IBISWorld’s top 100 Australian manufacturing companies released

Market researcher IBISWorld has announced the long-awaited annual Top 100 Manufacturing Companies in Australia list in conjunction with Manufacturers’ Monthly. The top 100 list offers a glimpse into the largest and most diverse sectors in Australia.

The selected companies have been ranked on the basis of revenue. The ranking process also revealed the struggle in several industrial sectors. The largest 100 manufacturers employ more than 260,000 Australians. Together, they have generated more than $282 billion in revenue in the last 2014-2015 financial year. The turnover was slightly down from the nearly $300 billion earned in 2013-2014 fiscal year.

Some key highlights

• Caltex: Number one on the list on the basis of revenue generated
• Fonterra Co-op Group: Moved to third rank, from fourth position in 2014
• Perth Mint: Entered the top 10 club for the first time
• General Motors Holden: Lost one place and occupied the 20^th position.
• Bindaree Beef: Moved to 87^th rank from the 146th rank in 2014.

Challenges

Reflecting on the growth pangs faced by many companies, its analyst noted the following issues.

“Overseas manufacturers, particularly in China and other South-East Asian countries, operate with far lower labour and overhead costs. This can be passed on to their customers both locally and globally in the form of lower product prices. While Australia’s manufacturers are finding it tough to compete, it is anticipated that the downward trend across manufacturers will ease and a contraction of only 0.1 per cent is expected in 2016-17,” IBIS World Senior Industry Analyst Spencer Little noted in a press release.

According to the study, the following industry trends are underpinning major company movements in 2015-16.

• Strong growth in agriculture industries and associated food processing industries – particularly meat processing. The growth is driven by free trade agreements and rising global demand for Australian produce.
• Substantial growth for building and construction manufacturers, including the Clay Brick Manufacturing industry, where a revenue growth of 6.4 per cent is expected in 2015-16.

It also marked out the beer manufacturing industry, which is facing decline in revenue as alcohol consumption and demand for traditional beer brands is waning.

Meat processing up

According to the analyst, amidst the struggle put up by many industries in the top 100 manufacturing companies, meat processing industry in Australia is a standout industry with its promise for huge growth. The sector is expected to grow 11.8 per cent in 2015-16.

“The trend of strong demand and rising prices has really assisted the meat processing industry over the last 12 months,” Little added.

Little noted the rise of meat processor and wholesaler Bindaree Beef, which has occupied the 87th slot on the top 100 manufacturers list after moving up 59 places from the list of last year.

“This is being driven by strong demand for high-quality Australian meat, particularly in Southeast Asia - China's is certainly a big one,” Little said.

Beer sector declining

On the beer industry, Little said it would decline by 1.1 percent in 2015/16 as consumers are taking less alcohol, particularly the traditional brands of beer. Average consumption of beer per person per year was 92.4 litres in 2013/14, which is the lowest in 70 years.

“Declining beer consumption and also rising competition inside and outside the industry have weighed on sales of the traditional beer brands, and weakened the revenue and profit of the industry,” Little said.

Instead of the mass-market brands like Victoria Bitter, Carlton Draught and XXXX, consumers are looking for premium, healthier beers, including foreign labels, low-carb and boutique craft beers.

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