Up to $500,000 is available from ASDP to support automotive supply chain companies to diversify and secure alternative revenue streams for a sustainable future.

Automotive Supplier Diversification Program (ASDP)

Automotive Supplier Diversification Program (ASDP)

The Automotive Supplier Diversification Program (ASDP) is an $11.65 million initiative to assist South Australian automotive component to support eligible manufacturing companies operating within the automotive supply chain to successfully diversify and secure alternate revenue streams to drive sustainable growth, long term employment and potential for export revenues. Funding is available over the five financial years from 2013–14 to 2017–18.

Features of the ASDP include:

  • Flexibility in the assistance package based on the individual circumstances of each firm;
  • Support for a wide range of activities related to diversification and securing alternate revenue streams, including but not limited to:
    • Diversification strategy development and associated business models – able to be provided by contracted specialists relating to business improvement, capability development, business development and research service provider(s);
    • Mentoring;
    • Business development;
    • Capability development;
    • Management and workforce up-skilling; and
    • Re-tooling – direct funding support to assist companies re-tool to implement their diversification strategies
  • Ongoing targeted support for firms including mentoring, rather than once-off transactional intervention.
  • Quick decision making processes guided by the Minister for Automotive Transformation (as required).

The ASDP is delivered by the Automotive Transformation Taskforce in the Department of State Development.

 

Objectives

The objective of the Automotive Supplier Diversification Program (ASDP) is to support South Australian manufacturers operating in the automotive supply chain to successfully diversify and secure alternate revenue streams, to:

  • Retain and build on key manufacturing capabilities and skills currently residing in firms operating within the automotive supply chain by helping companies apply their capabilities and develop new capabilities in alternate industry sectors;
  • Encourage and support innovation within manufacturing firms through identifying and supporting the development of new capabilities, new markets and new customer offerings;
  • Increase the competitiveness and profitability of firms that operate within the automotive supply chain; • Upskill management and the workforce to effectively apply new and existing capabilities to new opportunities;
  • Create and retain manufacturing employment;
  • Increase potential for exports, by increasing the global relevance of firms; and
  • Provide a focal point to ensure that our automotive component suppliers receive the appropriate information and advice to assist their transition and/or exit from the industry.

 

Funding

A grant under the Program must be for not more than $500,000 per company.

The Minister may at his/her discretion, for projects tied to employment growth opportunities and enhanced capabilities, allow a company to apply for multiple grant opportunities, or for a project above the $500,000 threshold.

The ASDP will contribute up to one dollar for every dollar contributed by a grantee on eligible expenditure.

 

Eligible Projects

Eligible Activities

A project under the ASDP will include any or all of the following activities:

  • Financial, strategic and operational review and analysis of individual automotive supply firms to identify firms’ financial position and company structure; identify core capabilities that can be matched to new technologies, joint ventures and/or other partnerships and collaborations; identify target market opportunities; and understand constraints to growth;
  • Identifying and analysing gaps in individual supply chain firms’ capabilities and as a cohort of automotive suppliers;
  • Developing and implementing business improvement or business development strategies to close specific gaps and accelerate automotive suppliers’ diversification and growth. This may include, but is not limited to:
    • business model innovation;
    • strategic planning (including diversification planning);
    • capability matching (technology, research, other organisations);
    • research and development activities;
    • proof of concept, early stage commercialisation and pre-production development activities;
    • mentoring and coaching;
    • business development support;
    • investment planning; and
    • plant consolidation, performance improvement
  • Developing managerial and leadership capability of automotive supply firms;
  • Workforce re-skilling and training; and
  • Developing process and operational capability of automotive supply firms
  • Capital expenditure projects related to diversification activities, including:
    • development of new production methods and process technologies, including advanced manufacturing capabilities;
    • new, expanded or consolidation of facilities to produce new products;
    • investments in new manufacturing processes;
    • introduction of new manufacturing technologies to substantially increase productivity, efficiency and competitiveness, expand new product offerings and enter new markets.
  • Alliance, partnership and/or acquisition proposals
    • The ASDP shall be open to non-automotive manufacturing businesses that are looking to form alliances and strategic partnerships with automotive supply chain companies or acquire specific capabilities and skills;
    • This may include mergers and acquisitions that involve specific capabilities or skills residing within local automotive suppliers, but only where it will result in sustainable job retention or creation in South Australia.

All business improvement, capability development, business development and research activities will be conducted with a view to assist firms to diversify and secure alternate revenue streams to drive sustainable growth, long term employment and potential for export revenues.

Eligible Expenditure

Expenditure directly related to an eligible activity may be eligible for grant funding and include:

  • payments to advisers, consultants, training organisations, research providers and other service providers for business improvement, capability development, business development, mentoring and research and development work undertaken with automotive supply chain companies to achieve the objectives of the ASDP;
  • payment of salaries relating to dedicated Business Development activities
  • other costs associated with preparing relevant materials, training and other guidance in support of the objectives of the ASDP; and
  • administration and overheads directly arising from the execution of the approved Implementation Plan.

In addition, for capital expenditure related projects

  • labour;
  • contractors and/or professional services;
  • manufacturing machinery and equipment;
  • tooling;
  • costs of training directly relating to new capital items.

An ASDP grant will only cover expenditure incurred on or after the start date and on or before the completion date.

Retrospective funding is not offered under the ASDP. Project expenditure incurred prior to the offer of a grant will not be supported by the ASDP.

 

Eligible Applicants

To be eligible to apply for assistance under the ASDP, an applicant must:

  • Be a financially viable Australian manufacturing business, currently participating in the automotive supply chain, or have significant business activity aligned with the objectives of the ASDP, with operations in South Australia;
  • Have been in operation for longer than 12 months and be able to enter a legally binding funding agreement with the South Australian Government;
  • Demonstrate that it has finance available or access to finance to successfully implement its diversification strategies;
  • Be willing to provide ‘open book’ access to information and data on the company’s operations, including financial information as required;
  • Be prepared to commit to Senior Executive or Board level engagement; and
  • Commit to contributing a minimum of 50 per cent of eligible project costs (exclusive of in-kind contributions) from non-government funding.

In addition, to be eligible for a grant related to capital expenditure, an applicant must demonstrate that it:

  • Has undertaken and completed an arm’s length business review that has resulted in the development of a diversification implementation plan; and
  • Has access to, or the beneficial use of any intellectual property necessary to carry out and commercialise opportunities.

Automotive supply chain manufacturing companies unfamiliar with business improvement, capability development, business development or research and development service providers and who are interested in receiving such services, can register with the State Government. An approach to a potential service provider can be facilitated.

 

Timing

Applications open on an ongoing basis.

 

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