In the latest in our series on innovative South Australian companies, Richard Blandy examines the success of an automotive component manufacturer who isn’t beholden to the fading Australian car industry.

Australian Clutch Services (ACS) is an automotive parts manufacturer located in Wingfield. It was founded in 1988 by Brenton Jordan, who is still the owner and managing director of the company. Brenton was born in Riverton and moved to Adelaide at a very young age. After spending time in Perth, he returned to Adelaide.

After studying mechanics at Croydon Park Technical College, he began working for Repco Girling as production manager and industrial sales representative. He left Repco Girling to start Adelaide Clutch Services (now Australian Clutch Services). Why clutches? Brenton had learned a lot about rebuilding brakes and clutches while working for Repco. He learned all there was to know about automotive clutches. ACS now imports, manufactures, distributes and exports clutch kits and components all around the world.

From shed-like beginnings in Torrensville, where a fish-shop fryer was used to clean the clutches, ACS has evolved through excellence at what it does, a belief in and capacity for innovation, and through sheer hard work by every employee, into an international manufacturing company with a multi-million dollar turnover. It now employs 40 people, 15 of whom are not skilled. It exports all over the world. Its turnover has increased 50 per cent over the last six years, notwithstanding the global financial crisis.

It switched to manufacturing clutches from servicing them when the GST came in, as manufacturing clutches became less costly than reconditioning them. ACS produces a wide variety of clutches including clutches for performance and racing cars. V8 Utes competing in the Australian V8 Utes Series all use ACS clutches. ACS has also recently developed a heavy-duty clutch for the new Nissan Navara, which is expected to be extremely successful in Australia and overseas.

ACS has stuck to Adelaide because of the relaxed standard of living Adelaide offers. It ships its containers filled with clutches through Sydney, but wishes that there were an economic possibility of shipping them through Port Adelaide.

ACS is typical of Australian innovators: breakthroughs arise out of working it out themselves, rather than relying on research centres. In this they are very like a typical Australian mining supply chain company. ACS’s problem-solving capability enables it to break into international automotive supply chains. This is again reminiscent of how Australian companies typically break into international mining supply chains.

Brenton likes hiring young people and mentoring them. The high productivity of the staff comes from their hard work: they care about, and are proud of the success of, Australian Clutch Services. Brenton starts the day by walking around the company. The staff know him and he knows them.

ACS provides a free lunch for staff every month so they can catch up; there is a company newsletter to keep everyone in the know about what is happening in the business.

Innovation is important at ACS. Brenton likes trying new things out. He has always got ideas from everywhere – going to trade shows overseas, talking to people, even watching TV.

Brenton was one of the first in the auto industry to have a website. He understood the marketing potential of the internet very early on.

ACS’s main export market is New Zealand, followed, in Europe, by Poland, the United Kingdom, France and Germany. It has a warehouse in Poland, which acts as its main distribution hub for Europe. In Europe it also sells to Belarus, Belgium, Bulgaria, Cyprus, Czech Republic, Estonia, Finland, Italy, Ireland, Lithuania, Netherlands, Norway, Portugal, Russia, Slovakia, Slovenia, Spain, Sweden, Switzerland and Ukraine).

ACS also sells to markets in the Middle East (United Arab Emirates, Bahrain, Jordan, Lebanon, Oman, Qatar and Saudi Arabia), Asia (China, Hong Kong, Indonesia, Malaysia, Philippines, Singapore and Taiwan) and the Americas (United States and Bolivia).

ACS has a distributor in every state and territory and recently opened warehouses in Queensland, New South Wales, Victoria and the Northern Territory. The company recently invested in new software offering better and faster stock monitoring, accessible by customers, who can now order on line for faster delivery.

ACS is not an original equipment supplier for Holden, Ford or Toyota, which means that their viability is not directly affected by the closure of Australia’s main car assemblers. However, like every other business, ACS is concerned by the adverse effects of these closures on the Australian economy and the effect that that may have on their own sales.

In April of this year, ACS won a Silver Export Award from the Australian Automotive Aftermarket Association (AAAA). Previously, ACS has won the AAAA Gold Export Award and a number of other product awards. In 2007, ACS was declared South Australian Telstra Business of the Year.

ACS is now doing a lot of defence work overseas – because armies typically want all-terrain-reliable Land Cruisers that they can put machine guns on the back of! It also flogs its clutches to a number of police forces who also want to be able to burn off the crooks.

ACS has stuck to Adelaide because of the relaxed standard of living Adelaide offers. It ships its containers filled with clutches through Sydney, but wishes that there were an economic possibility of shipping them through Port Adelaide.

ACS has had government help. They have used the Export Market Development Scheme (EMDG) for the allowable maximum seven years, and Austrade is helping them in their new marketing push into Indonesia and Thailand. EMDG is, of course, one of the more economically-justifiable government support schemes, based on the infant industry argument in economics.

But, in general, ACS believes that the procedures to access government help can be very complicated and time-consuming for small and medium businesses.

Richard Blandy is an Adjunct Professor of Economics at UniSA.