Australian manufacturing poster child Tritium fails days after Qenos

Nick Bonyhady and Tom Rabe

Updated Apr 19, 2024 – 3.05pm,first published at 1.45pm

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A Nasdaq-listed electric vehicle fast-charger company hailed first as a Queensland success story and then as a justification for government subsidies is the second major Australian manufacturer to collapse this week.

Tritium, founded in 2001 and worth about $2 billion when it went public at the peak of the market for loss-making technology companies in early 2022, went into administration on Friday.

Electric vehicle charging manufacturer Tritium went into administration on Friday. Jamila Toderas

Tritium’s demise comes just days after Australia’s largest plastics producer, Qenos, was placed into administration, and as an industry chief warns that rising east coast gas prices will continue to threaten a range of domestic manufacturing across the country.

“Quite clearly we have got a lack of political will in some jurisdictions to exploit gas to service the local market,” Australian Industry Group chief executive Innes Willox said.

“Because of the constrictions on the domestic market, there’s now a much greater potential reliance on imported gas to get us through, and that’s probably the next big step we’re looking at.

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“Then you’re going to get international pricing playing into the local market – that’s obviously going to impact prices across the board.”

Mr Willox said major manufacturers of bricks, cement, glass and paper would all be vulnerable to ongoing gas price increases, as well as chemical and fertiliser producers.

In a speech in Queensland this week outlining his government’s big-spending Future Made in Australia plan to support domestic manufacturing, Prime Minister Anthony Albanese pointed specifically to the nation’s gas sector as a key pillar underpinning the energy transition and creation of local jobs.

Mr Albanese’s multibillion-dollar local manufacturing policy was criticised this week by inaugural Productivity Commission chairman Gary Banks, who said the plan was a “fool’s errand”, prompting the prime minister to accuse him of being a “flat-Earther”.

Grattan Institute energy program director Tony Wood also questioned the Albanese government’s $1 billion scheme to boost local solar panel production.

WA-based Wesfarmers Chemicals, Energy & Fertilisers managing director Ian Hansen on Friday pointed to the major input cost pressures that gas consumers were experiencing on the east coast, and warned the state government against opening up WA’s onshore gas industry to the export market.

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“We caution against any move in WA to allow onshore gas development to export domestic gas,” Mr Hansen told AFR Weekend.

“The eastern states issues are slightly different to WA. If the state’s Domestic Gas Reservation Policy works like it is intended, then we do hope to see a return of energy prices to more affordable levels.”

Mr Hansen said affordable gas was critical to the future of downstream chemical manufacturing and critical minerals processing.

Earlier this month, Mr Albanese said Tritium’s decision to close its Australian factory and produce its chargers in the US was a “lost opportunity”.

“We need to acknowledge that this is a reality, that we are in a global competition for capital,” Mr Albanese said, directly linking it to the government’s plan to fund domestic manufacturing.

In its heyday, Tritium had been a poster child for Australian manufacturing, pairing a story that appeared good for the climate with new jobs for blue-collar workers.

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The company had previously asked the Queensland government for a bailout worth up to $90 million and tried to secure an investment from Taiwanese electronics giant Lite-On. Neither eventuated.

McGrathNicol partner Shaun Fraser said the receivers’ priority was to stabilise the business.

“A sale process for Tritium’s business and assets was underway prior to our appointment – we will be re-engaging as a matter of urgency with interested parties and the broader market to seek a long-term capital and/or ownership solution for Tritium,” Mr Fraser said.

Qenos creditors in suspense

Meanwhile, McGrath Nicol partner Jason Preston, in a letter to suppliers of Qenos, said it was too early in the process to know if funds would become available to unsecured creditors.

“Amounts owed by the Qenos Group prior to 17 April 2024 remain a liability of the Qenos Group and are not payable by the Administrators,” the letter said.

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“These debts represent an unsecured claim against the Qenos Group and payment is dependent upon the outcome of the administration. At this stage, it is too early to say if funds will become available to unsecured creditors”.

Mr Preston is one of the McGrath Nicol partners appointed to handle the administration.

– With Simon Evans

your a lost opportunity Albo