology and service, but being expensive. Respondent did not know much about North American equipment other than perceiving it to be expensive. Australian equipment is seen as being good in service and technology at average prices but the respondent felt that blister pack machines were not available from an Australian manufacturer.

7. Contact Information Company Name: Merck Sharp and Dohme Australia Pty Ltd Contact: John O'Neil Position: Packaging Engineer Address: 54 Ferndell Street, South Granville NSW 2142 Telephone: (02) 9795 9848 Fax: (02) 9795 9595

125

Pfizer

Industry: Pharmaceuticals Location: Sydney, NSW Purchasing Potential: Next 3 years A$3-4 million


Pfizer is one of the top 3 pharmaceutical products suppliers in Australia and the Australian operation is a wholly owned subsidiary of the international company.

2. Main Products Produced

The main products produced are as summarised in the table below.

Key Products Packs

Tablets 95% blister packs, 5% plastic bottles

Capsules 90% blister packs, 10% plastic bottles

Ointments and Pastes Packs, metal tubes

Suppositories Plastic and Aluminium shells



Origin

Blister pack form, fill and seal machines 6 Italy (3) Germany (3)

Suppository filling machine 1 Italy

Tube filling and sealing machines 3 France (2), Italy (1)

Bottle fill and cap machine 1 UK & Australian

Tamper evident label applicators 2 Italy

Adhesive labelling machine for bottles 1 Germany/UK?

Laser marker 1 Germany

Inkjet printers (video jet) 5 Australia

Check weighers 8 Germany

Bottle unscrambler 1 Australia

Cap sorter 1 Australia

Case packing machines for blister packs into cartons

7 Italy (4) Germany (3)

Shrinkwrapping machines 8 Germany (5) Australia (3)

126

4. Future Packaging Machines Plans (next 3 years) Pfizer expects to install a complete additional blister packing line at a cost of A$3-4 million.



• local support and service including parts availability • proven reputation and reliability • speed and technology particularly with respect to quality

assurance and quality control • price • availability of training.

6. Attitude to Suppliers

Equipment from Germany is seen to have the best technology but prices, including that for spares, are very expensive. Italy is seen as having the next best technology out of Europe and price not quite as high as Germany. This respondent did not have a view on North American equipment as he had little experience of it. Australian equipment is seen as having reasonable technology but limited range. Some advantage was seen in dealing with Australian suppliers including the ability to customise designs to suit particular needs. The supply of spare parts out of Europe is seen as a significant draw back in purchasing European sourced equipment as deliveries of say 4-5 days cause down-time on packaging lines.


Company Name: Pfizer Company Division: Pharmaceutical Division Contact: Michael McPherson Position: Engineering Team Leader Manufacturing and Packaging Address: 38-42 Wharf Road, West Ryde NSW 2114 Telephone: (02) 9850 3333 Fax: (02) 9850 3129

127

Schering-Plough

Industry: Pharmaceuticals Location: Sydney, NSW Purchasing Potential: Next 3 years A$300,000


Schering -Plough is fully owned by the US based parent. It is a medium sized pharmaceutical company in Australia. The total turnover of the company is probably less than A$100 million.


Schering -Plough's products are tablets packed into blister packs and plastic bottles, liquids packed into glass and plastic bottles, and creams packed into aluminium metal tubes.




Origin

Fluid bed dryer 1 Sweden (Airomatic)

Liquid fill and seal machines 2 Europe

Cream fill and seal machines 2 Germany & Italy

Solid fill and seal machines 3 Germany & Italy

Inkjet coders 9 USA (Video)

Adhesive labellers 2 Australia (Impresstik)

Check weighers 15 (Vision)

Unscramblers 10 Europe

Cartoners 6 Europe

Bunder wrappers 5 Germany (Pesta)


Schering -Plough has just installed new machines and therefore believes they will have little need for any more over the next 3 years. The most likely requirement will be laser coders to replace inkjet coders. This is an occupational health and safety issue because inkjet coders are considered to be unsafe. About 10 new laser coders would be required at a cost of A$30,000 each.

128

5. Key Issues in Purchasing Decisions The most important issue is local support followed by price and performance of the equipment. Another key issue is GMP compliance.


This respondent believed that the Europeans have the pharmaceutical market sewn up with Germany and Italy dominating. These two sources have different specialities. Italian equipment is seen as less user friendly than German sourced which has a much better operator interface.


Company: Schering -Plough Pty Ltd Contact: Tony Broughton Position: Engineering Services Manager Address: 11 Gibbon Road, Baulkham Hills NSW 2153 Telephone: (02) 9852 7444 Fax: (02) 9852 7435

129

Sigma Company Limited

Industry: Pharmaceutical Location: Melbourne, Victoria Purchasing Potential: Next 3 years - A$3-4.5 million


Sigma is an Australian public listed company and operates as a wholesale druggist and manufacturing chemist. Most of Sigma's packaged products are over-the-counter pharmaceuticals. The total turnover of Sigma in Australia is approximately A$1.8 billion with much of this turnover being in wholesaling. The company has three different plants in Australia packaging its own pharmaceutical products and also doing contract packaging for third parties.


The pharmaceutical products of Sigma come in different forms and packs as illustrated below.

Product Packaging

Powders Glass bottles, plastic bottles and plastic sachets

Granules Sachets

Creams Plastic tubes and tubs

Tablets Blister packs , glass bottles, plastic bottles

130


The current machinery inventory in the three packaging plants of Sigma is as set out below.



Origin

Sterilisers 3 Finland (1), Australia (2)

Filling machines 15 Australia, UK, Italy

Cappers and closers 12 UK (5 King) Australia (2 Bosspack) Italy (5)

Thermal, transfer and hot foil labellers

14 Germany / Australia

Check weighers 1 Japan (Shima) balance UK (Garvan)

Cartoners 9 Japan (1) Germany (2) Italy (6)

Bottle blowers 8 UK (6 King) Australia (2)


The company is likely to be purchasing more blisters packers, thermo formers, cartoners and additional automation for its tube filling lines. Total expenditure depends on the growth of the business but is likely to be in the order of A$3-4.5 million.


• good local service availability • reliability of equipment • suitability for the particular applications.


North American equipment is seen as being only of average technology with poor service and high prices. German equipment is seen as having the best technology with good service but also highly priced. Italy has good technology and good service with more reasonable pricing. Japan also has good technology but the service is not seen to be as good as that from Italy or Germany and prices are also high. Australian equipment is seen as having average to good technology with a simila r level of service but lower pricing. The respondent feels that Italian suppliers will put themselves out more for customers.

7. Contact Information Company: Sigma Company Limited Contact: Ian Nicholson Position: Engineering Manager Address: 386 Frankston-Dandenong Road, Dandenong Sth VIC 3175 Telephone: (03) 8792 1285 Fax: (03) 9839 2801

131

6. THE PERSONAL CARE INDUSTRY


The personal care market overlaps somewhat with the pharmaceutical / medical market and many manufacturers are rep resented in both fields. Two key categories within the market are soap and other detergents, and cosmetic and toiletry preparations. The total Australian production of these categories in 1998/99 had a value of US$1.38 billion and has shown no growth in recent years (with any growth in consumption coming from imports).

The Australian market is dominated by leading international global organisations. Some of these companies, for example Procter & Gamble, L'Oreal and Estee Lauder do no manufacturing in Australia and supply the market with fully packaged imported products.

The key personal care product categories produced in Australia in terms of value are as follows:

• Baby napkins, sanitary products

• Laundry washing preparations

• Other detergent preparations

• Toothpaste

• Hair shampoo

• Soap.

A more complete list of Australian produced products is given in Section 6.3.

132

6.2 KEY PLAYERS

The leading personal care companies manufacturing in Australia are set out in Table 6.1. All these are international companies with no local ownership.

TABLE 6.1 LEADING PERSONAL CARE MANUFACTURERS PACKAGING

IN AUSTRALIA Source: Polymex Consultants Research

Company Owner-ship

Cosmetics & Toiletries

Soaps & Detergents

Bristol Myers LO X

Colgate Palmolive LO X X

Cussons LO X X

Johnson & Johnson LO X

Reckitt Benckiser LO X X

S C Johnson & Son PO X X

Smith & Nephew LO X

Unilever LO X X Ownership code: LO Listed Overseas, PO Private Overseas.

There is one medium-sized Australian-owned producer of laundry products, Campbell Brothers Ltd, which is a publicly listed company. Campbell Brothers also used to make toilet soap, but this part of their business was recently sold to F H Faulding, another Australian listed company mainly represented in pharmaceutical and medical products.

6.3 AUSTRALIAN PRODUCTION

Summary production figures for personal care products are set out in Table 6.2.

TABLE 6.2 PERSONAL CARE PRODUCTION STATISTICS AUSTRALIA


Industry Code

Description

Employment at end of

June

Thousand

Turnover US$

,000m

254 Other chemical product mfg 2545 Soap and other detergent mfg 3.8 0.79 2546 Cosmetic and toiletry preparation mfg 4.7 0.59 Total 1.38

133

Production sales values for many of the product categories that are included under personal care are set out in Table 6.3.

TABLE 6.3 PERSONAL CARE PRODUCTS PRODUCTION 1995-96 TO 1998-99



Baby napkins , sanitary towels and tampons 415.5 411.8 471.3 485.8Barrier creams and toilet lanolin; sunscreening preparations 32.9 34.1 38.6 37.8Detergent and washing preparations for fabrics 408.9 282.6 267.3 255.9Detergent and washing preparation - Dishwashing preparations 143.2 126.0 124.5 134.5Detergent and washing preparation - Soaking, rinsing or bleaching preparations (exclude hydrogen peroxide) 65.4 51.2 60.1 80.4Detergent and washing preparation - Other 80.8 69.9 117.1 149.4Disinfectants (incl phenyl)

67.7 68.8 58.3 76.9Laundry bleach 34.4 47.3 20.3 30.4Scouring preparations and abrasive cleaners 45.9 43.2 41.1 41.7Soap and soap based products 75.4 86.9 83.1 104.9Toothpaste and other dentifrices

133.2 167.5 165.9 155.2

Aftershave and shaving preparations 17.8 18.1 11.7 26.3Face and body moisturisers 85.5 72.5 89.9 96.3Face powder and lotions 43.2 51.3 39.6 30.5Hair colouring preparations

67.9 66.5 61.2 60.8Hair conditioners 107.9 90.3 75.1 90.5Preparations for permanent waving or straightening of hair

16.9 13.8 13.4 8.1Hair shampoo 142.4 165.5 105.4 160.8Hair sprays (lacquers)

51.2 38.7 32.0 34.3Other hairdressing preparations

38.8 27.7 46.1 29.7Hand cream or lotions , nail care preparations 31.0 40.5 39.0 31.3Other beauty creams and lotions

34.7 20.8 34.7 37.3Eye make-up and mascara

15.9 15.2 12.8 10.4Lipstick and other lip make-up

18.0 22.5 19.9 11.7Perfumes and eaux de toilettes 52.1 38.1 38.3 25.3Personal deodorants and antiperspirants 98.9 97.3 109.6 125.0Room deodorisers and air fresheners

30.1 76.5 56.6 22.9Other cosmetic and beauty preparations n.e.c.

93.6 63.9 75.7 87.8

TOTAL 2,449.2 2,308.5 2,308.6 2,441.9

134


Australia is a sophisticated personal care products market with the market dominated by international brands manufactured by global companies. Hence the packaging of personal care products is very similar to that found in North America or Europe. Packaging used for the key products of the particular manufacturers interviewed for this survey is described with the other information for those manufacturers that is recorded in the next section.


Bristol-Myers Squibb Australia Pty Ltd

Industry: Personal Care Location: Sydney, NSW Purchasing Potential: Uncertain

1. Company Description Bristol-Myers Squibb Australia is part of the international company and has an Australian turnover of about A$400 million. Some of the company's business is in pharmaceutical products and some in personal care. Within the personal care area the company is in the top 4 or 5 suppliers. The interview covered the Clairol Division of the company. Whilst the business in Australia is still trading under the name of Bristol-Myers Squibb it is possible that some changes will take place in the future, since the parent business has now been acquired by Procter and Gamble of the USA.


The main products within the Clairol Division (the division covered by this interview) are hair dyes, hair shampoos and conditioners and anti-perspirants. The primary packing materials for all these products are bottles, usually plastic. There are also some sachet packs.

135



Origin

Horizontal form and vertical fill machines for sachets

1 Spain

Liquid filling machines 9 Australia

Closing machines for caps 7 Italy, Spain, USA

Self adhesive labellers 8 Australia

Unscramblers for bottles 3 Australia (1) USA (2)

Cartoning machines 3 Australia (1) In-house (2)

Cellophane wrapper 1 UK

Semi-automatic case sealing machines (tapes)

1 Australia

4. Future Packaging Machinery Plans - (next three years)

The acquisition of Bristol-Myers Squibb by Procter & Gamble has made the future somewhat uncertain. If further plant investment takes place in Australia, it would be to replace current machines and would involve bottle filling, capping and cartoning.


A very important issue is strong and stable representation in Australia. (Sometimes agencies change hands frequently which influences parts availability and service.) The other important factor is the reputation and experience of the manufacturer in terms of other customers that have used, tried and tested the equipment.


USA sourced equipment is seen as very expensive in the light of the low Australian dollar, and its service and technology is considered only average. German equipment is seen as having the best technology and good service, but also with high pricing. Italy and Spain are seen as having reasonable product and pricing but service particularly from Spain has been questionable. The respondent expressed the preference to buy from Australian manufacturers if a suitable product was made in this country. The problem with Australian equipment is the limited range available.

136


Company Name: Bristol-Myers Squibb Australia Pty Ltd Company Division: Clairol Division Contact: Harley Newham Position: Site Manager Address: 320 Victoria Road, Rydalmere NSW 2115 Telephone: (02) 9684 8444 Fax: (02) 9684 4987

137

Carter Holt Harvey Tissue Australia Pty Ltd

Industry: Personal Care Sub Industry: Paper Products Location: Melbourne VIC Purchasing Potential: Next 3 years, A$6-7 million

1. Company Description Carter Holt Harvey Tissue is the largest supplier in Australia of toilet rolls, kitchen towels and facial tissue. The company is owned by Carter Holt Harvey, a major listed forestry and forest products company with a New Zealand domicile. The tissue business of Carter Holt Harvey was purchased from Bowater Scott some years ago and the major brand of the company is Sorbent. The company has about 40% of the market in toilet rolls, kitchen towels and tissues, giving it an annual turnover in these products of approximately A$300 million.


The main products are toilet rolls packed in a poly pack, kitchen towels also packed in poly pack and facial tissues in a fibreboard carton.



Origin

Tissue fill and seal machines 1 USA

Inkjet Printers 6 USA (Videojet)

Bag wrappers 20 Italy (5) USA (15)

Case packers 4 Australia (1), USA (3)

Robots Palletiser 7 Australian built with Japanese robots


The company expects to be buying more wrapping machines and another cartoner in the next 3 years. The total expenditure is likely to be A$6-7 million.

138


These are seen as: • past experience with the particular supplier • speed and capacity of the machine • change over time • flexibility of operating.


North American technology and service are seen to be good but prices are expensive. Europe is seen to be similar to North America in terms of technology and service and at a somewhat lower but still high price. Australian equipment has only average technology with not much around to suit a high speed operation. However, prices are seen as more reasonable and service good for Australian sourced equipment.


Company Name: Carter Holt Harvey Tissue Australia Pty Ltd Contact: Gary Wood Position: Senior Development Engineer Address: Ailsa Street, Box Hill VIC 3128 Telephone: (03) 9258 0540 Fax: (03) 9258 0785

139

Colgate Palmolive Pty Ltd

Industry: Personal Care Products Location: Sydney, NSW Purchasing Potential: Nil

1. Company Description Colgate Palmolive is a leading supplier of personal care and laundry products in Australia, but many of these are now manufactured overseas as the company is truly global. Total turnover of the company in Australia is about A$400 million.


The interview related to two personal care products only, liquid handwash, which is packed in PET or HDPE bottles, and hair care products that are packed in HDPE bottles.



Origin

Combined fill and seal machine (For all products)

1 Italy

Capping machine 1 Italy

Inkjet printer with 2 heads 1 Australia

Pump placer 1 Spain

Bottle unscrambler 1 Italy

Shrink wrapper 1 Italy (Skinetta)

Case erector 1 Italy


Respondent did not see any likely demands over the next 3 years.



• local support and service

• compatibility with other equipment

• robustness of design

• price.

140


Italian equipment is seen as being of mixed technology with some filling equipment being state of the art and others not so technologically advanced. His experience of Italian equipment is that service has been average and price somewhat above average. Australian equipment is seen as having reasonable technology and service at average prices.


Company Name: Colgate Palmolive Pty Ltd Company Division: Personal Care Division Contact: Mark Cross Position: Factory Manager Address: 50 Marple Ave, Villawood NSW 2163 Telephone: (02) 9794 5000 Fax: (02) 9794 5008 Email: [email protected]

141

Colgate Palmolive Pty Ltd

Industry: Household Products Sub Industry: Laundry Powders Location: Brisbane, QLD Purchasing Potential: A$100,000

1. Company Description Colgate Palmolive is the largest manufacturer of laundry powders in Australia with its market share just ahead of Unilever. Colgate Palmolive's turnover of laundry detergents is of the order of A$150 million p.a. The interview relates to the particular plant that is responsible for the manufacture and packaging of laundry powders. Laundry liquids are produced and packed in a separate plant.


Laundry powders are packed in cartons and LDPH and HDPE packs.



Origin

Cooling and drying machine 1 Netherlands (Scheugi)

Carton fill and seal machines 2 Italy (1) Akma USA (1) (very old)

Bag filler 1 Sweden (ICA)

Check weighers 2 German (Garvens)

Case packers 2 Australia (Fibre King)

Palletisers 2 Australia (1) (Fibre King) Japan (1) with robotics


It is possible that some upgrading of componentry will take place eg a hot melt groove sealing system. If any upgrade does take place, total expenditure is unlikely to exceed about A$100,000.

142



• recommendation from the international corporation

• ease of operation and control so that minimum labour is needed

• reliability

• service and parts availability

• equipment specification.

The respondent said that Colgate Palmolive stretches the equipment to its limits, requiring fast and large volume operation over 24 hours.


European equipment seems to cope with the workload better than the North American. North American technology is considered to be more conservative and older and prices are higher. Australian equipment, within the range that is available, is seen as providing excellent service and good technology at reasonable prices. Preference would always be for Australian sourced equipment if it was ava ilable.


Company Name: Colgate Palmolive Pty Ltd Company Division: Labrador Fabric Care Plant Contact: Ron Brothers Position: Engineering and Design Manager Address: Captain Cook Drive, Labrador QLD 4215 Telephone: (07) 5588 7579 Fax: (07) 5588 7501 Email: [email protected]

143

Lever Rexona

Industry: Personal care Location: Sydney, NSW Purchasing Potential: Unknown

1. Company Description Lever Rexona Personal Care is a part of the worldwide Unilever organisation. This section of Unilever manufactures and packs shampoos, detergents and deodorants and is the only personal care plant for Unilever within Australia . Total turnover of the Unilever organisation in Australia exceeds A$1.1 billion, but this includes products that are fully imported and other product categories not covered by this interviewed section.

2. Main Products Produced and How They are Packed The key products are; shampoos packed into plastic bottles and tubes, detergents also packed into plastic bottles with refills in liquid paper board, and deodorants which are packed either in a plastic roll-on form or in aerosols.



Origin

Fill and seal machines for tubes 2 Europe

Filling machines 13 Germany and Italy

Closing machines crimp closers and aerosol screw pump closers

Germany and Italy

Self-adhesive labellers 6 Australia

Unscramblers for bottles 4 Europe

Unscramblers for closures 7 Europe

Stretch wrappers Europe (4), Germany (1) Czechoslovakia (1)

Bottles into trays robots 2 Sweden

Pack bundles into corrugated cases 3 Sweden (APV)

Stretch wrap palletisers 3 Australia (Windsor)

The respondent commented that 20-30% of the machinery in their plant had been modified by their own engineers.

144


The respondent thought not much would be likely to be installed at this site as there had been recent major spending and some of the machinery had become redundant. There is a need in the future for more inspection equipment looking for labels and bar codes, and to move to fully automatic palletisation to replace the semi-automatic process they now have.


These are:

• parts availability and service

• reliability of equipment

• availability of a local agent

• Head Office input from Unilever Worldwide

• price.


North American equipment is seen as being rugged and reliable but not necessarily reflecting the latest technology. Price is high because of the exchange rate. German and Italian technology is seen as being the best with good service and high prices. These two countries tend to produce equipment in different specialised areas so they do not always directly compete . Australian equipment is seen as providing the best service with good technology and average prices. In Australia Lever Rexona is concentrating on high volume packaging and will use contract packers for smaller requirements.


Company Name: Lever Rexona Home and Personal Care Pty Ltd Contact: Jim Nash Position: Packaging Engineer Address: 219 North Rocks Road, North Rocks NSW 2151 Telephone: (02) 9871 9447 Fax: (02) 9871 9505

145

Reckitt Benckiser

Industry: Chemical Products Sub Industry: Household cleaning products Location: Sydney, NSW Purchasing Potential: Next 3 years, none

1. Company Description Reckitt Benckiser is a large international manufacturer of household and personal care products. The company's turnover in Australia is about A$330 million.


The information for this survey relates to Reckitt Benckiser household cleaning products. These are packed into cartons, plastic bottles or bag in box depending on the item.



Origin

Bag fill and seal machine 1 USA

Bottle filling machines 10 Germany and Italy

Labellers 5 Australia

Bottle sorters 5 Europe

Carton sealing machines 5 Australia Case handling machines 2 Australia


At this stage no expenditure is expected in the next 3 years and the company will be concentrating on using its current equipment more effectively.


These are seen as:

• flexibility of the equipment

• technology

• price.

146


Equipment from North America is seen as being solidly built, but prices are high and service not particularly satisfactory. Germany and Italy are seen as having good technology and average service levels, with both of these sources having better equipment than from North America. Equipment sourced from Australian suppliers is seen to be backed up by better service than imports and price and technology are satisfactory.


Company Name: Reckitt Benckiser Contact: Mark Gamble Position: Plant Engineer Address: Wharf Road, Cnr Hope Street, West Ryde NSW 2114 Telephone: (02) 9857 2244 Fax: (02) 9857 2007 Email: [email protected]

147

Sara Lee

Industry: Chemical Products Mfg Sub Industry: Household chemicals Location: Melbourne, VIC Purchasing Potential: Next 12 mths, A$320,000

1. Company Description Sara Lee is a large US domiciled international organisation which purchased the Australian household products business formally operated as Kiwi Brands. The section of Sara Lee interviewed for this project was the household and body care division. This division used to have 30 production lines for its ranges of household and personal care products in Australia, but now there are only four with all the other products being manufactured and packed off shore in countries which include Spain, UK and Germany.

2. Main Products Produced

The information for this company relates only to its production of liquid bleach which is packed in polythene bottles.



Origin

Liquid Bleach Filling Machines 5 US, Germany and made in-house

Capping Machines 3 France, Germany & UK

Continuous Hot Melt Wrap Around Labeller (P.L.S.)

1 USA

Self Adhesive Labellers 4 Switzerland (1) (Kolomat)

In-house (3)

Wrapping Machine over-packer 1 Spain

Carton Sealer (Fibre King) 1 Australia

Fully Automated Palletisers 2 NZ (1) Australia (1)

Debagging Machine 1 Made In-house

148


The company will be installing a new liquid bleach filler within the next 12 months. However, because the technology is specialised and imported product is expensive they will make the filler in -house. Associated conveyers for the filling line will also be purchased locally.


Key issues for their plant are considered to be:

• service and parts ava ilability

• meeting of occupational health and safety regulations

• ease of use and operation

• ease of maintenance

• quick change over from one product to another

• price.


The preference is to purchase from Australian manufacturers primarily for service and parts availability reasons.

This respondent had a negative view of North American sourced equipment based on problems of parts supply and the use of imperial measurements as well as the view that it is expensive.

European sourced equipment is seen as having excellent design and ergonomics. They would be concerned about purchasing from Asia because of the low emphasis on occupational health and safety with their equipment.


Company Name: Sara Lee Household and Body Care Australia Pty Ltd Contact: Jeff Spencer Position: Co-ordinator in Engineering Address: 610 Heatherton Road, Clayton South VIC 3169 Telephone: (03) 9262 2300 Fax: (03) 9558 2413

149

S C Johnson

Industry: Household Products Location: Sydney NSW Purchasing Potential: Next 3 years A$2 million


S C Johnson is a wholly owned subsidiary of the multi national US based private company. In Australia it is the second largest supplier of household cleaning and insecticide products, behind Reckitt Benckiser.


The S C Johnson products that are produced and packed in Australia are a number of different household cleaning products. These are packed into bottles, cans, flow wrap and blister paks.



Origin

Liquid fill and seal machines 2 Italy (1) Germany (1)

Labelling machines 5 Australian

Check wires 2 US

Bottle sorters 1 Italy

Can unscrambler 1 Australia

Automatic case packing machines 2

Semi-automatic case packing machines 3 Australia

Palletising machines 2 Australia

4. Future Packaging Machinery Plans (next 3 years) Possible requirements in the next 3 years include fillers, a blisterpak packer and cartoners. Total expenditure is likely to be in the order of A$2 million.

150

5. Key Issues in Purchase Decision The key issues are seen as:

• availability of local service and parts

• reputation of the supplier including experience and references

• flexibility of the equipment to suit their particular needs

• speed of installation including the necessary modifications required

• price.

6. Attitude to Suppliers

North American equipment is seen as being of average technology with below average service and ve ry expensive. European is seen as having the best technology with reasonable service but it depends on the manufacturer and its agency arrangements in Australia. Australian equipment that is available is seen as providing good technology with excellent service and prices being reasonable. European liquid filler machines are well priced and good for the purpose. Australian suppliers do well in the markets in which they are represented, but they have to find a niche market because of the limited total ma rket size.

7. Other issues This respondent commented that many of the suppliers in Australia had switched their manufacturing and packaging offshore, primarily because of the small market size here. He was concerned that this trend might continue.

8. Contact Information Company Name: S C Johnson Pty Ltd Company Division: Household Products Division Contact: Ray Houghton Position: Packaging Development Manager Address: 160 Epping Road, Lane Cove NSW 2066 Telephone: (02) 9428 9111 Fax: (02) 9428 9299

151

7. THE PACKAGING MARKET IN AUSTRALIA


The packaging market is well developed in Australia and a full range of packaging materials are made and converted in the country.

There are no definitive figures on the size of the packaging material industry, but a recent report by BIS Shrapnel estimated that the market was valued at US$3.8 billion in 1999-2000 and forecasted annual growth at a conservative 2.5%.

7.2 KEY PLAYERS

In its report, Plastic Packaging in Australia 2000-2002, the industry forecaster BIS Shrapnel nominated three suppliers as having about 65% of the Australian market. These manufacturers and their estimated market shares were as follows:

Market Share %

Amcor 27.3

Visy Industries 23.2

ACI Packaging 13.0

Subtotal 63.5

Amcor is a local publicly listed specialist packaging company which operates globally. It is a major manufacturer of fibreboard and makes a comprehensive range of rigid and flexible packaging products. It does not currently manufacture glass bottles but is setting up a plant to make bottles for the wine industry.

Visy Industries is the holding company within a specialist privately owned packaging materials group. It also like Amcor manufactures fibreboard and a large range of rigid and flexible packaging.

ACI was a domestic company and is now owned by Owens Illinois. ACI is the only manufacturer of glass bottles in Australia and also offers a comprehensive range of rigid and flexible packaging.

A list of the leading manufacturers in each packaging category is set out in Table 7.1 on the following page.

152

TABLE 7.1

MAJOR PACKAGING PRODUCTS MANUFACTURERS / CONVERTERS IN AUSTRALIA

Packaging Product Leading Suppliers

Corrugated boxes Amcor, Visy Industries, Carter Holt Harvey

Cartons Amcor, Carter Holt Harvey, Wadepack, Colorpak Packaging

Food cans Amcor, Visy Industries, National Can Industries, Irwin & Sheehan

Beverage cans Amcor, Visy Industries, National Can Industries

Drink cartons Amcor, Visy Industries, Tetrapack, ACI

Steel drums Van Leer, Morris McMahon

Aerosols Amcor, National Can Industries

Flexibles Amcor, Sealed Air/Cryovac, Visy Industries, ACI, Finewrap

Rigid Plastics Amcor, Plaspak, Visy Industries, Tetrapak, Brickwood

Closures Amcor, ACI, Cormack Packaging, Peteron

Sacks Amcor, Visy Industries, Carter Holt Harvey

Glass Bottles ACI

Flexible Zip Packs Zip Pak

Note: Visy Industries includes members of the Visy group of companies namely, Visy Board, Visy Pak, and Visy Paper.

153

7.3 AUSTRALIAN PRODUCTION

The table, which follows gives the Australian production figures for a range of different packaging materials over the most recent four year period for which the figures are available from the Australian Bureau of Statistics. The Bureau does not present statistics in industries where the number of manufacturers is so small or the dominance of the manufacturers is such that the figures would break confidentiality. This is the case for both the manufacture of glass bottles and of paperboard containers.

TABLE 7.2

PRODUCTION STATISTICS FOR SELECTED PACKAGING PRODUCTS



PaperboardCorrugated paperboard containers 1,655.4 1,424.3 1,445.3 n.p.Solid paperboard containers, sacks and bags 437.3 519.6 501.7 495.8Other paper sacks, bags, cartons and boxes

235.1 271.3 333.0 316.6Paper and paperboard trays, dishes, plates and cups, cones, egg containers of paper, fruit wrapping pads, record sleeves, box files and similar articles 80.5 82.9 77.8 95.0

Plastics

Plastic bottles 693.5 615.9 648.1 651.0Plastic sacks, packets and bags - Of polyethylene 485.1 517.7 467.7 231.9Plastic sacks, packets and bags - Of polypropylene 56.7 74.1 25.9 n.p.Plastic sacks, packets and bags - other 80.4 78.5 42.7 n.a.Plastic boxes, crates, cases and similar containers 99.0 152.9 103.1 324.6Plastic packaging and shipping containers for liquids 35.6 38.3 31.0 67.7Plastic packaging accessories and components - Stoppers, lids, caps and other closures 98.3 98.1 259.5 210.8Plastic packaging accessories and components - Seals, seal rings and other 94.3 123.3 76.5 57.3

Glass

Glass containers, bottles or jars; glass stoppers and closures; glass inners for vacuum vessels n.p. n.p. n.p. n.p.

Metal

Metal casks, drums, cans, boxes, barrels, collapsible tubes, cigarette cases, tool boxes and other containers of a capacity not exceeding 300 litres -Iron or steel 663.8 594.7 672.9 554.5

- Aluminium 370.7 314.6 208.9 260.9

-Other metal 17.6 5.3 111.4 275.0

TOTAL 5,103.3 4,911.5 5,005.5 np

154


An important influence on packaging practices over the next few years is the National Packaging Covenant, which was launched in August 1999. The aim of the Covenant is 'to provide more effective management of used packaging based on the principles of shared responsibility and product stewardship'. In practical terms this means reducing the waste stream in ways such as using more recyclable materials and doing more recycling.

Signatories to the Covenant to date, of which there are about 240, already include most of the major packaging material manufacturers and converters and many leading packaging users. Organisations that are signatories have an obligation to:

• produce action plans to evaluate and improve packaging environmental outcomes

• adopt 'product stewardship' policies that contribute to the effective environmental management of packaging

• apply the principals of the Covenant to their own operations

• contribute to a transitional kerbside funding mechanism

• encourage reuse and or disposal with minimal environmental impact.

The Covenant itself does not specify which actions individual signatory companies should take but, rather, provides for a "menu" of options. A company might, for example, decide to:

• design packaging so that the use of material is minimised

• undertake and promote research

• reduce production, printing, transport and waste disposal

• support kerbside/recovery programs

• support market development for secondary packaging materials

• promote education and community awareness

• support litter reduction.

Organisations that do not become signatories to the Covenant will be obligated to meet the objectives of the Covenant through a regulatory safety net designed to achieve national consistency. This is called the National Environment Protection Measure (NEPM) which will be implemented by state governments. The NEPM provides for 'take back' requirements with the focus on brandowners.

155

Implications for Packaging Machinery Manufacturers

The Covenant will lead to changes in packaging with greater emphasis on packaging that is easily recyclable or has lower impacts on the environment and the waste stream.

Some of the likely impacts of the Covenant on packaging practices are listed below:

• Use of recyclable materials preferred to ones that can not be recycled

• Materials that are easier to recycle or have well-established recycling facilities preferred over others. (This would favour PET over PVC bottles for examp le.)

• Weight reduction of all packaging

• Reduction of wasted space in containers

• Shrink wrap to replace cartons

• Pallet wrap to be replaced by other means of pallet stabilisation

• More efficient use of space on pallets

• Increased use of refillable / reusable packaging

• Blister packs changed to flow wrap

• Reducing gauge and thus weight of all packaging materials.

Some of the above types of actions that may flow from adoption of the Covenant will have direct impacts on the nature of packaging equipment requirements and demand.

156

APPENDIX

IMPORT STATISTICS FOR PACKAGING MACHINERY

COUNTRY OF ORIGIN 98-99 99-00 00-01 3 YEAR %A$'000 A$'000 A$'000 TOTAL of TOTAL

EUROPE FRANCE 606 0 1 607 4.2

GERMANY 2,096 1,809 334 4239 29.0 ITALY 494 581 533 1608 11.0

NETHERLANDS 319 20 119 458 3.1 SWEDEN 693 655 683 2031 13.9

SWITZERLAND 262 272 595 1129 7.7 UNITED KINGDOM 67 158 2 227 1.6

OTHER 35 18 23 76 0.5TOTAL EUROPE 4572 3513 2290 10375 71.0

NORTH AMERICA CANADA 0 39 0 39 0.3

UNITED STATES OF AMERICA 535 1,067 1,051 2653 18.2

TOTAL NORTH AMERICA 535 1106 1051 2692 18.4

OTHER ISRAEL 0 0 189 189 1.3

NEW ZEALAND 544 251 548 1343 9.2OTHER 10 3 5 18 0.1

TOTAL OTHER 554 254 742 1550 10.6

TOTAL ALL COUNTRIES 5,660 4,873 4,084 14617 100.0

Australian Imports of Cleaning & Drying Machinery (HT code 842220024)

157

COUNTRY OF ORIGIN 98-99 99-00 00-01 3 YEAR % ofA$'000 A$'000 A$'000 TOTAL TOTAL

ASIA JAPAN 73 0 0 73 1.8 TAIWAN 0 24 106 130 3.3OTHER 0 0 8 8 0.2

TOTAL ASIA 73 24 114 211 5.3

EUROPE ITALY 743 0 1,964 2,707 68.5

UNITED KINGDOM 6 505 0 511 12.9OTHER 37 47 42 126 3.2

TOTAL EUROPE 786 552 2006 3,344 84.7


UNITED STATES OF AMERICA 64 0 8 72 1.8


TOTAL OTHER 0 26 0 26 0.7TOTAL ALL COUNTRIES 917 763 2,269 3,949 100.0

Australian Imports of Combined moulding & wrapping machines

(HT code 842240028)

158

COUNTRY OF ORIGIN 98-99 99-00 00-01 3 YEAR % of A$'000 A$'000 A$'000 TOTAL TOTAL

ASIA JAPAN 6013 5207 4482 15702 5.9

KOREA, REPUBLIC OF 670 310 287 1267 0.5 MALAYSIA 15 30 600 645 0.2

SINGAPORE 243 18 317 578 0.2 TAIWAN 1975 2179 2082 6236 2.4

THAILAND 408 286 368 1062 0.4 OTHER 132 483 258 873 0.3

TOTAL ASIA 9456 8513 8394 26363 10.0

EUROPE AUSTRIA 0 430 162 592 0.2

DENMARK 424 372 6 802 0.3 FRANCE 2422 3131 2152 7705 2.9

GERMANY 11931 16222 20054 48207 18.2 IRELAND 1186 1655 1102 3943 1.5

ITALY 13354 18445 25909 57708 21.8 NETHERLANDS 4906 8324 3115 16345 6.2

NORWAY 207 634 248 1089 0.4 SPAIN 1233 3897 2958 8088 3.1

SWEDEN 1527 542 1020 3089 1.2 SWITZERLAND 13410 6768 6201 26379 10.0

UNITED KINGDOM 5523 2374 3283 11180 4.2 OTHER 357 87 291 735 0.3

TOTAL EUROPE 56480 62881 66501 185862 70.4


UNITED STATES OF AMERICA 15610 15985 13022 44617 16.9


OTHER AUSTRALIA 265 126 690 1081 0.4

NEW ZEALAND 506 2130 1315 3951 1.5 SOUTH AFRICA 502 0 36 538 0.2

OTHER 0 60 39 99 0.0TOTAL OTHER 1273 2316 2080 5669 2.1

TOTAL ALL COUNTRIES 83043 90760 90349 264152 100.0

Australian Imports of other packing or wrapping machinery(HT Code 842240029)

159

COUNTRY OF ORIGIN 98-99 1999-00 2000-01 3 YEAR % A$'000 A$'000 A$'000 TOTAL Of TOTAL

ASIA CHINA 69 408 133 610 0.2 INDIA 0 321 263 584 0.2

JAPAN 1,799 2,477 3,186 7,462 2.7 KOREA, REPUBLIC OF 270 709 183 1,162 0.4

PHILIPPINES 0 655 0 655 0.2 SINGAPORE 301 109 622 1,032 0.4

TAIWAN 1,131 2,262 1,011 4,404 1.6OTHER 136 297 381 814 0.3

TOTAL ASIA 3,706 7238 5779 16,723 6.0

EUROPE AUSTRIA 676 168 730 1,574 0.6

BELGIUM-LUXEMBOURG 1259 908 538 2,705 1.0 DENMARK 2525 2,180 828 5,533 2.0 FINLAND 48 827 52 927 0.3 FRANCE 12507 3,156 2,824 18,487 6.6

GERMANY 20953 13,757 18,224 52,934 19.0 GREECE 0 791 67 858 0.3 IRELAND 1315 0 0 1,315

ITALY 23626 19,846 31,686 75,158 27.0 NETHERLANDS 6361 2,400 3,602 12,363 4.4

SPAIN 1150 1,085 3,505 5,740 2.1 SWEDEN 1823 29 3,937 5,789 2.1

SWITZERLAND 3056 3,276 1,925 8,257 3.0 UNITED KINGDOM 9256 3,390 3,129 15,775 5.7

OTHER 140 74 234 448 0.2TOTAL EUROPE 84695 51887 71281 207,863 74.7

NORTH AMERICA CANADA 164 783 320 1,267 0.5 UNITED STATES OF AMERICA 17637 10,992 8,673 37,302 13.4

TOTAL NORTH AMERICA 17801 11775 8993 38,569 13.9

OTHER AUSTRALIA 82 468 297 847 0.3 NEW ZEALAND 2983 4,094 4,367 11,444 4.1 SOUTH AFRICA 136 794 264 1,194 0.4SOUTH AMERICA TOTAL 281 199 41 521 0.2OTHER 536 627 100 1,263 0.5TOTAL OTHER 4018 6182 5069 15,269 5.5

TOTAL ALL COUNTRIES 110220 77,082 91,124 278,426 100.0

Australian Imports of Machinery for filling, closing, sealing or labelling(HT code 8422300043)

160

COUNTRY OF ORIGINUS$'000 % US$'000 % US$'000 %

ASIA JAPAN 4,947 3.9 4,834 4.4 4,179 4.1 TAIWAN 1,950 1.6 2,810 2.6 1,743 1.7OTHER 1,412 1.1 2,281 2.1 1,866 1.8

TOTAL ASIA 8,310 6.6 9,924 9.1 7,789 7.6

EUROPE DENMARK 1,872 1.5 1,617 1.5 467 0.5 FRANCE 9,747 7.8 3,955 3.6 2,712 2.6

GERMANY 21,958 17.5 19,998 18.3 21,044 20.6 IRELAND 1,569 1.3 1,041 1.0 601 0.6

ITALY 23,977 19.1 24,454 22.4 32,750 32.0 NETHERLANDS 7,269 5.8 6,784 6.2 3,749 3.7

SPAIN 1,495 1.2 3,134 2.9 3,522 3.4 SWEDEN 2,539 2.0 771 0.7 3,074 3.0

SWITZERLAND 10,500 8.4 6,494 6.0 4,753 4.6 UNITED KINGDOM 9,318 7.4 4,043 3.7 3,496 3.4

OTHER 1,683 1.3 2,466 2.3 1,265 1.2TOTAL EUROPE 91,928 73.3 74,758 68.5 77,433 75.6

NORTH AMERICA CANADA 241 0.2 1,288 1.2 443 0.4

UNITED STATES OF AMERICA 21,235 16.9 17,642 16.2 12,401 12.1TOTAL NORTH AMERICA 21,476 17.1 18,931 17.3 12,844 12.5

OTHER NEW ZEALAND 2,530 2.0 4,073 3.7 3,395 3.3

OTHER 1,131 0.9 1,448 1.3 904 0.9TOTAL OTHER 3,661 2.9 5,522 5.1 4,299 4.2

TOTAL ALL COUNTRIES 125,375 100.0 109,135 100.0 102,365 100.0 Notes: 1.The HT code 8422300043 also includes the category of aerating machinery so the total imports may be slightly overstated 2. US$ figures have been converted from AU$ using the exchange rates of 0.627, 0.629 and 0.545 for the years 98-99, 99-00 and 00-01 respectively

Australia's total imports of packaging machinery products 1998-2001HT codes 842220024, 8422300043, 82240028, 842240029)

( Source: Australian Bureau of Statistics )

98-99 99-00 00-01

PACKAGING MACHINERY MANUFACTURERS INSTITUTE Staff Contacts

EXECUTIVE OFFICE Charles D. Yuska, President Email: [email protected] Corinne Mulligan, Executive Assistant Email: [email protected] Administrative & Finance / Statistics & Survey Craig Silverio, Director of Finance/Administration Email: [email protected] Paula Feldman, Manager of Statistics Email: [email protected] Deborah Tyler, Accounting Manager Email: [email protected] Erica Lee, Accounting Coordinator Email: [email protected] Joseph Evans, M ailroom Manager Email: [email protected] Anna Kostrzewa, Administrative Assistant Email: [email protected] China Office Shen Zhonghui, Director, PMMI China Office Email: [email protected] Alison Yan, Office Assistant Email: [email protected] Communications Matt Croson, Director of Communications Email: [email protected] Jenn Ellek, Manager of Communications Email: [email protected] Sara Kryder, PEF / Communications Asst. Email: [email protected] Education Margaret Elgin, Director of Education Email: [email protected] Danny Martinez, Education Coordinator Email: [email protected] Industry Relations Ben Miyares, VP, Industry Relations Email: [email protected] International Jorge Izquierdo, Director of Global Marketing Email: [email protected] Laura Bender, Manager, Global Marketing Email: [email protected]

Lindsay Marsh, Global Marketing Coordinator Email: [email protected] Latin America Office Maria Lourdes Toriz Alvares, Office Manager Email: [email protected] Julio Ortega, Data & Statistics Coordinator Email: [email protected] Meetings Patti Fee, Director of Meetings Email: [email protected] Membership / Member Services Jerry Welcome, VP, Member Services Email: [email protected] Don Barber, Director, Member Purchasing Programs Email: [email protected] Caroline Pons, Meetings/Membership Coordinator Email: [email protected] Samara Wolf, Administrative Assistant Email: [email protected] New Media Joshua Caulfield, Director of New Media Email: [email protected] Jacquelyn Bradshaw, Webmaster Email: [email protected] Show Jim Pittas, Director of Expositions Email: [email protected] Dinah Sprouse, Director of Trade Show Operations Email: [email protected] Kim Beaulieu, Exhibitor Services Coordinator Email: [email protected] Heather Harvey, Operations Representative Email: [email protected] Kelly Norman, Operations Representative Email: [email protected] Laura Lecas, Show Assistant Email: [email protected] Technical Services Maria Ferrante, Director of Technical Services Email: [email protected] Laurie Benson, Technical & New Media Asst. Email: [email protected]

Packaging Machinery Manufacturers Institute

4350 North Fairfax Drive, Su ite 600

Arlington, Virginia 22203 USA Telephone: (703) 243-8555

Fax: (703) 243-8556 E-mail: [email protected]

Latin American Office:

Homero 538-803, Col. Chapultepec Morales 11570 Mexico, D.F. Mexico

Telephone: 011 (52-55) 545 -4254 Fax: 011 (52-55) 545-4302 E-mail: [email protected]

China Office

Shanghai Centre, Suite 631 1376 Nanjing West Road

Shanghai, China Phone: +(8621) 6279-7640 Fax: +(8621) 6279-7649 Email: [email protected]

Documents

Packaging Machinery Manufacturers Institute