Investment in Indonesia releases capacity constraints for Austin Engineering

In the global mining industry, innovation and efficiency are critical. Austin Engineering, an Australian company specialising in custom load and haul equipment for mining, stands as a prime example of how strategic international expansion can drive success.

Founded in 1982 and today employing 1,200 people, Austin Engineering’s growth story spans 4 continents. With an annual turnover of more than A$320 million, Southeast Asia is one of the company’s top growth markets.

Overcoming capacity constraints

Austin Engineering’s decision to move into Southeast Asia was driven by a need to increase production capacity. According to CEO David Singleton: ‘The capacity issue really comes out of the fact that there are well-understood labour limitations here in Australia, just as there are in North America as well.’

Indonesia presented an attractive solution, in particular the island of Batam, with its strategic location and robust industrial base.

‘Batam is very accessible from Perth,’ Singleton explains. ‘The island of Batam has been set up as a heavy industrial island, so there is plenty of capability and skills there, particularly in heavy manufacturing.’

Austin Engineering’s Batam facility undertakes plasma-cutting, pressing, manufacturing, blasting and painting. Workshops deliver large production runs of mining truck bodies, buckets and water tanks.

Australian Government key to smooth expansion

Embarking on international expansion is fraught with challenges, from understanding local markets to navigating regulatory landscapes. For Austin Engineering, Austrade played a crucial role in smoothing this transition.

‘We use the Australian Government to assist us in any country overseas that we operate,’ says Singleton. ‘Austrade has supported us from the very beginning, 11 years ago, when we were setting up our new facility in Batam.

‘More recently, as we expanded that facility, Austrade has been helping us with advice and support. They have also helped local politicians and influential businesspeople understand that this is an investment that Australia is making into the economy of Indonesia.’

Austin Engineering’s investment in Indonesia has addressed the company’s capacity constraints, fortifying its position in the global market.

Indonesian investment delivers benefits to Australia

The investment in Southeast Asia has yielded large benefits for Austin Engineering. By addressing capacity constraints in Australia and North America, the Indonesian operations have fortified Austin Engineering’s position in the global market, enhancing both profitability and resilience.

‘When we grow the company, this also brings significant advantages back to Australia,’ says Singleton. ‘By optimising products within the sophisticated Australian mining industry and exporting them worldwide, we contribute to the national economy through increased tax revenue and enhanced global credibility.’

Austin Engineering’s experience underscores the numerous benefits of a strong trade and investment relationship between Australia and Southeast Asia, including significant economic growth and job creation.

‘By dealing with capacity constraints in Australia and North America, the Indonesian business has allowed us to grow at a very fast rate to meet the demands of mining companies in Australia,’ says Singleton.

Such growth not only enhances the profitability and stability of Australian companies but also strengthens Australia’s position in the global market, bringing substantial tax revenue back into the country.

For Australian companies considering expansion into Southeast Asia, Singleton says: ‘Any company in Australia, particularly small to medium companies going into Asia, should start with Austrade because they can help you understand market nuances, mitigate risks, and navigate logistical challenges.

‘Using Southeast Asia to support Australian manufacturing is a critical part of the equation. If you’re not thinking about manufacturing in Asia to support your Australian business, you’re missing out.’