DIGGA AUSTRALIA EXPANDS OFFSHORE

ONE of the Gold Coast’s homegrown manufacturing success stories will set up distributor networks in the US and a manufacturing base in the UK by 2012.

Digga Australia has forecast FY11/12 revenues of $50 million as it taps global markets and soaring demand for its drilling and digging machinery.

Chief executive Suzie Wright (pictured), who will celebrate 15 years with the company on Melbourne Cup day, says despite global pressures and a volatile Aussie dollar Digga Australia will keep its 12,500 square metre manufacturing base at Yatala, north of the Gold Coast – but will manufacture some components in the UK.

“We have an enormous future ahead of us in the USA. You don’t have to have too much of the market to be successful there,” says Wright.

Digga supplies gearbox components to the US military for its all-terrain vehicles with two years remaining on the contract. When the term expires in 2013, the company would have shipped 7000 auger drives into the US.

The company has also acquired a two-acre parcel of land in the UK where it has built a 900sqm plant to manufacture auger drill tips to avoid excess shipping costs.

“We have an office in the UK where they do base fabrication, while all-sub assemblies will come from here (Queensland). Auger drills are very difficult to ship. They have sharp tips, don’t pack together well and there’s a lot of space when packing them into a container. You can’t max out a container in its weight,” says Wright.

“It’s only a small factory, but it’s on two acres for testing equipment. It’s not ideal, but we are looking at setting up master distributors in key countries with the first one potentially in Poland. We have a really good distributor, they are great to do business with and local costs are good. It will also give us good access to Russia.

“We went to Russia in May and June and what was impressive for us is that everyone knew who we were. We were invited to take the stand and people wanted to do business with Digga. While it’s (Russia) a very new market for us, the internet allows us to be next door. Our main sales rep in England speaks seven languages and is constant contact with our world-wide contacts.”

Wright says the networks and manufacturing plants will add efficiencies and significantly decrease lead times – ‘the biggest challenge facing Australian exporters’.

The significance of the company was highlighted recently when Federal Opposition Leader Tony Abbott visited the company as part of a national anti-carbon tax tour.

For the full story on the future of Digga Australia, expert economic insights for 2012 and a special feature dedicated to trading in China via Hong Kong, get your copy of Gold Coast Business News today – out now in a newsagent near you.