ABGF fund backs Derwent Industries with $15 million investment

Special purpose investment fund Australian Business Growth Fund (AGBF) will invest $15 million into family owned metal manufacturer Derwent Industries Group bringing its total investments made into SME businesses to more than $100 million.

Derwent is an advanced metal manufacturer servicing critical infrastructure projects and key industries including water, mining, rail and defence, operating from facilities in Victoria and Tasmania.

Derwent is set to be a key player in a core market which is underpinned by civil infrastructure projects and maintenance of existing networks that need onshore manufacturing capability to deliver major projects effectively, according to ABGF.

The business focuses on technological innovation, building proprietary processes and a skillset of advanced manufacturing, which creates more jobs for Australians and advances local world-class manufacturing capabilities.

Meanwhile ABGF has a unique profit-for-purpose investment model providing growth capital to Australian small-medium enterprises (SMEs).

The fund was formed with an initial capital of $540 million as a public-private partnership between the federal government and six leading banks in Australia to stimulate growth in the SME sector.

The investment is its eighth into SMEs.

The fund’s first investment for 2023 will support:

• Investing in market-leading robotics, automated equipment and increased sustainability measures. The company’s Wodonga site, which is currently a highly automated facility, is set to become a state-of-the-art facility for stainless steel clamps and couplings.
• Further opportunities for regional jobs across Derwent Industries within the Hobart, Wodonga and Bendigo manufacturing facilities – an estimated 18 per cent increase in jobs across these sites over the next three years.

Chief Executive Officer of Derwent Industries Craig Evans said: “Local contractors minimise risk and time delays in major infrastructure projects by working with us.

“We are delighted that ABGF is supporting us so we can also compete on a global level and ensure the sustainability of local manufacturing capabilities.”

ABGF Co-Head of Investments Patrick Verlaine said the fund played a vital role in filling the funding gap between late-stage venture capital and buyout funds.

With manufacturing operations in Hobart, Wodonga and Bendigo, Derwent Industries is one of the country’s few fitting and casting manufacturers of scale that supplies local industries and businesses that work on critical infrastructure projects. Derwent also exports its products to New Zealand and the pacific islands.

The company incorporates Derwent Foundry, Derwent Pipelines, Derwent Clamps and Derwent Couplings.

Picture: Australian Business Growth Fund