The real cost of imports in the sport surface industry - Polytan
Powered by Sport Group
sports surface industry imports

The real cost of imports in the sport surface industry

Home Advantage.

Playing on home turf is an uncontested advantage in sport. But does the same principle apply when it comes to purchasing decisions for new sports surfaces? Imports are often cheaper. On the surface at least. But can decisions around value be made on up-front costs alone?

These questions carry greater currency in the present climate as COVID-19 puts an unprecedented strain on global and local economies and international trade. World Trade Organisation economists predict that the decline will exceed the trade decline brought on by the global financial crisis of 2008/09. According to a recent report by Baker McKenzie;

“Global trade has already seen a significant downturn through reduced Chinese imports and the subsequent decline in activity.”1

This highlights the economic vulnerability of an over-reliance on China as ‘the world’s factory’.

The report goes on to say that;

“as of March 25, global trade is expected to fall over 4%, contracting for only the second time since the mid-1980s.”2

Against such a challenging economic backdrop, the answers are undoubtedly complex but this article explores some of the hidden costs and value that may not currently be part of purchasing decisions (and should be).

Economic Cost

The pandemic has necessitated a ‘buy local’mentality. But does this principle carry beyond the small, everyday purchases we make? And is the cost of not doing so, the same?

In Australia alone, manufacturing is a crucial part of the economy, representing the 7th largest sector for employment (approximately 7% of all employment) and the 6th largest for output.3 As of February 2020 The Australian Bureau of Statistics reported that 922,000 people are employed in the manufacturing sector in Australia.4 Furthermore, a report by the Australian Industry Group states that manufacturing remains one of Australia’s largest full-time employing industries with over 85% of the workforce employed full time (compared to a national average of 69%). As well as being a source of consistent and stable income for almost a million people, manufacturing GDP is $105 billion AUD, comprising 5.7% of Australia’s total GDP.5

These figures demonstrate the emphatic benefit of Australian-made, however, imports are seen as a significant threat with the same report revealing that 21% of manufacturing industry CEOs identified competition from imports and online sources as their primary business constraint.

factory making sports surface

In his 2015 research paper on the impact of international trade on employment, Razib Tuhan from the Australian Government Department of Industry and Science, concluded that;

“while over half of Australia’s manufactured imports by value are currently sourced from low-wage countries…the relationship between imports and employment is negative. On the other hand, exports have the opposite effect on industry employment.”6

APT and Polytan run the largest sports and recreational surfacing distribution facility in the southern hemisphere, employing a workforce of over 120 people across its three facilities in Melbourne. Buying local protects these jobs and boosts the local economy. Imports do the opposite. As we come out of containment, stimulating the economy and keeping people in employment will be key, and buying local, from groceries to green technology sports fields will all matter if communities are to survive and thrive again.

The question then, isn’t solely, what does this cost now, but what will it cost in the longer-term? What is in the broader best interests of the local economy?

Environmental Cost

The business of transporting sport surfaces between countries has a high negative environmental impact, especially if they are coming from low-wage countries like China, that typically have a more carbon-intensive energy mix.

Beyond the carbon footprint of transportation, there are also vital environmental factors at play from the raw materials used to the manufacturing processes followed. Granted, the local product may not always score more highly on this front, but asking the question is key to understanding value.

sport surface locally manufactured

Green R&D, like Laykold’s Gel Court system which is made from 60% renewables, and Poligras Tokyo GT, which utilises filaments from over 60% renewable raw materials derived from sugar cane, also tip the environmental scales favourably.

Performance Cost

It is true that quality comes at a price. But so does lack of quality. And even where imports and local products meet the same international standards, the local bar is often higher because international standards, by necessity, cannot account for every local nuance.

Each local environment comes with its own unique challenges that require local expertise and knowledge to be answered most effectively. Take the harsh Australian climate. It necessitates products that have climate innovation baked into their DNA.

The Allunga Exposure laboratory in Townsville, QLD, where the tropical heat is high and the UV content of natural light is intense, provides an extreme research facility for yarn fading and tensile strength loss development. Polytan & APT’s 25+ years of continuous testing at Allunga has led to proprietary in-house yarn formulations that provide unmatched heat stability and resistance to the degrading effects of UV light. This in turn, makes for much higher artificial turf durability standards than are being met anywhere else in the world. It is a product of strong regional production and teams, and international R&D investment – something that Sport Group, as a parent company, champions through all of its product brands.

Interestingly, the manufacturing industry invests in R&D more heavily than any sector in Australia.7 As such, the benefit of innovation extends beyond simply product performance, to the wider economy, and as we’ve witnessed above, often to the environment too.

local yarn

Keeping everything in house with a fully integrated supply chain is another way of ensuring consistent quality you can trust – particularly as we experience the disruptive effects of COVID-19. Extended shutdowns as regions, countries and individual states look to contain COVID-19 is impacting business supply chains. Sport Group is unique in the sports surface industry in owning its entire global supply chain, providing protection against supply chain shortages with third party suppliers.

According to Anne Petterd of Baker McKenzie:

“Enhanced supply-chain management has never been more important. Companies with well-considered supply-chain risk management processes will be better-placed to identify the impact of disruptive events on their supply-chain and product-offering, providing them with an opportunity to assess how to best respond in tough circumstances.”8

A Home Win

When you consider the cost to the local economy, the environment and performance values, then the true cost of imports is higher than their price tag. This cost is extenuated by the pandemic we currently face. Meanwhile, the ‘home advantage’ of Australian-made becomes more valuable than ever.

If you are in the market for a new synthetic sports turf for football, rugby, hockey or multisport use, we would love to hear from you to find out how we can deliver the best value to you and your community.

Phone 1800 663 812 or contact us for more information.


References

1. [“Beyond COVID-19: Supply Chain Resilience Holds the Key to Recovery”, Baker McKenzie, 2020]
2. [“Beyond COVID-19: Supply Chain Resilience Holds the Key to Recovery”, Baker McKenzie, 2020]
3. [ “Australian Manufacturing in 2019: Local and Global Opportunities”, Australian Industry Group]
4. [“Labour Force Australia, Detailed Quarterly Feb 2020”, Australian Bureau of Statistics]
5. [“Australian Manufacturing in 2019: Local and Global Opportunities”, Australian Industry Group]
6. [“Impact of international trade on employment: Evidence from Australian manufacturing industries”, Razib Tuhan, 2015]
7. [“Australian Manufacturing in 2019: Local and Global Opportunities”, Australian Industry Group]
8. [“Beyond COVID-19: Supply Chain Resilience Holds the Key to Recovery”, Baker McKenzie, 2020]

elliot@temeritydigital.com.au

About elliot@temeritydigital.com.au

FOLLOW US ON INSTAGRAM

This error message is only visible to WordPress admins

Error: No connected account.

Please go to the Instagram Feed settings page to connect an account.

SUBSCRIBE TO OUR NEWSLETTER