Home > Sevaan boss says sourcing from China can work out more expensive

Sevaan boss says sourcing from China can work out more expensive

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Sevaan Group’s CEO Tony Panrucker has questioned the practice of Australian manufacturers sourcing from China, with the benefits from using local suppliers often being overlooked.

Many Australian businesses have recently complained about Australia’s high-cost environment, and have looked to China for components.

Panrucker, however, said that many of the beliefs in sourcing from China being simply cheaper were grounded in habit, and there were risks, such as logistical issues, that should be considered.

“The inherent risks are so profound it is somewhat confusing why so many companies in Australia blindly accept outsourcing to Chinese manufacturers as some sort of destiny – almost as a default culture,” the CEO said, in comments reported by Dynamic Business.

“The [companies] that have normally found the right supplier domestically and can attest to the various risks which actually make China an unattractive risk if the manufacturing supply chain.”

He also mentioned that despite unit prices seeming cheaper, but standards and speed could be drawbacks, with weeks potentially being added to lead times.

Sevaan Group was formed in 2011 in a merger between Proline Technology and Wisby & Leonard, and “provides services that satisfy the majority ofthe steel processing industry requirements under the one roof.”

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