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APRIL/may 2016

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a smarter way to trade

From the editor

Our team

Australia looks to niche services for export growth

Director and National Sales Manager

Julie Fletcher


s the Australian economy transitions from the mining boom to the ideas boom, services are now a key focus for exporters. In this issue we look at the service sectors that are booming – and identify the services with growth potential. According to the Department of Foreign Affairs and Trade (DFAT), services exports expanded by more than 9 percent to nearly $63 billion last year. Strong growth was recorded with our major trading partners – China (up nearly 18 percent to around $9 billion), the US (up over 10 percent to $7 billion) and Britain (up 19 percent to nearly $5 billion. By contrast, there was a fall in the value of goods exports, particularly minerals and fuels. Newly appointed Trade Minister Steven Ciobo says services account for about 70 percent of our economy, yet represent only about 20 per cent of our total exports. So there is tremendous scope for growth. Mr Ciobo says expanding services exports “is a key trade policy focus for the government.” And recent free trade agreements (FTAs) with our three largest Asian trading partners – China, Japan and South Korea – will open further opportunities for service exports. The 1000-strong trade delegation now attending Australia Week in China will put professional services high on the agenda during the 5-day visit. The delegation – the largest ever to leave our shores – will promote a range of services in which Australia excels including financial, business, education, health and aged care. And agriculture will also be high on the discussion list. With Australia’s farm exports forecast to reach nearly $45 billion this financial year, agriculture is set to replace mining-iron ore as Australia’s top export earner. Agriculture is now recognised as one of Australia’s five “super-growth” sectors. Other sectors include tourism, international education, gas/energy and wealth management. These sectors are predicted to add more than $250 billion to the Australian economy over the next 20 years. Who said Australia is no longer the Lucky Country?



Tim Michael


Veronica Avant IT Manager

Rob Fearn Contributors

Hannah Bretherton, Anthony Fensom, Caleb Radford, Benjamin Sun Advertising enquiries:


Editorial submissions:

Tim Michael Editor editor@ dynamicexport.

Published by: Think Positive Pty Ltd PO Box 221 Waverley NSW 2024 Australia


Think Positive Pty Ltd cannot be held liable for any person(s), company or business acting upon or using the information provided in this e-magazine in any way. Information and content in Dynamic Export e-Magazine is provided to the best of our knowledge. We advise that you should seek independent professional advice to verify that all information is accurate and correct.

APRIL / MAY 2016

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Australia’s biggest ever trade mission sets sights on China

What’s on 34-35

Local & international events


More tariff cuts under Japan fta


ustralian businesses are continuing to reap the benefits of the JapanAustralia Economic Partnership Agreement (JAEPA) with a third round of tariffs cuts taking effect from April 1. Tariffs on more than 1200 products have fallen, providing a competitive

boost for Australian exporters and building on the success of JAEPA’s first year in operation. Trade Minister Steven Ciobo said 92 per cent of Australian products are



Overdue payments on the rise: Special Coface report



Efic launches new Small Business Export Loan facility



now entering Japan duty-free. This will increase each year until 2034, when 98 per cent of our goods will enter duty free or receive Australia-only preferential access. For the first time, Japan has cut tariffs on high quality Australian Southern Bluefin Tuna, an export worth $116 million to Australia last year. “These tariff cuts give Australian exporters a crucial lead over competitors who continue to face the full tariff,” Mr Ciobo said. Australia’s exports of beef to Japan grew by 14.6 per cent to nearly $2 billion in 2015.

More SMEs looking to expand globally

From April 1, tariffs on Australian beef have again been cut to 27.5 per cent (frozen)


38.5 per cent.


Wine ex Aussie exporters drive services boom in Asia ports booming



China slowdown: How will it affect exporters?


and 30.5 per cent (fresh or chilled). Competitors continue to pay the higher rate of Mr Ciobo said Australian exports of oranges to Japan have hit record levels under JAEPA. Last year’s sales were valued at more than $36 million. And the latest tariff cuts will see Australia’s competitive position further enhanced, with seasonal tariffs falling from 13.1 to 11.6 per cent. Competitors continue to pay a 16 per cent tariff on citrus exports. Other products including nickel, worth an estimated $80 million a year, and food products such

as sauces and mustard worth $29 million a year, will also enjoy significant tariff cuts. Mr Ciobo said the Japanese market has embraced


high-quality Australian product, which can

Why fashion designers should target China

be found in stores, restaurants and hotels throughout Japan.


This month Mr Ciobo launched a new


FTA Portal to help Australia’s SMEs take full advantage of Australia’s free trade

Call for national branding on all food exports


agreements with China, Japan and South Korea. The new FTA Portal provides free and


accurate information on tariffs under the FTAs

Port Melbourne to be sold off

so small and medium businesses can easily work out how price competitive they will be.



Agriculture: our next top export earner

The Portal also has Australian and international trade data and an

innovative step-by-step system to help businesses assess whether

their product is likely to meet the requirements of the agreements. ••• The FTA Portal is available at:


APRIL / MAY 2016

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Australia’s largest ever trade mission sets sights on China More than 1000 Australian business leaders, mostly SMEs, left Australia this week to explore new business opportunities in China.


he delegation will attend Australia Week in China (AWIC) from April 11 to 15.

fast-developing innovation ecosystems for the first time. It includes a series of events promoting Australia as a

AWIC 2016 will deliver more than 150

premium investment, education and tourism destination,

events across 10 cities including Beijing,

including the Chinese launch of Tourism Australia’s

Guangzhou, Hong Kong, Shenzhen, Xiamen,

coastal and aquatic campaign.

Shenyang and Hangzhou and Shanghai.

The first Australia Week in China promotion resulted in

Activity is scheduled across eight business streams:

significant trade and investment outcomes for Australia.

agribusiness, financial services, health and aged care,

About $1 billion in export sales were generated and more

innovation, education, urban sustainability and water

than $3 billion in investment followed the event.

management, premium food and beverage and tourism. The delegation, which is the largest trade mission

“We anticipate that the breadth and scale of AWIC 2016 will generate similar outcomes and be the catalyst for

ever to leave Australia, hopes to make the most of

significant export sales and investments into Australia,

opportunities created with the signing of the China-

further driving jobs and growth,” Mr Ciobo said.

Australia Free Trade Agreement (ChAFTA) signed in December last year.

Tourism Minister and Minister Assisting the Minister for Trade Senator Richard Colbeck said China is now our

Trade Minister Steven Ciobo, who is leading the

largest source of international students and our highest-

delegation, said a highlight of AWIC is the first ever

spending tourism market, with both sectors experiencing

innovation-focused program.

strong growth.

The program brings together Australia’s and China’s

“The Australian Government recognises tourism and international education as key economic super-growth sectors for the next decade,” Senator Colbeck said. Senator Colbeck is leading the tourism and education streams of Australia Week in China (AWIC) 2016.

Steven Ciobo … ‘significant export sales’

The program includes meetings, site visits and events focused on promoting Australia to Chinese businesses, students, tourists and consumers. AWIC will also help tourism and education providers explore new opportunities arising from the ChinaAustralia Free Trade Agreement. “It will also allow them to see first-hand how China’s transition to a consumer-driven economy is affecting demand for services like tourism and education, which are currently our top two services export earners,” Senator Colbeck said. •••


APRIL / MAY 2016

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Is your business ready for the world stage? The Export Council of Australia’s (ECA) has announced a series of upcoming workshops this month to help you grow your business overseas. The workshops are designed to help you build your capacity and capability to become a confident participant in the world of international business. Whether you’re just starting out on your international journey or you’re a seasoned professional you can follow the ECA’s pathway to international success. The program includes:

Are you ready to go global? This half-day workshop will cover the basic fundamentals required to access and prepare your business for entering global markets. The workshop has been created to help you to develop a successful international strategy and tools to identify global opportunities to ensure you are ready for international business success. VIC Date: Tuesday, April 12 Venue: Melbourne CBD Times: 9am – 2pm Register: Click here to register QLD Date: Tuesday, April 19 Venue: Brisbane CBD Times: 9am – 2pm Register: Click here to register WA Date: Wednesday, April 27 Venue: Perth CBD Times: 9am – 2pm Register: Click here to register Getting the documentation right Preparation of export documentation can be confusing, time consuming, costly and, unfortunately, prone to human error, but correct export documentation is vital for any exporter to transact business in an efficient and cost effective way. The ECA has developed a one-day workshop for companies looking to not only understand export

documentation requirements but who are also looking for assistance in training up their team to process documentation correctly and efficiently. VIC Date: Thursday, April 14 Venue: Melbourne CBD Times: 9am – 5pm Register: Click here to register WA Date: Monday, April 18 Venue: Perth CBD Times: 9am – 5pm Register: Click here to register NSW Date: Monday, April 27 Venue: Sydney CBD Times: 9am – 5pm Register: Click here to register QLD Date: Tuesday, April 28 Venue: Brisbane CBD Times: 9am – 5pm Register: Click here to register Marketing for international growth Doing business in international markets requires know-how and companies need to understand how to easily navigate the “how to finance for global growth”. This half-day workshop provides an overview of what you need to know when it comes to managing and preparing for global growth and also provides you with key contact information for experts in the field.


APRIL / MAY 2016

NSW Date: Wednesday, April 20 Venue: Sydney CBD Times: 9am – 2pm Register: Click here to register International payments and understanding documentary credits This workshop will help all importers or exporters to obtain essential information on how to use letters of credit as a safe payment method for handling overseas transactions. WA Date: Friday April, 18 Venue: Perth CBD Times: 9am – 5pm Register: Click here to register Pricing your product or service for international success Getting your international pricing strategy right is crucial to the success of your business. It is difficult to go back and renegotiate your price once this has been set and also you ultimately cannot risk potentially not getting paid. NSW Date: Wednesday, April 13 Venue: Sydney CBD Times: 9am – 5pm Register: Click here to register VIC Date: Thursday, April 21 Venue: Melbourne CBD Times: 9am – 5pm Register: Click here to register

// 5


Worrying trend: Overdue

payments on the rise in China Corporate payments continued to deteriorate in China last year, with eight out of 10 corporates experiencing overdue payments, a new survey has revealed.


he survey on corporate credit risk management, to which 1,000

Chinese companies responded, was conducted on behalf of Coface, a leading global credit insurance group. And Coface is forecasting GDP growth in China to slow to 6.5% this year – about 0.4% lower than the previous year. Businesses in China are facing increasing challenges, such as high leverage with steep costs of financing (despite monetary easing), low profitability (driven by large overcapacities in certain sectors) and volatility on the foreign exchange and stock markets. Coface, a global leader in credit insurance and risk management, does not expect non-payments And a higher percentage

will improve in China in the

a more prudent approach to

overdue payments in 2015

short term.

granting credit facilities to

(compared to 79.8% in 2014).

of respondents (about 10

Over 58 percent of these

percent) said that average

Last year, the average


firms also reported an

overdue periods have been

by China-based firms

with 80.6% of respondent

increase in the amount of

longer than 150 days.

decreased again, reflecting

companies experiencing


credit terms offered

And risks have increased,


APRIL / MAY 2016

Of companies surveyed,

// 6


‘Exporters to China should fasten their seatbelts and stay alert’

compared with the previous

the process of rebalancing


and low global demand.

• Chemicals

The authorities are

• Household electronics

implementing reforms

• Industrial electronics

needed to rebalance growth

• Textile-clothing

in favour of consumption

At the same time, automotive and transport

and services. Ms Wong says Australian

has stabilised, while the

exporters should be aware

long payments is putting

risk in the paper-wood and

of the increased risk of

increasing pressure on

pharmaceutical sectors has

overdue payments when

company financials.


trading with China.

Jackit Wong, a Coface

Coface warns that Chinese

“This could be a very

economist for the Asia-

firms that are suffering

difficult year for Australian

Pacific region, says the

from overcapacity and low

exporters that rely so much

results of the survey were

profits now have a higher

on China,” she says.

not surprising given the

probability of default.

slowdown in the Chinese economy.

And even though credit

Ms Wong believes Australian exporters should

growth is slowing, private

not abandon China as a

debt is continuing to grow

trading partner, but they

now facing an increasing

faster than GDP. China

should investigate ways to

risk of overdue payments

has not yet entered a

manage the risk.

and bad debts when trading

deleveraging process and

with China, she says.

the risks are increasing.

Australian exporters are

Outstanding debt held by

Should they be

the private non-financial

concerned? “Of course,” Ms Wong says.

sector reached 201% of GDP

“The best solution would be to find the right partner and hedge against the risk.” Factoring, she says is a logical option. This is where a business

“An increasing number of

in June 2015, compared to

exporters will be harmed.”

114% in June 2008 and 176%

sells its accounts

in June 2013.

receivable, or invoices, to

She advises exporters to China to “fasten their

China’s 6.9% GDP growth

seatbelts and stay alert.”

in 2015 was the lowest in

Ms Wong says goods

25 years, while Coface’s

a third party commercial financial company. This means a business can

exporters are facing a

forecast of 6.5% in 2016

receive cash more quickly

higher risk of overdue

would be another record.

than it would by waiting 30

payments than service

Momentum is on a downward trend, due to


to 60 days for a customer payment. •••

The survey identified nearly 18 percent have

construction, metals and

had to deal with ultra-long

IT-telecoms as the highest

overdue amounts (of more

risk sectors.

than 180 days) exceeding

The risk of overdue

5 percent of their annual

payments also increase in

turnover. The rise of ultra-

the following sectors in 2015


The Coface Group offers companies around the globe solutions to protect them against the risk of financial default of their clients, both on the domestic market and for export. Coface has been conducting the corporate credit management survey in China since 2003. The 2015 survey is the 13th edition.

APRIL / MAY 2016

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Three steps to save time and money on overseas payments Business owners all know there are some challenges of doing business overseas, especially with currency fluctuations between the time a deal is agreed and when payment is completed.


f you don’t have a hedging strategy you are often exposed to uncertainty and as Benjamin Franklin once said: “By failing to prepare, you are preparing to fail.” Whether you’re looking at a one-off transfer overseas

or importing/exporting hundreds of containers a year, using the right combination of payment and cash management strategies means you can improve cash flow and protect profits. 1. Save money on transfers. Most people and businesses will use their bank to make a money transfer as they’re probably unaware of alternatives that can make the process easier and save them a lot of money. You have

your margins. Next time you have an upcoming future expense ask

to be aware of real transaction costs on international

OFX about hedging and they can walk you through your

money transfers, as they are not always that transparent.

Forward Exchange Contracts or other products that may

When transferring funds internationally you have two fee

suit your needs.

structures – direct and indirect. Direct: Most banks charge a high upfront fee to process the transfer and receiving fees are charged by the bank you

3. Now create a strategy It’s important to look at your business needs and build a plan around it.

send to, if it’s sent internationally. Indirect: These are (hidden) costs in the exchange rate

First you should find out at what rate makes your

itself and known as the margin. Banks often have the

international trade worthwhile or unprofitable. This will give

largest margins and can be as high as 5 percent.

you a trading range that tells you when it’s a good time to

In comparison OFX (formerly OzForex) have minimal or no

lock in a rate or not. You will also need to work out what

direct fees and offer far better margins than banks, allowing

your cross-border payment needs are, both incoming and

you to save hundreds if not thousands when settling your

outgoing, and set your actions accordingly. This allows you to decide as and when you use a spot rate

international invoices.

(for imminent payments, due now) or hedge forward using 2. Hedging: Whilst this may sound complicated, hedging is actually quite easy to do and can provide some certainty

Forward Contracts (for future payments) when the rates are worthwhile. Now relax knowing your business has been de-risked and

in your costs. By taking out a Forward Exchange Contract (FEC) you can

focus on running your company. •••

fix the exchange rate at a fixed time in the future with just a 5 percent of the total amount you need. This will remove the exchange rate risk, give you piece of mind, and protect


For more information contact Jonathan Sermon from OFX directly (quote the code 2775) on +61 2 8667 9106 or jonathan.sermon@ or or simply REGISTER HERE to get started.

APRIL / MAY 2016

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Efic unveils its new

Small Business Export Loan


ith a lower Australian dollar and a host of new trade agreements in place, many small businesses are considering expanding operations internationally to boost growth. However, despite an apparently favourable export environment, many small to medium enterprises (SMEs) are still finding access to finance a key barrier. It’s this factor that ultimately prevents them from implementing export initiatives. In February this year, Efic’s SME Exporter Index* found that, of the more than 500 small businesses surveyed, more than half expected greater difficulty in sourcing financing solutions for their export endeavours in the year ahead. The survey also found that the smaller the business, the greater the difficulty accessing credit, with one in four SMEs reporting they’ve had new credit applications refused. Andrew Watson, Executive Director of Export Finance at Efic, says “Our new Small Business Export Loan has been developed specifically to meet the needs of small businesses with a turnover of less than $5 million per annum.”


*Efic’s SME Exporter Index, February 2016

Getting financing secured quickly is often essential for export contracts so a key feature of the product is that it is approved in as little as 7 business days. Applications can only be made online through EficDirect, Efic’s online application portal. “Small businesses are often time-poor, and the online application process allows them to complete an application at a time that suits them,” says Andrew Watson. Another key feature of the Small Business Export Loan is that it is unsecured, with the small business’s ability to repay the loan, rather than taking security, one of the aspects considered in the loan approval process. In addition to this, applying businesses will (amongst other things) need to show that they are unable to secure funding through their bank, and that the export product meets Australian content criteria. “At Efic, our objective is to help small businesses achieve export success“ says Andrew Watson. “We are confident that our new Small Business Export Loan will address some of the ‘access to finance’ issues that SMEs encounter today, and ultimately enable them to take on the world.”

APRIL / MAY 2016

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More SMEs look to overseas markets for expansion The number of Australian SMEs looking to expand their business overseas has grown by nearly 40 percent in the past 18 months, according to a major business survey.


cottish Pacific’s latest SME Growth Index found that 9.4 percent of SMEs surveyed were seeking overseas expansion in March this year, compared to 5.6 percent in September 2014.

And those looking at expansion both at home and

overseas, in the same timeframe, grew from 11.6 percent to 15.3 percent. “The proportion of growth SMEs seeking overseas geographic expansion, and a combination of domestic and overseas geographic expansion, is on the rise,” said Scottish Pacific CEO Mr Peter Langham said. The SME Growth Index also found that an alarming two thirds of Australia’s SME owners use personal finances to support their business. One in five of business owners survey admitted to regularly dipping into their own pockets to fund their business. And nearly 50 percent said they resort to using personal finances occasionally. This included using credit cards with high interest charges. Only 10 percent of SME owners had never settled

Peter Langham … ‘significant concerns’

business expenses using non-business sources. The Scottish Pacific SME Growth Index is a twice yearly look at the growth prospects and concerns of more than 1200 Australian small and medium sized business

because there were better funding options available to help SMEs grow. “How SMEs are funded has a significant bearing on

owners and CEOs. It was initiated by Scottish Pacific, the

operations, from how well they can manage cash flow to

largest specialist provider of working capital solutions for

the pace at which they can expand. It’s crucial to get it

SMEs in Australia and New Zealand.

right and not think too short term,” Mr Langham said.

Scottish Pacific CEO Mr Peter Langham said the findings on personal credit card use posed significant concerns,


“Personal finance may appeal from a convenience, speed and accessibility perspective – the downside is

APRIL / MAY 2016

// 10


that higher than necessary funding costs cut directly into margin, and personal financing can impact on lifestyle

great ideas but may not own any real estate.” Despite the rise of online and automated funding

and leave owners open to family conflict which can

solutions being offered for SMEs, he said it was worth

destabilise the business.

noting the high importance SME owners still place on

“I’d strongly encourage SMEs, whether product or service orientated businesses, to seek smarter funding options. Look beyond the banks as this is an active, innovative space trying to offer a better alternative.” Mr Langham said another significant finding was that

being able to talk directly to the lending decision maker. The funder should be an expert who can provide guidance and support, not just dollars. Since September 2014, the Scottish Pacific SME Growth Index has twice a year tracked the optimism for growth

SMEs were more than willing to pay higher rates to

of a range of small business across many industries in

obtain finance if it meant they didn’t have to provide real

Australia. “Of note is that the number of optimistic enterprises

estate security. “This reflects a growing awareness amongst SME

is relatively unchanged since we started the Index –

owners that putting the house on the line is no longer a

dipping 1.5 percent in March 2016 from the finding of 58.9

given and suggests openness to alternative, innovative

percent a year ago – yet the average revenue growth

funding solutions such as trade and debtor finance.

forecast in that time has contracted sharply from 6.7 to

“This is key for up and coming entrepreneurs who have


5.2 percent,” Mr Langham said. •••

APRIL / MAY 2016

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Services exports set to boom The need for professional expertise is now stronger than ever in maturing economies to Australia’s north – especially China and India.


nd Australian exporters are perfectly placed to service the growing demand. Department of Foreign Affairs and Trade statistics show services exports accounted for about 20 per cent of Australian exports

services exporters,” says Mr Hunter. “Business owners tell us that they don’t care too much about the country itself – they care about the market and prices, and regulation and red tape.” But Australian SMEs should not be deterred by

in 2014-15, even though services make up 80 per cent of

regulatory barriers, HSBC Australia head of global trade

our domestic economy.

and receivables Rohit Garg told The Australian.

Services exports increased 9.4 per cent in the year to

“It is not an excuse for doing nothing. “This is a time for services firms with existing

June 2015. This was fuelled by demand for education-related

relationships in Asia, especially in China, to be hanging in

travel services (14.5 per cent), personal travel services

there and building on those connections,” Mr Garg says.

excluding education (6.4 per cent), financial services

“It’s a good time for Australian services firms to consider

(25.4 per cent) and telecommunications, computer and

exporting. The opportunity is enormous.” The Australia-China Free Trade Agreement is one of the

information services (35.8 per cent). The government has attributed the growth to the transitioning of the Chinese economy from an industrialconstruction focus towards middle-class consumerism. Other contributing factors include the devaluing of

most comprehensive FTAs when it comes to services. However, its allowance of wholly owned Australian operations in China is limited by industry (software, building and cleaning services, real estate,

the Australian dollar and the recently signed free-trade

manufacturing services, environmental services and

agreements with our three biggest Asian trading partners

interpretation) or limited by territory, such as the

– Japan, Korea and China.

Shanghai Free Trade Zone (telecommunications,

It has opened opportunities for services firms, small and medium enterprises (SMEs) in particular, Export Finance and Insurance Corporation (Efic) chief executive Andrew Hunter told The Australian newspaper last month. Between 2012 and 2015, services exports grew 33 per

legal) and Beijing, Tianjin, Shanghai, Jiangsu, Fujian, Guangdong and Hainan for Australian medical services. “Whereas Australia’s gross domestic product is 80 per cent services, China’s services economy is still developing and contributes just 50 per cent of its GDP,” Mr Garg says.

cent, he said. “Regulation and red tape is the biggest trade barrier for


“The growth of the Chinese services sector is the next

APRIL / MAY 2016

// 12


big story in that country,” he says. “Twothirds of their economic growth now comes from the services sector, and services is something that Australia does very well.” Mr Garg says the commodity boom in Australia-China trade is not “over” in the true sense because the next phase of the commodities trade is the services that accompany the hard goods. “Australia doesn’t just have the

The written word can be crucial to export success


nnovation alone is not always enough to secure commercial success in a competitive globalised world economy. Another important factor of success is quality of finish,

which is often overlooked or undervalued.

opportunity to export dairy, meat and

According to BizTechWrite, it receives enquiries from

grains. China’s demand for these products

inventors and start-up companies that consider export

is growing, so they want expertise in

planning, product documentation and written language

logistics and cold chain logistics. It

translation as an afterthought.

isn’t just about buying milk, it’s about,

In worst case scenarios, some companies attempting to

‘How do I transport milk from A to B, at the right

export to Asia will spend over $AUD 25,000 on hotel costs

temperature, every day?’”

without having a local language document or having a

Managing supply chains for agriculture, food

poorly written technical data sheets in disjointed English.

and mining products is an expertise developed

Some even use Internet translation software, which is

in Australia over many years and it isn’t only the

more likely to attract ridicule than paying customers.

Chinese who need the expertise, he says.

For example, one Australian exporter did not translate

“India is now looming as a really big opportunity

a payment terms contract with an international customer

for Australia. Like China, they have many mouths to

ultimately missing important information that meant they

feed and they see the value in developing their own

had to wait over 120 days beyond the expected date for

agriculture and supply chains rather than relying on

payment. This led to an immense strain on cash flow.


Concise, well written, translated and illustrated product

Large countries such as India and China

documents and commercial contracts are crucial steps

understand that they need to attract expertise in

for ensuring business are treated with respect in different

key industries from countries such as Australia, he

export markets.

says. However, the deep and complex regulatory

BizTechWrite offers technical documentation, technical

arrangements in both of those countries cannot be

drawing, language translation, contract translation and

changed overnight.

export planning and their customers include some of the

“Services exporting is always more complex than

biggest Australian value-add exporters and start-ups. •••

goods, because it isn’t one transaction,” he says.

“You’re living and operating in that country.” The China-Australia Free Trade Agreement addresses services and makes material concessions to attract Australian companies to operate in China, he says. “Now we have the India FTA. There are no guarantees, but we know Andrew Robb has been visiting there a lot, and we know that the Indian government needs partnerships with expert firms, especially in the agricultural sector.” •••


APRIL / MAY 2016

// 13


Australian exporters set to drive services boom in Asia Long the poor cousin of goods exports, services continued their rise in 2015 on the back of lower trade barriers in Asia. Anthony Fensom


or the Turnbull government, the latest data

to around $9 billion, the United States up over 10 percent

makes happy reading in its push to transition

to $7 billion and Britain rising by 19 percent to nearly $5

the economy from the former mining boom to

billion. According to DFAT, services exports to China have risen

the so-called “ideas boom.” According to the Department of Foreign

Affairs and Trade (DFAT), services exports expanded by more than 9 percent to nearly $63 billion in fiscal 2015,

by 9.2 percent a year since fiscal 2010, with a 6.8 percent annual gain for US exports and 4.2 percent for Britain. Among the services sectors, education stood out, with

contrasting with a fall in the value of goods exports,

international student expenditure growing by 14.5 per

particularly minerals and fuels.

cent to a record of more than $18 billion. For calendar

Strong growth was recorded in the nation’s top three services exports markets, with China up nearly 18 percent


2015, the sector is estimated to have racked up more than $19 billion in exports, with education currently the top

APRIL / MAY 2016

// 14


services export and the third largest overall behind coal

secure a WTO-plus Trade in Services Agreement, which

and top-ranked iron ore.

involve 50 economies.”

Exports of business services rose by nearly 11 per cent

However, Australian businesses have been urged to take

to around $17 billion, with financial services increasing by

advantage of the competitive gains from the FTAs, or risk

25 percent to $3.5 billion and telecommunications and

losing an edge to rival exporters.

information services posting a 36 percent gain to $2.7 billion.

According to HSBC, only 19 per cent of Australian exporters are using FTAs, compared to 26 per cent of

The tourism sector also benefitted, with short-term

Asian competitors. Another study, AIBS 2015, showed that

international visitors to Australia rising by nearly 7 per

around 20 per cent of Australian exporters consider FTAs

cent to 7.1 million, and expenditure on personal travel

useful to their business, but nearly half were uncertain

other than education growing by 6 percent to almost $15

about whether such deals are applicable.

billion. The largest sources of visitors were New Zealand

With China engaged in 22 current or planned FTAs,

with 1.26 million tourists, China with 927,700 and Britain

Japan in 24, South Korea with 23 and India in 28,

with 666,200.

Australia’s underutilisation of FTAs could put exporters at

Commenting on the latest data, Trade Minister Steven Ciobo said expanding services exports “is a key trade policy focus for the government.” “As the economy transitions from the mining boom to the ideas boom, services will be a central element of Australia’s transition to a broader-based growth model, one that delivers more diversified sources of growth, higher levels of productivity and job creation,” he said. “There is tremendous scope for growth in our services exports, given services account for around 70 percent of our economy yet represent only about 20 per cent of our total exports.”

a commercial disadvantage.

‘Among the services sectors, education stood out’

Typical reasons given for such lack of use include a lack of understanding of FTAs and their benefits, a lack of awareness of the Rules of Origin

requirements, compliance issues and a belief that accessing the benefits is “too costly and burdensome.” In a bid to ensure Australian exporters benefit, DFAT and Austrade have rolled out a series of information

While Australia’s relative geographic isolation “makes

seminars across the nation on the latest North Asian FTAs,

it harder to deliver services compared to countries

including a promotional campaign and grants for industry

that border other nations,” DFAT argued that traditional


measures underestimate the contribution of Australia’s services industries to total exports.

For details of the latest seminars, visit: http://www.

According to DFAT, services’ contribution to exports on a value-added basis exceeds 40 percent. The figure

seminars With the mining boom now a distant memory, Australia’s

may be even greater when considering that two-thirds of

services exports are crucial in ensuring the nation

Australian services provided to the world are delivered

continues its record-breaking run of economic growth.

by Australian foreign affiliates abroad instead of via direct

For services exporters, it could be the start of what the

export, the department said.

government has proclaimed in its innovation agenda as

The Trade Minister said recent free trade agreements

“the most exciting time in Australia’s history.” •••

(FTAs) with North Asian trading partners had opened up further opportunities for services exporters, with a further lowering of trade barriers eyed. “Following the entry into force of the China, Japan and Korea FTAs, Australia is pursuing early ratification of the Trans-Pacific Partnership Agreement,” Mr Ciobo said.

Anthony Fensom is an experienced business writer and communication consultant with more than a decade’s experience in the financial and media industries of Australia and Asia.

“We are also actively participating in negotiations to


APRIL / MAY 2016

// 15


Australia keen to expand trade with Philippines Australia is expecting two-way trade with the Philippines to further expand this year, after sustained growth over the last five years.


ustralian Ambassador to the Philippines Amanda Gorely says trade between the two

countries the Philippines sends exports. Australia is looking toward sustained trade growth

countries has been steadily increasing in recent

and investment links with the Philippines and views the

years and the trend is set to continue.

economic reforms implemented by President Aquino as

“Trade between Australia and the Philippines is at $4.2

billion and increasing fast at the rate of 10 percent over the last five years,” Ms Gorely told BusinessMirror in a recent interview. Beef, lamb, wine, wheat, consulting services, services and engineering are Australia’s main exports to the Philippines. Also, there are 200 Australian companies now operating in the Philippines. They employ more than 30,000 Filipinos

‘Trade is at $4.2bn and increasing fast’

positive steps towards greater cooperation and building investor confidence. The Philippines is also a signatory in the ASEANAustralia-New Zealand Free Trade Area, which opens and

creates new opportunities for its 600 million population and combined economic output of $.265 trillion.

in the business-process outsourcing, finance, oil and gas, This agreement will:

manufacturing and infrastructure sectors. On the Philippine side, main exports to Australia include

• Progressively reduce tariffs

heating and cooling equipment, electrical machinery and

• Facilitate movement of goods through flexible rules

parts, mechanical machinery, pumps, coconut and rubber

of origin


• Simplify custom procedures

And Philippine companies like International Container

• Liberalise trade barriers

Terminal Services Inc., Monde Nissin and San Miguel

• Facilitate movement of individuals engaged in trade

Corp., have a strong presence in Australia.

and investment

The Philippines ranks Australia among its top 20 import sources, while Australia is also in the top 20 among


• Install an investor-state dispute settlement mechanism. •••

APRIL / MAY 2016

// 16

focus on asia

China’s economic slowdown: are you at risk? Tim Michael


Michael Sarpi … ‘not every exporter is the same’

hina’s economy continues to underperform

companies and individuals to secure competitive

and its stockmarket remains volatile.

foreign exchange rates.

But Chinese consumers are still spending strongly – and that spells good news for

Australian exporters, says financial expert Michael Sarpi. Mr Sarpi, the Chief Operating Officer for Compass

Boutique Forex solutions providers like Compass offer a more personalised service than major banks – with highly competitive rates due to lower overheads. And with the Australian dollar trading about .75c

Global Markets, a company specialising in foreign

against its US counterpart, it’s a good climate for most

exchange payments, hedging and advisory services, says

export sectors.

domestic sales in China remain strong.

So where is the dollar heading in 2016?

“So that is good for the majority of Australian exporters,

Mr Sarpi, a former senior executive with the

with the exception perhaps of commodities such as iron

Commonwealth Bank, predicts the downward trend

ore,” Mr Sarpi says.

will continue over the next 12 months.

“It is more industry and infrastructure where China has

“The US currency will remain the dominant currency

slowed in recent times.”

in that period,” he says.

And Mr Sarpi says consumer spending in China is unlikely to slow in the short term. “I think they will continue to spend,” he says confidently. “We are talking about wealth that has been developed over the past 10-20 years or so – and the Chinese middle class continues to grow. “So there will still be a strong need for consumer

‘Chinese consumers will continue to spend’

“The market was expecting further rate immediately in the US that didn’t eventuate. “But I still believe there will be at least two rate hikes this year

products. It could be the next growth area coming out of

… and by the end of the year the dollar will slip back


below .70c as the US dollar strengthens.” •••

Mr Sarpi says the new China-Australia Free Trade Agreement (ChAFTA) is also helping to boost trade between the two nations. “China is not an easy market to get in to,” he says. Financial companies such as Compass Global Markets can assist exporters to crack the challenging, yet lucrative Chinese market. “We have a dedicated Asia Desk that can connect exporters with key trading partners in China, Malaysia, Singapore and Indonesia.” Mr Sarpi says when exporting to Asia it is vital for


For more information visit:

APRIL / MAY 2016

// 17


Dressed for success: Why Aussie fashion designers should target China Hannah Bretherton

Last month the editor in chief of Vogue China got me thinking.


had never before put “fashion” and

that time there were no Chinese

one million Chinese visitors to

“China” in the same column.


Australia agree with her, associating

When I talk with friends about shopping destinations in Asia

the list will run from Hong Kong to Singapore to Tokyo or Kuala Lumpur

Currently valued at $85 billion it’s

Australia with “good food, wine, local

only now that the Chinese fashion

cuisine and produce” according to

industry can take centre stage.

survey data by Tourism Australia.

When asked about the Australian

With Chinese tourists ranking these

before anyone even contemplates

fashion industry Cheung said it wasn’t

commodities as the second most


really on the collective radar of her

important factor when choosing

Angelica Cheung admits China

readers. But she was quick to point

any holiday destination, it dawned

was late to the party – the Chinese

out how impressed she was during

on me that Cheung’s comments

subsidiary of the world’s most

her visit by Australia’s dining scene.

weren’t necessarily that off-topic.

iconic fashion magazine was only

Observing a knowledgeable yet

When thinking about the huge

laid-back feel in hospitality service,

market potential in China, Australian

as well as the finest, unrecognizable

businesses need to go back to basics

not fashionably, late meant Cheung

ingredients in fusion cuisine, Cheung

and highlight a uniquely Aussie

and her team made it just in time to

admired what she thought of as a

competitive advantage that speaks to

join the back of the catwalk.

unique and quintessentially “Aussie”

Chinese consumers.

established in 2005. As it turns out being strategically, if

China’s fashion market has tripled since Vogue China’s inception. At

The latest figures on the Chinese

offering. It seems that 76 percent of the


APRIL / MAY 2016

middle class make Australian

// 18


opportunities in China more conspicuous than a fake Louis Vuitton bag. China’s middle class now outnumbers the US equivalent by roughly 17 million. In 2015, Chinese tourists in Australia spent $7.7 billion, up from $3.3 billion five years earlier. Currently only six percent of the Chinese population holds a passport. It’s not difficult to see the scope for growth. Back to the F word. The typical Chinese fashion consumer is depicted as buying high-end, heavily branded luxury apparel. But Cheung underlined the growing Rather than be depressed about

sophistication in the Chinese market;

exports, the Australian wool industry

the Chinese fashion consumer is

is looking at ways to innovate and

China’s move from manufacturing to

increasingly willing to take risks.

adapt to a market that is moving from

consumption, Australian industries

Why does that matter for Australia?

manufacturing towards consumption.

should see this massive market as

It makes room for high-quality

Clothing expenditure in China is

its biggest economic opportunity

Australian designers who may not

projected to grow by 11 percent

yet. It can move from exporting raw

have the same name value as the

annually over the next five years,

resources to producing innovative

perennial Italian or French labels.

more than two and a half times that

high-quality, distinctively Australian

These designers appeal to the

of the US Australian Wool Innovation

products and services – whether they

consumer who sees an “Australian

is developing highly advanced

may be in the form of fashion, food or

Made” label they know they can trust.

technologies in wool processing

anything else that might be financially

Alice McCall for example became

enabling lightweight, waterproof


the first Australian designer to open

outdoor wear as well as breathable

a stand-alone boutique in China last

sportswear to be made from 100

year, a move that could pave the way

percent wool.

for others.

Yves Saint Laurent once said that “fashion fades but style is eternal.” Australian producers and service

This appeals to the Chinese market

providers will always have their

on two levels – one is the huge

competitors but no other country can

China’s slower growth coupled with

growth in the sportswear market

replicate the genuinely Australian

Australia’s post-mining boom anxiety

and the other is the demand for

brand. The lesson from Vogue China

disorder has led many Australians

environmentally sustainable products.

was that demand for any industry can

to prematurely don black mourning

Eighty percent of Chinese consumers

wax and wane but true Aussie style

suits. But if they swap their synthetics

think of wool as a sustainably

will never fade. •••

for more natural fibres they might find

produced commodity and Australian

there are many industries in Australia

wool is seen as the best in the world.

just starting to find some momentum.

This is not to simplify the complex

China buys 80 percent of Australian

challenges facing the wool sector, but

wool exports.

to highlight the simple lesson at the

The doom and gloom about

Although much of this is in raw

Hannah Bretherton is a Researcher at the Australia-China Relations Institute, UTS.

heart of this story.


APRIL / MAY 2016

// 19


Benjamin Sun

How Chinese influencers can boost your brand Chinese influencers can be a valuable tool for Australian brands looking to deepen their relationship with the Chinese market.

help Australian businesses boost their brand. The behaviour of Chinese online consumers means influencers have a great power, possibly more so than their Australian counterparts. With 46 per cent of Chinese online consumers reporting they find out about overseas products from friends, and another 34 per cent discovering new overseas goods from social media, according to research from Think China, the reach of micro-influencer isn’t so little after all.


The reviews of friends and trusted

hether they’re a

households around China, working

influencers are particularly important

“mummy blogger”

with an influencer can strengthen your

in China due to the abundance of

who shares their

relationship with Chinese consumers

counterfeits products. With consumers

thoughts on the

and expose your business to a broader

often coming across fake clothing,


handbags, and even counterfeit

latest products as a hobby, or a glamourous film celebrity known in

These are the ways an influencer can


APRIL / MAY 2016

food, a trusted recommendation or

// 20


warning from a fellow customer can give a consumer the confidence to try your product or even abandon their shopping trolley.

‘Celebrity influencers can have a large impact on your brand’

The wariness of Chinese consumers mean influencers can help Australian

Being an influencer isn’t a full-time

to receive samples of your products in lieu of payment.

SMEs gain trust in their brand and

job for micro-influencers – most do

products, which is especially important

it as hobby. They genuinely love the

Working with a professional KOL

if they are beginning exports to China

products, sharing their opinions, and

can be expensive, depending on the

for the first time or are relatively

trying new brands.

size of their fans and the commitment

unknown in the region.

Since micro-influencers are genuine

required. For example, providing a

fans of the products they review and

product mention or simple product

influencer” may have only 500 friends

don’t rely on being an influencer alone

review on one social media platform

on social media platform WeChat, their

for their income, it is often simpler to

will be less expensive than requesting

relationships with these influencers are

negotiate a deal which suits both your

multiple mentions and instructional

more likely to be stronger. A micro-

business and the blogger.

videos on multiple platforms as this

Although a so-called “micro-

influencer’s contacts are more likely to

On the other hand, self-professed

will require a larger investment of

be “offline” relationships, such as those

KOLs are more likely to make a

their time. However, for larger brands

with family, friends, colleagues, and

career out of becoming an influencer.

looking to make the greatest impact

classmates, and as result, their opinion

Although this means they may have

in the Chinese market, working

can have an equal, if not greater,

more experience in reviewing goods

with Chinese celebrities, such as

impact than that of a more prominent

and dealing with brands, you can

engagements from actors, musicians

celebrity influencer.

bet that they are also working with a

or socialites, can attract plenty of

number of other businesses – some

attention to your business.

One of the most underappreciated types of micro-influencers are “mummy bloggers,” those that review baby and pregnancy products. These women are powerful as they often have a tight-night community of

‘There are influencers for every budget’

Engaging with influencers will have a greater impact for certain products and industries.

friends going through a similar life

of which may be your competitors.

Women are more likely to be swayed

stage of pregnancy or raising a young

Working with a “professional” KOL

by influencers and reviews, with 37

family. With 85 per cent of Chinese

means running the risk of having them

per cent of females reporting a peer

mums naming safety as their top

recommend your brand this week, and

influence as a reason for buying

concern when buying baby goods

your rival’s the next.

an overseas product, compared to

For the majority of Australian SMEs

only 29 per cent of men. With this

CTR, achieving trust from this group is

looking to enter the China market for

in mind, it can be more effective to

particularly important.

the first time, their budget is often a

use influencers for products that

chief concern. Since micro-influencers

are purchased by women, such

can have a large impact on your brand.

don’t rely on being an influencer

as vitamins, beauty products, or

Even a small engagement such as a

as their main source of income,

pregnancy goods. •••

repost or mention on Chinese micro-

arrangements with them are often

blogging platform Weibo can amass

much cheaper, and as a result, are

a significant number of new fans,

often a better choice for brands with a

assisting a brand to broaden their reach

limited budget.

online according to research from

More prominent celebrity influencers

to an untapped wider audience.

Many micro-influencers will be happy


APRIL / MAY 2016

Benjamin Sun is a director and co-founder of Think China, an Australian agency specialising in marketing and analysis to help customers access the Chinese market.

// 21


Call for national brand on all Australian food exports Mining magnate Andrew Forrest wants a national brand and logo to identify Australian food exports – particularly for the lucrative Chinese market.


r Forrest, who addressed the Boao Forum on China’s Hainan

Island last month, said Australian food suppliers are missing opportunities in China because of poor branding. “This is because we insist on having our own little corporate brands or our little State brands

‘The power of consistent branding, both here and overseas, cannot be overstated’

competing with each other,” he said. Mr Forrest said a host of Chinese business leaders had urged Australia to export food and produce under one brand and logo. “We might be reasonably sized fish in a little pond in Australia but get up here and no one has ever heard of you,” he said. “What they are really interested in is are you Australian or not and is your product genuinely Australian.

haven’t heard of your

a strong legal system

was not in danger of running

“Their message is ‘it is

company, we haven’t heard

and excellent quarantine

out of food and that it was a

Australia we have heard

that much about your State,


mistake to think that much

about since school, we

but we all know Australia

haven’t heard of your

to be clean, green, well-

industry association, we

managed, reliable, have


“That is what they want to buy.” Mr Forrest said the world

APRIL / MAY 2016

of China’s population did not already eat well. “There will be no shortage

// 22


of food. There will be a

brand that worked to the

overseas, cannot be

Australian produce in export

shortage of quality food,

benefit of that country’s

overstated,” Mr Harrison

markets for 30 years with

reliable food, of source-

agriculture sector.


great success, so there is a

identifiable and sustainably

The Australian Made

Mr Harrison said the

pivotal role for the symbol to

Campaign has supported Mr

already well-established

play in any ‘Brand Australia’

Forrest’s call for a national

Australian Made, Australian

strategy,” Mr Harrison said.

the Federal Government

brand and logo on food

Grown logo should form

“Australia enjoys a strong

was close to endorsing a


part of the food labelling

reputation internationally for

Australian Made Campaign

system envisaged by

its clean, green environment

supplied food,” he said. Mr Forrest said he hoped

national brand and logo.

Chief Executive, Mr Harrison

Mr Forrest, to provide

and high standards for

Colbeck, who was at the

said Australia’s food and

consumers in markets

the production of food, so

forum, has said he will lead

agriculture sectors should

everywhere with better

it makes sense to place

the push for an Australian

work closely together to

surety of the true origin

a strong emphasis on

brand to sell food and a

promote their products

of the food they are

promoting the Australian

range of other products.

using a “Brand Australia”


brand and defending

Tourism Minister Richard

Senator Colbeck cited 100% Pure New Zealand as an example of a national

“The iconic green-and-

strategy. “The power of consistent branding, both here and


the authenticity of food

gold kangaroo logo has

supplied from this country.”

been clearly identifying


APRIL / MAY 2016

// 23


Qatar Airways launches new service to Sydney Qatar Airways has launched direct flights between Doha and Sydney – the airline’s third gateway in Australia.

Officer Kerrie Mather. “It will also foster trade, providing greater air cargo capacity and access to the Middle East. Australian exports to Doha grew by 23 per cent last year, and the State of Qatar’s high demand for livestock, cereal, meat, dairy products and crops provides a significant opportunity for Australian exporters.” Qatar Airways’ hub, Hamad International Airport in Doha, offers passengers travelling from Sydney a comfortable and efficient transit with an average connection time of just 90 minutes. The luxurious and modern airport, less than two years


old, has more than 40,000

he new service is

thinking, Mr Al Baker

exporters to Qatar Airways

sqm of retail space and

expected to bring

said. “These qualities are

Cargo’s global network,

restaurants including more

an additional $240

reflected in the strength of

providing 84 tonnes of cargo

than 70 retail and 30 food

million to the local

our current trade, totalling

capacity per week.

and beverage outlets, as

economy each year.

$1.56 billion in 2014. We look

Qatar Airways Cargo is the

well as a 25m swimming pool, gym, hotel and spa.

forward to building on this

third largest international

announced a new service

success and to going places

cargo carrier, already

between Dohar and


carrying 301 tonnes of

board the Qatar Airways

The airline has also

Adelaide later this year. Qatar Airways Group Chief Executive, His Excellency Akbar Al Baker said the new services would double the airline’s capacity to and from

Passengers travelling on

freight in the belly hold of its

Boeing 777 to and from

serving Australia since 2009

passenger aircraft into and

Sydney in Business Class

when it began flights

out of Perth and Melbourne

will be treated to fully-flat

each week.

beds as well as an on-

Qatar Airways has been

from Melbourne. In 2012 it added flights from Perth. The award-winning airline

“Qatar Airways’ new daily

demand à la carte menu

service will boost tourism,

service at any time during the flight.

Australia in the first half of

will fly a Boeing 777-300

providing an additional


daily from Sydney to Doha

245,000 seats per year,

connecting Australian

generating an estimated

the state-of the-art Oryx

similarities in our cultures

passengers to its global

3,000 jobs and contributing

One entertainment system,

and home countries – Qatar,

network of more than 150

more than $240 million to

with more than 3,000

like Australia, is known for


the Australian economy, said

entertainment options on

Sydney Airport Managing

individual screens in all

Director and Chief Executive

classes. •••

“There are many

its hospitality, its warm welcome and its forward

And the new service will connect Australia’s leading


APRIL / MAY 2016

The aircraft also features

// 24


Germ free flights: Boeing develops self-cleaning toilets

Boeing has developed a self-cleaning toilet prototype that uses ultraviolet (UV) light to sanitise its surfaces.


ngineers and designers estimate that 99.99 percent of germs are killed with all surfaces disinfected in just three seconds.

even helps eliminate odours.” The cleaning system, which will require further study before it can be offered to airlines, would lift and close the

The lavatory uses Far UV light, which is different

toilet seat by itself so that all surfaces are exposed during

from the UVA or UVB light in tanning beds, and is not

the cleaning cycle. The design also incorporates a hands-

harmful to people.

free tap, soap dispenser, rubbish bin flap, toilet lid and seat

Nevertheless, the Far UV light would be activated only when the lavatory is unoccupied.

and a hand dryer. A hands-free door latch and a vacuum vent system for the floor are also under study, all to keep

“We’re trying to alleviate the anxiety we all face when using a restroom that gets a workout during a flight,” said Jeanne Yu, Boeing Commercial Airplanes Director of

the lavatory as hygienic as possible between scheduled cleaning. “Some of the touchless features are already in use on

Environmental Performance. “In the prototype, we position

some Boeing airplanes today,” said Yu. “But combining that

the lights throughout the lavatory so that it floods the touch

with the new UV sanitising will give passengers even more

surfaces like the toilet seat, sink and countertops with the

protection from germs and make for an even better flying

UV light once a person exits the lavatory. This sanitising

experience.” •••


APRIL / MAY 2016

// 25


Expressions of interest called for Port Melbourne sale After an intense political battle the sale of Port Melbourne, Australia’s biggest port, has now begun.


he sale – one of the nation's largest privatisations – is expected to reap the Victorian government

major port facilities. The Port of Melbourne will be sold as a 50-year lease, with the proceeds to be allocated to roads and

more than $6 billion. VIC Treasurer Tim Pallas launched the formal

transaction process for the 50-year lease of the port last

infrastructure projects across Victoria. A new $200 million Agriculture Infrastructure and Jobs Fund will also be established.

month, calling for expressions of interest. The deal is expected to be finalised before the middle of

"This will drive economic growth in our regions, boosting exports and supporting Victorian farmers from paddock to

next year. Overseas bidders, including those connected to foreign governments, will be welcome to bid, but they will be

port,” Mr Pallas said. "The lease will make our port even better, increasing

subject to the approval of the Foreign Investment Review

efficiencies and competitiveness, and will reinforce

Board. The sale of Darwin's port to a Chinese company

Victoria's position as the freight and logistics capital of the

earlier this year sparked controversy and concern from


the United States, underlining the strategic importance of


The government expects to announce a preferred

APRIL / MAY 2016

// 26


leaseholder before the end of 2016. The deal should be

meaning it will expire in about 2031. A source close to the bidding process said there would be

finalised by mid 2017. "We're moving to market quickly because of the strong

political interest in the sell-off, nationally and internationally,

bidder interest in the Port of Melbourne and we're

as Melbourne is Australia's biggest port, but added "it is

confident the lease will deliver significant, long-term

less strategically sensitive than the port in Darwin". The sale of the Port of Darwin to Chinese investors

economic benefit to Victorians," Mr Pallas said.

attracted widespread criticism, including from Australian

It is understood that major Australian super and investment funds, including IFM and Hastings, are likely to bid for the port. International consortiums are also

Defence officials. Following the controversy, the federal government

likely to express interest. Morgan Stanley is advising the

directed the Foreign Investment Review Board to review

government on the process.

what are known as "critical infrastructure assets" sold by

The bill enabling the leasing of the port was passed by the Victorian Parliament on March 10, following a stand-off with

state and territory governments to private investors. The Victorian Chamber of Commerce and Industry said the lease of the port will have a significant impact on

the opposition. The Labor government eventually agreed to dramatically

Victoria’s economic future.

water down a controversial clause exposing the state to a

“The estimated $6 billion to be generated is essential to

compensation payment to the future owner if a rival port is

progress our state’s infrastructure priorities,” the Chamber

built that undercuts its business.

said in a recent statement.

Labor previously insisted the compensation regime apply

“The port will continue to be a significant piece of infrastructure to Victoria as container throughput is

for at least 30 years. But under the new agreement, the compensation regime only applies for 15 years from the day the port is sold,


expected to more than double to nearly six million units per annum in the next 15 years.” •••

APRIL / MAY 2016

// 27


Logistics Executive Group promotes Australian business in Jafza

Done deal … (from left) Adil Al Zarooni, SVP – Global Sales, Khalid Al Marzooki Senior Manager - Asia Pacific Region Jafza and Global CEO Kim Winter formalise the agreement

Jebel Ali Free Zone (Jafza) is one of the world’s leading free zones.


ocated between a top container terminal (Jebel Ali Port) and a top international airport (Al Maktoum

International Airport), it is the region’s most efficient logistics hub. The flagship free zone entity of Dubai has always been an attractive destination for Australian companies looking to expand their business in the Middle East, North Africa, South Asia (MENASA) region. An Australian company, Logistics Executive Group, was recently chosen to represent Jafza in the ANZ region for the third consecutive year. Established in 1999 Logistics Executive Group has a well-

South, South East and North Asia

food & beverage, electronics and

established global office network.


electrical, readymade garments

The company has been operating in

Making the announcement, Khalid

group and motor vehicles and auto

Dubai since 2004 and boasts offices in

Al Marzooqi, Senior Manager-Asia

Sydney, Melbourne, Perth, Singapore,

Pacific Region said 55 Australian

Hong Kong, Shanghai, Chennai,

and New Zealand companies are

geographical advantages that give

Mumbai and London.

represented in Jafza with trade worth

inroads to the regions such as the

US$262 million in 2014.

Middle East, Africa and North Asia

Logistics Executive Group has developed a strong reputation

“We have some of the renowned

spare parts.” Al Marzooqi said Jafza has

regions, including the Jebel Ali Port,

for assisting Australian and new

companies operating in various

Dubai International and Al Maktoum

companies to establish and grow

sectors such as equipment and

International Airports.

businesses in the Middle East, Africa,

machines, building materials trading,


APRIL / MAY 2016

“We have been attracting

// 28


and the West, contributes 20 per cent of Dubai’s economy. It is well connected to all corners of the world by land, sea and air. In 2014 the Free Zone generated trade worth US$96.5 billion. The Free Zone offers world-class infrastructure, logistics, zero tax regime and a 100 per cent foreign ownership to mention a few of the advantage. Jafza’s product offerings include plots of land, warehouses, showrooms, customised development solutions, offices, retail companies from Australia to set up

to set up an operating base here,” he

outlets, a business park and on-site

manufacturing and processing units


residences. •••

providing them with all the support

Jafza, the bridge between the East

Cargo theft remains top supply chain risk in 2016


In Europe, disruptions in trade caused by the ISIS terrorist group clearly highlighted the link between terrorism and the supply chain. Border controls in France following

upply chains across the

increase in cargo truck hijackings

the November attacks in Paris are

world face a number of

over the last year, with thieves using

estimated to have cost the Belgian

challenges and one of

high levels of violence and switching

shipping industry $3.5 million.

the biggest threats to the

from targeting only high value goods

global supply chain is cargo theft. Last year, according to BSI’s Supply

to also targeting lower value items. Daring vehicle shipment thefts have

Terrorist-linked smuggling rings were also identified to be colluding between Spain and the Middle East,

Chain Risk Exposure Evaluation

become increasingly commonplace

the groups illegally transporting

Network, damages caused by cargo

in China, with a recent series of in-

shipments of stolen electronics,

theft amounted to $22.6 billion – and

transit vehicle thefts occurring along

drugs, weapons and other

that figure is estimated to grow by a

the busy G45 highway.


further $1 billion this year.

More sophisticated attacks were

In addition to theft, business

observed in India throughout 2015,

continuity-related threats such as

particularly in China, Germany, India,

where criminal gangs masterminded

extreme weather events and political

Mexico, South Africa, and the US, BSI

new techniques to steal goods

and social unrest, led to significant

says in its latest report.

without breaking customs seals in

losses for individual companies and

order to avoid detection – a major

national economies last year.

There are increased concerns

BSI says most cargo thefts in 2015

The top five natural disasters in

could be attributed to security

risk for companies participating in


international supply chain security

2015 caused a collective $33 billion


of damage to businesses. •••

South Africa has seen a 30%


APRIL / MAY 2016

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Agriculture on track to become Australia’s top export earner tim michael

Australia’s farm exports are forecast to reach nearly $45 billion this financial year.


hat’s a 37 per cent increase since 2010-11 –

(FTAs) with our three major markets in North Asia, and

and the figures are edging closer to Australia’s

eventually the TPP.

top export earner – mining-iron ore – which is

And Asia is not the only success story.

currently tracking at $49 billion.

“Last year US demand for Australian beef was so high

It also surpasses the Number 2 on the list – coal at $37


that export volumes exceeded the US’s WTO beef quota,” Senator Colbeck said.

Addressing the recent ABARES Outlook conference in

“Our producers had recourse to the special beef quota

Canberra, the Minister for Assisting the Minister for Trade

negotiated under the Australia-US Free Trade Agreement

and Investment, Senator Richard Colbeck, said Agriculture

for the first time since it came into force.”

is now recognised as one of Australia’s five “super-growth” sectors.

Senator Colbeck said Australia is perfectly positioned to grow its exports in key sectors, with access to more than

Other sectors include tourism, international education, gas/energy and wealth management.

600 million people in neighbouring countries alone. “Of great significance is that this population has age

“The size of these five collectively match that of mining at its peak,” said Senator Colbeck.

profiles that align to our service strengths, particularly tourism and education, and a growing middle class

“Together these sectors are predicted to add more than $250 billion (to the Australian economy) over the next 20 years.

seeking what we have to offer and that’s protein/food, energy and wealth management,” he said. “The increasing middle class of our major trading

“With the right tail winds there is a very real possibility we could see much more than that added to the economy and there is every reason to believe now is the time to capitalise on Australia's advantage.”

partners means the demand for protein is increasingly rapidly. “The world wants what we have got. And the more we play, the stronger we get.”

Senator Colbeck told the conference exports to Asian markets, in particular, are expected to grow even more as a result of the entry into force of free trade agreements


Free trade agreements are now in place with Korea, Japan and China. And the Trans-Pacific Partnership trade pact, signed by

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About the conference

‘The world wants what we have got’

The ABARES Outlook conference is Australia’s premier information and networking forum for public and private sector decision-makers in the agriculture sector. The conference was held in Canberra on March 1-2.

Australia and 11 other countries earlier this year, would

trade agreements and strong international demand

provide further benefit to exporters.

are expected to provide ongoing support for Australian

“The Government has recognised the importance of active implementation and follow-up of these FTAs,” said

agriculture in world markets. Ms Schneider told the ABARES Outlook Conference

Senator Colbeck. “It’s not simply enough to negotiate a

these factors would underpin future opportunities for

great agreement – we need to explain to producers how to

agriculture in export markets. “The weaker dollar has supported average export

use it. “Accordingly, we have invested significant resources in

prices in Australian dollar terms across the board, and

explaining to business the opportunities these agreements

contributed to favourable farmgate prices, she said. “We’re

have opened up, through FTA information seminars across

forecasting the gross value of farm production will reach

the country, and through the creation of an FTA Portal,

a record high of more than $60 billion in 2016-17 and

which provides easy access to clear technical information

support exports of around $45 billion. “The recent trade agreements finalised with major

on how to use FTAs.” Senator Colbeck said good progress is also being made

regional trading partners and new market access protocols

in bilateral negotiations with India and “reinvigorated”

will provide opportunities in both new and established

negotiations Indonesia.


And the Government is also moving toward establishing a comprehensive, high-quality FTA with the European

Ms Schneider also discussed the domestic factors affecting farm performance and trade opportunities. “On the home front the challenge is increasing

Union. (EU). “This is important for the agriculture sector, as the EU is the only one of our top ten export markets with which we

productivity to remain competitive in global markets,” Ms Schneider said.

have not already negotiated an FTA or with which we do

“We’re likely to face more intense competition in global

not have FTA negotiations in train,” Senator Colbeck said.

markets from countries such as Brazil and Argentina, which

ABARES Executive Director, Karen Schneider said a relatively weak Australian dollar, newly signed free


have invested significantly in reducing costs and boosting productivity in their beef and grains industries.” •••

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Bicycle manufacturing keeps export wheels turning in SA

‘Titanium is a beautiful material’

Caleb Radford

A high-end bike manufacturing industry is emerging in South Australia as the state’s traditional car making sector winds down.


outique manufacturers Astir Frames, Bouwmeester Composites and Finch Composites are taking advantage of South Australia’s strong manufacturing history and

access to university testing facilities to gain a foothold in the potentially lucrative cycling market. The global bicycle industry was worth $US48 billion in 2014, driven by the sale of about 133 million bikes. It is expected to reach an estimated $65 billion by 2019 on the back of rising fuel prices and growing traffic congestion. General Motors Holden’s car manufacturing plant in Adelaide will close next year, costing thousands of jobs not only at the plant but also at component manufacturers that have supplied it for decades. Astir Frames specialises in long-lasting tailor made titanium bicycles. The bikes are built using parts from around the world and assembled in Adelaide, South Australia’s capital city. Founder James Moros said the decline of the automotive industry in the state was opening doors for him. “If there are factory machines that are idle, I’ll ask to use them. I’m not scavenging, but I’m utilising available equipment that other people aren’t using at


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competitive against some of the big overseas

the time,” he said.

brands that predominantly have their wheels

“Titanium is a beautiful material. It is precious, low maintenance, and you can leave Moros has exhibited at the Tour Down Under for the past two years, and said it was a great

showing promise. The company is working on prototype carbon wheels equipped with disc brakes for

opportunity to showcase his brand. “People who

‘A wheel set sells for $3500’

made in Asia.” Finch Composites is another company

it out for years without painting it.”

bought my bikes

racing bikes. The UCI is allowing the use of disc brakes

saw me and

in 2016 and if this testing phase is a success,

talked about how

disc brakes will be permitted across the sport

pleased they were

from 2017.

with my bikes. It’s a testament that

Finch is looking to partner with car component manufacturers who are looking to

the bikes that I made for them are working

shore up new business ahead of the Holden

fantastically,” Moro said.


South Australia has hosted the southern

Co-founder Ben Tripodi said he was able to

hemisphere’s biggest cycling race the Tour

work with one of the local universities to test

Down Under since 1999. It has also produced

the quality of the products.

many of the nation’s best riders including

“We partnered with Flinders University

Rohan Dennis, Stuart O’Grady and Jack

last year and we had access to their


computational fluid dynamics (CFD), which

Astir Frames sold 30 bikes last year and is on track to increase sales by more than 30 per

allowed us to simulate many different wind conditions,” he said. Tripodi said disc brakes increased stopping

cent this year. Bouwmeester Composites is another company that has found success in South

performance for cyclists and the extra responsiveness made them safer. “It allows them to brake a lot later so they

Australia. Since the launch of its product at the

can keep their maximum speed a lot longer

end of 2014, sales have been in line with

into a corner, particularly downhill,” he said.

the forecasts with 50 per cent of sales

“Our target market really is professionals like lawyers and accountants who like to

contributed coming from exports.

ride on the weekend but have the money to

The company manufactures high performance carbon fibre wheels for off-road

spend and demand the highest quality and

racing bikes.

professional racers.

Founder and CEO Mello Bouwmeester

“We believe the majority of them we can

brought the composites work to Adelaide

sell in Australia however, we do really want to

after previously manufacturing overseas.

target the American market.”

“We wanted to have total control over our

Prototype manufacture and final testing of

manufacturing and intellectual property,” he

Finch’s carbon wheels is expected to take


place in the coming months with the first

“Manufacturing in SA allows for us to speed up our R&D cycle and also maintain strict

production run coming towards the end of the year. •••

quality control practices. Source: The Lead

“A wheel set sells for $3500. Which is


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1 September 9 China eCommerce Seminar Series 2015 Host: Austrade Where: National Wine Centre of AustraliaExhibition Hall Cnr of Botanic & Hackney Rds Adelaide Ph: 13 28 78



September 15

September 20-23

October 7

Industry & Innovation Workshop

Fine Food Australia Trade Show

Premier of Queensland Export Awards 2015

Host: Department of Industry Where: ANU Commons Building – Function Room Ground Floor Cnr Barry Drive & Marcus Clarke St, Canberra. Ph: 02 6125 0228

Where: Sydney Showground Sydney Olympic Park Ph: 03 9261 4500

Where: Brisbane Convention & Exhibition Centre Plaza Ballroom South Bank, Brisbane Ph: 07 3514 3134

7 October 28 Premier of NSW Export Awards 2015 au/events

Where: The Star, 80 Pyrmont St. Pyrmont, Sydney Ph: 02 9251 6492

2 September 10 Australia-Germany Business Conference Host: German-Australian Chamber of Industry & Commerce Where: International Chamber House, Conference Centre L5 121 Exhibition Centre, Melbourne Ph: 03 9027 5618

5 October 6 EMDG Coaching/ Information Session, Brisbane Host: Austrade Where: Level 16, 307 Queen St Brisbane Ph: 13 28 78

8 October 30 November 1

Good Food Show

Where: Brisbane Convention & Exhibition Centre, Merivale St South Brisbane Ph: 03 9261 4500


APRIL / MAY 2016

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April 25-29

Expomin 2016 - Santiago, Chile Mining & minerals exhibition Where: Huechuraba, Santiago, Chile

1 April 11-15

Australia Week in China 2016

April 13-15

May 10-13

China Luxury Travel Showcase 2016 Where: Shanghai, China au/

April 12-15 Food&HotelAsia (FHA) & ProWine Asia (PWA) 2016 Venue: Singapore Expo

May 19-21

Seoul Food & Hotel 2016 Food & beverage, hospitality

Australian Culinary Trails 2016 Flavours of Australia

Where: Seoul, Korea

Where: Bali, Indonesia events


April 25-27

Australian Agribusiness Research and Innovation Showcase 2016 Where: Hanoi, Vietnam

May 31-June 3 Broadcast Asia Technology Exhibition & Conference Where: Marina Bay Sands, Singapore


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APRIL / MAY 2016

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Dynamic Export E-magazine Apr/May 2016  

Latest news for Australian exporters

Dynamic Export E-magazine Apr/May 2016  

Latest news for Australian exporters