GREAT EDITION 9
for the
STATE 18 November 2019 | businessnews.com.au
12-PAGE LIFTOUT
TIME & PLACE Why WA is the place for resources P3 Seven big developments for tourism P8 Lobster journeys from ocean to plate P10
How can WA engage the region’s brightest minds? P4 Partners Hazel Tan Student, University of Western Australia Photo: Gabriel Oliveira
EDITION 9
Time and place The Indo-Pacific is undergoing profound development, and WA is positioning itself to contribute with our resources, food, education and as a destination.
OUR PARTNERS – HELPING US SHAPE GREAT FOR THE STATE Peter Chong General Manager (China practice WA) KPMG
It’s expected there will be a seismic shift towards Asia as the world’s economic centre during the 21st century. This will provide huge potential for Western Australia to not only reboot its resources sector, but to diversify its economy across tourism, international students, and a range of high-quality goods and services now in demand by Asia’s increasingly sophisticated and rapidly expanding middle-class population. With Asia expected to account for 50 per cent of the world’s GDP and 40 per cent of the world’s consumption by 2040, the time is now for WA to strengthen its connectivity with our closest neighbours through trade, investments, cultural and people to people links. (See page 6)
Professor Shamit Saggar Director UWA Public Policy Institute
GREAT for the STATE Final 2019 edition Cultural growth December 16
Perth is ideally positioned to connect Australia and Western Australia to the Indian Ocean region, but has traditionally concentrated its attention on Canberra and the cities on the eastern seaboard. The University of Western Australia is at the forefront of a new Indian Ocean focus, with its UWA 2030 vision and strategic plan for 2020-25 reflecting a number of initiatives to drive such an ambition. The UWA Public Policy Institute has been established to examine common and pressing policy challenges that many countries across the Indian Ocean region will have to address. They include climate change, maritime security, urbanisation, free trade opportunities, energy security, food security, frozen conflicts and grievances, multilateralism and intergovernmental collaboration. (See page 7)
Professor Peter Leedman
Often in Perth we hear that it’s hard to attract international experts to our shores and that we are so far away from the action that Western Australia misses out.
Director Harry Perkins Institute of Medical Research
However, sometimes we allow cliches to frame perspectives more than reality. In medical research, for example, what is evident is that WA has laboratories filled with a veritable league of nations. Experts from across the globe typically collaborate in science and share research findings, but add into the mix the facilities that we have here and their co-location on large medical campuses, and scientists are attracted to move to Perth. With major teaching hospitals situated alongside research institutes, clinical trials facilities, pathology centres, and other health services and universities nearby integrating student learning into a range of professions, Perth is very appealing to international researchers. Next year, a new chair in melanoma research is being established in Perth, with a professor from Sweden to fill the position – and he’s not alone on the journey. (See page 8)
Rob Slocombe Group CEO RAC Photo: LILA PHOTO
Where we live, work, socialise and the way in which we move around are all heavily influenced by the planning and design of our cities. But do we really understand what Western Australians truly value in their communities, or how they really feel about the future? Have we heard their opinions about the challenges and opportunities faced by Perth and Peel as it grows to a population of 3.5 million? (See page 9)
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GREAT for the STATE
Boom brings mutual benefit 2000 Shanghai 2018
Photo by Zhang Kaiyv/Unsplash
Perth and Shanghai have developed dramatically in recent decades, and former premier Colin Barnett says a strong relationship between WA and China has enabled the state’s success. Story by Matt Mckenzie
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Photo by Sean Lim/Unsplash
2001 Perth 2019
Photo from Business News archives
Photo by Gabriel Oliveira
hinese economic growth has brought significant changes to the lives of millions in that country, and there’s no doubting the degree to which Western Australia’s provision of the building blocks of development has transformed Perth. Almost all of Shanghai’s 20 tallest buildings were built in the past two decades, according to statistical service Emporis (see photos). Nationally, half a billion Chinese lived below the extreme poverty line in 1999, but the number is now 10 million, according to the latest World Bank data. The portion of the population in urban areas lifted from 47 per cent in 2008 to 57.4 per cent in 2016, with roughly 179 million more people living in cities. This big build drove prolific demand for raw materials, fed by WA. China was manufacturing about 129 million tonnes of steel annually in 2000, which rocketed to 871mtpa in 2017. Iron ore production in WA rose from less than 200mtpa to about 800mtpa in that period, with sales rising to $78 billion annually. The production growth was enabled by an enormous investment boom, with the mining industry’s capital stock lifting more than eightfold over two decades to be $437 billion in June 2018. The state’s population grew 42 per cent to be 2.6 million, as workers were drawn west.
Disposable income nearly tripled for the average person to be nearly $54,000 in June 2018. Meanwhile, the face of Perth has changed. Projects such as the new museum, the stadium and Elizabeth Quay show Perth has matured. Former premier Colin Barnett told Business News it was after a Council of Australian Governments meeting in 2009 he had decided to step on the accelerator of development. “Sometimes it’s the little things that affect you,” Mr Barnett said. “I noted how Brisbane had changed … getting on the plane on the way back, I came to the realisation of how far Perth had fallen behind. “It was a one-in-100 year transformation of Perth.”
Relationship building WA’s wealth of natural resources and proximity to Asia made it one of the biggest beneficiaries of development on the continent, but the state has relied on more than luck. In the 1960s, Japanese steel mills underwrote the development of iron ore mining in the Pilbara through contracts with Rio Tinto and BHP. Similarly, in the 1980s, it was Japanese utilities that underpinned the North West Shelf LNG project. Continued on page 12
CHANGE As Chinese cities such as Shanghai have transformed, so has Perth changed. 18 November 2019 | businessnews.com.au
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GREAT for the STATE
Gearing up for Indo-Pacific’s bright minds International education is a $1.9 billion industry for WA, and there are plenty of innovative ideas about how to build the sector. Story by Matt Mckenzie
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Photo by Gabriel Oliveira
arge investments to attract bright minds and a sharpened focus on collaboration show Western Australians have high ambitions for engagement in the region as an education destination. Navitas founder Rod Jones, who also serves as the chair of industry body Study Perth, said there was genuine momentum building in international education. “We’ve done a lot in the past 18 months, two years, to position the state far better than it has been,” Mr Jones told Business News. “All of the educational institutions have come together in a way I haven’t seen in 25 years.
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“Everyone is going at it with the right spirit … there’s a lot of optimism.” Mr Jones took the role as chair in February 2018, with the government also announcing a $2 million funding injection, which was followed up with another $4.5 million in May 2019. “There’s never really been support for international education by any government,” he said. Mr Jones said Premier Mark McGowan had recognised the sector’s value, and led the charge. But he acknowledged a drop in student numbers in the past two years. The big impediment to a strong student inflow had been the state government’s 2017 change to
18 November 2019 | businessnews.com.au
remove Perth as a region in the Regional Sponsored Migration Scheme, Mr Jones said. That move was reversed in recent weeks, meaning students will now again be eligible for an additional year in Australia on a post-study work visa. International student commencements had fallen by 11 per cent to just more than 16,000 in the three years to June 2019. Perth Airport chief executive Kevin Brown said he welcomed the policy change because WA would be disadvantaged without the ability to provide work experience. International students bring more to the state than just their fees, Mr Brown said.
“These students are excellent advocates of the destination, their families come to visit, their friends come to visit them,” he said. “For every international student, there is the equivalent of four airline seats (sold annually).” Mr Brown said he would be working to improve collaboration between hospitality operators, through the Australian Hotels Association and student groups to generate part-time work opportunities. University of Western Australia deputy vice chancellor Tayyeb Shah agreed the migration change would make WA more attractive as a student destination, although he said UWA had not
been affected as much as others. UWA’s international student revenue grew about 56 per cent to $150 million in the three years to 2018, the strongest growth of any public university in WA. But Mr Shah, who was lured to Perth from King’s College London earlier this year, said his strategy would be broader than just bringing in students. Instead, he would look to build reciprocal partnerships. The focus would be in the Indian Ocean area, where Mr Shah said UWA had a strategic advantage, and particularly on research collaborations with foreign institutions, which were generally weighted higher on academic indices.
GREAT for the STATE
It’s about the environment, something I can feel and experience every day - William William
SEEKING WISDOM William William (left) and Hazel Tan are international students at UWA.
“We’re (also) looking at how we get our students out there, through the Colombo Plan … and similarly looking at ways we can work with industry to develop collaborative PhDs, internship opportunities,” he said. “We’ve got a prime opportunity to forge excellent links with India, countries in East Africa, Indonesia, Singapore, Malaysia.” The New Colombo Plan is a federal government initiative to support Australian students studying at institutions around the Indo-Pacific region, designed to boost cultural competency. Incoming researchers and students from overseas also benefited the university community as a whole, Mr Shah said.
“Those students form a network for the university overseas, and benefit local students by building their international understanding through classroom diversity,” he said. One idea under consideration was to partner with a South African university and a major miner to deliver a program where students spend time on both continents. Mr Shah said WA could do more to explore the potential of its sister-state relationships, which include East Java in Indonesia and Andhra Pradesh in India. Those regions would be a good place to start when working with foreign institutions and industries, he said.
Dynamic approaches East Java provides a good case in point. Local universities are collaborating through the WA East Java Consortium to bring Indonesian students to Perth to visit all five campuses, adding to existing tours operated by individual universities. Curtin University, which was the top international student revenue earner in WA in 2018 at $159 million, has tried a couple of quirky programs. In July, Curtin named a scholarship after the host of Chinese dating show If You Are the One – the Meng Fei Innovative Fu-
ture Leader Scholarship, scoring publicity on Chinese social and mainstream media. The university has built links through offering professorships to famous entrepreneurs such as fashion maestro Jimmy Choo and venture capitalist Bill Tai, while leveraging the successes of former graduates such as John Lo, an executive of Chinese technology business Tencent. Perhaps the biggest move to build WA’s educational engagement was the development of the Forrest Fellowships. The program was created by a $65 million donation in 2014 from Andrew and Nicola Forrest’s Minderoo Foundation. Attracting bright researchers
to WA has big benefits for the community. Copenhagen-born fellow Frederik Seersholm is studying the impact of climate change and human activity on biodiversity at Curtin’s Ancient DNA lab. At Murdoch University, Seattle-born Karissa Lear is studying how climate change is affecting local freshwater sawfish. Giovanni Polverino is at UWA, collaborating with New York University, developing robotic fish that protect Australian species from others that have been introduced to the ecosystem. The teams are training an artificial intelligence program Continued on page 6
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GREAT for the STATE
Continued from page 5
enabling the robot fish to differentiate between local species and invaders, with the robots built to look like predators of the invasive species. Dr Polverino said WA was a perfect place to research invasive species because the local ecosystem was unique and so well preserved.
Why Perth? A recent report by consultancy QS shined a light on what drives Asian students in choosing a university, with cost, availability of scholarships, and measurements of quality such as rankings, prime factors. When picking a destination city, about 47 per cent of responders in Beijing said safety was the top determinant, as did 42 per cent in Jakarta. The survey said parents and education agents were highly influential in decisions. About 75 per cent of international enrolments across Australia’s education sector come through agents, according to federal government research. UWA masters student Hazel
Tan’s story highlights some of these factors. “I wanted to study something related to life sciences,” Ms Tan said. “The agent suggested Australia because there’s a lot of research and a lot of niche majors not available in Asia.” In life sciences fields, UWA ranks 31st for human biological sciences on the Academic Ranking of World Universities. Overall, UWA ranks 99th in the world, with Curtin in the 201-300 bracket, and Murdoch and Edith Cowan University between 701 and 800, meaning all are in the top 10 per cent globally. But there were other big selling points for Ms Tan, who studied a Bachelor of Science and is now working on a Masters in Physiology. One was the campus, one of Australia’s oldest. “It’s very different where I come from (Singapore),” Ms Tan said. “It’s city and high skyline … here I see so much sky.” Perth’s steady pace of life gave more time to focus on studying, she said.
All of the educational institutions have come together in a way I haven’t seen in 25 years - Rod Jones
And there was a level of influence from her dad, who studied at Curtin, although Ms Tan said her parents had been shocked how much the city had developed when they visited recently. William William picked up a scholarship from the Indonesian government to study a Masters
of Strategic Communication at UWA. Mr William said he chose the university because of the quality and proximity to Asia. “The teaching method, I find it’s a good room and opportunity for discussion with the lecturer,” he said.
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At the frontline of the Asian Century The rise of Asia in the 21st century will be the biggest trade, investment, social and cultural opportunity for Western Australians. We are fortunate to be the Australian state that is located closest geographically to Asia and in the same time zone with our largest trading partners. The Western Australian Government, knowing the shift in the world’s economic centre to Asia this century for Western Australians’ future prosperity, recently released Western Australia’s Asian Engagement Strategy 2019 – 2030.[1] The facts speak for themselves. Our State’s merchandise exports to Asia increased more than five times from $24 billion to $129 billion between 2004 and 2018. Asia now accounts for about 70% of international students and about 50% of international visitors to Western Australia. Investment from Asia also accounts for a substantial portion of inbound foreign investments to Western Australia. But this huge Asian potential for Western Australia belies even greater changes in Asia that are taking place this century. Asia is on course to account for 50% of the world’s GDP and 40% of the world’s consumption by 2040.[2] Within this seismic shift, Asian countries, while highly
diverse, are integrating among themselves faster than anyone expected. 52% of Asia’s trade today is already intraregional, compared to 41% for NAFTA. This suggests that supply chains in Asia will become even shorter and more importantly, located within the region. The recent commitment of 15 Asian countries including Australia to implement the Regional Comprehensive Economic Partnership (RCEP) will drive this integration further. The burgeoning middle classes in Asia will also be more demanding and sophisticated, with the purchasing power to pay for high quality goods and services, and travelling more within the Asian region. The rise and integration of Asia is a golden opportunity for Western Australia to grow and diversify our economy, and become even more integrated with Asia through trade, investments, cultural and people to people links. For Western Australia, the time is now and the place is Asia. Peter Chong General Manager (China practice WA) KPMG
[1] Government of Western Australia (2019). Western Australia’s Asian Engagement Strategy 2019-2030. [2] McKinsey Global Institute (July 2019). Asia’s future is now.
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ADVANCING Navitas founder Rod Jones now chairs Study Perth. Photo by Attila Csaszar
GREAT for the STATE
$158.6m
TAKEOFF Kevin Brown says international students are a big driver of visitors to WA. Photo by Attila Csaszar
Curtin international student revenue 2018
“The distances between the lecturer and the students are not that wide, unlike some Asian countries, here we’re quite equal.” That meant students could more easily speak their minds, which he said would be a major draw card for his compatriots, who valued the freedom and relaxed attitude in Australia. Perth was also a good place to start a family or raise children. “It’s about the environment, something I can feel and experience every day,” he said. The data backs Mr William up. Earlier this year, the Life in Australia survey by Ipsos found that inner Perth was the most livable metropolitan region in the country.
The tertiary education sector is embracing this, with accommodation developments in Northbridge such as Campus Perth and The Boulevard. Murdoch University and UWA are also pursuing city campuses, where they will join Curtin University and Central Queensland University, the latter of which opened in 2017. Eva Chye, who specialises in international services trade at a major professional services firm, originally came to Perth as an international student from Singapore. Ms Chye said her father had also studied in WA, and the natural environment, safety and pace of life were attractors. “When students come to Aus-
tralia for as serious study experience, Perth is just the right balance of city life and quietness, less distraction,” she said. The other benefit of a moderate size was that international students were encouraged to interact with locals in a way that was less common in really big cohorts on the east coast, Ms Chye said. But she said WA would need to step up on this front to match jurisdictions such as the United States, where local students usually move cities and stay with international students in residential colleges, making integration easier. Recent moves towards group assignments would also support integration, Ms Chye said.
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UWA spearheads our 21st century focus on the Indian Ocean
The great city of Perth has long been drained by having to focus its attention on the national capital and the eastern seaboard. And yet it sits at the fulcrum of the wider Indian Ocean Rim. This means we are ideally positioned to not just connect Australia and WA to the Indian Ocean region but, in addition,
we serve as an ideal launch point for knitting together our future as a littoral society of the Indian Ocean. The University of Western Australia is at the forefront of a new Indian Ocean focus, placing this at the heart of its decadal vision, UWA 2030, and also its strategic plan for 2020-25. This is re-
flected in a number of initiatives to drive that ambition. To begin with, the UWA Public Policy Institute has been established to examine common and pressing policy challenges that many countries across the Indian Ocean region will have to address. These are wide-ranging and substantial such as climate change, maritime security, urbanisation, free trade opportunities, energy security, food security, frozen conflicts and grievances, multilateralism, intergovernmental collaboration, and so forth. The UWA Australia-India Institute and the UWA Australia-Indonesia Centre have postdoctoral researchers examining contemporary India and Indonesia that will provide a better, shared understanding for Australians of these fastmoving economies. The UWA Africa Research and Engagement Centre is building new academic exchange and collaboration opportunities with the 22 countries of the Indian Ocean Rim Association. And the much-respected Perth USAsia Centre provides a steady source of expert knowledge about much of the region.
In 2020 UWA is also proposing a major thought leadership program for future political, business, non-profit and cultural leaders of the Indian Ocean Rim. The impetus for this is to grow the capabilities of these emerging leaders and to ensure that Perth rapidly becomes a go-to place for knowledge and insights about the Indian Ocean as a whole. UWA sees its role as facilitating that journey, leading Australia’s partnership with modern states and cities across the region that will be at the forefront of future globalisation. That means seeing Perth in the intellectual, commercial and cultural company of Mumbai, Kolkata, Durban, Singapore, Jakarta and Colombo. Professor Shamit Saggar Director, UWA Public Policy Institute
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GREAT for the STATE
Seven developments that built brand Perth Major recent investments and fresh ideas have added to WA’s traditional tourist attractions and natural beauty. Story by Matt Mckenzie
Perth Stadium
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Australians love sport, whether playing or watching, and the new Perth Stadium takes our national obsession to the next level. Earlier this year, the venue won the Prix Versailles Sport Award for the world’s most beautiful stadium. More than 120,000 people travelled from outside Perth to visit the venue in its first year, according to the operators. With 1.4 kilometres of lighting embedded into the facade, the arena has a uniquely colourful presence on the Swan River. It has already hosted several major sporting fixtures, including visits from the Manchester United and Chelsea soccer clubs.
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Perth Stadiu Photo by Al
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exandre Gou
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veia
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The benefits of close proximity HEN the U.S Department of Defence wanted a trial of a new drug that could possibly benefit their soldiers in the field, they did a global search for somewhere that offered quality drug trials and had expert eye doctors and researchers. Where they landed state’s children’s hospital, the was Perth. Linear Clinical Telethon Kids Institute (TKI), Research and the Lions Eye the Ralph Sarich NeurosciInstitute (LEI) met the brief. ence Research Institute, state Both are internationally pathology laboratories and recognised and they opernumerous other health serate out of adjacent buildings, vices. even sharing some research Colocation means the mafacilities within the Harry jor diseases affecting children Perkins Institute of Medical and adults are researched and Research. treated on one large campus. It’s a QEII hospital campus Such a comprehensive success story. health campus attracts interLinear, which runs firstnational medical experts and in-human drug and new leading researchers to our treatment trials for some of shores. the world’s largest pharmaBoth the TKI and the ceutical companies is on the Harry Perkins Institute often same campus as the LEI, the acknowledge the benefits of Harry Perkins Institute, a being able to attract to Perth November hospital, 2019 | businessnews.com.au 8 major 18teaching the some of the world’s best.
A case in point is the new single cell sequencing centre for research on advanced cancer that will officially open next year. TKI and the Harry Perkins Institute will jointly house multi-million dollar equipment that will analyse patient tumours and contribute to individualised treatment plans. Melanoma is another example. WA’s approach to this deadly disease, which now has very good treatment outcomes for some, but not all patients, delivers the best options for patients by expediting the advice process and coordinating treatment plans.
The WA Kirkbride Melanoma Advisory Service at the Harry Perkins Institute brings together dermatologists, plastic surgeons, researchers, pathologists and oncologists to give coordinated advice to GPs and their patients. Early next year a world expert in Melanoma is moving to Perth from Sweden, partly lured by this successful model that brings together all the specialists and links patient cases to research. Professor Jonas Nilsson is taking up the inaugural Chair in Melanoma. He is currently the Director of the Sahlgrenska Cancer Center in Gothenburg, Swe-
den and he will bring to Perth three experts who will be a part of a new laboratory at the Perkins. His team focuses on altering immune cells outside a patient’s body so the enhanced immune cells can be reintroduced in large numbers. It’s a right time, right place story. Perth’s high standard of research and range of facilities helped seal the deal for this Swedish expert.
GREAT for the STATE
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Elizabeth Quay & Swan Bell Tower After four years of construction and $440 million, the Elizabeth Quay riverside renewal project has emerged as a focal point of central Perth. The quay features a water park, a ferry terminal, the Spanda artwork and pedestrian bridge, with plans for $2 billion of adjacent development projects. It has also served as a hub for
cultural events and concerts, such as Perth Festival. One element of the quay has been around since 2000, the Swan Bell Tower, which features 12 bells from the famous London church St Martin-inthe-Fields. The Bell Tower had about 17,000 international visitors in the 2019 financial year.
Hotels and resorts There has been a boom in the construction of stylish hotels during the past decade, led by Crown Towers at Burswood. The casino complex underwent a $1.7 billion, 10-year redevelopment, with 500 rooms in the new Crown Towers hotel. Crown’s VIP program, which is in large part driven by clients from outside WA, earned
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Amelia Park Winery
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about $103 million in the 2018 financial year. In the city, there was the Westin Hotel at Hibernia Place and Como the Treasury at the state buildings, both luxury developments supplemented by dining precincts. Other big developments included the QT Hotel on Barrack Street, and Alex Hotel.
Fashion, 5 retail and an activated city International brands such as H&M and Uniqlo have staked out spots in Perth during the past decade, while the Raine Square development highlights the presence of luxury retailers. The Perth Fashion Festival has operated for 21 years, and showcases internationally successful local brands such as Morrison, Ae’lkemi and Empire Rose. The city is abuzz with activity on summer nights, with hawkers’ markets, street markets, Perth Festival, Fringe Festival, and the Christmas Lights Trail. Perth is slowly achieving progress on improving opening hours in retail, with Sunday trading commencing in 2012.
Fremantle
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Fremantle has been reenergised in recent decades, almost two centuries after settlers arrived. The port city is the second most popular locale for international visitors in WA, with about 68,000 tourist visits annually. Fremantle is surely the cultural heart of the Perth region, with a bustling strip filled with tourist crowds, buskers and locals every weekend, even at a time when street malls in other parts of Perth are struggling. There are at least 12 arts venues in Fremantle, with art walking tours a popular attraction. One major work is Marcus Canning’s Rainbow Sea Container, a 66-tonne statue. There’s also the 40-metre Tourist Wheel, which opened in 2013.
Culinary destination Perth’s food and beverage scene has developed dramatically in the past decade. There have been events such as Festival Fromage celebrating cheese, the WA Cider & Pork Festival, the upcoming Espresso Martini Festival, and the Western Australia Gourmet Escape.
The city’s restaurant scene has evolved, with new high-end offerings and more venues offering top-quality produce at accessible prices. Bars have specialised in gin, whiskey or vodka, while a local craft beer scene has flourished. Regionally, visitors can tour wineries or truffle farms such as Amelia Park Winery.
Rainbow Sea Containers
City link & Yagan Square
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Bookending William Street with Elizabeth Quay, Yagan Square was the final stage of a project to sink the railway line west of Perth station. The square is nestled next to the Horseshoe Bridge, with bars, a food court and an amphitheatre. A giant Wirin statue towers over visitors, with the open spaces used for more than 200 events in the year to June, including markets, pop-ups and the Pride March. In the precinct nearby, there has been a renewal of the laneways in Chinatown, the creation of Kings Square, and the construction of RAC Arena, which opened in 2012.
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Is urban planning hearing the voice of the community? Recently 800 residents from across the metropolitan area took part in RAC’s Urban Planning and Connected Communities survey, exploring how planning influences our daily lives. The survey found support for more housing diversity and choice, but planning must ensure our communities remain great places to live. People want to be connected, be part of a community, close to shopping centres, essential services and local amenities. Access to public transport remains a high priority and affordable services a must. While higher density apartment buildings are considered most suitable in and around the Perth CBD and major activity centres, there is support for medium
density developments of between one and four storeys, around train stations, shopping centres, smaller suburban activity centres and along high frequency corridors. While being open to the benefits of increasing density, there remains the underlying worry about its impacts. While 55 per cent feel more infill should be built in Perth and Peel to better manage congestion and improve access to a range of transport options, concerns remain about the impact of increased local traffic, overcrowding, noise, and a reduction in privacy. Clearly planning and development decisions can have major repercussions. It is important to work with local communities to understand their concerns. With a case for change, an
engaged community, and a way forward, clearly the time to address these challenges is now — before they develop into an urgent and reactive necessity. The goal is to ensure that decisions about urban development lead to density done well. This means planning and designing developments at the right scale, at the right time, and ultimately in the right space. Rob Slocombe Group CEO, RAC
18 November 2019 | businessnews.com.au
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1 Lobster is caught and delivered on the coast. Photo: Geraldton Fishermen’s Co-operative
Hard work, a lean supply chain and premium quality help make WA lobster a popular delicacy in China. Story by Matt Mckenzie
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From ocean to plate, it’s favoured in Asia 2 It is then placed in tanks at the Welshpool export facility. Photo: Gabriel Oliveira
$500m Economic value of lobster industry to WA economy, 2017 Source: ACIL Allen
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eter Stanich has loved lobster fishing for as long as he can remember, braving early starts and long days on the ocean. “There’s been nothing else I’ve ever wanted to do,” Mr Stanich told Business News. His family owns one of the 226 boats that fishes for western rock lobster off the Western Australian coast, and while both Mr Stanich’s father and grandfather were lobster fishers, he said there had been a dramatic shift for the industry in recent years, with a massive new market growing in China. Mandurah-based Mr Stanich meets his three crew at the boat at 2:30am, and they head out to sea. They can spend anywhere between 10 to 16 hours on the ocean, four to five days a week. “I like the quiet,” Mr Stanich said. “I like the phone not ringing. “It’s you and your boat and your crew.” According to ACIL Allen, the lobster industry added about $500 million of economic value to the WA economy in the 2017 financial year, directly employing 878 full-time equivalent roles. Mr Stanich said he was particularly proud of one of those 878. “I’ve got one guy, he’s been with me 14 years,” he said. “He left school at 14, he’s been with me ever since. “I don’t think he looks like he’s going to go anywhere, he’s part of the family.” When Mr Stanich’s crew returns to shore, the lobster change hands to Geraldton Fishermen’s Co-operative, which eventually takes them to markets such as China, Japan and the US. The lobster are trucked from receival points along the coast to a new export facility in Welshpool. Chief executive Matt Rutter told Business News the cooperative had invested more than $20 million in the facility, which was commissioned in 2017. The 4,000 square metre premises can hold up to 220 tonnes of lobster while the seafood rests for periods of at least four days. Mr Rutter said refrigerated tanks helped maintain the seafood at optimum quality, while having a hub close to the airport lowered supply chain costs.
The cooperative moves about 60 per cent of the lobster caught in WA, and more than 90 per cent is sent overseas. Most flies to China, sent live to 12 cities. That means direct flights from Perth to China were significant for the cooperative, Mr Rutter said. It had strongly advocated for China Eastern Airlines’ trial of flights from Perth to Shanghai starting in January next year, in addition to the existing China Southern Airlines direct route to Guangzhou. Once the crates arrive, they are auctioned via an online portal to a group of 100 customers, including Shenzhen Datang Food Company. That company has worked with the cooperative since October 2018 and distributes the lobster to venues such as the Shangri-La Hotel chain. Datang general manager Mengqiu Tang told Business News his customers were full of praise for the WA lobster, which fetched up to $300 per kilogram on the plate.
Colossal China Total Chinese seafood imports reportedly grew 44 per cent year on year to be $US11.9 billion in 2018. In 2004, WA earned about $40 million revenue from lobster exports to China, while in 2014, that number was more than $300 million, a big rise in demand that reflects broader trends in Chinese society as the level of wealth grows. Around the middle of that period, the management of the western rock lobster fishery was changed and production levels dialled down to ensure long-term sustainability. In 2015, the China Australia Free Trade Agreement started, leading to a further surge in exports. It also meant companies like the cooperative could enter China directly rather than via other countries in a so-called grey market. The combination of strong demand and a quota-managed fishery means the cooperative takes an unusual tack when navigating the Chinese market, because in-
GREAT for the STATE
creasing the amount caught is not an option. Mr Rutter said about 12 million lobster were shipped to China annually. “More and more Chinese are affluent enough to afford lobster,” he said. “It’s very much a niche market. “The challenge for us is to increase the value of the product … we can’t necessarily increase supply but we can increase value.” That means making lobster a premium offering, highlighting the quality and the fishery’s sustainability certification. For Mr Stanich, the FTA was a big win. “Things look good, a lot better since we’ve had a free trade agreement [with China],” Mr Stanich said. “We’re getting into more places in China … there are more options to sell the product. “I’m planning on expanding my business “Trying to buy more quota, with a bit of optimism around, good strong markets, people are planning now to start spending money, building boats, that’s a snowball effect of an industry going well. “I’d like to upgrade my boat.” Other seafood producers had also felt the benefits of the FTA with China. Ocean Grown Abalone founder Brad Adams said it had boosted his aquaculture business. OGA harvested 55 tonnes of abalone in 2018-19 from its Augusta ocean ranch, with 90 per cent of the company’s product headed to Asia and more than half to China. “Considering what it was like five years ago, it’s been a quantum change,” Mr Adams said. “Five years ago the borders were closed, product was being smuggled, it was losing its brand identity. “There’s no tariffs any more. “It was a total game changer.” There are expansion plans in train, too, with Mr Adams saying he was confident about the market. A 500t land-based hatchery in Esperance is in the pipeline, with a concept study completed in early November. Mr Adams said it would create 60 jobs.
Hungry for growth Many foods make their way from WA to the state’s northern neighbours. Fremantle-based Austral Fisheries sold its first shipment of carbon neutral fish to Chinese companies Hai Bao International
and Sunkfa International, and USbased Mark Foods, in June 2016. In the Pilbara, Singaporean retail magnate Bruce Cheung is planning a big expansion of Pardoo Beef Corporation, hoping to lift cattle numbers from 11,000 head in 2015 to 100,000 in 2030. Pardoo has begun irrigating land at the Pardoo Station, creating green circles against an arid backdrop to feed a bigger herd. Mr Cheung has also brought in a famed Japanese expert in Wagyu genetics, Shogo Takeda, to help breed the best-quality animals. Brownes Dairy and Kailis Bros have been acquired by Chinese businesses. After Shanghai Ground Food Tech bought Brownes in November 2017, the company has stepped up sales to China, with 800t of cheese reportedly shipped north in the 2019 season. KB Food came under the control of Legend Holdings in 2016, which planned to develop Chinese and other international markets.
3 Packed for the journey. Photo: Gabriel Oliveira
The challenge for us is to increase the value of the product … we can’t necessarily increase supply but we can increase value
Incoming Seafood can also be a tourism attraction. Indian Ocean Rock Lobster general manager Peter House said the company’s Lobster Shack restaurant in Cervantes could seat up to 750 people. The business has been owned by the Thomspon family since 1966, but a recent change to lobster licensing laws enabled a new opportunity in on-water tourism. Lobster Shack has been running the Shack Attack boat for a couple of years, giving tourists a chance to pull cray pots or go for deep sea fishing trips. That sails three times per day, with customers eating the lobster they catch. From the end of November, Lobster Shack will expand its opening hours to offer food service on Friday, Saturday and Sunday nights. Mr House said tourists would usually visit the nearby Pinnacles and stop at the Shack, with an increase in star gazing trips creating the opportunity for expansion. He estimated that more than half of diners were from Asia. The company is also ordering a new boat, Seal of Approval, which will seat 45 people for seal watching expeditions.
-Matt Rutter
4 On the plate. Photo: Geraldton Fishermen’s Co-operative
18 November 2019 | businessnews.com.au
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GREAT for the STATE
Economic boom brings mutual benefit Continued from page 3
WA’s relationship with China had two big early milestones – the 1987 Channar iron ore agreement between Sinosteel and Rio Tinto, and the $25 billion contract for North West Shelf Venture to ship LNG to Guandong, signed in 2002. The Guandong agreement was heavily backed by then premier Richard Court, who worked to promote Australian gas in a series of trips to Asia. Mr Barnett said Mr Court deserved major credit for the engagement, which resulted in the first purchase of LNG by China from anywhere in the world. “Government played a critical role (in the 1990s), far more so because ... Chinese customers and investors were stateowned enterprises, the government-to-government relationship is absolutely vital,” he said. In 2011, WA signed a memorandum of understanding with the Chinese National Development and Reform Commission, one of only a small number of re-
gional economies to secure such a deal, Mr Barnett said. The commission is the country’s key economic agency. “WA is very much leading the relationship with China,” Mr Barnett said. He also highlighted Chinese investments in magnetite, a specific type of iron ore that requires processing, as showcasing the relationship’s growth. Citic Pacific’s Sino Iron project had stalled when Mr Barnett came to office in 2008, and he said the government was proactive in encouraging the Chinese state-backed enterprise to proceed with the $US10 billion investment. The biggest project of the period was Chevron’s Gorgon LNG, which sells to a number of Asian partners, and serves as a good example of the role of government in facilitating foreign investment. “Gorgon has a history going back to the 1990s. When I became premier the project was on hold,” Mr Barnett said.
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“One of the first things I did was get involved with Gorgon… there were issues to be resolved to do with responsibility for the emissions of greenhouse gases.”
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mtpa Chinese steel production in 2017 Source: World Steel Association
Carbon capture and storage at Gorgon started earlier this year as a result of that work, with about 40 per cent of the operation’s lifetime emissions to be sequestered.
Forward Looking to the 2020s and beyond, WA is expected to remain a leader in autonomous mining, and embrace opportunities producing lithium and hydrogen for an anticipated green energy boom. Department of Mines, Industry Regulation and Safety director general David Smith told Business News WA had been the first jurisdiction to develop a code for safe autonomous mining. The code sets out training requirements, safe practice, risk control and emergency management, and was an example of how the industry and regulators were forward looking, Mr Smith said. “The industry is at the forefront of technology development and application,” he said. Mr Smith said he understood WA had more autonomous vehicles than California, which has the headquarters of companies developing self-driving cars such as Alphabet.
In the Pilbara, there are autonomous trucks, trains and drilling rigs. Mr Smith said while automation had been shown to improve safety, it also created opportunities for more diverse, high-skilled employment. Similarly, lithium and hydrogen would be industries with a technological focus. Two lithium refining projects are under development in WA with more planned. The Tianqi operation in Kwinana is the world’s biggest. In hydrogen, research is under way at Hazer Group, and renewable hydrogen projects include at the Gold Fields Agnew mine. Mr Smith said there were good reasons WA had always been able to capitalise on demand for its commodities. “We’ve got good resources and information about resources … a safe and predictable, transparent regulatory regime,” he said. “And we’ve got science.”