Page 1

july 2017

Australia set to seal FTA with Peru Page 4

Where is the Euro heading post Brexit? Page 10

How to negotiate in the Middle East Page 16

Our women exporters in world spotlight Page 26

Export success is all about timing


july 2017

Page 32

// 1

Tips for exporting to Mexico Page 34

a smarter way to trade

From the editor


he government was supremely confident of wrapping up a free trade agreement with India before the end of this year. But now even Prime Minister Malcolm Turnbull is having grave doubts. During a visit to India earlier this year, Mr Turnbull met with his Indian counterpart Narendra Modi in New Delhi hoping to revive the free trade deal which has stalled in recent months. He now concedes a free-trade deal with India could be “still years away.” Agriculture remains the main sticking point in the negotiations. India has resisted Australia's demand that it open up its market to agricultural products – arguing that it could endanger the livelihood of the vast number of small-scale farmers in India. India has a long tradition of protection, particularly for agriculture. On the other hand Australia is a huge agricultural exporter and obviously wants open markets. India boasts 118 million farmers, with roughly 85 per cent of all operational farm holdings less than two hectares. Indebtedness is the cause of the vast majority of the thousands of farmer suicides each year. And millions of jobs in India are dependent on farm income. The Indian government is well aware of their plight. Despite the stalemate, both sides remain committed to an agreement, Mr Turnbull insists. The PM remains bullish about striking an agreement over the long term as India sheds its protectionist mentality and large numbers of Indians continue to move to Australia to live and work. Former prime minister Tony Abbott championed the Comprehensive Economic Cooperation Agreement (CECA) while he was in power, with both India and Australia vowing they would try to strike a deal by the end of 2015. But negotiations became bogged down last year after that deadline passed. Mr Modi says the two sides will soon return to the negotiating table for another round of talks. But in the short term India is focussing on other trade deals. With so many farmers and so little land, don’t expect a free trade agreement between the two nations any time soon. ■


Our team

Hopes of a free trade deal with India are fast fading

Director and National Sales Manager

Julie Fletcher


Tim Michael


Veronica Avant IT Manager

Rob Fearn Contributors

Patricia Butera, Anthony Fensom, David Gray, Mark Hoppe, Marc Lim, Malcolm Lower 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.

july 2017

// 2




Australia on track to seal FTA with Peru



DEFAT building its own facial recognition system



Where is the Euro heading post Brexit



When is the right time to seek cross-cultural advice?

focus on middle east


Gulf states represent a growing market for Australian agriculture

business & 20-21 finance

Is your business ready to take on the world?


The Aussie software company making its mark on the world stage

WOMEN IN 26-28 INTERNATIONAL BUSINESS Meet Australia’s female export achievers



Export success is all about timing


export credit agency, Efic, has appointed a new Managing Director, Ms Swati Dave. Ms Dave has more than 30 years’

experience in finance and banking across a range of sectors in both domestic and international markets. She has held a number of senior roles, most recently as Executive General Manager at the National Australia Bank. Minister for Trade Steven Ciobo said Ms


Australian made


he Board of Australia’s

In announcing the appointment, the

Tips to rev up your business in the new financial year


Australia’s export credit agency appoints new managing director


Key tips for exporting to Mexico

Dave brings to Efic a strong track record

medium enterprises (SMEs) to capitalise

of leading strategy, driving customer

on export opportunities, including those

focus, risk management and people

created by the free trade agreements the


Coalition concluded with Japan, China and Korea.”

“With extensive international

Efic supports Australian businesses

experience, she has led and grown complex P&L businesses in the United

become exporters. During the last

Kingdom, Hong Kong and Singapore, as

four years Efic has helped almost 300

well as here in Australia,” Mr Ciobo said.

exporters with more than $500m of

“Ms Dave’s breadth of experience has seen her work across a range of diverse

facilities. Currently more than 90 per cent of all Efic transactions support SMEs. Efic has launched a range of initiatives

sectors such as infrastructure, energy and utilities, renewable energy, and

to meet the specific needs of SME


exporters such as the development of an online portal to support the Small

Considerable contribution

Business Export Loan, which has

Mr Ciobo thanked outgoing Efic

significantly reduced application approval

Managing Director Mr Andrew Hunter for

times. Ms Dave will take up the new role on

his considerable contribution. “Under Mr Hunter’s leadership, Efic has

July 3. ■

had a strong focus on enabling small to


july 2017

// 3



ustralia has

the previous year.


In the same period Australia exported


$6.7 million of agricultural products to

for a free trade

Peru, and imported $114 million worth.

agreement with

Mr Joyce said the Government is

Peru, which

in discussions with 10 countries,

would deliver new

including Peru, involved in the Trans

opportunities for Australian primary

Pacific Partnership negotiations


following the withdrawal of the US

Deputy Prime Minister and Minister for Agriculture and Water Resources,

earlier this year. The government is keen to bring the

Barnaby Joyce, said an Australia-

TPP into force as soon as possible, he

Peru FTA not only offers immediate


economic benefits to both nations, but

Mr Joyce said negotiations with

also represents a critical gateway into

Peru are a positive development for

Latin America.

Australian agricultural exporters, and

“An FTA with Peru will strengthen our economic relationship with the region, facilitate essential value chains

represent a new step forward for Australian exports into Latin America. Industries expected to benefit

between the Americas and Asia and

included the kangaroo meat industry

prove Australia’s credentials as a

along with beef, horticulture and wine.

reliable and responsible supplier of

“Economic partnerships are the

high-quality agricultural produce,” Mr

bedrock of success for modern

Joyce said.

trading nations,” Mr Joyce said. “A Free

which give them preferential access.” Mr Joyce said Peru’s booming

Trade Agreement with Peru will ensure

gastronomy industry offered niche

Alliance trading bloc and a FTA

that Australian farmers have the

opportunities for many other high-

could be used as a stepping stone

opportunity to share in Latin America’s

value Australian agricultural and food

to an Australian-Pacific Alliance FTA,

economic growth and be on an even


including Mexico, Chile and Colombia.”

footing with our competitors.

“Peru is a member of the Pacific

Peru is Australia’s fifth-largest commercial partner in Latin America.

Ray Borda, President of the Kangaroo

“Australia’s agricultural exports to

Industry Association of Australia, said

Peru, such as beef, horticulture and

the commencement of negotiations

wine, face high tariffs that many of our

with Peru represents an exciting

trade in goods and services with Peru

competitors do not—the US, the EU,

opportunity for kangaroo meat

was worth $504m – up 19.4pc from

and Canada, all have FTAs with Peru,


In 2015-16, Australia’s total two-way


july 2017

// 4


“It’s fantastic, not only are they big

Agreements, which include:

meat eaters in Peru but all throughout

• The Australia-Gulf Cooperation Council FTA, and

South America and they love the taste

• The Regional Comprehensive

• The Australia-Hong Kong FTA

of kangaroo,” Mr Borda said.

Economic Partnership (RCEP),


“If negotiations go well this will be a

• The Indonesia-Australia Negotiations for a high-value Free

huge step towards opening up the

Comprehensive Economic

rest of South America and towards

Partnership Agreement (IA-CEPA),

Trade Agreement with Peru could

demonstrating how great this product

• An Australia-EU Free Trade

be completed quickly building

is to the rest of the world.”

Agreement (A-EU FTA),

on the work already undertaken

• Australia-India Comprehensive

between both nations as part of TPP

currently working on negotiations

Economic Cooperation Agreement

negotiations, he said. ■

to deliver five new Free Trade


Mr Joyce said the government is


july 2017

// 5


New facial recognition system to combat cross-border crime


he federal government

identities, and identify unknown individuals, to

is building a new facial

help reduce cross-border crime.

recognition system to help

It was set live in November last year as part

detect identity and passport

of a staged implementation, giving the AFP


and DFAT access to images on citizenship

The Department of Foreign Affairs (DFAT) has been

using facial recognition and other biometric

applications held by the Immigration department. Other types of images, like visa, passport, and

technology to detect passport fraud since

potentially drivers’ licence photos, and more


government agencies including ASIO and

But with the impending arrival of a trusted digital identity solution being built by the Digital Transformation Agency (DTA), coupled

Defence will be brought into the service over time. The AGD has said the government currently

with the new facial image matching hub run

holds more than 100 million facial images for

out of the Attorney-General’s Department

identity purposes.

(AGD), the DFAT system is set to be taken to

The arrival of these two platforms has forced DFAT to review whether its own facial

new level. The DTA’s ‘Govpass’ digital identity solution will provide a whole-of-government approach to verifying identity in online government

recognition system will be able to cope with the new demands. DFAT processes more than 25 million facial images a year – around 8000 a day – and that

transactions. And the AGD-controlled national face verification service (FVS) lets law enforcement agencies share citizens’ facial images to verify


figure is growing at two million each year. The agency has potentially the country’s largest database of biometric facial images,

july 2017

// 6


says Stephen Gee, assistant secretary of the passport

we’ll be connecting in July, and the DTA’s trusted digital

policy and integrity branch.

identity framework initiative, will require high levels of

And to get more out of its facial recognition operations it has embarked on a three-step ‘systems improvement’ drive, Mr Gee told a Biometrics Institute conference in

availability. Being down for an hour won’t really be an option.” To meet these demands and cater for expected future growth in the use of biometrics, the DTA is “building, not

Sydney recently. “The first is upgrading our architecture. At the moment we have single instance architecture with warm disaster

buying” a new facial recognition system, Mr Gee said. “It’ll have highly available architecture, including

recovery, which means we can get back on our feet within

hardware stacks fully replicated across two sites and an

about an hour if the system goes down.

F5 load balancer.

“That’s fine for our current passport processing operation, and it’ll be fine for the new passport processing system that we’re developing and hope to put in place later this

“It will be fully scalable and extensible as new uses are developed.” Mr Gee said development work on the new system was “well advanced” and it was on track to enter production in

year. “But the Attorney-General’s Department hub to which


the first half of next year. ■

july 2017

// 7

business & finance

Why Australia is

the perfect breeding ground for fintechs Bruce Nixon


’m sure you’ve noticed that Australia’s

models and rapidly changing consumer

fintech space is booming.

expectations. This is opening the door for

It has been predicted that our fintech sector will be valued at $4.2 billion by 2020 – up from just under $250 million in 2015.

revolutionising the market, and fast. These fintechs are not bogged down with the same operational complexity that

Even the Australian Government

the big banks have to deal with. Fintech’s

recognises the importance of the role

nimbleness is a clear advantage in the

fintechs are playing and will continue to play

market that is not just ripe for disruption, but

in our financial arena.

is demanding it.

The Treasury website states: “We want to see fintechs in Australia become a locus of creative thinking and business activity.”

Where does this leave the incumbents? There’s no doubt our big banks enjoy healthy profitability, in fact the big four banks

The biggest factor driving this incredible

‘Fintechs in the form of global tech giants are looming ever closer’

innovative, nimble fintech startups that are

combined have a profit approaching $30

growth is our banking ecosystem,

billion. But they are being challenged on

dominated by the big four banks. It’s a

many fronts to protect that profitability. What

double edged sword in some respects.

may have worked in the past is no guarantee

While we have one of the most stable (and

for growing or even stable profitability.

regulated) banking sectors in the world, we also have a limited level of competition.

What this change is proving is that complacency will be a killer while agility is

Because of this our banks have remained complacent and haven’t felt the pressing

an enabler. For a long time banks haven’t had to do

need to innovate at break neck speeds.

much to retain market share. Now it’s no

Rather they have continued to grow in size

longer a matter of ‘if’ they will be threatened

and complexity, all the while getting by on

by new models and new players, but ‘when’.

legacy technology that although constant, can be inflexible to change.

Fintechs in the form of global tech giants are looming ever closer. Companies like Apple, Amazon and Alibaba are seeing the

Change is happening fast

opportunity to gain market share in Australia

The pace of change in the banking

and are starting to offer innovative banking

space is increasing, driven by new

products to their already loyal customer

technology, disruptive new service delivery



july 2017

// 8

business & finance

According to a recent KPMG report, 84 per

understand their operating model with a focus

cent of millennials would consider banking with

on understanding customer journeys and the

a tech company if they had a better product or

internal processes that support them. This needs

deal than a traditional bank.

to happen now. If they wait until their profitability is

Not to mention the toll technology and new

threatened and starts eroding, it will be too late.

regulations are having. For instance, the New

To facilitate this level of change and new

Payments Platform (NPP) to be introduced in

technology, what’s required is the operating

October 2017 will mean bank accounts can be

model to be reimagined so businesses are more

assigned to phone numbers or email addresses,

able to become customer centric. The operating

making your bank account portable. This is

model, embedded in a business management

likely to have an impact on customer churn as

system, needs to be able to connect the people,

the NPP could make switching banks easier.

processes, policy and technology across the

Competing in this new fast-paced, technology driven environment will require all players, big and small, to have a clear understanding of

organisation in order to improve customer experience. While there remain many uncertainties about

how their business operates, otherwise they will

how the banking sector will adapt and the impact

caught off guard.

fintechs will ultimately have, what is certain is that

It sounds simple, but the reality is the big

it will be an interesting journey to witness. ■

banks have become so complex that they have little understanding of how all their different silos operate – the left hand mostly has no idea what the right is doing – or how organisational change will realistically impact the business. Now more than ever banks need to


Bruce Nixon is CEO at Holocentric which helps organisations to improve performance and achieve successful business outcomes.

july 2017

// 9


Euro tipped to strengthen and Australian exporters should remain vigilant Marc Lim


n the last six months alone, the AUDEUR

year for Australian SMEs who export into the

has seen highs of 0.73c in February and

Eurozone. We are now seeing euro buoyancy on the

lows of 0.65c.

back of renewed confidence in the Eurozone

Rewind to a year ago and we were also around 0.65c as a result of the impending

following the Italian and French election results

US Election and right-wing push in Europe.

in April and May respectively – for now, calm in

It’s safe to say it has been a turbulent

the region has been restored. The AUDEUR is now sitting between the 0.66 and 0.68c mark, a relatively comfortable spot for Australian SMEs who generally budget for an AUDEUR exchange rate of 0.65c. Looking forward, the upcoming German election in September is likely to provide Chancellor Angela Merkel with another term, a positive for stability in the region. For the Eurozone as a whole, manufacturing and GDP data have been tracking relatively well and showing signs of recovery, apart from inflation still lagging target levels. This has led to calls for the European Central Bank (ECB) to scale back the current stimulus program, due to run to December 2017, and commence monetary policy tightening. ECB


july 2017

// 10


Key considerations for Australian exporters

Marc Lim is head of sales at AFEX, a leading global payment and risk management solutions provider specialising in cross-border transactions.

President Mario Draghi is yet to pull

for Australian exporters. However,

the trigger on formalising a scale-

even with this outlook, exporters

back, but the market expects he will

should not be complacent with their

do so in the coming months.

currency risk management approach.

Without a majority government in place, British PM Teresa May is facing a Brexit divorce settlement demand

There’s every reason to suggest another Eurozone issue is just around the

from the ECB of between $60 to $100

corner, particularly with each of the

billion – a payout the UK is not keen

28 member states of the European

on delivering. Negotiations and trade

Union experiencing their own

agreements with each individual

political, unemployment and default

country will commence in coming


months, with everything needing to be finalised in less than two years. We are likely to see time become

Even the slightest currency movements can have an enormous impact on an exporter’s bottom line,

an issue as the deadline fast

so it’s worth taking the time to get a

approaches. In terms of currency

plan in place to protect your business.

impacts, Brexit is more of a pound

With the new financial year just

concern than a euro concern. It has

around the corner, it’s an opportune

been weakening substantially while

time to set or readjust your business

the euro has maintained its strength

goals, budget, and develop an overall

against the majors.

currency management approach to

All things considered, we should see further euro strength with the

• The current strength of the euro based on market calm, and stability around the 0.66c mark – positive for Australian exporters • Downward move from the February high of 0.73c – positive for Australian exporters • Threats to exporters remain from systemic Eurozone issues reemerging in coming months, due to market over reaction to unexpected events • All signs indicating the ECB intend to tighten monetary policy in the coming months – further strengthening euro

allow you to focus on what matters – the growth of your business. ■

AUDEUR potentially moving to 0.65 cents or below – a sweet spot


july 2017

// 11


When is the right time to seek crosscultural advice?


xport success hinges as much on

visits and attending (and paying for) expensive and

strategy as it does on building strong

extravagant dinners and gifts, only to determine that the

cross-border relationships. Yet, it is

potential partners were no longer serious.

often the unknown or misunderstood

Fly in/fly out pitches also don’t work in many cultures.

cultural nuances of interactions in

Knowing the subtext which may be present in interactions

another culture that can unhinge efforts

in many cultures is vital. Or the business which had

and blow budgets.

identified a location for their venture in a foreign market,

A question I often hear being asked

of successful exporters is “what is one of the most challenging aspects of getting a product or service into a foreign market?”

getting close to signing the deal, only to conclude that cultural and value alignment could not be achieved. Being culturally open and aware is important in the export journey. Cultural values are not universal but,

The answer, almost exclusively, is – not understanding the market culture well and failing to prioritise building cultural awareness at the time of mapping out the export strategy.

equally, when it comes to cultural values, there is no right or wrong. There are many other situations when the advice or a cross-cultural consultant would have been well worth the

Whilst identifying a key market for your product or

investment. But first – what is a cross-cultural consultant

service is usually the first step to an export journey,

and when is the right time to seek cross-cultural advice?

culture is often a last-minute afterthought and in being so, can expose you to expensive mistakes.

A cross-cultural consultant is someone who is able to inform on cultural differences that exists in different

Take for example the exporter who kept making market


cultures and explain why and how such differences may

july 2017

// 12


impact on your business dealings. These cultural differences present themselves in the general beliefs, values, traditions, ethics and protocols of a particular market and, depending on the market, may vary at the national level and regional level. A cross-cultural consultant is able to provide insights and understanding on broad scenarios such that dealing within a different culture and a specific context can be done effectively and move you closer to your objectives faster. Cross-cultural consultants are key should you need to foster strong working relationships with foreign business partners as they are able to identify the different communication styles between you and people from diverse cultural backgrounds and work with you to bridging those communication gaps. Their awareness of cultural and business protocol means they are able

Patricia Butera is an expert in cross-cultural business relations. To learn more visit:

to leverage cultural knowledge and make culturallysensitive recommendations to influence strong outcomes. There are a number of opportunities along the export journey when a cross-cultural advisor can be invaluable

The right cross-cultural advice provides your business

to your efforts and help you save time and stay on budget.

with more options and fresh opportunities to develop

This includes the preliminary stages when a business has

international business efficiently and effectively in multi-

identified a commercial opportunity in a target market but

cultural settings. The cultural awareness gained can

is not familiar with the ‘ways’ of business.

potentially save you time, help broaden partnership

Behaviours and traditions influence concepts such as gender balance in many markets and may impact how to approach such a market rather than if to approach the

prospects and impact positively on your export strategy budget. Ultimately, cross-cultural consultants are the bridge between the strategic focus of the business and the

market at all. When planning in-market visits – an essential part

necessary and essential interpersonal acumen – that

of the export strategy – a cross-cultural advisor can

is, relationships or communication between people –

‘Being culturally open and aware is important in the export journey’

broaden your

required in cross-cultural scenarios. They are valuable

awareness of

‘cultural ambassadors’ for your business and their insights

what to expect

and knowledge can help exporters optimise their foreign

at your chosen

market strategy.


Agencies such as Austrade, your State’s International

what potential

Trade and Investment Office, Export Council of Australia


and Efic can help exporters establishing a solid framework


for an export plan.

you might find that will impact the number of visits you

By adding a cross-cultural advisor to the mix, businesses

may need to make and other budget considerations.

set for themselves a solid foundation to ensure their

They should also be able to gain insights into your team

export strategy will have the very best chance of success.

and provide strategies to leverage your or your team’s

Book a complimentary call with a cross-cultural advisor

communication styles to optimise your competitiveness

and discover the opportunities to enhance your export

and assist in your negotiation strategies.

strategy. ■


july 2017

// 13


Qantas Freight signs new deal to fly airmail out of China


antas Freight has

Shanghai and Hong Kong to various

produce, online shopping, mining

entered into a one

points in the United States by Qantas

equipment, racehorses and even the

year agreement with

Freight using our Boeing 747-400

occasional helicopter.

Sai Cheng Logistics

freighter network from Shanghai and

“The uplift of China Post airmail is a

International to fly

our belly capacity out of Hong Kong

welcome addition to our network and

via Australia.

reinforces that the routing we operate

airmail weekly out of China to the United States.

Sai Cheng is a joint venture

Qantas Freight currently operates four freighter services per week

is aligned to our customer needs,” said Ms Webster.

company between Australia Post

from Shanghai to the USA, including

General Manager of Sai Cheng

and China Post, which provides

stops in Los Angeles, New York City,

Jonathan Qiao said he was really

an integrated logistics solution for

Chicago and Dallas Fort Worth.

pleased to be partnering with Qantas

Chinese customers to overseas

Executive Manager Qantas Freight,

Freight. “We collect more than fifty tonnes

markets including Australia, New

Catering and Australia Airports, Alison

Zealand, Asia, the US, Europe and

Webster said the airline was excited

of airmail each week across China

South America.

to be working with Sai Cheng.

bound for the US. Our customers

The new agreement builds on the

“We’ve been flying freight between

seek a fast and reliable service and

longstanding Australia Post and

China and the US for the past 14

Qantas’ service frequency and freight

Qantas relationship, which includes

years with a triangular freighter route

network to the US allows us to deliver

contracts for the transport of

that operates four times per week

just that.

Australian international outbound mail

between Australia – China – the US –

as well as a dedicated domestic air


freighter network. The airmail from China Post will be airlifted from China Post’s hubs of

“With 13 warehouses spread across eight cities in China, this partnership

“The variety of freight we carry on

will strengthen our growing network,

this freighter network is extensive –

connecting Chinese consumers with

including medical equipment, fresh

the world.” ■


july 2017

// 14


All smiles: Airbus unveils smart new livery


rench aircraft manufacturer Airbus

important symbol of our company, and I’m sure my team

has unveiled a new livery for its next

feels the same about this exciting project. I’m already

generation of Beluga outsize cargo and

looking forward to seeing our first BelugaXL emerging

freight planes.

from the paint shop and greeting the world with a big

The BelugaXL, which is slated to enter into service in 2019, will sport a smiling whale design on the cockpit and front side

smile on its face.” Airbus’ Beluga fleet is used to transport complete sections of the company’s aircraft between production sites across Europe and to the company’s final assembly


Airbus asked its employees what the new A330 Family-

based airlifter should look like when it rolls off the

lines in France, Germany and Spain. Built as a replacement for the five current Beluga A300600ST aircraft that entered service in 1996 (based on the

production line. “The six designs we proposed for consideration by

A300-600 jetliner), the BelugaXL are derived from the

employees respected our brand identity while running

larger and more powerful A330-200, which is six metres

from the conventional to the unconventional, even

longer, one metre wider, and boasts a payload lifting

adding a touch of fun,” explained Tim Orr, Airbus’ Head of

capacity six tonnes greater than its predecessors. As an example of its increased payload capabilities,

Branding. Gaining over 40 percent of the employees’ vote, the

a BelugaXL will be able to carry two wings for the new

“Smiling BelugaXL” entry – complete with beluga eyes

widebody A350 XWB instead of a single wing currently

and a happy grin won the hearts of Airbus staff. The

accommodated on the BelugaST.

Beluga XL is already distinctive for its bulging upper

Adding a happy face to the uniquely-shaped airframe

forward fuselage and enormous cargo area (one of the

will further reinforce it in the public’s mind and help

most voluminous of any aircraft in existence).

further develop Airbus’ identity. ■

“It is amazing how our BelugaXL airlifters foster such enthusiasm,” said Bertrand George, Head of the BelugaXL program. “I’m extremely proud of working on such an


july 2017

Source: Digital Supply Chain

// 15

focus on middle east

Negotiating in the Middle East can be a real challenge

‘Maintaining ‘face’ is an important and serious issue’

Here are some tips to help you cut through Patricia Butera


july 2017

// 16

focus on middle east


he Middle East is a richly diverse region which consists of traditional trading societies and a population well-known for its business savvy. Sophisticated, well-travelled, multi-linguals make tough negotiators on home soil but are equally confident in western settings to drive a tough bargain. Whilst driving a win/win solution may be a

common goal, the process by which negotiations come to such a conclusion in the Middle East is underpinned by cultural tendencies that differ from western norms. It is therefore worth taking the time to understand a

‘Don’t be alarmed if discussions depart far and wide from set agenda items’

few of the basic cultural nuances and concepts that may present unique challenges along the way. Having an awareness of these cultural dynamics can help you frame your approach and better align your strategy. Islam is central to the ways of life and business Most societies in the Middle East are governed by Islam, a system of beliefs and social behaviour which have remained consistent throughout the centuries. This is an important aspect that underscores life and business and, equally, negotiations. Islam in the

Middle East, unlike Christianity in western societies, is not something that an individual chooses to follow but rather, it is a way of life and their conduct will be influenced accordingly. Schedules, work days, social interactions, entertaining and business protocol are just a few areas that will inevitably be influenced by the

Patricia Butera is an expert in crosscultural business relations. To learn more visit:

principles of Islam. The holy month of Ramadan, for example, presents definite challenges for businesses as productivity falls significantly during this month with most businesses operating reduced hours. The 2017 month of Ramadan is from May 26 to June 24. Know your counterpart It may seem an obvious statement but it is nonetheless central to conducting negotiations in the Arab region. Formality of greetings, clear and distinct lines of authority, hierarchical seating and use of titles are just some of the important elements to observe, respect and apply in negotiation settings. Identify the obvious leader in negotiations and the senior decision maker. They are people with whom it is crucial to build a direct and trusting relationship. When challenges call for alternate solutions, it is through these important relationships and networks that desirable outcomes will be achieved. Prepare a strong agenda Don’t be alarmed if discussions depart far and wide from set agenda


july 2017

// 17


items. When this happens, listen and use these segues and deviations in conversations to your advantage. Start

The end goal What is of greatest importance? The contract you might

connecting issues raised to reveal the bigger picture. Be

sign or the relationships you may cultivate? Both may

open to new elements introduced along the way as part

be the answer but in middle-eastern contexts, priority

of the process and show respect to proposals and ideas –

must be given to relationships. Developing all possible

even those which may warrant push-back.

contacts with the decision maker and within their sphere of influence is required. Your efforts need to focus on

Communication is key

building trust and allowing your counterparts to get to

Communication is indirect and body language, eye

know you well and vice versa. This means that generally,

contact and other non-verbal cues should all be taken

negotiations take time. Allow for this in your planning.

into account as part of any interaction. Learn to appreciate

Engaging successfully at any level with business people

the context within which the exchange is taking place as it

from diverse cultures requires some understanding of the

will help decipher what will most certainly be left unsaid –

cultural values that motivate them, drive their behaviour

“no”. Applying the language of diplomacy when needing

and communication style. Building cultural capability

to disagree on issues is essential to ensuring the dialogue

in this way can help you identify and maximise the


opportunities presented in foreign markets. ■

Maintaining ‘face’ is an important and serious issue and it is best to withhold any immediate negative reaction. Reacting in a negative fashion can potentially undo much of the progress. It is expected that different views will be offered as part of negotiations but it is important to do so

Book a complimentary call with a cross-cultural advisor and discover the opportunities to enhance your export strategy at com

in a respectful manner.


july 2017

// 18


Bridging the gulf:

New opportunities for Australian agricultural exporters billion. Population and demographic trends in the region have changed significantly over the past decade. Increasing birth rates and a surge in expatriate populations have driven strong population growth over the past decade. And rising affluence among residents and a growing tourism sector have boosted demand for premium agricultural goods, further


increasing revenue received by Australian exporters. hile many Australian

The value of Australian fresh, dried and frozen

agricultural exporters

vegetable and fruit exports to the UAE is expected to

have been focusing

rise at an annualised 15.2% over the five years through

on Asian markets in


recent years, the Gulf States have been

In May this year, the UAE and Australia announced that non-tariff barriers would ease for chilled beef and lamb exports, extending the maximum allowable shelf

growing in size and affluence. The region’s arid land and climate mean that

a substantial portion of its food requirements

life of these products. This will likely reduce transport costs associated with exporting premium chilled meat to these markets,

must be sourced from imports. The Gulf States represent a rapidly growing market for Australian meat, fruit and vegetables. Liberalised trade laws in the United Arab

benefiting local exporters. Meat product exports to Saudi Arabia are also expected to grow over the same period. Beef exports

Emirates (UAE) have helped the country

have largely driven this growth, with sheep meat

become a hub for re-exports to the rest of the

products also contributing to a lesser degree. Similarly,

region, which includes Bahrain, Kuwait, Oman

the value of grain exports to Bahrain, largely driven by

and Saudi Arabia.

wheat, are expected to skyrocket over the five years.

Demand for Australian meat, horticultural

Australia’s relative lack of market penetration in the

goods, sugar and grain crops from many of

emerging Gulf States presents an opportunity for

these countries has surged over the past five

greater export growth over the next five years, says a


new IBIS World report.

According to IBIS World, the value of

However, current political difficulties in the region, with

Australian meat product exports to these six

Saudi Arabia and UAE suspending trade with Qatar,

countries is expected to grow at an annualised

could limit the ability of domestic exporters to expand

17.7% over the five years, reaching over $1

in Qatar. ■


july 2017

// 19

business & finance


nd of financial year

including brokers


and accountants.

combined with

“Cashflow is key

a review of cash

to the health of any


business. Now is the perfect time for

the business is using the most

processes, will put

owners and managers to get a clear

appropriate funding solutions to

small to medium

understanding of their position, and

meet these goals,” Mr Langham said.

businesses in a strong starting

explore the funding options that will

“Working capital finance is essential

position for the new financial year,

help them in their business situation

for all business situations and

according to Australia’s largest

as the new financial year unfolds,” Mr

without it, you will not be able to

independent funder of SMEs,

Langham said.

fulfil your ambitions. Therefore, it is

Scottish Pacific. Cashflow conversations are the

Scottish Pacific's top two EOFY tips

options and make sure you pick the

for SMEs:

right one for you.

key for any SME at this time of year, according to Scottish Pacific CEO Peter Langham, and this

critical to consider all working capital

1. Reassess your cash position “Thinking what has happened over

“Trade and Debtor Finance are two options. They are linked to the

means conversations within the

the past year and what is about to

success of the business (not your

management team as well as an

happen in the upcoming financial

personal assets) and should not

external dialogue with the business’

year, now is a great time to review

require real estate security, providing

financier and with trusted advisers

strategic goals and consider whether

flexibility to expand.”


july 2017

// 20

business & finance


"cashflow is key to the health of any business"

be aware of. It’s important to

housekeeping must-

be well-positioned to take


advantage of positive change (continuation and extension of

1. Meet your

the $20,000 instant asset write-


off, for example – the turnover for

commitments before

eligible businesses has increased

June 30

from $2 million to $10 million) and to be prepared for adverse

2. Put tax changes


on your radar Bad debt – write it off 3. Bad debt – write

If you’re still chasing old invoices from the last financial

it off

year, now might be the time to 4. Be aware of

write them off. Bad debts are

credit reporting

tax deductible and SMEs can

changes from July 1

use them to offset their taxable income.

Meet your superannuation commitments before Superannuation is

2. Keep your income-producing

changes from July 1 From July 1 the ATO will

June 30

assets up to date

Be aware of credit reporting

disclose to credit reporting

not tax deductible

bureaus the tax debt information

until it has been

of businesses who have not

paid, so ensure all

effectively engaged with the ATO

your superannuation

to manage their taxation debts.

obligations have been completed

Take steps to ensure tax arrears

prior to July 1. It’s the right thing to

or paid down (invoice finance can

do by staff, and is a great way to

provide the necessary working

costs, sometimes very significantly,

reduce your company tax bill. Look

capital to prevent the cash flow

by structuring finance and

at funding options, including debtor

issues that often lead to tax

repayments to suit tax and cashflow

finance, that allow obligations to



be met while smoothing out the

SMEs can reduce their operating

Keeping your income producing

cashflow implications.

Scottish Pacific Business Finance is the largest specialist

assets up to date contributes towards keeping a business

Put tax changes on your radar

provider of working capital

operating efficiently, and maximises

New financial year, always new

solutions for SMEs in Australia

cashflow. Make sure you utilise all

tax updates to be aware of. Your

the tools and tax planning assistance

financial advisers will be able to

you can find, to keep assets up to

highlight changes, or the ATO

date and possibly avoid costs in the

website is a good source of tax


amendments that SMEs should


july 2017

and New Zealand. ■

// 21


Aussie software leads the way in logistics and warehousing automation David Gray


ocal Australian

As innovation, quality control

Invoices are generated automatically,

materials transport

and productive output are such a

seamlessly integrating with cloud-

and warehousing

central part of the CartonCloud value

based accounting systems.

software developer

proposition, Mr Fletcher is adamant

CartonCloud is

the best results are gained by having

automatically, selecting warehouse

experiencing that

all software coding work done in

stock based on steps and guides. The

sweet smell of

Australia with an integrated and

jobs are then sent direct to operators

committed team.

on the warehouse floor complete

commercial success as it launches the next exciting phase of business growth. CEO and co-founder Vincent

The company is already receiving significant interest from overseas based on a reputation for affordable

Warehouse jobs can be imported

with the most efficient sequence of picking. From here, the operator can bulk-

Fletcher impresses, demonstrates

quality and reliability. Exports now

pick, scan barcodes or perform any

and exemplifies that modern sense

equal almost one third of all sales.

other function associated with the

of entrepreneurship, vision, prudence

CartonCloud now processes around

order. Upon completion, the client

and focus so essential when creating

120,000 deliveries each month, and

is automatically advised the job has

a business from virtual scratch.

is budgeting to invoice over $100

been picked and they’re emailed the

million in freight during the next

expected delivery date.

Today CartonCloud is amongst the market leaders in logistics

12 months. In May, CartonCloud

warehousing and distribution

celebrated its two millionth delivery

optimisation plan is available to

software services for small to medium

through the robust CartonCloud

maximise on road delivery efficiency.

sized organisations.


Employing six full time software

For drivers, a GPS based route

CartonCloud is winning new

It has brought a service to the

customers every week with its

developers and planning to double

market at a price that delivers a clear

innovative model, which has removed

the size of the development team in

business value proposition for small

the need for high up-front costs and

the next six months, CartonCloud is

to medium sized customers.

contracts. â–

well on target to list more than 100

The software delivers fully

companies as customers by the end

automated job creation, POD and

of the year.

invoice processing functions.


july 2017

David Gray is lead consultant at Digital Information Partners

// 22

If it’s Aussie made, it pays to spread the word


f it’s Australian made, say it. That’s the message

from our clean, green environment and are

from the Australian Made

made to demanding

Campaign, which says


latest research confirms

standards,” said

consumer preference for


Australian made products.


It is encouraging companies


that make Australian


complementary health


products to display their Aussie

Ian Harrison.

credentials. Roy Morgan research,

What is clear from the research is that businesses that make

commissioned by the Australian

complementary health products

Made Campaign, revealed

in Australia and market this key

way for consumers here and

that more than two thirds of

point to consumers have an

overseas, to identify genuine

Australians (69.9%) would give

advantage in the marketplace.

Australian products. It’s instantly

preference to buying genuine Australian-made products. In fact, the Australian made

“It makes absolute sense for businesses that produce

works. So, if it’s Australian made,

products locally, to leverage

say it.” ■

attribute is particularly important

consumer preference for Aussie

to consumers looking to

products,” said Mr Harrison.

purchase complementary health

“And the best way for business

and vitamin products (78%), as

to tell consumers that their

well as beauty and personal care

products are genuinely Aussie

products (68%).

is by branding them with the

“It comes as no surprise that consumers are increasingly

recognised, it’s trusted and it

Australian Made logo. “The famous green and

demanding authentic, premium-

gold kangaroo logo has long

quality products that originate

been the quickest and easiest


july 2017

Businesses can register to use the Australian Made logo by contacting the Australian Made Campaign today on 1800 350 520 or visit:

// 23


The region is looking to Australia as a source for technology transfer and innovation’

Hooking deep sea fishing and aquaculture opportunities in India


he Government of India and the

Fishing currently takes place about 15 to 20km off Tamil

Government of Tamil Nadu will provide

Nadu’s coastline and in the Palk Straits separating India

$300 million over the next three years

and Sri Lanka, despite the state’s access to 2.02 million

to develop infrastructure for deep sea

square kilometres of marine resources in the exclusive

fishing off the coast of Tamil Nadu.

economic zone, which extends 200 nautical miles out to sea.

The decision will open up

To build a sustainable deep sea fishing industry,

opportunities for Australian

organisations to supply sustainable marine technologies

the Government of Tamil Nadu has prioritised the

and services.

development of coastal infrastructure, including

With the second longest coastline in India at 1,076km,

modernising harbours and fish landing centres and

Tamil Nadu is one of the leading states for seafood

building new facilities. It is also acquiring new tuna


longliners, mechanising traditional fishing boats and


july 2017

// 24


tendering for a new mid-sea fishing vessel.

Australian expertise is sought in the following areas:

“There are opportunities for Australian organisations to

• Barramundi fingerlings and hatchery setup processes

assist with boat building by providing design, refrigerated

• Octopus by-catch techniques

sea water systems, on-board and onshore fish processing

• Pearl oyster harvesting

systems, and communications devices,” said Gregory

• Bio-algae-based aquaculture waste water treatment

Harvey, Trade Commissioner, Austrade.

• High-performing shrimp feed

“Assistance is also needed to establish fin fish hatcheries

• Deep sea fishing vessel design.

and aquaculture grow-out systems, including RAS and high-quality feeds.”

Indian organisations are also looking for joint venture

In addition, there are opportunities to take part in World Bank projects, including undertaking resource assessment

partners for boat building. There is growing interest from other coastal Indian

for fisheries and investigating ways to enhance revenue

states looking to improve their processes and capabilities

by selling by-catch such as octopus and oysters and

in fisheries and aquaculture, and the region is looking

harvesting pearl oysters.

to Australia as a source for technology transfer and

“Austrade is well positioned to assist Australian


organisations that want to access opportunities in the

Austrade has helped Australian organisations establish

fisheries sector in South Asia through its Sustainable

research and education partnerships with leading fisheries

Fisheries Initiative,” said Mr Harvey.

universities in India; organised for Australian aquaculture

“The initiative showcases Australia’s capabilities in wild-

experts to visit South Asia to hold fisheries and aquaculture

caught fish and aquaculture across major coastal states in

master classes; and assisted Australian companies to

India and Sri Lanka, with the aim of helping both countries

export fingerlings to the Sri Lankan market. ■

achieve efficiencies of scale and improve the sustainability and economic viability of their fisheries and aquaculture industries.”


Contact Austrade for more information on deep sea fishing opportunities in India.

july 2017

// 25


Australian women exporters in the world spotlight Kay Ganley … unique opportunity

Anthony Fensom

Breaking down the barriers to achieve export success

‘Find your passion and go for it … and be prepared to take risks’


ustralian women

boomers, some two-fifths internationalised

are succeeding in

within a year of starting, with a third now

exporting, often with a

earning more than half of their sales

“global first” mentality

overseas. Significantly, 74 per cent of those surveyed

that has allowed them to overcome

said they were looking to expand into new

barriers and expand

markets, with the majority already operating in five or more overseas countries. Benefits


of operating overseas included “positive

However, increased business and

government support could spur even

reputational effects, strengthened strategic

greater successes on the global stage.

positions, improved competitiveness, enhanced workforce capabilities and

According to the Women in Global

greater profitability,” the report said.

Business 2015 report, a survey of 416 Australian businesswomen revealed a

Challenges to overseas expansion cited

large and active group of women-owned

by those surveyed included the exchange

businesses operating across foreign

rate, difficulty finding a suitable distributor,


red tape, a lack of resources and lack of alternative sources of capital.

Typically, small and medium-sized enterprises (SMEs) founded within the last four to eight years and owned by baby


Despite the barriers, a number of successes have emerged, as highlighted

july 2017

// 26


Barbara Stephen … award winner

by the various export awards and the Chief

According to former federal Small Business

Executive Women (CEW) Austrade Women in

Minister Bruce Billson, common traits shared

Export Scholarship.

by successful women exporters include

Concerning the latter, this year’s winner was

having big ambitions, having had significant

Sydney-based molecular biologist Dr Noelle

life experience before exporting, and an

Sunstrom, founder of biopharmaceutical

ability to persevere. “Many of the female exporters I encountered

company NeuClone, which is developing and commercialising high-quality biosimilars

set out in business with a vision to take on

using proprietary technology developed in

the world. While their business operations


may have started small, their aspirations were

A number of states have also offered a

big. Having confidence and belief that you

Women in International Business award.

can scale and expand your business in new

In 2016, the NSW winners were Louise

markets is important when setting out to build

Watts and Karen Thomas of professional

an export business,” Billson told the Sydney

development firm HPC Global and Barbara

Morning Herald.

Stephen of film production firm Flying Bark

He also pointed to the fact that such female

Productions; Queensland’s award went to

exporters are typically well-educated, with

food exporter Queensland Food Corporation;

the aforementioned 2015 report saying 78

and Margaret River winery Churchview Estate

per cent held a bachelor’s degree or higher.

was Western Australia’s winner.

Half of those surveyed had worked overseas


july 2017

// 27


in previous organisations, typically for five or more years. One such successful female exporter is Kay Ganley, former owner and chief executive of

Louise Watts … export success

Brisbane-based registered training organisation, Charlton Brown. First established in 1985, the company has grown from its Brisbane base to deliver training to more than 15,000 students worldwide, delivering qualifications and skill sets across Asia.

counterparts,” she said. However, women exporters in Australia can benefit from a range of government programs, such as Austrade’s

Ganley told Women’s Network Australia that going

scholarships, along with various business and networking

global started with an invitation to deliver childcare

organisations including CEW, Head over Heels,

training in Malaysia, after which the company attracted

Springboard Australia and WeConnect International.

further opportunities for partnerships, speaking

Nevertheless, the challenges are still evident, as seen

engagements and other events.

by recent data on female leadership. Globally, the

“I was given the unique opportunity to represent

percentage of women in senior management teams has

Australia at the Global Welfare Summit in Japan in 2013.

been estimated by accountancy Grant Thornton at just

In developing countries, it has been wonderful to see the

25 per cent in 2017, with 34 per cent having zero female

big difference a small amount of education can make,

leaders. In Australia, there were only nine female CEOs

particularly for women,” she said.

and 10 women chairing boards of ASX 200 companies,

Ganley’s advice to other working women was

according to a March 2017 report by consultant Conrad

straightforward: “find your passion and go for it”; “be prepared to take risks”; and “as the song goes, ‘know when

Liveris. With a range of studies showing the benefits of female

to hold them, know when to fold them, know when to walk

leadership for business performance and corporate


culture, Australia clearly needs to lift its performance. For

Azusa Takahashi, Brisbane manager at study consultancy

both government and business, providing a supportive

International Cross-Cultural Committee (ICC), pointed to

environment for women exporters could result in a new

cultural differences which can add to the challenge for

wave of international business successes. ■

women exporters, such as in Japan. “Japan has only recently been making a transformation, from women working in mainly supportive roles to stepping up into management and working the same hours and earning the same income as their male


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.

july 2017

// 28



First Women in Export Scholarship Winner announced

ydney-based molecular biologist Dr Noelle Sunstrom has won the inaugural Women in Export Scholarship. Dr Sunstrom is the founder and CEO of NeuClone Pty Ltd, which develops and commercialises high quality biosimilar medical


NeuClone’s patented technology enhances the production of

biologic drugs by causing cells to increase protein expression, creating cost-efficiencies for manufacturers. This has led to a partnership with the Serum Institute of India, the world’s largest vaccine maker. Trade Minister Steven Ciobo said NeuClone is a perfect example of how Australian innovation is generating global interest and creating Australian jobs. “NeuClone’s disruptive technologies will deliver a significant social impact and Dr Sunstrom, as the inventor, founder and CEO of NeuClone, is a very worthy recipient of this scholarship,” Mr Ciobo said. Dr Sunstrom, who is originally from Canada, obtained a PhD from McGill University in Montreal before moving to Australia on a post-doctoral scholarship with the John Curtin School of Medical Research at the Australian National University. She began her academic research career at the University of NSW, where she led a team in producing monoclonal antibody drug therapies for the influenza virus, collaborating with big pharma in taking those drugs to market. She and her team developed cutting-edge ways to produce complex biopharmaceuticals for commercial production. In 2000, Dr Sunstrom co-founded Acyte Biotech, which commercialises intellectual property from the mammalian cell research groups at the University of NSW and University of QLD. She completed an Executive MBA in 2007 and soon after founded NeuClone. Sunstrom is also a Fellow of the Australian Institute of Company Directors and the Royal Society of NSW. The Women in Export Scholarship is offered in partnership by Austrade and Chief Executive Women (CEW). ■ Dr Sunstrom will attend Harvard Business School’s Disruptive Innovation – Strategies for a Successful Enterprise program, delivered at Boston, Massachusetts next month. For more information visit: womeninexport or


july 2017

// 29


Nearly 35,000 aircraft required

in next 20 years to cope with demand


he world’s passenger aircraft

engineers will be needed. Airbus said that the single-aisle aircraft sector

fleet above 100 seats is set to more than double in the

is set to account for 70 per cent of new units,

next 20 years to over 40,000

with nearly 25,000 aircraft required.

planes, with traffic growing at

Growth is expected to be highest in emerging

4.4 per cent per year, a new

markets, with Asia-Pacific set to take over 40

report predicts.

per cent of new deliveries, followed by Europe

According to Airbus’ latest Global Market

with 20 percent and North America with 16 per

Forecast 2017-2036 a combination of factors

cent. Emerging markets currently home to 6.4

will drive a need for over 34,000 passenger and

billion of the world’s 7.4 billion population will

freighter aircraft, worth a total of US$5.3 trillion.

account for nearly 50 percent of the world’s private consumption by 2036.

The forecast is based on the increasing

Middle class numbers will almost double to

numbers of first time flyers, rising disposable income spent on air travel, expanding tourism,

nearly five billion as wealth creation makes

industry liberalisation, new routes and evolving

aviation even more accessible particularly in

airline business models.

emerging economies where spending on air travel services is set to double.

The manufacturer said that over 60 per cent

“Air travel is remarkably resilient to external

of new units would be used for airline growth, with 40 per cent being used to replace less fuel

shocks and doubles every 15 years,” said John

efficient aircraft.

Leahy, Chief Operating Officer – Customers,

And over the next 20 years, 530,000

Airbus Commercial Aircraft. “Asia Pacific continues to be an engine

new commercial pilots and 550,000 new

for growth, with domestic China to


become the world’s largest market. Disposable incomes are growing and in emerging economies the number of people taking a flight will nearly triple between now and 2036.” ■


july 2017

// 30



uckland Airport has announced plans to invest NZ$1.8 billion (A$1.72 billion) in aeronautical infrastructure

development over the next five years to upgrade its international departures and arrivals capabilities. And new domestic facilities will be included as part of the major project. The move comes as the country’s major airport has been experiencing significant growth over the past few years, notably a 26 percent increase in passenger volume since 2014 and a 61 percent increase in international airlines over the past 22 months. In the past year alone, Hong Kong Airlines, Hainan Airlines and Tianjin Airlines have each launched new non-stop services to Auckland. It will be these international services that will be the primary focus of the new investment. Among the developments planned

spaces, while departures will see an

“Setting aeronautical prices for a five-year period is a complex process

upgraded check-in area. The upgrade includes plans for a

involving a range of specific charges.

new domestic jet terminal attached to

We believe that the prices we have

the existing international terminal.

announced today balance different

“As a result of this significant investment in infrastructure over the next five years, there will

views and are in the best interests of travellers and New Zealand.” Auckland Airport already currently

to take place between 2018 and 2022,

be better and faster passenger

invests more than NZ$1 million

the airport will be “expanding and

journeys through and around our

(A$940,000) per working day on

upgrading the international departure

airport,” said Auckland Airport’s chief

aeronautical infrastructure.

experience” as well as providing three

executive, Adrian Littlewood. “The

additional international gates for

experience within the terminals will

a new five-star airport hotel to be

aircraft such as the A380 and B787.

be more intuitive and relaxing, and

located next to the international

International arrivals will also be

Last year, plans were unveiled for

transferring between domestic jet

terminal. The new hotel is expected

able to make use of expanded

and international flights will be faster

to open by late 2019. ■

border processing areas and public

and more efficient.”


july 2017

// 31


Malcolm Lower


s a co-owner of a small

tip of the Straits of Johor, and its people. The

business, focused on

latter needed much development and nothing

exporting, I cannot

got greater attention than education, an

help but despair at our

emphasis that continues paramount today.

country's "trying to catch-

The geography was exploited immediately

up" status in many of our

with the development of a massive, modern,

export markets.

container port that has made Singapore one of

At the same time, I am inspired by the efforts

that so many people are making to meet the export opportunity (too many would say

the world's most important export hubs and a gateway to South East Asia. In due course, its airport banked on the same advantages, but not without huge and risky

challenge). Australia is trying, and trying hard. Lots of time, energy, and thought, have gone into

investment. The examples that Lee Kwan Yew looked to

FTAs, overcoming logistical obstacles, export

were Hong Kong and Israel. Israel showed

financing, streamlining red tape, and so on.

Singapore the importance of education,

But there remains at least one

‘In Australia, we could do much to bring our exporters closer to our markets’

technology, and self-defence. Hong Kong

very fundamental factor that is

showed that you could get rich, despite having

constantly overlooked; and on

no natural resources, by exporting intangibles

the rare occasions that it does get

in the form of financial services.

mentioned, it is quickly dismissed

Lee Kwan Yew boldly set about the daunting

for the most trivial or bizarre of

task of competing with Hong Kong by doing,


more or less, the same as Hong Kong. He very

When the Great Sage, Lee Kwan

soon realised that Singapore had one major

Yew, realised that his tiny island

disadvantage, but one that could be swept

state could not grow prosperous

aside very easily. Singapore was out of sync.

making cheap plastic toys, he looked for examples of who was

If Singapore wanted to serve the same customers as Hong Kong, then it had to be open for business at the same time as Hong

doing well, and how. Singapore, in his view, had only two resources – its geographical location at the


Kong. Just look at the map. Singapore and Hong

july 2017

// 32


Kong are on quite different longitudes and

a constant nuisance for overseas customers

(back then) were half an hour apart. A born

who find it both inconvenient and confusing.

competitor, Lee Kwan Yew eliminated Hong

Nowadays, much focus is placed on

Kong’s 30-minute advantage with a stroke

markets that are longitudinally close, for

of his pen – his people adjusted easily and

example China, Korea, Singapore and

readily. The results speak for themselves.

Indonesia. Singapore and Beijing are in sync.

Here in Australia, we could do much to

If our wide, flat land forces us to be

bring our exporters closer to our markets

different, couldn’t we make it just a bit easier

and make us more competitive by

for ourselves with Perth and Adelaide in one

eliminating at least some of the barriers.

zone, and Brisbane, Melbourne, Canberra,

We only make it harder for ourselves with five time zones. Despite being on more

and Sydney just one hour ahead? I can already hear the outcry, but if we

or less the same longitude, Brisbane and

really see our future as being export

Sydney, two of our major cities, are out of

dependent, then we need to wake up –

sync with each other for half the year. This is

literally. ■


JUNE / JULY 2017

// 33

Malcolm Lower is a co-owner of Four Cow Farm Pte Ltd, a manufacturer of natural and organic skincare products based in Queensland. The business exports over 80% of its production. Malcolm spent 30 years living and working in Asia.


Does your business export to Mexico?


ustralian businesses with ties to Mexico need to be aware that the country is highly exposed to economic and policy developments in the United States. High uncertainty surrounding North American Free Trade

Mark Hoppe, managing director, Atradius

Agreement (NAFTA) negotiations and other US policy directions in international trade, and specifically targeting Mexico, could adversely affect sentiment and investment, according to Atradius, a

leader in risk management and credit insurance. The direct channels through which the Mexican economy could be affected by US

policy are trade and investments and, to a lesser extent, remittances and immigration. Mexico is also indirectly vulnerable to the broader global effects of President Trump’s policies.


july 2017

// 34


Peso movements have reflected these vulnerabilities and have already driven payment delays. Peso depreciation in 2016 has helped some exporters, particularly boosting the tourism sector. This stimulus has subsided as the peso has recovered some lost ground. The domestic slowdown will weigh heavily on the retail and construction sectors. “Mexico’s economy has been performing sluggishly, well before the November 2016 US presidential elections,” said Mark Hoppe, managing director, Atradius. “GDP grew only 2.3 per cent in 2016, mainly due to decreased oil prices, lower oil production, tighter fiscal policies, and low productivity growth. Ongoing domestic political woes, namely the unstable security situation and widespread corruption, continue to negatively affect business and consumer sentiment. “On top of this, uncertainty over future US policies has added to Mexico’s challenges. GDP growth is forecast to slow further this year to 1.5 per cent.” Atradius advises businesses to be aware of four key considerations when dealing with companies in Mexico: 1. US policy outlook is more confident but Mexico is

4. US policies are likely to bring some pain to Mexico but

still vulnerable to uncertainty. Exports directed to the US

economic fundamentals are strong. Due to its proximity,

accounted for over 80 per cent of total exports and 26

close economic ties, and dependence on the US market,

per cent of GDP in 2015. As a result, Mexico’s economy is

Mexico stands to lose more than most other countries

exposed to developments in the US.

from radical shifts in US foreign and trade policies.

2. Investment is likely to contract in 2017 but the

The softening stance of the US administration toward

medium-term outlook is still strong. Mexico benefits from

Mexico ahead of NAFTA negotiations has eased concerns

significant foreign investment (FDI), which accounts for

of financial destabilisation and/or a recession for now.

44.3 per cent of GDP, with over 40 per cent of all inflows

“Atradius’s outlook for the Mexican economy is one of slowing growth, largely driven by policy uncertainty in the

coming from the US.

US,” said Mr Hoppe. 3. The effect of lowered remittances would be limited. Remittances from Mexican workers in the US amount to about US$25 billion annually; the largest amount in the

“As a result, payment delays and insolvencies will increase in 2017. “But in our baseline scenario, we do not expect the

world. Impediments to these transfers, such as a potential

‘Trump effect’ to be overly destabilising. Thanks to

US tax, would decrease the net value of remittances,

effective measures to reduce external vulnerability

hurting consumer confidence and private consumption.

and diversify trade partners, GDP growth is expected

The effect on the total economy however would, however,

to pick up in the medium term, driven by a recovery in

be limited, as remittances account for just 2.2 per cent of

investment.” ■

Mexican GDP.


july 2017

// 35


july 2017

// 36

Dynamic Export e-magazine July 2017  

Latest news for Australian exporters

Dynamic Export e-magazine July 2017  

Latest news for Australian exporters