Austin commences $6.5mn capital investment in Perth & Indonesia

Austin commences $6.5mn capital investment in Perth & Indonesia

SYDNEY, AUSTRALIA: Austin Engineering Limited has commenced a $6.5 million capital investment to transform and automate its design and manufacturing facilities at its major Asia Pacific centres in Perth and Indonesia.

 The capital investment (CAPEX) program will involve a new manufacturing flow approach with increased automation, custom jigs, fixtures, workstations and a standardised manufacturing approach to building product.

Austin will still be able to provide customised engineering solutions and products to its customers while leveraging the benefits of a production flow line. In particular, Austin sees major benefits to its truck body product offering, which comprises 70% of Austin’s annual revenues.

Critical outcomes to the capital investment will be to reduce the time to deliver customised solutions to clients, while maintaining or enhancing quality outcomes. Further targets include waste reduction and decreasing the workshop capacity required, lowering the overall product cost base.

The program of works was outlined in the second phase of Austin’s recently communicated global strategic review results, which identified opportunities for future growth and ways to optimise the Company’s cost base.

The expected payback period is twelve months post-implementation, with the majority of benefits to be realised in FY2023, although incremental benefits will be achieved during the latter months of FY2022.

Funding will be available through operating cash flows and surplus asset sales. The approach is expected to be scalable and transferable to other Austin manufacturing operations in the medium term and will support Phase 3 of the strategic review, which focuses on further product and service improvements through technology and innovation.

Austin CEO and Managing Director, David Singleton said: “Improvements being made in Austin’s manufacturing facilities in Perth and Batam in Indonesia will elevate an already market-leading service offering. We will be able to deliver products more quickly, in larger quantities, with less waste, and with improved quality, while still offering tailored design and engineering solutions to our customers.

What is exciting about our manufacturing improvement project is its scalability at a relatively modest incremental cost. This made the decision to adopt a fast follow from Perth to Batam easy. The investments made also support longer term strategies around product and service innovation as outlined in our strategic review.”

Austin Engineering Ltd. share price

0.22 AUD+0.023 (11.98%)today

19 Aug, 4:10 pm GMT+10 ·Disclaimer

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