ASX-listed Quickstep’s Chief Executive, David Marino says Australians have a tendency to underrate their inherently flexible nature in providing innovative solutions, which can be vital to success in global manufacturing.
“We undervalue our can-do attitude. Doing what you say you are going to do, being fast and flexible and our capacity to solve complex problems — these are really important traits in successful organisations,” he says.
“Given our innovation, there are ways to connect globally.”
Quickstep is proof of that. The firm listed in 2005 and is at the forefront of advanced carbon composite manufacturing for the global aerospace, defence and automotive industries. It counts the US Department of Defense, major European car manufacturers, aerospace majors and many other institutions and commercial organisations among its customers.
Quickstep has an aerospace-grade manufacturing facility at Bankstown Airport on the site previously occupied by Boeing Aircraft, a new technology site at Deakin University, Waurn Ponds Campus near Geelong and a sales and technical operation in Munich.
The firm is successfully countering Australia’s much-lamented tendency to send raw material offshore only to “buy it back at three times the price converted,” as Mr Marino neatly puts it.
“Manufacturing in Australia is changing and repositioning from the old type of high volume manufacturing to a new high tech high automation which fundamentally means the skill types and where you are investing needs to change,” Mr Marino says.
“It is something we should embrace. I don’t think it is something we should be afraid of. It is different but it’s not less activity if done well. It is just different types of activity.”
Demand for advanced composite materials is forecast to grow from 43,000 tonnes in 2010 to 340,000 tonnes by 2020, and the more tonnage demanded the faster it will need to be cured. Quickstep’s unique, patented technology offers cost savings and importantly reduced manufacturing or curing) times to meet these future demands.
State One Stockbroking, which rates Quickstep a buy, forecasts revenue growth of 8 percent in FY17E to $54 million, followed by accelerated sales growth of 42 percent in fiscal 2018 and 58 percent in fiscal 2019 as increasing joint strike fighter sales are augmented by a ramp-up in automotive exports and other revenues.
Quickstep’s patented Qure process, formerly known as the Quickstep process, was developed by Perth’s Graham family and was born out of a need for lower capital investment. The key breakthrough is the transfer of heat via fluid rather than air as done in standard technologies using autoclave.
The process is cheaper and more energy efficient, and emission-regulation friendly.
“It is not easy for someone to just come in and pick it up and replicate it tomorrow. Knowhow is difficult. Knowledge of the design, material science, and the processing approach is very, very complex. We are 15 years into the journey,” Mr Marino says.
Quickstep spent around eight years on technology investment before it became a manufacturer, and it is still undertaking that technology investment.
“It takes time, you’ve got to be determined. You’ve got to stay the course and you need to find smart ways to support your investment.”
Mr Marino concedes that one of the biggest challenges in Australian manufacturing is that we don’t have the big global Original Equipment Manufacturers (OEMs) demand firms in the industry. But he says there are lots of global arenas where Australian innovation can be put to good use.
“The challenge for Australian manufacturers is the size of the market and the dispersed nature of it versus the likes of Europe and the US. The big challenge is the global supply chain and how to get into that global supply chain.
“Scale is fundamental. The transition from innovation to commercialization relies on this scale to support ongoing investment. It’s a critical consideration.
Mr Marino says you need to have something unique, and recommends finding the right collaboration model and accepting that you can’t do it all on your own.
“Global competition is hard. But innovative Australian companies have got a lot to sell in the world market, “ he says.
Quickstep is branching out into marine with work related to the government’s submarine program, and anticipates demand from the energy sector, particularly wind turbines.
“Manufacturing is not for the feint hearted. But don’t undervalue that we have got a lot to sell in the world market. We are extremely innovative in this country and we need to make sure that we keep manufacturing as a priority activity. It is fundamental to the value add,” Mr Marino says.