ECA, Australia's Export Voice - Sept 2014 Edition

SEPTEMBER 2014

Giving trade the attention it deserves How Australia can

help build Asia’s

infrastructure MEET THE 2013

EXPORT AWARD

WINNERS PLUS

The official magazine of the Export Council of Australia www.export.org.au

News, events & education

Image copyright Animal Logic

Invitation Trade & Investment Queensland cordially invite you to join us on Thursday 16th October 2014 to celebrate the 2014 Premier of Queensland’s Export Awards.

Event Details Date: Thursday 16 October 2014 Time: Pre-dinner drinks from 6.00pm. Seating 6.45pm Venue: Brisbane Convention & Exhibition Centre, Brisbane Tickets: Tickets purchase online at www.tiq.qld.gov.au/awards RSVP: Monday 13 October 2014

Invitation The Export Council of Australia and NSW Trade & Investment cordially invite you to join us on Thursday, 23rd October 2014, to celebrate the 2014 Premier’s NSW Export Awards.

Event Details Date: Thursday 23rd October 2014 Time: Registration and cocktails from 5:45pm.

Awards ceremony commences at 6:30pm and concludes at 11pm Venue: Doltone House, Darling Island Wharf Tickets: To find out more about tickets, contact Kristen Mulligan at kristen@export.org.au or go to www.export.org.au

In the future, local demand will shape global supply.

Dairy consumption in emerging economies is rising fast – in China alone it will triple by 2020*. As rice-paddies turn to pasture, the global market is seeing a structural change. But what will this and other mega-trends mean for your business?

HSBC Trade teams, on the ground in over 60 countries, can help you connect with the most important emerging market trends.

Find opportunity in the changing patterns of global trade.

To connect to the latest international business insight

Go to hsbc.com/globalconnections

*Source: Quoted in the FT, May 29, 2011.

Issued by HSBC Bank Australia Limited ABN 48 006 434 162 AFSL 232595.

Image copyright Animal Logic

CONTENTS

Australia’s Export Voice September 2014

FEATURE ARTICLES

Editor Alexandra Cain

Trade is critical to our economic success. So why isn’t trade policy a more critical part of our domestic political agenda?

Art director Nikola Viereckel Publisher Export Council of Australia Sales and editorial enquiries Ph: 02 8243 7400 Lisa McAuley lisamcauley@export.org.au

Published by Export Council of Australia

Level 2, 22 Pitt Street Sydney NSW 2000

Positioning trade front and centre

The infrastructure opportunity in Asia

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16

Australian firms are in a unique position to contribute to the developments being planned around Asia, but there are many hurdles to be overcome.

Asia trade: shaping the twenty-first century

20

Three tipping points will drive trade across Asia in the coming years.

Export Awards 2013

28

Export success shines across state and territory Export Awards programs.

REGULAR COLUMNS Executive chairman’s report

4

Editor’s report

6

Austrade report

8

News 9 Spotlight on

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ECA: Export Red Tape

29

Government: Transfer Pricing

38

Email: info@export.org.au

ECA: AIBS 2014

41

Website: www.export.org.au

Events

42

Education & Training: www.aiex.com.au

Tipping’s tips

44

Calendars and programs

46

Ph: 02 8243 7400 Fax: 02 9251 6492

Twitter: twitter.com/Aussieexport

All rights reserved © 2014 ISSN: 2202-2236 No part of this work covered by the publisher’s copyright may be reproduced in any form by any means, graphic, electronic or mechanical, including photocopying, recording, taping, or information storage and retrieval, without the written permission of the publisher. Any unauthorised use of this publication will result in immediate legal proceedings.

Publisher’s Note: Although every care has been taken to ensure the accuracy of the information contained within this publication, neither the publishers, authors nor their employers can be held liable for any inaccuracies, errors or omissions.

Readers are strongly advised to contact their professional advisor before entering into any contract to buy or sell any security.

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AUSTRALIA’S EXPORT VOICE

DOING BUSINESS

The internet: driving Australian SME exports

EXPORTER

34

Gekko

30

Ecotech

31

Appen

32

PEOPLE

ECA Export Hero Barry Thomas, CEO, Cook Medical

PLACES

22

Beyond the horizon: Poland’s blue sky potential

24

Postcard from Warsaw

26

THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

No one takes on the world alone.

Efic is a specialist financier that delivers simple and creative solutions for Australian companies – to enable them to win business, grow internationally and achieve export success.

1800 093 724 www.efic.gov.au

www.export.org.au

SEPTEMBER 2014 |

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EXECUTIVE CHAIRMAN’S REPORT

I

Ian Murray AM, executive chairman Export Council of Australia

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was once asked how I get a feel for how important innovation is among exporters. My response, given I had very little evidence at my fingertips at the time, was, “take a look at the Export Awards’ winners and you will get a good feel for it.” That, I might add, was about six or eight years ago.

Given the economic turmoil of the last five years and the ever-resilient Aussie dollar, the comment I made back then is even more pertinent now.

While considerable anecdotal evidence has existed for some time on the link between innovation, export and productivity, I’m not sure that it has been sufficiently well addressed.

I’m also not sure many SMEs have a sound understanding of the many forms innovation can take. They are likely to see it in the context of product, rather than process innovation – or indeed the many other forms of innovation that can be employed in exporting, including marketing.

The question is whether success in export is driven by companies that innovate before they enter a foreign market, or whether companies competing internationally have a greater incentive to innovate. My view is that it’s probably a combination of both.

Understanding the causality between innovation, export and productivity is particularly important when it comes to government policy as it can help ensure the more efficient allocation of resources.

I recently read a very interesting paper by Alfons Palangkaraya, from The University of Melbourne. Alfons’ February 2013 paper sets out to identify the relationship between innovation and export. The study focused on the SME sector and used both quantitative and qualitative analysis, which included looking for evidence among recipients of Export Awards.

The study found export and innovation are positively linked stating that, “depending on the industry and the type of innovation (product or process), innovation may lead to export and, to a lesser extent, export may lead to innovation.” The former was strongest among mining and agriculture companies and the latter among services exporters who tend to be more process innovation focused.

Notwithstanding the above, the study highlights the need for Australian SMEs to first discover or create a competitive advantage before they enter a global market. It supports the argument that a process innovation can be successful and considerably less expensive than product innovation. This point is certainly supported by evidence sourced from Export Awards winners, many of whom have either been early adopters of new innovative marketing approaches or have focused on improving manufacturing processes to effectively compete in premium sectors of global markets. There is no doubt innovation is a key contributor to export success.

The Export Council of Australia has argued for some time that trade is both an all of government issue and central in determining Australia’s domestic economic policy settings. Innovation in all its forms is a critical factor in preparing Australian companies for export. In order to fully realise the opportunity there needs to be a stronger interface between agencies responsible for R&D and innovation and those responsible for trade.

Government needs to view trade as an integral part of domestic business, thereby promoting innovation as a key step towards business development through export.

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

We’re building the partnerships that build Australia.

Efic is a specialist financier that delivers simple and creative solutions for Australian companies – to enable them to win business, grow internationally and achieve export success.

1800 093 724 www.efic.gov.au

EDITOR’S REPORT

W

Alexandra Cain, editor

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hat an exciting time to be an Australian exporter. The Prime Minister Tony Abbott has affirmed his commitment to the export community by immediately embarking on a series of overseas visits to some of Australia’s most critical trading partners and securing new trade agreements with Korea and Japan.

This has given the Australian export community a clear indication of the importance the new government places on exports and trade. With the prospect of a free trade agreement with China on the horizon, as well as generally more buoyant and positive economic conditions, Australia’s exporters have much to look forward to.

In this, the second issue of Australia’s Export Voice, we explore the importance of a strong domestic trade policy agenda for our nation, with a special focus on the education sector as a current and future driver of export growth.

We also take a look at the immense opportunity for Australian exporters involved in infrastructure in Asia. As many Asian nations urbanise and develop, they will require massive infrastructure projects – ports, roads and rail being just three examples. Many businesses in Australia will be able to take advantage of this opportunity and we talk to experts to find out how they can do just that.

We also profile the winners of the 2013 Australian Export Awards, and talk to ECA Export Hero Barry Thomas, CEO of Cook Medical. This pioneering business develops and manufactures innovative medical devices. The company was most recently awarded the Health and Biotechnology Award at the 2013 Premier of Queensland’s Export Awards. According to Thomas one of the reasons why it has been so successful is the absolute focus on patient health.

Another Export Hero we feature in this issue is Robert Dal Sasso, founder and CEO of Ecotech, a hugely successful environmental monitoring business.

Dal Sasso explains the strategy was always to tap into export markets, and exports now make up 40 per cent of all sales.

We’re also privileged to have James Emmett, global head of trade and receivables finance at HSBC explain the three catalysts that are generating trade in Asia: the west’s trade orientation, the burgeoning middle class and the growing importance of the renminbi.

Don’t forget to check out our fascinating exploration of the opportunity for export and trade between Poland and Australia, as well as the Postcard from Warsaw, which has all the inside information you need to have a great time in this captivating city.

We are also pleased to be able to bring you Dianne Tipping’s tips on the ins and outs of airfreighting goods, as well as loads of photos of Australia’s leading exporters at some recent functions, and a full list of all the important upcoming export events happening across the country.

I do hope you enjoy this issue.

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

AUSTRADE REPORT

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Bruce Gosper, chief executive officer Australian Trade Commission

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e often hear that having the right ‘connections’ and identifying capable partners are a critical part of securing business. And there is a lot of truth in this. Being connected is an important part of managing a successful export business.

Building trust and relationships with customers, monitoring policy and regulatory changes in overseas markets and securing intelligence that is valuable to long-term planning: these are all critical to businesses success.

But there is another significant way that business can build connections: understanding the potential of digital marketing and online sales.

We all appreciate the rapid change and increasing reliance on the internet as part of our work and, for that matter, our personal lives. But Australian companies can do more to explore the potential of digital marketing and online sales to secure a bigger portion of what is a massively growing channel for a seemingly endless variety of products, particularly in our Asian markets.

Last year on ‘singles day’ in China, the equivalent of Valentine’s Day, online shoppers set an extraordinary new record on Taobao, China’s top retail website, spending a massive $3 billion in a single 24-hour period. They were buying clothes, cosmetics, health supplements, toys, furniture, electronics, food and infant formula to name a few of the items available.

By way of comparison, according to the NAB, Australians spent $14.2 billion on online retail in the 12 months to August 2013.

Avoiding the congestion of China’s cities, convenience and the opportunity to source quality products from the comfort of one’s own home is a powerful motivation.

The online sales systems are already supported by sophisticated payment, warehousing and distribution networks, allowing almost instant delivery.

By 2020 the online retail market in China is predicted to be worth up to US$650 billion. That will exceed the combined value of online sales in the USA, UK, Japan, Germany and France. Bain and Company projects annual growth in the China e-retail market of 32 per cent from 2013-2015. China has already overtaken the US as the world’s largest digital retail market this year.

China is not alone when it comes to rapid consumer up-take. Austrade’s offices in Japan, Korea, Thailand and India all report solid growth across the major online platforms, with expanding product ranges and increasingly competitive branding and marketing strategies.

Large supermarket chains like Tesco and TOPS are already sourcing many of their products from Australia and selling them online in Thailand.

Australian companies already active in this area report strong revenue growth from a number of markets.

Austrade can provide practical information to help more firms access the opportunities.

One of our current projects is seeking to assess the suitability of Australian products for the Japanese online market by providing initial feedback from selected operators and customers.

An Austrade report on China’s digital market includes advice for Australian companies looking to establish a presence.

Demand for safe, reputable products from key markets in Asia is creating new opportunities for Australian companies to export and build on an already strong national brand.

Traditional bricks-and-mortar distribution will always have a role to play but companies must increasingly consider online channels in any market entry strategy.

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

NEWS

TRADE AGREEMENT UPDATE JAPAN

KOREA

Tony Abbott and Japan’s Prime Minister, Shinzo Abe, signed the Japan-Australia Economic Partnership Agreement (JAEPA) on 8 July 2014 in Canberra. Japan is Australia’s second biggest trading partner and the third-largest economy in the world. When JAEPA is fully implemented, 97 per cent of Australia’s exports to Japan will receive preferential access or enter duty-free.

The Korea-Australia Free Trade Agreement (KAFTA) was signed on 8 April 2014 during a ceremony in Seoul, South Korea.

The agreement has now been tabled in the Australian Parliament and is being considered by the Joint Standing Committee on Treaties.

CHINA The Australian Government continues to work towards concluding a Free Trade Agreement with China, with the aim to conclude negotiations by the end of 2014.

UPDATE ON THE B20

T

he B20, organised by the Australian B20 Leadership Group, has put forward its recommendations to the G20. The B20 recommendations concentrate on structural reforms that will enhance structural flexibility, free movement across borders, consistent and effective regulation, and integrity and credibility in commerce.

The B20 Trade Taskforce put forward four key recommendations to G20 Leaders: • G20 economies to accelerate the implementation and ratification of the WTO Trade Facilitation Agreement • Stop the introduction of new non-tariff barriers by G20 nations and to reverse those already in place, including localisation requirements • Remove supply chain barriers through targeted infrastructure investment, streamlined border administration (including reduction of corruption in customs clearance), and domestic regulatory reforms • G20 Leaders to ensure that preferential trade agreements produce value to business commensurate with the effort required to achieve them

THE ECA’S IMPORT AND EXPORT HANDBOOKS ARE NOW AVAILABLE AS E-PUBLICATIONS

T

he handbooks are an immensely valuable resource for Australian exporters and importers, both new and experienced.

The 20th edition of the Australian Export Handbook, which has been in publication for over 30 years, covers a wide variety of topics including export procedures, banking and finance for export, insurance, customs regulation, packaging for export and much more. The first edition of the Australia Import Handbook was published in 2010 and provides comprehensive information on a range of topics such as incoterms, import payments, FX management, import documentation and international trade and IP law. Visit www.aiex.com.au for more information and to purchase your copy.

www.export.org.au

SEPTEMBER 2014 |

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NEWS

IS THE MINING BOOM REALLY OVER?

I

nvestment in the mining industry may have slowed but export volumes are on the rise as the resources sector transitions from the investment phase to the production phase.

Statistics released by the Department of Foreign Affairs and Trade (DFAT) reveal that the volume of Australia’s resources (minerals and fuels) exports increased over 10 per cent in 2013, with the principle drivers being iron ore and coal exports.

DFAT’s Composition of Trade, Australia 2013 export statistics also reveal: • Iron ore rose 27.6 per cent to a record $69.5 billion in 2013 • Natural gas up 8.8 per cent to $14.6 billion • Other personal travel services (excluding education) - which includes short term visitors’ expenditure in Australia mainly for recreational purposes - rose 8 per cent to $13.1 billion • Aluminium ores up 11.9 per cent to $5.9 billion • Beef up 19.8 per cent to $5.7 billion • Professional services up 18.9 per cent to $4.6 billion

NORTHERN AUSTRALIA POSITIONED TO HELP FULFIL THE PROPHESY OF AUSTRALIA BECOMING THE FOOD BOWL FOR ASIA

A

ccording to the CSIRO, across the north of Australia there is up to 17 million hectares of arable soil, potentially suitable for a variety of agriculture and horticulture. The Government has two key objectives for this geographical region: to see it become a food bowl for Asia through focussing on growing premium produce, and for Australia to grow its gas industry to have an energy export industry worth $150 billion by 2030.

With effective water management, agricultural and horticultural production in Northern Australia is set to help Australia double its agricultural output. Minister for Trade and Investment, the Hon Andrew Robb, has announced he will be hosting an investment forum later this year in Northern Australia, to bring together significant investors from around the world to promote investment in major projects throughout the region.

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RESULTS FROM EFIC SURVEY REVEAL THAT AUSTRALIAN EXPORTERS ARE OPTIMISTIC

T

he Australian Export Finance and Insurance Corporation’s (Efic) SME Exporter Index survey of 856 SME exporters in June 2014 found that 95 per cent of respondents expect their overseas sales to remain the same or grow in the next 12 months. This optimism is driven by an expected depreciation in the value of the Australian dollar, better business conditions and improved demand in existing markets, introduction of new products and services, and an improved sales strategy.

Expected profitability increased 6 per cent on the previous quarter to reach 31 per cent of respondents that expect the profitability of their international operations to increase in the next year. SME exporters also reported that export revenue is making up a larger proportion of their overall turnover, which was at 14 per cent in June, compared to 12.7 per cent in February.

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

AUSTRALIA’S ACE IN THE UNITED STATES: UNITED STATES CONNECT GOES LIVE

T

he Export Council of Australia is proud to announce the launch of United States Connect, a one-stop-online-shop for Australian exporters in the United States. The website allows Australian exporters to access the information, advice and contacts they need to succeed in the United States.

Developed by specialists in the United States market, United States Connect takes the resources that Australian exporters need to succeed in the United States and places it at their member’s fingertips from anywhere in the world at anytime.

The United States can be a daunting prospect for Australian exporters and rightly so, having one of the highest failure rates and recently being ranked as the third hardest market to do business in by Australian businesses. The United States is a competitive and multifaceted market, which makes getting the right research, advice and support crucial for business success.

The key benefits of United States Connect membership include access to: • Export ready checklists; • “Peer rated” service providers; • Up-to-date market intelligence; • Member only exporter forums; • “Ask an expert” functionality; and • Monthly newsletter – United States Connection.

ECA members are able to receive 50% off an already discounted United States Connect membership price of $100, by logging into the member’s area of the ECA website to retrieve the promotion code.

For more information on United States Connect and to register go to www.unitedstatesconnect.com.

AIBS RESULTS HIGHLIGHTS

A

ustralia’s International Business Survey 2014 (AIBS 2014), which captured data from more than 1,600 Australian businesses, is the most comprehensive investigation into Australian international business activity to be conducted in more than a decade.

AIBS 2014 was commissioned by the Export Council of Australia (ECA) with the support of Austrade and EFIC (Export Finance and Insurance Corporation) and was conducted by the University of Sydney between October and December last year.

AIBS 2014 key highlights: • Respondents are operating across more than 120 markets • 74 per cent plan to expand to two or more markets in the next two years • 19 per cent identified China as the top target country, while 15 per cent selected the United States • Respondents report that their current top five export markets are the Unites States, China, New Zealand, the United Kingdom, and Japan • A lack of information on areas such as local culture, business practices, language, consumer requirements, local regulations and tariffs are the most prominent challenges of doing business in the most difficult overseas markets The highlights report and the complete report are available for download from the ECA’s website.

www.export.org.au

SEPTEMBER 2014 |

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| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

Positioning trade front

d centre Imports and exports are vital for our economic success. So why isn’t trade policy a more critical part of our domestic political agenda?

Alexandra Cain finds out.

www.export.org.au

SEPTEMBER 2014 |

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Positioning trade front and centre

A

ustralia’s role hosting the 2014 G20 summit in Brisbane in November 2014 gives us a unique opportunity to review the role of trade policy in our overall domestic policy – as does the current political landscape.

There is a huge push from the trade sector to encourage governments and the public sector to put trade policy squarely at the forefront of Australia’s domestic policy.

But much needs to be done to reduce red tape and build the right infrastructure if trade is to take centre stage in the nation’s future.

Stephen Deady, director of the Export Council of Australia and a former senior government trade official, says over the past few years, the key role trade policy should play in our economic settings has weakened.

Deady applauds the efforts to develop a system of free trade agreements – but he says it’s not enough.

“Getting access to markets is a necessary but not sufficient condition for success. We need innovation to take advantage of the opportunities market access brings,” he says.

“So it’s not just about negotiation, it’s about Australia’s competitiveness internationally, developing a supportive framework for exporters and importers and not imposing additional costs that make it more difficult to trade.”

Deady says making the right policy decisions, putting in place infrastructure to encourage trade and lowering the cost of trading are all essential parts of the domestic trade policy.

“It’s about reducing the regulatory burden to make it easier to do business and to take advantage of global growth opportunities. Australia has to be seen as a key trading nation and we need to get the structures right.”

Education, one of the country’s most important exports, is a key example. University of NSW exporting expert Jennie Lang says when it comes to education exports, there is a pressing need to reduce the regulatory burden on the sector to make it more competitive globally.

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“There has been so much regulation and it’s starting to constrain the ability of certain sectors to export optimally.

With the education sector, it’s got to a point where there are so many layers of red tape around education providers wishing to attract international students it’s become counter productive.”

She says it’s reached a point where leading universities are now putting on full time staff to ensure their practices comply with government agency regulations.

“We have a lot more regulation than the US and when you get to that tipping point, students gravitate to the US, which is counterproductive at a time when we need to be focusing on productivity, particularly as the world is turning to Asia. We need to elevate our trading hub to the level of our diplomatic hub because we need a multiplicity of exports,” Lang explains.

According to Lang, education in particular should be elevated in governmental priorities to the same level as other sectors that also export, such as tourism and manufacturing.

“We need that level of support and then we can add value in Australia and globally,” she says. 

Supporting SMEs Stephen Deady says if negotiating the exporting landscape is tough for large businesses, imagine how hard it is for smaller businesses.

He says more needs to be done to help smaller exporters reach global markets.

“Anything we can do to identify markets and cut costs for smaller businesses will be worthwhile. Industrial relations is also a critical part of this process,” he argues.

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

The dangers of moving away from a multilateral approach to trading

T

here’s been an incremental shift from a multilateral to a bilateral and regional approach to trading, as the failure to complete the Doha Development Round of trade negotiations indicates.

Mark Thirlwell, chief economist at Austrade and a Fellow at the G20 Studies Centre, at the Lowy Institute for International Policy, says this failure is problematic for the global trading system.

“The proposed new mega-regional agreements like the Trans-Pacific Partnership and Trans-Atlantic Trade and Investment Partnership currently don’t include China, India, Brazil and Russia, so they risk excluding some key players in world trade. Meanwhile, we’re seeing signs of gradual backsliding on protectionism,” says Thirlwell, who hopes upcoming G20 meetings will start to address this problem.

“Australia could use our hosting of the G20 to put trade at the heart of the meeting’s agenda,” he says.

Thirlwell says he’s worried no international agreement on a multilateral approach will provide more impetus for what is already a growing network of regional deals.

“Individual countries like Australia will have to participate because these agreements might be the only game in town,” he says.

According to Thirlwell membership in global supply chains has changed the economics of protectionism. “Countries that are worried about competition might be tempted to use import barriers, but if they are part

of the global supply chain, they will also rely on imports.” But according to Thirlwell, while supply chains have made traditional measures of protection less popular, governments have been finding new ways to intervene, so protectionism remains a live issue.

He says Australia’s domestic trade policy should focus on making the country an attractive place for foreign firms to do business.

“You want the international trade environment to be as welcoming as possible.

If the world becomes split regionally then that makes trading much more awkward.”

According to Deady, a successful trade policy requires a whole-of-government approach. He says taking an holistic view of the impediments to trading and having a structure that allows for that debate will go a long way in helping to elevate the trade agenda.

“The public sector also needs to understand the costs involved in trading and how this impacts exporters’ ability to compete. It’s about understanding the trading structure and how policy can help exporters do business.”

When it comes to free trade arrangements, Deady says it’s essential to understand the opportunities these agreements deliver, and where the barriers are that stop exporters from making the most of these agreements.

“There’s a gap there that we need to bridge,” he says, adding that, “there is also still a job to be done to understand all the opportunities.”

www.export.org.au

SEPTEMBER 2014 |

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the

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| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

With a rapidly growing middle class and urbanisation across the region, Australian infrastructure firms are in a unique position to contribute to the massive developments that are being planned around Asia. But there are many hurdles to be overcome, so an intelligent approach is needed to ensure Australian businesses make the most of this opportunity.

Alexandra Cain

in Asia A

ustralian infrastructure businesses are in an enviable position to export to Asia their knowledge of delivering and funding infrastructure. The region’s rapid growth and massive population means there’s a pressing need for everything from railways and bridges to schools and even parks and gardens.

Australia is extremely well placed to contribute to this development, given the successful public-private partnership approach that has underpinned many of our own country’s most significant infrastructure assets.

But the message to Australian infrastructure businesses that want to participate in the Asian infrastructure boom is tread carefully. Asia is a very different place to do business than Australia, with a multitude of different cultures and bureaucratic systems to navigate.

Businesses that want to become involved in Asian infrastructure projects must take a long-term view and spend time developing relationships. Luckily, there is a swag of different bodies and agencies that are helping them to do just that.

Tim Harcourt, a professor at the Australian School of Business at the University of New South Wales, says a combination of the growth of the Asian middle class, as well as the development of second and third tier cities

in China, will produce significant opportunities for Australian exporters – and not just large businesses.

“In Chengdu, the capital of Sichuan province in south-west China, which has a population of 15 million people, there’s a Brisbane landscape gardener building Italian renaissance gardens doing extremely well, because everyone in Brisbane who wants a landscaped garden already has one,” says Harcourt.

So how should Australian infrastructure businesses go about finding opportunities in Asia? Tim Harcourt says the idea is to use a variety of methods.

“Look at the advertising different cities are doing in business media and don’t forget government networks, because that’s how you will find out about trade missions,” he advises.

Harcourt says ultimately, it’s not about a lack of opportunities across Asia – it’s about picking the right ones. “Pick one and focus on what you’re good at. And don’t forget to use government agencies because their networks are effective.”

Austrade export adviser Stan Roche says the foundations have been laid over many years for Australian infrastructure businesses to secure work across Asia. Part of this has been putting funding structures in place that will sit behind infrastructure projects being led by Australian consortia.

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The infrastructure opportunity in Asia

According to Roche, numerous Australian financial services firms including AMP, Industry Funds Management and Hastings Funds Management, as well as ANZ and CBA on the debt side, are all interested in funding projects.

Super funds also want exposure.

“Australian Super has an Asian advisory board, with a view to building relationships throughout Asia and to better understand the market,” he says.

Roche also points out that many legal, accounting and other advisory businesses that are critical to the success of a project also have established operations in Asia.

“We have everything we need set up across Asia already in place. So now it’s about co-ordination and working closely with [Asian] government agencies to help them deliver what they want to deliver,” he Roche.

According to Roche, it’s essential to be mindful that there are vast cultural and geographic differences across the region that make it tricky to get projects up. For instance, in Indonesia alone there are 17,000 islands and an appetite to develop infrastructure. But of the 90 different projects put forward by the then president Susilo Bambang Yudhoyono since 2005, only one has reached investment stage.

“One of the key issues is getting projects to a bankable stage – not lack of finance. So the focus now has to be on how to structure projects. And the lesson is to treat each project individually,” he explains.

This involves working out which party is going to bear what sort of risk. For instance, does the private sector or government bear patronage risk, or should it be shared and how?

Interestingly, Roche says although there is potential for Australian firms to do business across the region, the relatively small country of Myanmar offers an interesting opportunity for Australian infrastructure businesses, partly because its legal system is based on English law. But aside from the highest echelons of government, the institutional capacity of the relevant government departments is very low, which is a barrier to projects getting up.

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“The focus now has to be on how to structure projects. And the lesson is to treat each project individually.”

Bob Seidler, a vice president of the Australia-Japan Business Co-operation Committee, has been working with its counterpart, the Japan Australia Business Cooperation Committee to develop infrastructure projects, not just in Japan, but also across Asia.

Seidler says it has been an exceptionally long-term process to establish relationships and share Australian knowledge of infrastructure developments. For instance, in Japan, there has had to be changes to the Japanese legal system to allow public-private partnerships to operate, so that private sector businesses can own public sector assets.

But what’s so significant about the relationship between Australia and Japan that has been forged by the Committee is that it is now going into other nations to start building relationships, with a view to developing joint AustralianJapanese projects in those countries.

For instance, the Committee recently went to India to share information about the work the two countries have done so far to develop infrastructure projects.

“There’s a big game going on,” says Seidler, “but we’ve been very targeted and we are in a unique position because we have the influence of two governments. I’m confident that within a relatively short period there will be significant opportunities for Australian businesses across Asia.”

Experts agree Australian infrastructure businesses have an unrivalled position to contribute to major projects across the Asian region. Says Roche: “Australians are well liked throughout Asia and people are comfortable dealing with us. This makes a big difference in a place where relationships really matter. The fact that we have capital and skills is secondary to this. As long as we don’t go in with an arrogant approach, the potential for Australian firms is enormous.” 

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

A$1 und trillio er P n PPs

3bn 2+bn 1bn

A$8 trillion 2013

2025

ASEAN infrastructure committments over 10 years

2050

People living in Asian Cities (billions)

Infrastructure in

93

ASIA

funding gap

50

state budget

INDIA $1 trillion

140

Indonesian infrastructure needs

infrastructure planned, 2012-17 3rd most mature PPP market

(us$ billion)

Investment needs, 2010-20 ($ trillion)

4.1

1.1

energy telcom

2.5

transport

0.1

water & sanitation

Total = 8.1

Growth rate in investment spending, 2008-18 Infrastructure 6.0%

Global

Asia-Pacific

8.2%

Clean Energy 10.9%

18.9%

www.export.org.au

SEPTEMBER 2014 |

19

Three tipping points will drive trade across Asia in the coming years: the trade orientation of the west, the rise of the middle class and the increasing importance of the renminbi.

James Emmett, global head of trade and receivables finance, HSBC

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| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

I

n the late 1970s I travelled to Hong Kong’s northern border with the Chinese mainland and looked over to a place called Bao’an County. It was a small village surrounded by paddy fields as far as the eye could see. There were no signs of it then, but Bao’an County was about to change the world – because in 1980 it was designated China’s first Special Economic Zone.

Fast forward three decades and today Bao’an County is known as Shenzhen – it has become a thriving city of more than 10 million people, an economic powerhouse, and a symbol of China’s success. The pace of the change is astonishing. If this sounds like a story about urbanisation, it’s not – it’s a story about trade. The phenomenal rate of change over these past decades in Shenzhen and across China has been driven by trade, and its success is now having a seismic impact on the patterns of trade around the world.

In 2006, the US was the largest trading partner of 127 countries and China was the largest trading partner of 70 countries. Just five years later, the position had switched.

China was the largest partner for 127 countries; the US, 76. Asia’s growing trade volumes and shifting trade patterns will have a fundamental impact on the global economy over the course of this century.

There will be three tipping points core to the changes in Asia’s trade in the coming years. The first is the orientation of the west. Many of those countries which have increased their trade exposure to China have enjoyed rapid gains in economic activity over the last decade. As China and other Asian economies increasingly diversify away from exporting and towards importing, the scale of this opportunity will only increase. In June 2013, Chinese Vice Premier Zhang Gaoli said in the next five years he expects China to import US$10 trillion of goods and services.

The challenge for economies in the west is clear: they must claim their share of this growth by building connections with the markets that are now driving the global economy.

The speed at which they can perform this pivot towards the east will be the decisive factor in their success.

The second tipping point is the rapid expansion of Asia’s middle class, a key factor in the increasing demand for imports. Three billion people will join the global middle class by 2050. Taking the broadest definition, Asia’s middle class is already 740 million people and growing fast.

For many multinationals, Asia’s consumers are already vital.

In one quarter last year, mainland China, Hong Kong and Taiwan accounted for approximately 20 per cent of Apple’s global revenues. According to a report by McKinsey, with the right policy measures, China’s urban household income will at least double by 2022. A new, more sophisticated and internationally-minded generation of Chinese consumers is set to emerge, shifting the focus of the global marketplace to the east.

“Each of these tipping points could spell opportunity for Australia.”

Western companies are increasingly targeting this new source of consumer demand and, as they do so, they are following the example set by Asian companies over recent years: instead of just using the US dollar, they are also trading directly in China’s own currency, the renminbi.

This is the third tipping point – the rise of the renminbi as a global currency. China’s trade account is now fully open and, increasingly, trade is being settled in renminbi – particularly in Asian markets such as Malaysia and Indonesia. At present there is no direct relationship between the Malaysian ringgit and Indonesian rupiah – conversions are performed through the US dollar. The tipping point will come when those conversions shift from being made in US dollars to being made in renminbi.

Each of these tipping points could spell opportunity for Australia, which has everything it needs to succeed: a significant endowment of natural resources, proximity to Asia, population and investment links with the region and of course the skills and expertise to provide services to these fast-developing markets.

Taking advantage of this opportunity will mean adapting to each of the trends I’ve outlined here: putting a greater focus on Asian markets and their emerging consumer class, and taking steps to win competitive advantage, for example by trading in the renminbi. But, above all, means directing all the effort and resources we can to create an optimal environment for exporting in Australia. 

www.export.org.au

SEPTEMBER 2014 |

21

PEOPLE

Cook Medical:

a values-driven business ECA Export Hero Barry Thomas, CEO, Cook Medical, which develops and manufactures innovative medical devices, attributes the business’s total focus on patients as the reason why it has been so successful.

C

ook Medical is a standout in a nation in which the manufacturing sector is often maligned.

It develops highly technical medical devices, which it exports internationally. Perhaps more importantly, its instruments and medical products have helped save countless lives around the world.

Cook Medical is privately owned by the Cook family. Although its founder Bill Cook died in 2012, his wife Gayle and son Carl are still very active in the business. The enterprise has its global headquarters in Bloomington Indiana. The facility in Brisbane is the only manufacturing facility to develop custom-made medical devices in the world.

Questioned as to how such a business has thrived given the pressures on the manufacturing sector, CEO Barry Thomas says it all comes down to the culture of the organisation.

22

“We don’t have the pressures of shareholders or Wall Street scrutinising us and the family is totally committed to health care. The focus of the business is genuinely about doing the right thing by patients – not about money,” explains Thomas.

Celebrating its fiftieth anniversary this year, he says Cook Medical’s underlying philosophy of dedication to patients has stood it in good stead throughout the course of its history.

“I am able to run the business under the guidance of the company philosophy, which allows us to do things in an entrepreneurial and visionary way. The culture and environment leads us to do things other companies would not do,” says Thomas.

To demonstrate this point, he uses the example of a patient presenting at a Parisian hospital with an aneurism, which required grafting. “There was nothing the doctor could use to help the patient that could be obtained off the shelf, so he sent his requirements to us so that we could manufacture what he needed. We shipped back the graft after three weeks, which is remarkable when you think everything was hand made and sterilisation took a week, so we couldn’t physically produce anything faster than that.”

“For us it’s all about what the patient needs, it’s not about finances. It’s a very different way of looking at a business.”

Another example of Cook Medical’s innovative approach is a unique device used with babies who have developmental issues that mean they cannot absorb food properly. “Few if any other business make anything like it,” says Thomas.

Given the enterprising approach Cook Medical takes to its core business, it’s not surprising it has a similar approach to day-to-day activities such as the way it recruits staff.

Cook just doesn’t advertise through the usual avenues when it wants to hire sales staff in Japan, it has established

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its own sales training academy, with a focus on bringing more women into an aspect of the business that had traditionally been extremely male dominated.

“We brought together 21 young people between the ages of 25 and 30 who wanted to sell medical devices. Then we put them through a 10-week intensive course on what it took to be medical device sales person. At the end of the process we employed 11 of the group, of which half were women. Now, the number three sales person in our Japanese sales team is a woman,” Thomas says.

The business has a significant R&D and manufacturing presence in Australia, something Thomas says management is adamant to continue.

He says: “we are committed to a continuing presence in Australia and we are working with the ECA as well as other bodies to help maintain the manufacturing sector in Australia.

Our approach is to ensure we are always thinking in an innovative and clever way and not relying on government handouts. And that’s our focus now and into the future.” 

COOK MEDICAL FAST FACTS • 460 employees in Australia • Exports products to the value of $90 million each year • Imports to the value of $90 million a year • Exports to 120 countries • Looking to expand into Indonesia and Vietnam soon

The Export Council of Australia and Cook Medical are involved in developing a joint initiative, the Australian Innovation & Manufacturing incentive (AIM). Rather than a direct subsidy, the AIM incentive would provide tax relief based on the retention of IP and manufacturing in Australia. Companies would receive an inducement equivalent to two per cent of sales on locally manufactured products, for which they hold patents or licenses. The incentive would be offset against a company’s tax bill, thereby linking it directly to commercial success and resulting in no upfront government costs.

www.export.org.au

SEPTEMBER 2014 |

23

PLACES

BEYOND THE HORIZON:

Poland’s blue sky potential Poland offers an attractive opportunity for Australian businesses to diversify their business across the European Union.

Antonia Kaucz, New Challenge International Consultancy, with Steve Rank, senior trade commissioner for Central Europe, Austrade (Warsaw)

U

S economist Professor Jeffrey Sachs, who advised former Eastern Bloc countries on the transition from communism, once observed that Poland always retained a great pre-war ‘memory of a market economy’. Since the introduction of reforms in 1990, it has emerged as a politically stable, democratic and market-based economy. Since joining NATO in 1999 and the EU in 2004, Poland has become integrated with the global security and economic architecture.

As one of two OECD countries to maintain economic growth during the global financial crisis (Australia being the other), Poland has enjoyed cumulative GDP growth amounting to 18.1 per cent over the years 2008 to 2012.

The Polish government has made significant investments to modernise the country, including £25.4 billion in roads and railway lines, £21.1 billion in education and new businesses), £10.7 billion toward environmental protection and £3.02 billion in IT infrastructure.

As the largest recipient of EU funds, Poland will receive £105.8 billion of the EU 2014-2020 budget pool to support economic development for at least the next six years.

A platform for growth

Over the last decade, Poland’s GDP per capita nearly doubled to US$20,260 and is expected to continue to grow. The country is transitioning from lower-middle to upper-middle income status, which presents opportunities for Australian firms. Poland is regarded as one of the most youthful nations in the EU, with 27.3 per cent of the total population aged 24 years and under. It is also likely there will be a 35 per cent increase in single-person households by 2030. These groups may be more likely to have disposable incomes and be able to travel overseas, something Australian exporters should take into account.

24

In the heart of Europe, Poland has become an attractive place for foreign direct investment, particularly considering its special economic zones, highly educated and industrious labour force, lower relative cost structures and export-based economy. FDI flows to Poland increased by 29 per cent in 2011 to the cumulative value of more than £60 billion, approximately 30 per cent of Central Europe’s FDI. According to Australia’s senior trade commissioner for Central Europe, Steve Rank, Poland is an excellent access point for Australian firms to enter Europe because it, “looks west as a member of the EU, and understands and has good trade ties to the east.”

Trade relations

Two-way trade between Australia and Poland, Czech Republic and Slovak Republic is relatively modest at $465 million, $545 million and $196 million respectively.

However, the potential for Australia-Poland trade and investment relations was highlighted during the historical May 2013 meeting between Australia’s Foreign Minister Bob Carr and Poland’s Foreign Minister Radoslaw Sikorski, the first Polish Foreign Minister to visit Australia in a decade.

Specific areas for Australia-Poland economic cooperation include infrastructure investment, high tech manufacturing, tourism, mining, clean technologies, renewable energy, agriculture, education, research and development, health care and wellbeing and human resources. There are potential markets in Poland and other Central European countries for Australian businesses offering high value added products and solutions not locally available.

The new alliance between Qantas and Emirates in 2013 has created seamless connections from Australian cities to Warsaw via Emirates’ hub in Dubai.

Australian businesses currently present in Poland include the Macquarie Group, a major shareholder in DCT Gdansk, the country’s most strategic port, offering access to Europe

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

“There is a natural synergy between Australian and Polish business cultures. We are aspirational, go-getting and pragmatic nations with a healthy sense of humour, even in challenging situations.”

Image courtesy of Mr Dawid Martynowski

via the Baltic Sea. Squiz Australia, a leader in web experience management, has a local subsidiary – Squiz Poland.

The Polish horse racing industry also uses Australian technology. Sterile Racing successfully delivered 12 and eight-stall starting gates to the Warsaw Race Track ‘Sluzewiec’ in 2013. There are many more such opportunities for Australian firms to meet the emerging needs of Central Europe.

Meeting of minds

There is a natural synergy between Australian and Polish business cultures: we are aspirational, go-getting and pragmatic nations with a healthy sense of humour, even in challenging situations. There some important cultural

subtleties of the Polish business environment, however.

For example, as Poland is in Central Europe, some Poles may not like being referred to as ‘eastern Europeans’. Formal meetings are taken seriously; preparation, punctuality and respect for formal titles, behaviour and credentials create a good first impression. Communication is direct and body language may be minimal, however, this does not mean a lack of interest. Also, there can be different attitudes towards business: the old Soviet style, for example, versus a more global, entrepreneurial approach.

With unique and untapped synergies between Australia and Poland, now is the time for Australian businesses to benefit from a closer economic relationship. 

Poland tops other EU countries in % increase in real GDP, 2007-13 G. Britain The Neth.

-1.7

-2.0

Estonia

Finland

-2.3

-4.0

0 20

Denmark

Hungary

Spain

Ireland

Portugal

Cyprus

Italy

Latvia

Croatia

Greece

-4.2

-4.6

-5.9

-6.7

-7.1

-7.8

-8.5

-8.7

-9.6

-23.4 0 20

-5

-5

15

15

-10

-10

10

10

-15

-15

5

5

-20

-20

25 0

19.7

11.4

8.3

5.4

Poland

Slovakia

Malta

Sweden

4.2

4.0

3.9

3.4

2.2

1.1

0.9

0.6

Germany

Romania

Bulgaria

Austria

Belgium

Czech Republic

Lithuania

France

0.5 Luxembourg

Sourced from Gazeta Prawna.

Estimation based on IMF statistics.

025

Want to find out more about business opportunities in central Europe? Go to Austrade’s social media channels, including the Austrade-Australian business in Central Europe group on LinkedIn and the @AustradeWarsaw Twitter feed, as well as The Australian Embassy in Poland’s Facebook fan page to find out more.

www.export.org.au

SEPTEMBER 2014 |

25

PLACES

Postcard from…

Have you even been overseas on business and had to take a client out to dinner, only to find you have no clue where to go, let alone what to order when you get there? Maybe you’ve had a few hours spare and spent it watching CNN in your hotel room instead of seeing the sights because you didn’t know where to go?

Each issue we’ll focus on a different city from around the world, bringing you the latest on where to go and what to do. This issue, let’s explore Warsaw, Poland, with Mirek Zarnowski from New Challenge International Consultancy.

Stacey Mills-Smith Export Council of Australia

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Warsaw If you have a few hours to spare in Warsaw, where should you go?

I recently visited Warsaw and I’m really proud of how the city is looking.

From when I saw it three years ago it has expanded and changed dramatically.

There is now a new airport, a new underground and a new railway station so the infrastructure has really improved.

The first place I would recommend is Old Town. This area was completely destroyed in World War II, but has been restored to look exactly like it did prior to the war. It’s a very popular tourist destination and is a UNESCO World Heritage Site. It’s very beautiful and allows you to get closer to the culture and history.

Nearby there is also the Royal Castle where you can take a tour and learn about some of the history.

My second recommendation would be the Warsaw Uprising Museum, which is a museum about rebellion against the Nazis in 1944; it’s a piece of history.

When I lived in Warsaw, my favourite place to go and have a walk or read a book was Wilanów Palace, located in the Wilanów district. It was built for the Polish king in the 17th century.

The Palace of Culture and Science, which today has nothing to do with culture or science, is a relic of communist Poland. You are able to go to the 30th floor for a very good view of the city.

My final recommendation is a place called Foksal Street. It’s a place to relax a walk and have coffee or a meal. It is stylish and has a good nightlife.

What are some Polish specialties you can recommend?

Poland is famous for its food; I’m not saying it’s the healthiest food in the world but it tastes good. You can have dumplings with anything you can imagine; cheese, cabbage, mushroom, meat – whatever. Źurek is a sour cream soup with eggs and sausages – a Polish speciality. I think it’s a good combination, very nourishing and very delicious. Another very famous dish is called Bigos, a delicious savoury stew of cabbage and meat.

If you are taking a client out for dinner, or just going out to dinner yourself, what restaurants would you suggest?

A restaurant called Zapiecek in Old Town. It’s not the most expensive place but they serve good quality Polish food.

Another place that is a little more upmarket and has been visited by many famous people is called Ufukiera.

The interior is a work of art and it’s said to be the oldest restaurant in Poland.

In terms of nightlife, where do you suggest visitors go?

There is very good nightlife in Warsaw, unfortunately everything is a little spread out so you might need to catch taxis between the different ‘centres’. One of the centres is along Foksal Street in Old Town. People generally start going out from between 9.00 pm and 10.00 pm and go home at around 4.00 am to 5.00 am.

The Dekada club is for over 25s and is one of the oldest and best clubs in Warsaw. It has a good atmosphere and is very safe.

Any more advice for visitors to Warsaw?

For first timers to Warsaw, stay somewhere close to the city centre. A good quality hotel close to the city will cost between $100 and $150 a night.

Make use of the taxis, they are cheap, convenient and safe – just make sure to check the driver speaks English before you jump in. 

www.export.org.au

SEPTEMBER 2014 |

27

SPOTLIGHT ON

Republic of Korea The Republic of Korea (ROK) known as South Korea has a population of 48 million who occupy a land area of 97,100 square kilometres, less than half the size of Victoria.

Here are a few key facts:

2012

Australia is ROK 6th largest import source

7.6

12

Australia is ROK 12th largest export destination

6

Australia’s investment into ROK has increased to $7.6 billion (2011)

ROK’s investment in Australia has increased to $12.8 billion (2011)

12.8

GDP per capita: US$23,113 GDP: US$1.156 trillion GDP growth: 2.0 per cent

Trade with

$31.9 billion AUSTRALIA

Top exports to ROK (AU$)  Iron ores & concentrates ($5,453m)  Coal ($5, 425m)  Crude petroleum ($1,389m)  Education related travel ($754m)  Beef ($646m)

Population

50 million

Top imports from ROK (AU$)  Refined petroleum ($2,676m)  Passenger motor vehicles ($2,047m)  Civil engineering equipment & parts ($1,292 m)  Telcom equipment and parts ($266m)  Transport ($218m)

For more information please visit the DFAT website: www.dfat.gov.au 28

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

ECA

THE META

DEREGULATION HUB

M

ETA, a collaborative network of engaged manufacturing businesses and researchers, together with the Export Council of Australia (ECA) will launch an important collaboration Hub next month to address the topic of deregulation.

The META Deregulation Hub has been established

by META and ECA to connect manufacturing businesses together with industry experts to identify and quantify the regulatory costs imposed on exports and the impact this has on Australian manufacturing companies.

By undertaking extensive consultation with industry, META and the ECA aim to obtain ‘bottom up’ information on the cost impact of export red-tape.

A critical first step for the hub is to undertake research into the regulatory costs imposed on individual exporters in getting their goods approved for export.

The research project will quantify the cost of the export regulations to members and then identify areas of unnecessary red tape that could be eliminated, resulting in reduced compliance costs. Once analysed, the insights will aim to support and improve management and workforce capability, assist manufacturers and related businesses in communicating and marketing their capabilities, improving linkages to overseas businesses and global supply chains and fostering environments where businesses can collaborate to achieve growth.

To help in this critical first step we are calling on companies to participate in the research by completing a questionnaire to help gather data for META and the ECA. The survey will ask questions about current barriers to trade, including regulations and the costs of specific processes which impede trade for Australian manufactures.

We welcome your participation in the survey and future involvement in this important collaboration Hub. To become involved in the Hub, please contact Collins Rex at collinsrex@ export.org.au.

The Hub will be officially launched on Thursday 18th September 2014, but survey responses are welcome now. Further information on the Hub will be available closer to the launch date on the META website, www.meta.org.au and the ECA website, www.export.org.au.

www.export.org.au

SEPTEMBER 2014 |

29

EXPORTER

Gekko – how is it holding on?

Gekko Systems has the mining world in its grip and it’s not letting go.

S

tarting out as a small outfit in Avoca and later Ballarat, Victoria, Gekko Systems has grown to become truly global with 500 installations across 43 countries and 130 personnel working in its offices in Ballarat, Perth, Johannesburg, Vancouver and Santiago.

Established in 1996 by Elizabeth Lewis-Gray, CEO and managing director, and Sandy Gray, technical director, Gekko is now a recognised leader in the design, development and distribution of innovative mineral processing equipment and systems with a particular focus on gravity separation.

Its trophy cabinet must be overflowing considering how many awards the team at Gekko has received over the years. Some of these accolades have included the Telstra and Australian Government Small Business Cisco Innovation Award in 2002, the Warren Centre for Advanced Engineering, Innovation Hero Award in 2007, the Premier’s Design Award at the Victorian Premier’s Design Award in 2010 and the Mining Magazine Award for Environmental Excellence in 2013.

So how did the business go from a small enterprise in regional Victoria, to becoming a respected multinational company servicing the world of mining? Research and innovation.

“Early on in the development of Gekko, market research indicated key opportunities would be in the Southern Hemisphere including South America, in particular Chile, Peru, Argentina and Brazil, South Africa and South East Asia,” explains Lewis-Gray, “All these markets have high levels of exploration, are growing strongly and are relatively new, making them more open to innovative mineral processing practices.”

Gekko also conducts strategic analysis of the gold price, political risk and potential IP risks in market before making crucial business decisions. It’s this strategic, forward thinking that helps its export business thrive. “Today, some 85 per cent of our revenue is derived from export,” reports Lewis-Gray.

The tight international competition in the mineral processing equipment space keeps Gekko on its toes.

“The innovation associated with our design keeps us competitive. The high dollar does make it difficult at times but our key competitors are based in Australia or Canada, which helps create a more level playing field,” says Lewis-Gray.

30

Stacey Mills-Smith

It’s also about location, location, location. “Our international offices in key mining industry gateways give us access to the mining community,” explains Lewis-Gray.

“They serve as bases for the sale, commissioning and servicing of Gekko equipment and act as platforms from which new markets can be identified. The global offices can cover inquires 24 hours a day, which is highly beneficial for our clients.”

Being the driver behind the wheel of a dynamic and complex international business is no mean feat.

When asked if she would have done anything differently Lewis-Gray comments, “say no. Sometimes you are better off pushing for a standard product or process to be left in place. Also, I would have rotated the Australian staff through the global offices more; it’s important to share the culture and knowledge company wide, as it helps everybody understand that it really is a global market place.”

With the ability to reflect, adapt and innovate, Gekko Systems is well placed for future growth. “Gekko will be introducing new technology and innovative processes for the mining industry,” says Elizabeth, “Our aim is to lead the world in innovative, beneficial practices in gold processing and try and transfer some of that skill set into the broader mineral base.”

It is an ambitious goal but one the Gekko team is determined to achieve. 

Elizabeth Lewis-Gray’s lessons learnt as an Australian exporter: 1. It is very important to look at the commercial arrangements, things like currency hedging are quite important when considering exporting.

It can really hurt if the Aussie dollar increases or decreases, so be prepared.

2. Another issue is the logistics; shipping documents, bills of lading and LOC contracts can be very taxing on a small company starting out. Again very high expenses can be incurred if you need to obtain special certifications for certain countries and if the voltages and specifications of your equipment need to be changed. This is something that we considered very early in our projects and other SMEs should do the same.

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From garage to glory The tale of a humble Victorian company that found glory in international export markets. Stacey Mills-Smith

T

his Australian exporter’s journey began like many international business fairy tales do… in a garage. Yet, from humble beginnings, Robert Dal Sasso, founder and CEO of Ecotech and a recently awarded Australian Export Hero, has grown a highly successful environmental monitoring business.

Ecotech was established in 1973 when Dal Sasso and the first employee he hired (who is still with the business) began developing data acquisition systems. Now the company employs 116 people in Perth, Melbourne, Sydney and Brisbane and roughly 40 per cent of sales are export.

This was always part of the plan. “I always had in my mind that whatever I started in Australia had to be international,” says Dal Sasso. So from inception the company and its products were groomed for export.

Ecotech’s export journey started with a World Bank Project in 1991 with BHP and the Steel Authority of India.

“We landed a tender for five air monitoring stations and dust monitoring equipment. We were new to export so, as expected, not everything went to plan,” says Dal Sasso.

For example, the equipment was held up in customs bond storage for 10 weeks before the final clearance occurred. Then once the equipment was cleared the instruments were damaged due to roof leakage and took three months to repair.

“Then finally we commissioned and trained the local people and the project was over. It took us two years to get our bond money back,” explains Dal Sasso.

Robert Dal Sasso’s four important export lessons: 1. Distributors need to have the capability to maintain equipment and you should be focused on developing a long-term relationship with them.

2. Have good communication skills and be careful how you communicate in different cultural contexts. “I remember I went back to one distributor and said to him he was a little cheeky with his pricing and he came back and was very offended because he didn’t understand what cheeky meant.”

3. When you go into export, be in it for the long haul. “Things don’t always work out but you have to just keep on going.”

4. Be friendly. It’s not win-win all the time, sometimes it has to be lose-win for a while.

The US was identified as a key export market and business boomed, before a key customer bought a competitor of Ecotech’s. So it had to rely on distributors and sales dropped dramatically. But despite a rocky start, and some hiccups, the business has been a success.

In today’s world of fierce competition and tough economic conditions, Ecotech has stayed afloat while others in the industry have been less fortunate. Dal Sasso puts this down to his decision to redesign products to improve efficiencies. He was also savvy in terms of currency hedging, which saved significant heartache when the Australian dollar climbed.

The company’s key competitors are US multinationals and a few French and Japanese companies - but Ecotech has the edge. Its international competitive advantage is twofold. First, it is knowledgeable and nimble. “We can answer most questions, even technical questions, directly.

We are much better than the competition in that regard,” says Dal Sasso. “We also have better data capture, so that helps,” he adds.

“Second, our engineers are sent out to train the local personnel in calibrating and repairing equipment, and this is the model we have used right from the start,” says Dal Sasso. “Distributors come over for training or we send someone there for training and that’s why we are successful.

If there is a problem, we go out there and we fix it.” 

www.export.org.au

SEPTEMBER 2014 |

31

EXPORTER

Creating, growing + managing

global social communities Exporters can expand global corporate visibility and improve customer service by maintaining an active social media presence.

Keith Crowell, vice president, social media division, Appen

I

n a recent study, researchers determined 59 per cent of customers will switch brands to get better service, and a staggering 96 per cent of job seekers said reputation was an important factor when choosing an employer. Whatever the touch point, social media is an important element of an organisation’s reputation.

In your export organisation, whether social media falls under the umbrella of corporate communication, public relations, or marketing, it’s important to get the word out about what you are doing so you can increase your visibility both domestically and overseas. Let your followers know about new clients, case studies, charity efforts, awards, and anything else that helps you tell your story.

But how should we accomplish this? The following are some key tips to get started: • The first thing you need to do is identify and tackle your main social media channels – Facebook, Twitter, Google Plus, Instagram, whatever is relevant for your industry. Don’t know where to start or don’t know what’s important? Take a look at your competitors, or look to industry associations like the Export Council of Australia and see what they are doing to reach their audience. But don’t spread yourself too thin, pick the top, most important channels and build those up first.

•

•

•

What happens when something goes wrong, like a spammer who is posting bad links on your social media channels? Establish a listening or moderation protocol for social media that can keep an eye out for inappropriate content and get rid of it for you, automatically.

It’s very important to address problems that arise quickly. Customers expect a much quicker response to social media posts than traditional communication channels like email. Keep in mind, social media should be a two-way conversation, so when your followers have something to say, listen and respond accordingly. It doesn’t take long to retweet or share a post; so the sooner you can take care of a problem, the better. If you don’t have an answer to a complaint, it’s still very important to publicly respond, and indicate that you’re aware of their post. Be wary of canned responses, if it’s canned, it will be obvious.

Don’t assume consumers will only use ‘’your” channels – such as your company Facebook or LinkedIn page – to criticise, praise or generally offer feedback on the company. Configure your listening platform and moderation tools to look for brand mentions across all social media channels. 

To learn more about Social Instinct, visit www.socialinstinct.com.

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Confused about intellectual property?

We know the ropes. www.cullens.com.au

DOING BUSINESS

The internet: With the depreciating Australian dollar there is a renewed focus on how Australian businesses can be more competitive internationally, particularly when it comes to exports.

Sassoon Grigorian head of policy Asia Pacific, eBay Inc

A

ccording to the OECD, Australian exports rose from 18 per cent of GDP to 21 per cent between 2004 and 2010. During this period exports peaked in 2008 when they were 23 per cent of GDP. By global standards, however, Australia has a smaller share of exports to GDP than almost all the other nations in the OECD. Canadian exports accounted for a third of its GDP over the same period, France’s exports are over a quarter of its economy, and even New Zealand exports more than Australia compared to its GDP. The only OECD countries for which exports are lower are the US and Japan.

"Even New Zealand exports more than Australia compared to its GDP. The only OECD countries for which exports are lower are the US and Japan."

34

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

driving Australian SME exports Small businesses taking charge

It may come as a surprise then that Australian SMEs, despite their remoteness and the high Australian dollar, are prolific exporters, especially when they leverage online opportunities.

The internet has torn down barriers for SMEs which are looking for customers beyond the domestic market.

Take, for example, the owner of Boots4all, David O’Connor, who operates retail stores in Melbourne and Sydney. He sells boots that are 100 per cent Australian made. By listing on online marketplaces such as eBay he has seen his international market blossom.

A 2013 report commissioned by eBay found 78 per cent of Australian commercial eBay businesses export. That number increases to 97 per cent when they reach sales of $100,000 or more.

In addition, on average, Australian commercial eBay sellers with export sales of $10,000 or more export to 28 destinations. That’s more export destinations than eBay sellers based in Germany and France, who closely border many more countries.

Compare this to traditional retailers who do not use an online presence, where on average just three per cent export.

The report also found eBay represents almost one in five of Australian retailers (with annual sales of $50,000 to $200,000). This means eBay is a sales channel for a significant share of Australian SMEs.

Australia exporting to the world

PayPal also released a report into ‘modern spice routes’.

It predicts cross-border online shopping will contribute $5 billion to the Australian economy this year, which will increase to $16 billion by 2018.

The study found shoppers in China, the United States and the United Kingdom are most interested in buying our products. In terms of year-on-year growth in Australian online retail exports, Thailand is the fastest growing market at a rate of 105 per cent per annum, followed by Russia at 67 per cent per annum and Israel at 55 per cent per annum.

Surprisingly, as the companies that sell on the internet grow, the product ranges they provide tend to decline.

They often find a niche and specialise in a sweet spot where they have a competitive advantage.

Although some of our significant trading partners reside in Asia, such as China, Japan, Korea, and India, the key destinations for Australian SMEs selling through the eBay platform is the US, followed by Great Britain, Canada and Germany.

Some commentators have said Australia’s future is not all about China. When it comes to trading on the internet they’re right. By leveraging the internet further, we can increase exports as a percentage of GDP, and thereby enable further economic growth. 

www.export.org.au

SEPTEMBER 2014 |

35

Assisting companies engaged in international business Whether you’re an established exporter or an importer, or a business just getting started in International Trade, the ECA provides practical assistance in managing the risks in doing business offshore.

Advocacy The ECA makes representations to and on behalf of exporters to appropriate decision makers on: >> Policies and regulatory measures impacting the international competitiveness of Australian industry >> The role of export promotion activities and programs which promote business development, encourage a greater outward orientation in industry and support the marketing of Australian products and services in international markets >> The Government’s broader trade policy agenda, including multilateral, regional and bilateral trade negotiations Exporters and importers can get involved by participating in: >> Industry Working Groups >> National Advisory Council >> State Advisory Councils >> International Trade Research

ECA Services and Programs Members of the ECA have access to a range of exporter and importers services and programs, including: >> Export Market Development Grants >> TradeStart >> Export Advice/ Support >> Multimedia Channel >> Export Magazine – Australia’s Export Voice >> Consulting Projects >> International Trade training programs

Event Programs >> FLEx Exporters Club >> Networking Events

Award Programs The ECA conducts two award programs that recognise individuals and companies for having the drive, passion and the vision to take their business global. >> Australian Export Heroes: Recognising individuals who have made a long and outstanding contribution to export. >> Premier’s NSW Export Awards: The state’s major export event, rewarding and profiling the best enterprises in exporting.

For more information contact the ECA at www.export.org.au 36

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

www.export.org.au

SEPTEMBER 2014 |

37

GOVERNMENT

The transfer pricing

rules have changed

HAVE YOU T

ransfer pricing legislation requires that the prices for international dealings between non-arm’s length parties are established according to arm’s length principles.

Broadly, an arm’s length price is one which might be reasonably expected to be paid under an agreement struck between independent parties dealing in the same or comparable circumstances.

Merely selling goods or services overseas does not bring you into the transfer pricing rules. Transfer pricing applies to the rates or prices that are used when selling goods or services cross-border between related parties such as between company divisions and departments, or between a parent company and a subsidiary.

What has changed?

The new transfer pricing legislation seeks to: Align Australia’s transfer pricing legislation with international standards.

• Ensure the amount brought to tax in Australia from related party dealings reflects the arm’s length contribution made by an entity’s Australian operations.

• Shifts the focus on outcomes being arm’s length rather than just individual transactions.

Key aspects of the new legislation include: • The new rules will apply to income years commencing on or after 1 July 2013 and will be applicable to international arrangements with both treaty and non-treaty countries. However, it is important to note that the legislation applies retrospectively and covers transactions or transfer pricing positions taken in prior years.

• Compliance with the arm’s length principle is assessed on an entity’s cross-border conditions.

This means the comparability standard for transactions has been set higher, as it now requires taxpayers to demonstrate that the methodology chosen is an appropriate transfer pricing methodology that can be applied reliably having regard to all comparable data relevant •

38

•

•

•

?

to the economic substance of the entity and its international arrangements. These include, but are not limited to, price, gross margin, net profit, and the division of profits between the entities.

Actual conditions in an arrangement can be replaced with arm’s length conditions where the operation of non-arm’s length conditions cause an entity to reduce its taxable income, reduce its withholding tax payable in respect of interest or royalties, increases its loss, and/or increases its tax offsets.

Actual conditions may also be substituted where substance differs to form, and / or where independent parties in comparable circumstances would not have entered into the arrangement or would have entered into an arrangement substantially different to the actual conditions observed.

Under the old rules the Commissioner had an unlimited amendment period, but the new legislation has restricted this to a seven-year amendment time limit in respect of transfer pricing adjustments.

Documentation requirements

The preparation of contemporaneous transfer pricing documentation has always been very time consuming and costly. A properly prepared transfer pricing report is set to become even more time-consuming as one of the fundamental changes has been around the introduction a self-assessment regime for transfer pricing with much stronger documentation requirements. Taxpayers will now be required to document and consider: • The actual conditions relating to the international dealings (functional analysis, business and industry context, identification of dealings).

• The arm’s length conditions (such as method selected, comparability analysis to determine arm’s length conditions using OECD comparability factors).

• Whether, on a self-assessment basis, the “transaction reconstruction” provisions could apply.

• Conclude whether a transfer pricing benefit exists.

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

Australia’s transfer pricing rules, which have been in place for over 30 years, have just undergone a radical transformation. The old Division 13 of the 1936 Income Tax Act, has been repealed and replaced by a new set of rules that seek to modernise the transfer pricing provisions.

Tony Nunes, Kelly and Partners

Further, businesses are required to prepare transfer pricing documentation before the income tax return is lodged in order to have a Reasonably Arguable Position (RAP) in respect of their international tax arrangements. Without a RAP, transfer pricing adjustments by the Commissioner would attract a penalty of at least 25 per cent, becoming 50 per cent where there is a scheme carried out for the sole or dominant purpose of obtaining a transfer pricing benefit.

A RAP on relevant transfer pricing transactions can bring the penalty down to 10 per cent.

It should also be noted that the Public Officer now has an onus to confirm that actual conditions are consistent with arm’s length conditions before signing the income tax return. This onus cannot legitimately be met without conforming to the new documentation standards.

What action steps should be taken?

Any multinational groups not already under review or audit should expect a call from the ATO, given its plan to focus its compliance activities on companies that engage in practices designed to shift profits offshore or avoid tax obligations, including: • 125 new profit shifting risk reviews and 26 audits in the large business market.

• 680 reviews and 115 audits regarding tax-haven related activity.

• Further profit shifting reviews and audits in the medium enterprise segment.

Thus with at least 150 tax audits of multinational companies being planned for the 2013/14 year, we expect the ATO to enforce the new regime with gusto.

Any multinational should consider taking steps to address risk areas in its business and to meet the standards of the new transfer pricing regime. Such steps should include the following: 1. Assess the current and proposed transfer pricing arrangements in light of the new rules and determine whether the group is compliant with the arm’s length principle. Focus should be placed on high risk

transactions, such as business restructures, related party financing transactions, entities with consistently low profits or losses and the use of intangibles in the group.

2. Formal documentation should be prepared to ensure penalty protection in the event of a transfer pricing adjustment. The documentation should addresses the broader scope of requirements outlined in the new rules and must be prepared before the income tax return is lodged. In line with the new rules, the documentation should: - highlight why the selected transfer pricing method(s) is the most appropriate.

- contain analysis to reflect the related party negotiation and bargaining process or whether alternative options were considered.

- assess whether the adopted approach has been consistent with those operating between independent entities.

3. Put a system in place to support ongoing application of the group’s transfer pricing positions and establish a review mechanism to ensure that if material changes occur, the transfer prices are adjusted as appropriate.

Public officer disclosure responsibilities and whether or not there is a RAP in respect of the group’s transfer pricing positions should be regularly reviewed.

Transfer pricing remains an important driver of shareholder value, providing an opportunity to optimise the value of a business by effective tax rate and franking credit management, but it is an area that is continuing to evolve in Australia and it remains a major issue for taxpayers and the ATO. In practice, the complexity and uncertainty has been heightened by the global financial crisis and the impact that this has had on Australian and global business operations. In this new, dynamic and increasingly aggressive transfer pricing environment, taking steps to manage transfer pricing risk is critical. 

www.export.org.au

SEPTEMBER 2014 |

39

INTERNATIONAL BUSINESS Whatever the size or experience of your business, there is a growing need to better understand the international business environment. Most organisations may be hesitant to push into international markets, fearing it may be too risky, complicated, or ambitious, however, BDO can assist organisations to succeed internationally.

Our local team continues to assist its Australian clients to identify business opportunities and minimise risk by leveraging our local knowledge and expertise in the Asia Pacific region. We specialise in making sure you get on the ground support to minimise the risks associated with expanding overseas.

Contact BDO to discuss your bilateral trade and investments queries and develop a plan for future international growth.

CAMERON MACMILLAN Executive Director, International Business cameron.macmillan@bdo.com.au +61 7 3237 5794

Distinctively different – it’s how we see you AUDIT • TAX • ADVISORY

DENNIS LIN Partner, China Advisory Services Leader dennis.lin@bdo.com.au +61 7 3237 5839

ECA

ECA launches

ground-breaking study of Australian

EXPORTERS

Lisa McAuley, COO, Export Council of Australia

•

A

IBS 2014 – Australia’s International Business Survey 2014 – is the most comprehensive investigation into Australian international business activity in more than 15 years.

Capturing data from more than 1,600 Australian exporters, the report provides unique insights from a diverse range of businesses – small, medium, and large; primary, secondary and tertiary. It manages to capture the opinions of a significant slice of Australian companies with international experience, operating across more than 120 markets, with a strong representation from the manufacturing sector (31 per cent) and services sector (58 per cent).

Some of the key highlights from the survey this year, include: • Broad international engagement: The AIBS 2014 results confirm that Australia’s international business engagement extends well beyond the export of goods.

• Australia’s current overseas markets: AIBS 2014 respondents report that their current top five export markets are the United States, China, New Zealand, the United Kingdom and Japan, indicating the continuing importance of advanced economies for Australian companies engaged in international business.

• An optimistic outlook: A particularly striking feature of the survey is the degree of optimism expressed by participants. Despite a sluggish world economy and strong currency, 74 per cent of respondents indicate plans to expand into two or more markets over the next two years.

Targeting China and the United States: As part of these expansion plans, companies are targeting a wide range of countries. Overall participants nominated 81 countries as important future markets. China and the United States continue to be front and centre.

• Lack of information remains a serious impediment: A lack of information on areas such as local culture, business practices, language, consumer requirements, local regulations and tariffs are the most prominent challenges of doing business in the most difficult overseas markets.

• Financial barriers also an impediment: More than 33 per cent of respondents report needing financial support to conduct and expand their international business, and 43 per cent struggle to obtain equity financing and 33 per cent debt financing.

In response to the research, the Export Council of Australia has called for the Australian Government to invest more resources in trade support to overcome the barriers faced in international markets across both advanced and developing economies, as well as addressing the barriers that negatively impact on Australia’s international competitiveness.

The Export Council of Australia wants to see more in-market assistance, particularly in the markets identified as having the highest barriers, greater access to market information and continuing support for programs such as TradeStart and EMDG, provide vital services to SME businesses.

What has clearly been identified by AIBS2014 is that there is no question that ongoing research is vital to informed decision making on trade policy in Australia.

The Export Council of Australia, in conjunction with Austrade, Efic and the University of Sydney will be asking companies to participate in the survey again this year, when we launch AIBS2015 in September. 

www.export.org.au

SEPTEMBER 2014 |

41

EVENTS

WINNERS FROM THE STATE EXPORT AWARDS 2013

42

Winners of the NSW Premier’s Export Awards 2013

Animal Logic wins the NSW Premier’s Exporter of the Year Award 2013

Bundaberg Brewed Drinks wins Premier of Queensland’s Exporter of the Year Award 2013

Australian Agricultural Company wins Premier of Queensland’s Agribusiness Award 2013

Winners of the Governor of Victoria Export Awards 2013

Winners of the Tasmanian Export Awards 2013

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

JOIN US IN OCTOBER TO FIND OUT WHO WILL WIN THIS YEAR!

Winners of the ACT Chief Minister’s Export Awards 2013

Winners of the Business SA Export Awards 2013

Winners of the Western Australian Industry and Export Awards 2013

Winners of the Chief Minister’s NT Export and Industry Awards 2013

OTHER ECA EVENTS

ECA and Centre for Customs and Excise Studies signing MOU

AIBS 2014 panel discussion at the launch of the 2014 NSW Export Awards

www.export.org.au

SEPTEMBER 2014 |

43

TIPPING’S TIPS

When time is of the essence it’s better to...

The distance between Australia and most of its fresh food markets makes airfreight important and means Australian exporters’ goods remain attractive to customers.

Dianne Tipping, deputy chair, Export Council of Australia

T

he demand for airfreight has always been limited by cost - typically the price of shipping by air is four to five times road transport and up to 16 times the price of sea transport.

So commodities shipped by air have high values per unit or are very time-sensitive.

Nevertheless, the use of airfreight can create competitive advantages. For example, producers may agree to shorter order times if shipments go by air. Similarly, manufacturers will compete for larger orders by shipping the large initial order using ocean freight and then using air freight to replenish inventories if demand is greater than expected.

Air freight can also be used as part of a strategy for diversification — to introduce products with shorter shelf lives or to provide reliable delivery of smaller volumes in new markets. Once the market has been established and volumes increase, the manufacturer can reconstruct supply chains by using a less costly mode of transport.

Warehousing

Customs clearance

Where customs procedures, inspection equipment, cargo handling services and warehousing are integrated into an efficient operation, most cargo will pass through the airport within a few hours.

Airfreight will also open new markets by providing fast and reliable service for initial deliveries of product.

Airfreight will continue to support production activities, especially the exchange of samples and delivery of critical spare parts and high-value inputs. It’s likely it will increase in importance in supporting reverse logistics, including repair and warranty work for electronics and other highend consumer goods. 

For importers, customs procedures are critical. The clearance requires both the airway master bill, sent at the time the flight departs, and the customs declaration, filed by the freight forwarders after the cargo had been shipped.

In some countries the customs authority at the airport uses the same procedures and systems as at other international gateways, and inbound cargo can take up to a day to be cleared. In others the procedures are adapted to the requirements of air cargo, with all transactions conducted electronically and cargo cleared within one or two hours on a 24/7 basis.

44

y fl

Modern airport warehouses have loading docks to speed truck turnarounds and minimise vertical movements of cargo. Export facilities have large areas for scanning, inspection, building aircraft pallets and gathering cargo for specific flights. Separate facilities for imports have offices and inspection areas to facilitate customs clearance procedures and to allow for segregation of cargo into truckloads. For perishable cargo, these warehouses have temperature-controlled rooms for maintaining the cold chain between the truck and the aircraft. These warehouses also provide some bonded storage for high-value cargo.

Air freight can also be used as part of a strategy for diversification

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

y

Tipping’s tips on airfreighting successfully 1) Understand your product and source suitable packaging for it – it will save on money and space when your product is efficiently packed.

2) Use a packaging company that can look at retaining the product integrity and also if required offer data-logging so that you can track the product up to arrival point at the final destination.

3) Understand the quarantine issues/ laws at both ends of the trip.

4) Have all of your paperwork in order before the uplift takes place.

5) Use a freight forwarder that has strength and experience in the type of product that you wish to export.

6) Use a freight forwarder that is available at key times for the delivery/ availability of early mornings and late evening deliveries and flights.

7) Become a member of the various airfreight councils in Australia to understand and discuss the types of offerings by the airlines.

8) Understand the routing of the flights so that time sensitive goods are moved in the most efficient manner to reduce costs and problems.

9) Remember that for perishables there are no chill systems on the planes and self supplied chill material such as dry ice will need to be used for cool chain movement.

Understand your goods and the amount of self supplied chill product required for the journey from start to finish – this means up to the receiver’s door.

10) Make sure your receiver is well aware of the flight details and ensure that there will be someone available at the end destination to take the goods when they arrive.

They must move from the airport facility fairly quickly.

www.export.org.au

SEPTEMBER 2014 | 45

INTERNATIONAL

CALENDAR

SEPTEMBER

21-23 SEPTEMBER

29-31 OCTOBER

Connecticut, USA

Jakarta, Indonesia

Aerospace and Defence International Trade Summit

Mining and Engineering Indonesia 2014

4-7 SEPTEMBER

Building and Infrastructure Indonesia Jakarta, Indonesia

27-30 SEPTEMBER

Education Exhibition Taiwan 2014 Taipei - Kaohsiung, Taiwan

10-13 SEPTEMBER

Food & Hotel Thailand Bangkok, Thailand

OCTOBER 3-6 OCTOBER

16 SEPTEMBER

Almaty - Astana, Kazakhstan

Beijing, China

17-19 SEPTEMBER

Electric and Power Vietnam Ho Chi Minh, Vietnam

Begin Group Education Fairs 2014 - Kazakhstan

European Association of International Education (EAIE) Conference and Exhibition 2014 Prague, Czech Republic

Mining Myanmar Yangon, Myanmar

Building and Construction Myanmar 2014 Yangon, Myanmar

NOVEMBER

4-7 OCTOBER

Australia Future Unlimited: Education Exhibition South Korea 2014 Seoul - Busan, South Korea 9-11 OCTOBER

17-19 SEPTEMBER

Yangon, Myanmar

30 OCTOBER - 1 NOVEMBER

World Food Moscow 2014

China International Mining Expo 2014

Electric and Power Myanmar 30 OCTOBER - 1 NOVEMBER

15-18 SEPTEMBER

Moscow, Russia

30 OCTOBER - 1 NOVEMBER

TTG Incontri 2014 Rimini Fiera, Italy

1-2 NOVEMBER

Australia Pavilion - OCSC International Education Expo 2014 Bangkok, Thailand 6-9 NOVEMBER

10-12 OCTOBER

Education Exhibition Japan 2014

Education Exhibition Vietnam 2014

17-19 SEPTEMBER

Tokyo, Japan

Danang - Hanoi/Ho Chi Minh City, Vietnam

Seoul, South Korea

15-17 OCTOBER

9-11 NOVEMBER

17-21 SEPTEMBER

Yangon, Myanmar

Food Ingredients Korea 2014

West Africa Education Exhibition 2014

Accra, Ghana - Lagos, Nigeria 18-20 SEPTEMBER

Biofach America 2014 Baltimore, USA

Oil & Gas Myanmar 19-23 OCTOBER

Salon International de l’Agroalimentaire (SIAL) - Paris 2014 Paris, France

SEAFEX/Gulfood Manufacturing/Specialty Food Festival Dubai, UAE

12-14 NOVEMBER

Appetite Australia Live Singapore 2014 Singapore

28-30 OCTOBER 19-20 SEPTEMBER

Australia Future Unlimited Education Fair Mongolia 2014 Ulaanbaatar, Mongolia

46

NAJAH Education and Training Exhibition 2014 Abu Dhabi, UAE

12-14 NOVEMBER

ProWine China Shanghai, China

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

12-14 NOVEMBER

China’s Global Food & Hospitality Expo 2014

TRADE MISSIONS

Shanghai, China

17-20 NOVEMBER

Exposibram Amzonia 2014 Belem-Para, Brazil 18-20 NOVEMBER

CommuniCast Myanmar 2014 Yangon, Myanmar 18-19 NOVEMBER

Australian Life Sciences & Healthcare Mission to India

WHEN: 15-19 September WHERE: Mumbai - Bangalore - Hyderabad - New Delhi, India

Victorian Trade Mission to Oman and the UAE WHEN: 21-26 September WHERE: Muscat, Oman - Dubai, UAE

Asian Logistics and Maritime Conference

Victorian Trade Missions to China

Hong Kong

WHEN: 22- 26 September WHERE: China

20-22 NOVEMBER

Victorian Automotive Trade Missions to Malaysia

Biofach Japan 2014 Tokyo, Japan

DECEMBER 3-6 DECEMBER

Machine Tool Indonesia 2014

WHEN: 29 September - 2 October WHERE: Kuala Lumpur, Malaysia

Austrade Cultural Precincts – North Asia Trade Mission WHEN: 29 September - 7 October WHERE: Seoul, South Korea - Taipei, Taiwan - Hong Kong

Austrade Urals Education Mission 2014

Jakarta, Indonesia

WHEN: 30 September - 1 October WHERE: Yekaterinburg, Russia

3-6 DECEMBER

Victorian AdvaMed Trade Mission to the USA

Manufacturing Indonesia 2014 Jakarta, Indonesia

WHEN: 6-14 October WHERE: Chicago, USA

Victorian ICT Trade Mission to South Korea WHEN: 20-26 October WHERE: South Korea

Victorian ICT Trade Mission to Japan WHEN: 27-31 October WHERE: Japan

www.export.org.au

SEPTEMBER 2014 |

47

DOMESTIC

CALENDAR

ECA EVENTS CALENDAR

48

SEPTEMBER

2

Market Briefing on Doing Business in Indonesia

7.30-9.30am

Brisbane, QLD

SEPTEMBER

4

QLD AIBS Focus Group: Developing a business strategy for export success

9.00-10.00am

Brisbane, QLD

SEPTEMBER

4

QLD AIBS Focus Group: Investment strategies for global success

10.15-11.15am

Brisbane, QLD

SEPTEMBER

4

QLD AIBS Focus Group: Export support an achieving your export goals

11.30am-12.30pm

Brisbane, QLD

SEPTEMBER

4

QLD AIBS Focus Group: International Competitiveness - Export controls and regulations

2.15-3.15pm

Brisbane, QLD

SEPTEMBER

4

QLD AIBS Focus Group: Using e-commerce to drive global growth

3.30-4.30pm

Brisbane, QLD

SEPTEMBER

4

EMDG Information Session

9.30-11.30am

Sydney, NSW

SEPTEMBER

11

EMDG Information Session

3.00-4.30pm

Brisbane, QLD

SEPTEMBER

11

Webinar: Demystifying the Asian Culture- tips before you enter the Asian market

12.30-1.30pm

National

SEPTEMBER

16

NSW AIBS Focus Group: Developing a business strategy for export success

9.00-10.00am

Sydney, NSW

SEPTEMBER

16

NSW AIBS Focus Group: Investment Strategies for Global Success

10.15-11.15am

Sydney, NSW

SEPTEMBER

16

NSW AIBS Focus Group: Export support an achieving your export goals

11.30am-12.30pm

Sydney, NSW

SEPTEMBER

16

NSW AIBS Focus Group- International Competitiveness: Export controls and regulations

2.15-3.15pm

Sydney, NSW

SEPTEMBER

16

NSW AIBS Focus Group: Using e-commerce to drive global growth

3.30-4.30pm

Sydney, NSW

SEPTEMBER

22-26

IMARC - International Mining and Resources Conference

Melbourne, VIC

OCTOBER

1-2

OCTOBER

2

Ag in the Asian Century - National Export and Innovation Conference FLEx Ask the exporter & See it in action: Agribusiness/Food

7.30-9.30am

Toowoomba, QLD Melbourne, VIC

OCTOBER

8

VIC AIBS Focus Group: Developing a business strategy for export success

9.00-10.00am

Melbourne, VIC

OCTOBER

8

VIC AIBS Focus Group: Investment strategies for global success

10.15-11.15am

Melbourne, VIC

OCTOBER

8

VIC AIBS Focus Group: Export support an achieving your export goals

11.30am-12.30pm

Melbourne, VIC

OCTOBER

8

VIC AIBS Focus Group- International Competitiveness: Export controls and regulations

2.15-3.15pm

Melbourne, VIC

OCTOBER

8

VIC AIBS Focus Group: Using e-commerce to drive global growth

3.30-4.30pm

Melbourne, VIC

OCTOBER

13-17

Queensland Trade & Investment Week

OCTOBER

16

2014 QLD Export Awards Ceremony

5.30-10.30pm

Brisbane, QLD

OCTOBER

20-21

OCTOBER

23

2014 NSW Export Awards Ceremony

5.30-10.30pm

Sydney, NSW

OCTOBER

30

Market Briefing on Doing Business in the United States

7.30-9.30am

Brisbane, QLD

NOVEMBER

6

FLEx Ask the exporter: Services

7.30-9.30am

Melbourne, VIC

NOVEMBER

27

2014 National Export Awards Ceremony

5.30-10.30pm

Sydney, NSW

DECEMBER

4

FLEx See it in action: Port of Melbourne

7.30-9.30am

Melbourne, VIC

National Farmers’ Federation (NFF) National Congress

| AUSTRALIA’S EXPORT VOICE THE OFFICIAL MAGAZINE OF THE EXPORT COUNCIL OF AUSTRALIA

Canberra, ACT

AIEx EVENTS CALENDAR

For details on upcoming courses and to register, please visit the AIEx website www.aiex.com.au

SEPTEMBER

2-4

Export Procedures Course

Sydney, NSW

SEPTEMBER

3-4

Import Procedures Course

Adelaide, SA

SEPTEMBER

3-4

Export Procedures Course

Perth, WA

SEPTEMBER

9-11

Export Procedures Course

Melbourne, VIC

SEPTEMBER

23

Understanding Documentary Credits

Adelaide, SA

SEPTEMBER

24

Understanding Documentary Credits

Perth, WA

OCTOBER

22-23

Import Procedures Course

Melbourne, VIC

OCTOBER

28-30

Export Procedures Course

Adelaide, SA

NOVEMBER

5-6

Import Procedures Course

Sydney, NSW

NOVEMBER

19

Understanding Documentary Credits

Melbourne, VIC

*All WA courses are awaiting confirmation

www.wallaceintl.com.au BRISBANE | SYDNEY | MELBOURNE |

PERTH

International Freight and Customs Brokers

WI - Advert - QTR 110x130mm - 20040324.indd 1

www.export.org.au

25/03/2014 9:50 am

SEPTEMBER 2014 |

49

Member of the Export Council of Australia

+ Exporting

+ Importing

Want to take on the world?

+ International trade publications

+ Corporate training

+ International business courses

Courses with the AIEx will provide you with a comprehensive understanding of Australia’s export and import processes.

Whether you are new to trade, have new

The Australian Institute of Export (AIEx) can show you how!

staff who require training, or you are looking to refresh and update existing knowledge and skills, the AIEx courses cover a wide range of topics with up to date and relevant information.

We make it easy for you to update your skills: courses are available Australia wide and online.

We also offer in-house corporate training courses and workshops to suit your business needs.

• Import and export publications • Import and export • In-house tailored corporate training

For more information contact the AIEx at www.aiex.com.au