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Government of South Australia - Department of Industry, Innovation and Science

    South Australia’s innovative manufacturing sector

    Header manufacturing

    South Australia’s long and productive manufacturing history is a foundational strength of our state.

    Manufacturing is currently South Australia’s largest sector, accounting for around 17% of total state output by revenue, 25% of business research and development, 20% of exports, 7% of employment, and 6% of industry value-add.

    Our state’s thriving food and beverage sector is a major driver of local manufacturing, with food-related manufacturing, machinery and equipment the largest component of South Australia’s manufacturing sector – accounting for nearly half of all manufacturing activity, or 3% of the state economy.

    Even in ‘traditional’ sectors like food manufacturing, the adoption of industry 4.0 technologies is set to mitigate South Australia’s historical challenges of cost, scale and distance to markets by improving our ability to provide customised and high-value products to global customers.

    South Australia is at a turning point in its economic history, with exciting new opportunities for re-industrialisation as the state emerges from the impacts of the COVID-19 pandemic and embraces sovereign manufacturing in a low-carbon, clean industrial future.

    Our international leadership in renewable energy and investment in hydrogen production are creating new manufacturing opportunities for premium low-carbon products like green metals, minerals, and fuels that capitalise on the global green transition.

    25%of SA's business R&D spend
    20%of SA's exports
    68,000+South Australians employed

    The future of manufacturing in the state

    Consistent with findings across Australia and most OECD nations, domestic manufacturing has contracted in South Australia over the last decade – from 9.7% (2011-12) of industry growth value-added to 6.3% (2021-22). The loss of local automotive manufacturing in 2017, when the Holden plant in Elizabeth ceased operations, was a viewed as a major milestone of this decline.

    However, the world’s manufacturing sector has shifted significantly since then – a result of the COVID-19 pandemic, focus on decarbonisation, and other global market disruptions. Now, manufacturers are evolving to compete more on design, quality, and innovation than cost.

    This is an arena where South Australia has several significant competitive advantages. State Government is working closely with industry, education, union and community stakeholders to identify and exploit these advantages, with a plan to support the growth of local manufacturing currently under development.

    WEB 741 394 SA Manufacturing Strategy x2

    South Australia's Advanced Manufacturing Strategy

    South Australia's Advanced Manufacturing Strategy has been developed to guide future industry and government collaboration, grow manufacturing, and drive our state's economic transition towards a knowledge-based, resilient, and greener economy.

    Competitive advantage sectors

    Defence and Space

    Developing sovereign capability in the defence and space sectors is a matter of national priority. In recognition of our existing research and industry strengths, South Australia has attracted significant Commonwealth and private investment to bolster the state’s advanced manufacturing workforce and capabilities as it relates to defence and space technologies.

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    Renewable Energy and Green Hydrogen

    South Australia is a global leader in renewable energy production and adoption. Our state is exploring ways to exploit this early advantage to its full potential – investing in a green hydrogen sector and pursuing low-carbon energy intensive manufacturing in sectors such as iron, copper, cement, critical minerals, and fuels.

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    Critical Minerals and Resources

    As the world transitions to low-carbon technologies, large amounts of critical minerals such as copper graphite and cobalt will be required. South Australia holds more than 69 per cent of Australia’s known copper and graphite resources and is highly prospective for cobalt.

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    Food and Beverage

    Food and beverage manufacturing, machinery and equipment account for nearly half of all South Australian manufacturing activity, and roughly 3 per cent of the state’s economy.

    South Australia is also Australia’s indisputable wine state, producing half of Australia’s bottled wine and about 80 per cent of premium wine, with nearly a billion bottles of South Australian wine on tables and in cellars around the world.

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    Forestry and Timber

    South Australia’s south-east generates a third of the nation’s house framing and interior sawn wood, and a quarter of particleboard. Approximately 40 per cent of timber leaving the region is unprocessed, meaning there’s huge opportunity to value-add by generating new structural timber products, creating new wood products to replace plastic and developing new biofuels and biochemicals.

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    Building and Construction

    Concrete, steel and aluminium are responsible for 23 per cent of global emissions – making the building and construction sector ripe for green industrial transformation. South Australian businesses are trialling innovative new building materials such as fibre and cement composites to support a more circular economy.

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    Health and Medical

    A by-product of the state’s globally competitive health and medical research institutes, South Australia is a hive of health-related advanced manufacturing – including the production of medicines, vaccines (including mRNA vaccines and therapies) and medical devices.

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    The role of critical technologies in manufacturing

    New technologies have the potential to reduce South Australia’s historical manufacturing challenges of scale, cost, and distance to market. They will also open new job opportunities requiring cognitive and communication skills between people and machines, freeing up production workers to engage in more creative, productive, and value-adding roles.

    Industry 4.0 refers to a platform of digital technologies such as artificial intelligence, machine learning, automation, robotics, additive manufacturing and sensors that enable manufacturing of customised products in small volumes, or in remote or decentralised locations.

    They also enable data-driven business models to strengthen links between customers and suppliers. Industry 5.0 is an emerging term describing the integration of people with machines to avoid systemic risks associated with the failure or collapse of highly digitised networks and systems.

    Support programs

    Economic Recovery Fund

    As part of the South Australian Government's Economic Recovery Fund, the Small Business Energy Grants program will allow eligible small businesses and not-for-profits to apply for grants ranging from $2,500 up to $50,000 in matched contribution.

    Manufacturing Growth Accelerator

    In 2022, The Department for Industry, Innovation and Science partnered with Flinders University’s Australian Industrial Transformation Institute (AITI) to establish the Manufacturing Growth Accelerator at the Factory of the Future facility at the Tonsley.

    SiGREEN Pilot Program

    Siemens has partnered with DIIS and Food SA to deliver a pilot of their SiGREEN solution to a cohort of South Australian food and beverage businesses where they identify a product's true carbon footprint to better track and demonstrate progress against set sustainability goals.
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    Industry Capability Network

    A powerful online database and our extensive network of Industry Consultants.

    ICN SA provides a pivotal connection between major projects and South Australia’s best suppliers, fostering opportunities for local businesses to capitalise on the billions of dollars in major projects in South Australia.

    With powerful tools like the ICN Gateway, a database containing more than 80,000 supplier records, ICN has contributed to contracts valued at more than $2 billion being awarded to South Australian companies and the creation of more than 28,000 jobs.

    ICN maintains a list of local businesses with the demonstrated capability to meet the requirements of major international, national and local developers, and matches the businesses, their skills and their expertise with projects and developers.

    Get help navigating opportunities in manufacturing

    There are experienced DIIS team members available to support your growth ambitions – whether that be help with workforce development, navigating government and other support programs, connecting with peers and industry leaders, or the adoption of new technologies.

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