Established in 1929 by Malcolm Phillips, Philmac Pty Ltd is a leading global manufacturer of valve and compression fittings. Though Philmac currently focuses on mainly polyolefin plastic components and innovations in the water and gas industries, the company began as a metal foundry business. In the 1960s, seeing the potential role of plastics within the water industry, Philmac began to integrate plastic components into the production of the pipe fittings. By the late 1960s, the company had developed the world’s first all-plastic mechanical compression fitting for polyethelene pipe. This invention coincided with the emerging popularity of polyethylene plastic pipe systems “It was a new emerging market and the company was able to capitalize on that market growth,” says Chris Stathy, Managing Director of Philmac.

Philmac continued developing product innovations in the 1970s and 80s, including the creation of pipe fittings that could adjust to the varying measurement standards used around the world, most notably the Imperial and metric systems. “The product platforms that Philmac developed gave the flexibility of being able to adapt the product to meet the varying standards from around the world,” says Stathy.

Family run for over 50 years, Philmac was sold to Glynwed PLC, a British company in 1984. Glywed was sold in 2001 to Etex Group, a then-private Belgian company. In 2003, Etex split the plastics companies, including Philmac, into the Aliaxis Group, an integrated group of gravity and pressure pipe systems.

DURABILTY AND CUSTOMER SERVICE

According to Stathy, one of the strengths of Philmac is that the products that it offers are designed to last 50 years or longer and are directed toward the high performance end of the market. “We try not to operate at the commodity end,” says Stathy.

Philmac is also known for customer service and great relationships, filling customer orders promptly and completely. “The business is built on being able to work alongside customers to help build a market position,” says Stathy. With more than 200 competitors around the world, Philmac is focused on quality customer service and uniquely positioning its products in the market. Philmac is very open with its customers, working with them through potential challenges that arise. This transparency fosters customer trust, enhances relationships and adds value to the business. The company has a large, diversified customer based with its largest customer comprising less than five percent of business.

With the help of cutting edge IT systems, Philmac is able to streamline its manufacturing processes and optimize business operations. According to Stathy, technology is becoming more important in the business. Customers are relying on electronic data interchange (EDI) to submit large orders and access invoices online. The company is refining all of its IT systems throughout the office to offer an enhanced service experience to its customers with the increased visibility to track the order from submission to delivery.

TECHNOLOGY AND INVESTMENTS

Philmac seeks to continuously improve its operations across all levels of the business—from manufacturing to sales to the upper echelons of the company. “I’m a firm believer that sales team productivity is as important as manufacturing productivity,” says Stathy.

The company manufactures the majority of its products in Adelaide with raw material supplies mostly imported from Asia. “For our kind of product, the benefits of relocating a manufacturing operation to a lower labor cost area are not that significant, largely because the labour cost of producing our products is relatively low,” says Stathy. “We just don’t see the financial benefit of doing it elsewhere at this time.”

Over the last three years, Philmac has invested approximately $10 million in robotics, new tooling and other equipment. As a result, the company has overhauled its automatic assembly cells for its core products. The robots are guided by cameras instead of predetermined routings, as with the previous system. “It’s a system that provides us with flexibility as to what we can run through these cells,” says Stathy. The software was developed internally through the use of off-the-shelf hardware to ensure control over the intellectual property of the company and the future evolution of the technology.

EMPLOYEE TRAINING AND DEVELOPMENT

Philmac is viewed positively throughout the Adelaide community as a respectable and revered employer. The company employs more than 200 personnel in the Adelaide location with many more around Australia and 25 in the United Kingdom.

Philmac places emphasis on employee training, career development and employee support. The company’s training programs are award-winning and recognized by industry professionals. Employees at all levels of the company, from apprentices to management, receive training to enhance their professional skills. In addition to training, the company encourages employee career paths, offering opportunities for growth and career development within the company. Philmac has sponsored many employees in the pursuit of an MBA or other educational pursuits, with the understanding that this investment will benefit the company in the long run.

To improve health and well being, Philmac has an onsite gym with instructors for employees to take advantage of before or after work. “Although we’re not a family business anymore, there’s still a family culture,” says Stathy. “It’s something that we’ve tried to nurture as an organization that shows care and concern for employees. In that respect, we’re seen as a preferred employer within our state.”

ADDRESSING CHALLENGES

Philmac’s Australian location has created some challenges for the business, as it is located far away from the trading centres. Stathy affectionately calls it “the tyranny of distance.” Though the location offers protection in the local markets, it can be a barrier when trying to export and expand into markets in other parts of the globe. To address the challenge, Philmac has established beachheads in the United States and Europe to keep a foot in the regional markets.

FUTURE PLANS

Stathy joined Philmac in 1997 with a focus on strategic development into the Australian and global markets. The company seeks further development into overseas markets. “Our goal is to become a stronger player in overseas markets, focusing on our export positioning,” says Stathy. While Philmac is positioned strongly in Australia, the United Kingdom and Ireland, the company is positioning itself for significant growth in Eastern and Western Europe, Canada and the United States.

Philmac has been active in the United States for several years and recently appointed a business development manager to assist with the expansion into the American market. According to Stathy, the American market is moving towards replacing expensive metal pipes and fittings with plastic, as the benefits for the latter begin to outweigh the former. The key driver of the change is the increased use and acceptance of polyethylene pipes within the American market. “We see it as a real opportunity for us to be on the ground as that occurs to take advantage of the upswing,” says Stathy.

The company has the capacity to produce more volume of products at its Adelaide facility. “We want to turn Philmac into the [Aliaxis] Group’s global brand throughout the product category,” says Stathy.

According to Stathy, Philmac is always on the lookout for acquisition opportunities, particularly in Australia.