Written by intesolsdev on February 10, 2018 in News

One company that didn’t delay in diversifying has been Parish Engineering. Established in 1932, the company manufactures precision components for industries including defence, aerospace and mining from its factory in Moorabbin, SE of Melbourne. However, the automotive sector had long provided the bulk of its business, leaving it significantly exposed. Around five years ago, Parish began seeking to diversify, culminating in late 2016 with the takeover of Longworth Engineering.

“We were very heavily into automotive, probably around 70%- 80%,” says Paul Rafferty, Parish’s Business Development Manager. “But we started working vigorously in the last five years on getting out of the industry because the writing was on the wall. When we took over the Longworth operation we were pretty much non- automotive locally. The Longworth business now has taken over about 40% of the Parish operation, so we’ve just balanced up what we’ve lost in automotive.”

Founded in the 1950s, Longworth specialised in repetition engineering, but also produced its own range of air fittings. Parish has now moved the entire operation down from Longworth’s old site in Nunawading, east Melbourne, to Moorabbin retaining some of its CNC machinery and centralising production.

“We’re sort of bedding it down now,” says Rafferty. “It’s taken a good 12 months to get a handle on it. Now we’re at the point of setting a website up, getting brochures done, and once we’ve got all that bedded down we’ll take it further and market the product a bit more.”

For Parish, Longworth was a good match because the two companies were engaged in more or less the same types of work. The key benefit of the acquisition, however, was the opportunity for Parish to have its own product line, in the form of Longworth Air Fittings, which will be retained as a brand under Parish’s ownership.

“Now we’ve got our own product that we sell, we’re not relying on a customer giving us an order,” explains Rafferty. “We’re sending the product out to a diverse range of industries; there’s the trucking industry, however air fittings are used throughout all different types of industries. So we’re a bit more in charge of our own destiny now, whereas before we were relying on what our customer does. Therefore you don’t take such a hit when somebody slows down. You’ve got a wider base. So that’s the big thing.”

According to Rafferty, the team at Parish knew they were on the right track with Longworth, when the company exhibited within the Manufacturers’ Pavilion section of the Austech 2017 trade show in May. “As first-time exhibitors we didn’t quite know what to expect,” he says. “But the exhibition confirmed to us that the potential for further expansion of the Longworth Air Fitting range, both locally and overseas, is very positive. A lot of these fittings are brought in from overseas, and we’re finding our product is actually competitive price-wise. It was surprising to hear how many people were of the belief that products such as these were no longer manufactured in this country.”

Rafferty believes the fact Parish saw that the Australian automotive industry did not offer long-term security, and began planning for that fact promptly, has been crucial in ensuring its future.

“There was a lot of moving offshore, with the components that were being supplied,” he says. “They started off with pressed components originally, going back 10-15 years ago, then they started moving onto turned components, which is what we do. The amount of work coming from offshore was going to really hit us hard.

“We’d be in a very different position now, had we not started working back then, because to get into new product and get it into the market, you really need a good 5-10 years. It’s not something you do overnight. Any companies looking at trying to get out of automotive just now – it’s just too late. You had to really be working on it at least five years ago.”

While Parish’s measures to diversify have clearly been a success, the company does still have some automotive clients. However its current arrangement is very different to the days when it was heavily dependent on the local car-makers.

“We do still supply a lot of products to the US, for the Ford Ranger,” says Rafferty. “That’s still very healthy. It’ll probably last until 2020; it’s uncertain after that what will happen to that, but that still gives us plenty of time to look at that avenue further, or for further development of the Longworth range. The automotive side now would probably be under 20% of the business.”

Meanwhile, the Longworth venture will be dominating Parish’s plans for the time being, though Rafferty suggests further expansions along similar lines may be an option in the future.

“What we can see in this type of industry, is that you’re not going to pick up any major work by going out knocking on doors and picking up a job here and there. The only way to expand in a big way is either merging with somebody, or a buyout. So we’ve got our eyes open. If anyone’s looking at closing their business, selling their business, merging their business, we’re looking at that all the time. It’s not outside the realms of possibility.”

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