Industry and Synergies
What is the Western Trade Coast?
Key Strategic Issues
Buffer Zone
Synergies (Industrial Symbiosis)
Synergies
The Kwinana Industrial Area is regarded as one of the world’s best practice examples of industrial symbiosis. There are around 150 commercial exchanges operating amongst the industrial companies located within the Western Trade Coast (WTC).
“Industrial symbiosis engages diverse organisations in a network to foster eco-innovation and long-term culture change. Creating and sharing knowledge through the network yields mutually profitable transactions for novel sourcing of required inputs, value-added destinations for non-product outputs, and improved business and technical processes.”
Lombardi, D. R. and Laybourn, P. (2012), Redefining Industrial Symbiosis. Journal of Industrial Ecology, 16: 28–37. doi: 10.1111/j.1530-9290.2011.00444.x
In layman’s terms, industrial symbiosis is about product and by-product exchanges, carried out on commercial terms.
The diagram below illustrates the scale of symbiosis occurring across the Kwinana Industrial Area, and its importance to the successful and sustainable operations of the State’s premier heavy industrial area.
The synergies help make the participating companies more internationally competitive. It’s also good for the environment because one company’s waste becomes the input for another.
Copyright © 2021. Kwinana Industries Council, Australia. All Rights Reserved.
The schematic may not be reproduced without the written permission of Kwinana Industries Council and the proper citation of its source.
Open this schematic on a zoomable PDF file
You can search for the sender, receiver or the material being exchanged.
What is this and why is it valuable?
When two individual companies exchange a manufactured or waste product, usually on commercial terms, this is known as a synergy exchange.
Industrial symbiosis is where a whole cluster of industries have many exchanges simultaneously and continuously occurring – this is what happens in the KIA. These exchanges grow over time as more companies move into the area. The synergies help to make the participating companies more internationally competitive, and this is good. It’s also good for the environment because one company’s waste becomes the input for another. The by-product is no longer a waste needing to be disposed of to the environment.
The value is created for participating companies when, through synergy exchanges, they are able to reduce costs of production, thus increasing their relative competitiveness.
Knowing what product and by-product exchanges are possible within a cluster aids the locational decision process for a prospective new entrant. Each new entrant that participates in the exchanges, increases the overall strength of the cluster itself. Everyone wins. While ‘the world’ talks about the product-based exchanges as being what industrial symbiosis is all about, at KIC we talk about three synergy dimensions, and these are the:
- Product/by-product synergy
- Skilled workforce synergy
- Support industries synergy
There’s a big, new wave of industry heading for Kwinana to set up their processing plants so they can take their place in the lithium battery value chain. Why? Because we have all four synergy types in Kwinana, and none of the other heavy industrial clusters do.
Product/By-product Synergy
There are around 150 exchanges operating on commercial terms amongst the industrial companies located within the Western Trade Coast (WTC). Add to this the bespoke products which are manufactured to customer specifications and the number of exchanges grows substantially.
These exchanges developed organically over at least 40 years.
It’s a fine example of industry supporting industry. Product processes set up to meet the needs of a neighbouring company, by-products once stored or sent to landfill being recognised as an input product into another’s chemical processes. Energy in the form of steam or hot water being seen as an economically viable resource by another.
KIC through its Board and specialist committees has, since incorporation in 1991, been central to the facilitation of the conversations, and it is from the conversations that so many of the exchanges have emerged.
Skilled Workforce Synergy
The ‘human resource’ synergy in the Western Trade Coast refers to the more than 40,000 highly skilled and experienced workers that are directly and indirectly employed in KIA.
Two thirds of these workers live within 15kms of their place of work. This means the industrial area is surrounded by residential communities that understand industry. This is an important side benefit of this synergy dimension.
These workers choose to work in the WTC rather than away in the regions via fly in/fly out arrangements, they don’t want to move to other regions to live, and they don’t want to uproot their families. They get to sleep in their own beds when they’re off-shift. They value these lifestyle and career progression characteristics.
When a new company builds its plant in Kwinana, it will more than likely attract workers from within the local area. The new company starts up with experienced employees.
Support Industry Synergy
The third synergy is the ‘support industries synergy’. Surrounding the Kwinana heavy industrial core where the chemical manufacturing and refining industries are located is a belt of companies that exist primarily to service the nearby major industries. They are connected to heavy industry.
These businesses are the expert fabricators, constructors, engineering workshops, plant and labour hire suppliers, and the specialist equipment maintainers.
There is a financial advantage in these support industries being located close to big industry, their customers, as opposed to establishing in regional or remote areas where these service industries can’t sustain themselves.
Heavy industry has a strategic advantage in having the support industries close by because aside from being on industry’s doorstep, they deliver top quality local content products and services to their customers, and have their local reputations to uphold.
Want to Know More?
If you are representing a company considering the Kwinana cluster for your project, be sure to contact the KIC. KIC will assist you to engage with other relevant companies in the area and to put you in touch with the right people in government