Advance Australian Manufacturing With ArmaSkin

Starting out in 2014 and based in Melbourne’s industrial heartland, ArmaSkin is in the business of manufacturing liner socks to help prevent the active person’s worst nightmare: blisters.

When your business relies on people heading outdoors and taking part in activities like hiking, triathlons and competition sports, a lockdown and the resulting halt to sporting life could be among the last things you'd want to happen.

Ian Bridger and Vlad Libeson from ArmaSkin talk to us about their experiences of manufacturing during Victoria’s COVID-19 lockdown.

What were some of your plans for 2020 before the pandemic took hold?

Ian Bridger (IB): “When it comes to ArmaSkin, our business is dominated by the liner socks – ArmaSkin anti-blister liner socks. At the start of 2020, we had a whole range of new products to put into the marketplace. For example, as well as our standard socks that we've been making for about four years, we were looking at bringing out a toe sock version, which needed packaging and a proper launch."

"We'd also planned to set up a new website; to go from an old WordPress site across to Shopify. And we were looking at improving some of the offshore margins on our export business and, in the background, just continuing to search out new product possibilities. So, that's what our 2020 plan looked like, until everything went pear-shaped."

So, what’s actually happened across the year? How big a difference has there been between your planned 2020 and the reality?

Vlad Libeson (VL): “Growth was really good for us from the beginning of the financial year right through until the pandemic hit. We were looking at between 15 to 30 percent growth for the year and then it fell off a cliff a bit.”

IB: “As far as new products have gone, we've really just not been able to get them to bite at all, not surprisingly. We haven't spent advertising money, we haven't got a lot of our product into the marketplace, so our local sales – or our direct sales, to be specific – dropped to about a third, which is maybe a half of what they should have been over this period of time.”

“The other big impact on us was our delivery times [when] going off-shore. They went from about a two-week delivery window to roughly six to eight weeks. So, our ability to actually sell to offshore customers got hurt with that."

“With respect to our original plans, anything that was about backend stuff – like doing the website, packaging, that sort of thing ­­– could still go ahead. So, we've been able to do all of the prep work but it hasn't translated into sales as yet. However, one positive is that we've happily picked up some larger orders into countries like Sweden and Denmark, which is one of the surprise wins.”

What have been the biggest hurdles that ArmaSkin has been forced to overcome?

VL: “Just getting the sales. People have been locked down, so they couldn't get out there. That's been the biggest hurdle and that's where our sales have been hit.”

IB: “We depend on people getting blisters on their feet!" [laughs] Our traditional way of market development is having contacts or individual contacts offshore, and working social media with those people; working our one-on-one contacts. So, instead of being able to talk to them about their latest hiking activity, or talk about new products with them, we've done a series of blogs around masks. We've been able to keep in contact with them because everybody's on the same page when it comes to COVID-19. While we're talking to them about masks, it's not necessarily developing sales but it keeps the engagement going.”

So, you've developed your own range of masks?

IB: “Yeah. With our product, the ArmaSkin material. We call it a technical textile because it's got a special silicon coating. So, when the mask issue was developing, Vlad was looking at the possibilities of using that material."

"Armaskin has special moisture transfer characteristics, which fits in neatly with trying to have an effective mask, so we developed that and put it to market. We had a good month there when masks suddenly became compulsory. But then, when all of the cheap imports – the two and three-dollar masks – started coming onto the market, we were knocked off our feet. Our products have always been priced at a premium due to their materials. It was nice while it lasted but not something we'll build our company on.”

Was it difficult doing that little 'pivot' to a completely different product?

VL: “It was a matter of matching up properties of particular things to overcome a problem. We seem to be okay at doing that sort of stuff. Apart from masks, we're developing wearable electronic textiles – wearable devices. We're trying to develop technical textiles, protective second skin solutions, so we do a plethora of development. The masks came along and we just happened to have a fabric that was particularly useful for it.”

IB: “Yeah, we have a mask, which is certainly going to be much more protective than the average mask that you're seeing advertised and sold. But to confirm that it's N95 quality, we would have to spend more than $15,000 of testing money. As it's turned out, we certainly wouldn't have recovered that sort of amount of investment to show everybody that it is a better mask than average because the marketplace is definitely not sensitive to the quality of the masks.”

Is there a way that your organisation is turning the pandemic into an opportunity to emerge stronger?

VL: “We're a small company already, so we're running lean as it is. There's not much opportunity for us to go leaner. Even before the pandemic – in the textile industry, production-wise – we already had to optimise things a lot along the way. We've optimised in the way that we own the factory, so we're not paying out rent, which means we were secured quite well before this hit. That was just lucky. I think being lean and optimised is helping us make it through."

IB: “With our new product development, although it's been a quiet time, it's been handy for some product fine-tuning over the period. We’ve got a sense of which products might have some opportunities, and which ones won’t, so that'll guide our plans for 2021.”

VL: “In terms of our workforce, COVID-19’s biggest impact has been felt mainly by our salespeople. We have a fairly sizable factory, so people already keep more than the required distance between them on the manufacturing floor. That wasn't an issue. But the salespeople, they sit in an office, so they had to work from home."

VL: “Before the pandemic, I was extremely busy doing more day-to-day kind of work. But one positive is we’ve had more time to devote to applying for grants for driving innovation within the organisation. One of the grants we are working on involves wearable technology and armed forces personnel. If we’re successful in getting that grant, and we get to work with universities to develop it further, it has the potential to turn into a product that, maybe two or three years down the track, will be bigger than everything else that we've got.”

How are you demonstrating to employees, customers and the wider community that you have their best interests at heart?

VL: “Luckily, we haven't had significant employee wellbeing issues. We've implemented improved personal hygiene standards and masks as much as we can around the factory. We stagger lunchbreaks to minimise large groups of people. No one's come forward to say they've been stressed or endured any hardships or anything like that. Everyone's just getting on with everything. So we've been fairly lucky in that respect.”

IB: “Generally, for the wider community, we've tried to research the proper story on masks and put that out to the general public. For us, it hasn’t been about writing some information to sell masks; it's really more about having a look out there in the emotional and politically charged environment of masks, and coming up with a straight story. We think we've done a reasonably fair-handed job there.”

IB: “And then, quite separately, we're doing a lot of work on environmental initiatives – whether it's solar panels or streamlining packaging and considering the use of recycled materials. We’ve had some time to think about things like that, and that, potentially, will be one of our 2021 initiatives that we'll be putting out there. You need time to think about these things. And certainly, the COVID-19 quiet time has helped us do that.”

Find out more about ArmaSkin at www.armaskin.com

The ArmaSkin story is part of Integra Systems' Advance Australian Manufacturing (#AAM) initiative. Read all about it and see how you can participate.