Bradmill, A Homespun Success
THE SUNDAY AGE
Sunday January 16, 1994
THE most remarkable feature of an innovative textile firm such as Bradmill Undare is undoubtedly the fact it succeeds _ an achievement as rare as it is welcome in Victorian manufacturing.
While the textiles industry has long labored with its public relations image _ William Blake condemned its ``dark satanic mills" 178 years ago _ most expert commentary of the past decade has abandoned the once-profitable line of work to the low-wage, teeming sweatshops of the developing world.
Ever since the Hawke Government instigated its policy of tariff reduction, the world of textile, clothing and footwear manufacturing has been regarded as no place to be _ and the Victorian variety especially so _ but the Bradmill revival has proved the experts wrong, with barely a fashionable microchip to boast of.
Bradmill was an orphan left over from the collapse of Abe Goldberg's Linter group and eventually sold by the giant American Sara Lee group.
Along came managing director and owner Mr Jack Frazer, who was said to have put up $15 million to take the helm. Mr Frazer characterised his takeover as a classic case of being in the right place at the right time, although in this case the right time was a long, arduous period culminating in signing the deal on 9 October 1992.
The gamble is paying off.
Bradmill Undare has transformed itself into the leading denim and canvas producer, employs more than 900 people in economically struggling areas and boasts an annnual turnover of $150 million.
For such a large concern, Bradmill is largely anonymous _ probably because it does not produce any brand product. There could hardly be an Australian who had not bought its output: Bradmill supplies more than 70 per cent of the market, including as its best customer the Levi Strauss group.
Mr Frazer said the most innovative strategy he had employed was to trim and harden management and invest heavily in better technology _ approaches that both ran counter to the prevailing trend.
Bradmill is almost halfway through an ambitious $27 million five-year program designed to lift it to the front line as a value-added, sophisticated manufacturer and exporter.
Of the $12 million spent to date, Mr Frazer said most had gone on plant and equipment. From now on the program will focus on expanding the Yarraville site where it plans to consolidate all the businesses.
The first step in this program is relocating the Leeds Dye Works from Northcote in the next three months. Mr Frazer hopes the company will qualify for State Government funds designed to encourage industry centralisation. It has knocked on the door of Regional Development Minister Mr Roger Hallam.
The company's record on this front is impressive. Last November, Bradmill received the final tranche of its $8.1 million international competitiveness grant from the Federal Government.
The Textiles, Clothing and Footwear Development Authority also made a bounty capitalisation grant of $7.5 million.
Mr Frazer said Canberra's support had been crucial, and so far it appeared to have paid off. ``We believe in what we're doing, and the Government does as well, I suppose. Otherwise they wouldn't have put the money in."
Mr Frazer said he did not find the extent of government support surprising, either, as its message to manufacturers sector was unmistakeable: export or perish. He said: ``We're taking Australian cotton, adding value and exporting it."
The difference is obvious. A kilogram of raw cotton can be sold overseas for about $2.90. A kilogram of denim would earn as much as $13.
Bradmill exports 40 per cent of its denim _ a good performance, but one that could be improved. It has just appointed an export development manager, Ms Kerryn Caulfield, formerly with the Australian Chamber of Manufactures.
There are differences between the official and business points of view. ``The Government is interested in an Australian textile industry rather than an Australian clothes industry," Mr Frazer said. ``From our point of view, we need to keep a clothes industry going here because that's who we sell to.
``That said, though, our future is in exports. We have to look at what will get us into various markets." Its main export markets are Europe _ principally Germany, Poland and Portugal. The American market, while the most tempting, is volatile and the biggest customers, such as Levi, prefer to use local suppliers.
Mr Frazer said Bradmill could only operate as an occasional exporter to the US and was cynical about America's commitment to global free trade. ``I've found that it's free only so long as it suits them ...
US politicians help US farmers. That's just the way it is," Mr Frazer said.
While Bradmill has adopted the more traditional reduction in unit costs, more through increased production and efficiency than through job shedding, it has also revamped management practices.
A good test of this will be negotiations this year for an enterprise agreement, particularly as rival unions have attempted to move in to cover the workforce. One particular sticking point could be the company's summer holiday, when the 24-hours a day, six-day or seven- day a week plant lies idle for three weeks.
The next big challenge _ and one Bradmill is not keen to discuss in detail _ entails extending the commercial territory it has carved out.
Mr Frazer was understandably guarded, admitting only that Bradmill was ``interested in taking our product through to the branded stage ...
You can't sell fabrics into Japan, but you can sell jeans into Japan".
Mr Frazer has come a long way since he moved from his native Northern Ireland to Collingwood to run a a flax mill for Davies Co-op. His 30 years since then have taught him more about the perversity of the industry than anything else.
``There's always been fortunes made in textiles, and there's always been people going bust. This industry is extraordinary in that, no matter how you compare them, they seemed to be doing the same thing at the same time." While management was the key, Mr Frazer conceded ``you need a bit of luck too".
Company snapshot.
Bradmill Undare Group.
Ownership: fully owned and controlled by managing director Jack Frazer.
Turnover: about $130 million.
Employment: 980 employees.
Exports: 40 per cent of output.
Products: non-branded fabric, principally premium denim and canvas, for clothing manufacturers.
Location: large Yarraville plant, off-shoots in Northcote, Moorabbin and Ararat.
© 1994 THE SUNDAY AGE