There are three reasons for setting up or buying a manufacturing operation in the US:
1. Product specifications make it too costly to ship products from Australia (e.g. bricks are too heavy to make in Australia and ship to the US).
2. The component inputs to your product come from the US.
3. Having manufacturing plants in Australia and the US provides surety of supply if natural or man-made disasters disrupt production in one country.
Example 1. Boral: Saving on Shipping Costs
Boral’s (http://www.boral.com.au/) bricks and concrete roof tiles are heavy to ship so manufacturing close to the customer is important. Consequently Boral bought existing US manufacturing facilities in the 1980’s and has become a dominant player in the US market while also building its operation in Australia.
Example 2. EGR: Getting Close to the Customer
EGR is an Australian company that manufactures automotive accessories. Its US plant is able to closely integrate with US based car makers, and that local manufacturing presence provides a focal point for before-sale and after-sale support.
Newcomers to Manufacturing in America : Digga and Aluminium Boats Australia
Digga (http://www.digga.com/dyersville-news.html) is following the lead of Boral and EGR to set up an American manufacturing plant and has drawn on assistance from the State government of Iowa.
Aluminium Boats Australia (ABA) was not able to set up at its originally preferred site in the US but has committed to keep looking for the best location. Like Digga, ABA is working with the government of Washington State to set up a US operation. For more on ABA's plans see the following website, http://www.bellinghamherald.com/2012/03/29/2459550/australian-boat-builder-nears.html.
There are always hurdles to overcome in expanding overseas but the following three benefits continue to attract successful Australian companies to the US.
1. Manufacturing in the US can provide a natural hedge against exposure to US dollar prices.
2. US state and county governments can help Australian companies with site selection and may provide financial incentives to set up in their state/county.
3. An American plant makes the US customer feels more confident knowing its supplier is close by.