On the face of it, the purchase and movement of Kanga manufacture to Digga’s factory at Yatala is a smart move. The Digga operation is state of the art in terms of its facilities and, at a time when market volumes have dropped, the addition of Kanga manufacturing to existing attachment production should keep people and machines busier. That is the short-term prognosis, but the longer term picture isn’t quite so clear. Digga has a long history of outgrowing its facilities, no matter that at the time they open, it seems there is adequate room for expansion. Such is the price of success. In a normal market, there is the possibility that the facilities required for Kanga manufacture would impinge on the capacity required for growth in the attachment market, and there is also the possibility that some sales of attachments for competitors to the Kanga loader could be lost. A lot depends on whether the contractor or the dealer is specifying the attachment. It will be interesting to see what happens when the market rebounds: will Kanga be retained or will it be on-sold as a going concern, allowing Digga to focus solely on attachments? In the short-term, the arrangement should ensure the survival of both iconic Australian brands. It will be interesting to see how much product development of the Kanga occurs after the purchase: Digga’s manufacturing expertise could conceivably see adjustments made to make Kanga cheaper and easier to manufacture, or take advantage of the sophistication of some of Digga’s production equipment. There is also some potential upside for having an attachment manufacturer involved in manufacture of the host machine, in terms of getting a better match of machine and attachment. However there is not a well-trodden history of attachment manufacturers getting into machine production. In specialised instances, such as large mulchers, attachment manufacturers have developed host tractors because suitable machines are not available off the shelf, but this is not true of most applications. The opposite has also occurred, with some manufacturers getting involved in attachment manufacture, with Bobcat being the consummate example of this.
