Derwent Industries expands its manufacturing footprint

‘One of the lessons of the pandemic is that we need to be more resilient, that we need to be more self-reliant, and we need to make more things here,’ Australian Prime Minister Anthony Albanese recently said.

It’s a sentiment that Derwent Industries CEO, Craig Evans, shares.

‘At Derwent, we are well placed to support critical infrastructure and other sovereign initiatives. We can manufacture in Australia at a price that doesn’t put additional burden and cost on the community.’

‘Growth capital has helped us expand and increase our ability to achieve that,’ he said.

Since Derwent Industries first received a $15 million investment from the Australian Business Growth Fund (ABGF) in late 2022, the company has expanded its footprint via acquisition and added rubber to its repertoire of products.

But for Derwent Industries, ABGF’s support goes beyond the financial capital.

An Australian industrial product manufacturer

Derwent Industries is a manufacturer, supplier and distributor of engineering solutions and industrial products for industries such as civil infrastructure, water, defence, oil and gas, transport and mining.

ABGF recently invested $15 million in Derwent Industries to help it scale up and expand its operations. For Derwent Industries though, partnering with ABGF is about more than the financial investment.

Since teaming up, the ABGF team’s capabilities and expertise have helped Derwent jump at opportunities and expand its services to the market.

Striking while the iron – and the rubber – was hot

In February 2023, Derwent Industries faced an opportunity to acquire Mackay Rubber, which would expand its ability to provide additional Australian-made products to critical sectors, such as defence.

The two organisations were a perfect match, both strategically and culturally – and the team had to act fast to make the acquisition happen. The ABGF investment team were on the ground to help Derwent Industries ensure it was successful, offering due diligence and transaction execution support. In just a few weeks, the deal was done – and Craig Evans couldn’t be happier.

Photo: Craig Evans, ABGF CEO Anthony Healy, and the Mackay Rubber team.

“At Derwent Industries, it is vitally important for us to help the local industry grow and to ensure continuity of supply. We are proud to have Mackay Rubber join our group, to expand the scope of products we supply to the community and to ensure that critical sectors can access Australian-made products,” he said.

“Having a partner we trust to lead us through this process, like ABGF, gave us the capability to strike while the iron was hot, and to smoothly and successfully integrate Mackay into the Derwent Industries family,” he added.

Derwent Industries has continued its expansion.

In May 2023, they acquired moulds and the Heinhard brand from the Sydney-based John Heine foundry, which recently shut down. As a result, the team is now manufacturing products for the quarry industry under the Heinehard brand at its Bendigo facility. This ensured that a critical product range was able to be retained and manufactured in Australia.

And in September 2023, Derwent Industries acquired AVFI, which provides leading water management services and valve products – complementing the extensive solutions that Derwent Industries provides to critical infrastructure projects and the water irrigation industry. The integration of AVFI’s distribution network will expand Derwent Industries’ services to customers and projects across Australia and New Zealand.

Fulfilling a need for Australian manufacturing

Derwent Industries has expanded and evolved since it was first founded by Craig’s parents, Doug and Dianne Evans, as a manufacturer of water fittings in 1963.

For Craig, Derwent Industries’ ongoing growth reflects the Australian community’s focus on local development and products.

‘As a community, we are no longer complacent about our sourcing and supply of critical products, but value the security and efficiencies offered by products manufactured in Australia. Going forward though, we can’t rely on doing things the same way we always have. We need to move into automation and high robotics to compete on a global scale,’ he said.

Recent research by the Commonwealth Bank backs that up. It indicates that Australian manufacturing companies have ‘outpaced their predictions for financial and production performance’ since 2022 – and that performance is expected to continue. Technology investment is a focus for the whole industry, and autonomous systems and equipment, as well as artificial intelligence, are expanding quickly.

Derwent Industries is on a growth trajectory to reflect those priorities. Using its growth capital, it is upgrading its facilities and its technical capability in areas such as robotics and automation, planning to open further distribution centres and broaden its reach. This will enable Derwent Industries to offer a viable alternative to products manufactured overseas – which is particularly important for clients in industries such as defence.

In addition, due to the group’s expanded capabilities for onshore manufacturing and providing end-to-end solutions, Derwent Industries has experienced a 150% increase in export order intakes.

‘This is being driven globally by a desire for high quality products from stable countries like Australia, at acceptable prices. It marks a change in the industry from the low cost ethos that defined the 1990s through to 2020,’ Craig explained.

Patrick Verlaine is ABGF’s Co-Head of Investment and sits on Derwent Industries’ board.

‘It’s fantastic to see Derwent Industries, which is a key player in Australia’s manufacturing industry, grow and evolve – while still staying true to its family roots and its mission of providing high quality Australian-made products.

‘The federal government has indicated that improving Australian sovereign capability is a priority – and Derwent Industries’ activity and growth help support that,’ Patrick said.

Partners in growth and development

As Derwent Industries becomes larger and more complex, the team is also evolving its operational systems and structures to make them more efficient, and to ensure they reflect the organisation’s size, scale and complexity.

‘ABGF’s team is a fantastic sounding board and support for us, particularly when making decisions in such a fast-changing environment. Since the beginning of our relationship, I’ve found that ABGF has a genuine desire to help, understand the strategy and get on board alongside us.

‘Now, several months in, they are a true partner, and a valuable part of our organisation,’ Craig said.

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