Leading industry research firm IBISWorld has revealed the list of Australia’s Top 100 manufacturers for 2020. The list provides an insight to the disruption caused by the COVID-19 pandemic across the manufacturing sector. It also highlights the largest firms, growing and declining sectors, and new businesses to watch in 2021 and beyond.
‘Revenue volatility across the list has spiked in 2020, amid the disruptive force of lockdowns and wild swings in commodity prices. The manufacturing sector has been fairly resilient through it all, with revenue across the Top 100 only declining by 3.7%, to $306 billion,’ said IBISWorld Senior Industry Analyst Jason Aravanis.
Close to 46% of the firms in the Top 100 posted a revenue decline in the 2020 list, primarily due to the impact of the COVID-19 pandemic in the final quarter of 2019-20. Approximately 52% of firms posted a decline in profit over the period. Just over half of the Top 100 reported a decline in employment in 2020, but this was offset by employment growth from other firms. Overall, employment across the Top 100 rose by 0.6%, to approximately 377,000 people.
Top 10
Gold Corporation, operating as the Perth Mint, has taken the top spot in the list, riding a surge in the price of gold to drive a 32.2% increase in revenue. The domestic price of gold rose by 32.8% in 2019-20, to $2,329 per ounce, driven by safe-haven demand during the early stages of the COVID-19 pandemic. Across the Gold Ore Mining industry, revenue grew by 20.5% in 2019-20, to reach $23.1 billion.
Fonterra Co-op Group remained unchanged in second place. Based in New Zealand, the company has seven manufacturing sites in Australia and maintains an 8.1% market share in the Cheese Manufacturing industry. Fonterra posted a profit for the first time in two years, despite the impact of the COVID-19 pandemic. The domestic price of milk rose by 5.4% in 2019-20, assisting the company’s performance.
Several players in the top 10 are heavily involved in the fuel and petroleum product supply chain. These include Ampol, ExxonMobil Australia, Viva Energy Group and BP Australia. While the petroleum supply chain was a big source of growth in the 2019 Top 100 list, each of these players sustained a major decline in revenue in 2020, amid a 5.0% decline in retail petrol prices. Across the Fuel Retailing industry, revenue declined by 16.0% in 2019-20, and is only expected to rebound by 2.5% in 2020-21.
CSL rose from rank 9 to rank 6 in the list, as demand for its healthcare products spiked during the COVID-19 pandemic, and long-term demand continued to rise due to the ageing Australian population. CSL maintains a 12.4% market share in Australia’s Biotechnology industry, and has grown its domestic revenue by 7.6% over the five years through 2019-20. The Australian Government has secured 53.8 million doses of the AstraZeneca COVID-19 vaccine, with 50 million of those doses to be manufactured by CSL Limited at a facility in Parkville, Melbourne.
Top 5 Risers
Asahi Holdings was the fastest grower on the list, with revenue rising by 76.4%. This tremendous increase launched the beverage manufacturer up to rank 23. Asahi completed the acquisition of Carlton & United Breweries in June 2020, contributing to the sharp rise in revenue. In the Beer Manufacturing industry, Asahi holds a commanding market share of 44.2%. Asahi’s revenue growth has come amid a difficult backdrop, with revenue across the industry declining by 8.0% in 2019-20, due to a sharp fall in demand from pubs, bars and nightclubs.
Australian Agricultural Company Limited, trading as AACo, was the second fastest grower on the list, with revenue increasing by 46.9% over the year through March 2020. This rise is primarily attributable to significant growth in the sales and marketing of premium wagyu beef products. The domestic price of meat also increased by 7.8% in 2019-20, supporting revenue. Across the Meat Processing industry, revenue grew by 8.1% in 2019-20. However, industry revenue is expected to decline by 10.0% in 2020-21, amid ongoing trade disputes with China.
AMA Group posted revenue growth of 46%, driven by its acquisition of ACM Auto Parts. AMA Group is the largest player in the fragmented Motor Vehicle Body, Paint and Interior Repair industry, with a market share of 10.8%. Revenue across the industry fell by 7.9% in 2019-20, as restrictions on movement reduced the total number of vehicle accidents on Australian roads. AMA Group has pursued an aggressive acquisition strategy over the past decade, with major acquisitions including Capital S.M.A.R.T Repairs and Gemini Accident Repair Centres.
PFG TopCo1 Pty Ltd, better known as Allied Pinnacle, maintains a market share of 13.1% in the Flour and Grain Mill Product Manufacturing industry. Over the fifteen months through March 2020, revenue grew by 38.0%. The company is one of Australia's largest flour millers and premix manufacturers. Allied Pinnacle operates seven flour mills and four mixing plants, which are supported by warehouse and distribution functions. As Allied Pinnacle’s reporting period ended in March 2020, the COVID-19 pandemic had no major impact on the company’s results in the list.
The a2 Milk Company posted revenue growth of 33.0% over the year through June 2020, driving a rise to rank 48 on the list, up from 57 in the prior year. While only a small player in the Milk and Cream Processing industry, the company increased overall sales throughout 2019-20, benefiting from a growing customer base and supplying an essential product during the early months of the COVID-19 pandemic. Liquid milk sales in Australia increased by about 14% in 2019-20. In March 2020, the company announced it had entered into a partnership with Canada-based Agrifoods Cooperative to produce, distribute and market a2 Milk branded liquid milk for the Canadian market under an exclusive licence.
Manufacturing outlook
The 2020 Top 100 list shows both the severe disruption of the COVID-19 pandemic and the remarkable resilience of Australian manufacturing firms. Revenue across the Manufacturing division fell by 2.5% in 2019-20, and is expected to fall by a further 3.5% in 2020-21. However, the division is forecast to gradually recover over the five years through 2025-26, with annualised growth of 1.2% to reach $422.2 billion.
‘The disruption of the COVID-19 pandemic has highlighted the importance of maintaining a robust domestic manufacturing division. In the wake of the pandemic, a stronger focus on reliable domestic supply chains is anticipated to drive demand for domestic manufactured products. This trend will likely persist in the 2021 Top 100 Manufacturers list and beyond,’ concluded Mr Aravanis.
IBISWorld reports used to develop this release:
- Gold Ore Mining in Australia
- Cheese Manufacturing in Australia
- Fuel Retailing in Australia
- Biotechnology in Australia
- Beer Manufacturing in Australia
- Meat Processing in Australia
- Motor Vehicle Body, Paint and Interior Repair in Australia
- Flour and Grain Mill Product Manufacturing in Australia
- Milk and Cream Processing in Australia
To access the full Top 100 Manufacturers list, obtain industry reports, or arrange an interview with an analyst, please contact:
Jason Aravanis
Strategic Media Advisor – IBISWorld Pty Ltd
Tel: 03 9906 3647
Email: mediarelations@ibisworld.com
