Over its 39 year history of opening up new markets, exiting others, and developing an enviable network of supportive partners, GBC Scientific Equipment has employed a diverse range of strategies to ensure export success
In 1978, GBC’s three founders invested $1,000 each to design, engineer and produce their first scientific instrument - an Atomic Absorption Spectrometer (AAS).
The breakthrough concept for the AAS was developed in Melbourne by the CSIRO over 50 years ago, and provided the ability to analyse extremely small amounts of elemental material.
While today the company manufacturers a broad range of scientific instruments and is renowned as a leader in its field, the development of its AAS product represented GBC’s first foray offshore – one that formed the bedrock to grow its distribution network into more than 100 countries.
Engineer and GBC’s Chief Executive Officer, Ron Grey, says that from humble beginnings, he quickly realised the company’s destiny was to adopt a global mindset and pursue opportunities in offshore markets.
“We basically sell to the world and 95% of our product is developed for export markets. While people talk about exporting as different to domestic operations, for us it’s just business.
“For many years, our business model was to showcase our products at major international tradeshows like Analytica in Germany and Pittcon in the US, and strike up relationships with local dealers.
“Today the same principal applies, and our distribution network and trust in our sales people across the globe is critical. However, it became evident that we could better manage our cost base through sourcing distributer contacts online, often through the conference website.”
As GBC worked to open up export opportunities, it experienced significant growth in major markets including India, South East Asia, South America, Europe and more recently found a rapidly growing market for their products in China.
This growth wasn’t without its challenges. For example, in 2011 when the Australian currency started to move beyond $1.10 against the US dollar, Ron found that his business model started to come under extreme pressure.
“At those currency levels, it was just not possible to manufacture and market competitively and our model was no longer viable.”
GBC weighed up its options to remain competitive and ensure continuity of supply into its export markets. This resulted in the decision to relocate half of the company’s manufacturing operations from Dandenong in Victoria to Penang in Malaysia – significantly reducing its cost base and currency exposure.
“We also used to be a vertically integrated manufacturing business, but we have learned to better manage our cost base. We now source our parts from China and Malaysia and maintain a small in-house facility.
“We continue to build our presence and team in Penang and are leveraging the local sales talent. It also puts us closer to many of our customers in places like China, Vietnam, Thailand and Indonesia.”
To deepen its network in China as a major growth market, GBC also established a strategic alliance and commercial partnership with a local company, solidified through a major investment in the Australian manufacturer.
“Through our alliance and change in ownership structure, we are now selling in China with a partner on the ground that understands the local market and access to a team of 120 sales people. China is now a key market and we are growing rapidly.”
GBC remains on a strong growth path with opportunities to increase its footprint in key markets. While the company has expanded and contracted over time, decisive management of its cost base and strength of its partners have underpinned sustainable export growth.