// 1// APRIL / MAY 2016

HOW CHINESE INFLUENCERS CAN BOOST YOUR BRAND

APRIL/mAy 2016

PAge 5

PAges 20-21 PAges 30-31

PAge 8

PAges 10-11

SERVICES EXPORTS SET TO BOOM

AUSTRALIA’S NEXT BIG EXPORT EARNER

PAge 12-13

// 2// APRIL / MAY 2016

a smarter way to trade

From the editor

As the Australian economy transitions from the mining boom to the ideas boom, services are now a key focus for exporters.

In this issue we look at the service sectors that are booming – and identify the services with growth potential.

According to the Department of Foreign Affairs and Trade (DFAT), services exports expanded by more than 9 percent to nearly $63 billion last year.

Strong growth was recorded with our major trading partners – China (up nearly 18 percent to around $9 billion), the US (up over 10 percent to $7 billion) and Britain (up 19 percent to nearly $5 billion.

By contrast, there was a fall in the value of goods exports, particularly minerals and fuels.

Newly appointed Trade Minister Steven Ciobo says services account for about 70 percent of our economy, yet represent only about 20 per cent of our total exports.

So there is tremendous scope for growth.Mr Ciobo says expanding services exports “is a key

trade policy focus for the government.”And recent free trade agreements (FTAs) with our

three largest Asian trading partners – China, Japan and South Korea – will open further opportunities for service exports.

The 1000-strong trade delegation now attending Australia Week in China will put professional services high on the agenda during the 5-day visit.

The delegation – the largest ever to leave our shores – will promote a range of services in which Australia excels including financial, business, education, health and aged care.

And agriculture will also be high on the discussion list.

With Australia’s farm exports forecast to reach nearly $45 billion this financial year, agriculture is set to replace mining-iron ore as Australia’s top export earner.

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

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

These sectors are predicted to add more than $250 billion to the Australian economy over the next 20 years.

Who said Australia is no longer the Lucky Country?

Tim michaelEditor

@dynamicexport

Director and National Sales ManagerJulie Fletcherjulie@dynamicexport.com.au

Our team

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.

EditorTim michaeleditor@dynamicexport.com.au

ProductionVeronica avant

IT ManagerRob Fearn

Contributorshannah Bretherton, anthony Fensom, caleb Radford, Benjamin Sun

Advertising enquiries: advertising@dynamicexport.com.au

Editorial submissions: editor@dynamicexport.com.au

Published by:Think Positive Pty ltdPO Box 221Waverley NSW 2024 australia

www.dynamicexport.com.au

editor@dynamicexport.com.au

Australia looks to niche services for export growth

// 3// APRIL / MAY 2016

6-7

8-9

10-11

14-15

17

18-19

22-23

26-27

30-31

FEATURE

FINANCE

FINANCE

PROFESSIONAL SERVICES

FOCUS ON ASIA

FASHION

AUSTRALIAN MADE

FREIgHT

AgRICULTURE

Overdue payments on the rise: Special Coface report

Efic launches new Small Business Export Loan facility

More SMEs looking to expand globally

Wine ex Aussie exporters drive services boom in Asia ports booming

China slowdown: How will it affect exporters?

Why fashion designers should target China

Call for national branding on all food exports

Port Melbourne to be sold off

Agriculture: our next top export earner

news

3-5

34-35

LATEST NEWS

Australia’s biggest ever trade mission

sets sights on China

Local & international events

WHAT’S ONMore tariff cuts under Japan ftanEws

australian businesses are continuing to reap the benefits of the Japan-

Australia Economic Partnership Agreement (JAEPA) with a third round of

tariffs cuts taking effect from April 1.

Tariffs on more than 1200 products have fallen, providing a competitive

boost for Australian exporters and building on the success of JAEPA’s first year in

operation. Trade Minister Steven Ciobo said 92 per cent of Australian products are

now entering Japan duty-free.

This will increase each year until 2034, when 98 per cent of our goods will enter

duty free or receive Australia-only preferential access.

For the first time, Japan has cut tariffs on high quality Australian Southern Bluefin

Tuna, an export worth $116 million to Australia last year.

“These tariff cuts give Australian exporters a crucial lead over competitors who

continue to face the full tariff,” Mr Ciobo said.

Australia’s exports of beef to Japan grew by 14.6 per cent to nearly $2 billion in 2015.

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

and 30.5 per cent (fresh or chilled). Competitors continue to pay the higher rate of

38.5 per cent.

Mr Ciobo said Australian exports of oranges to Japan have hit record levels under

JAEPA. Last year’s sales were valued at more than $36 million.

And the latest tariff cuts will see Australia’s competitive position further enhanced,

with seasonal tariffs falling from 13.1 to 11.6 per cent. Competitors continue to pay a 16

per cent tariff on citrus exports.

Other products including nickel, worth an estimated $80 million a year, and food

products such as sauces and mustard worth $29 million a year, will also enjoy

significant tariff cuts.

Mr Ciobo said the Japanese market has embraced

high-quality Australian product, which can

be found in stores, restaurants and hotels

throughout Japan.

This month Mr Ciobo launched a new

FTA Portal to help Australia’s SMEs take

full advantage of Australia’s free trade

agreements with China, Japan and South

Korea.

The new FTA Portal provides free and

accurate information on tariffs under the FTAs

so small and medium businesses can easily work

out how price competitive they will be.

The Portal also has Australian and international trade

data and an innovative step-by-step system to help businesses assess whether

their product is likely to meet the requirements of the agreements. •••

The FTA Portal is available at: https://ftaportal.dfat.gov.au/

// 4// APRIL / MAY 2016

news

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

The delegation will attend Australia Week in

China (AWIC) from April 11 to 15.

AWIC 2016 will deliver more than 150

events across 10 cities including Beijing,

Guangzhou, Hong Kong, Shenzhen, Xiamen,

Shenyang and Hangzhou and Shanghai.

Activity is scheduled across eight business streams:

agribusiness, financial services, health and aged care,

innovation, education, urban sustainability and water

management, premium food and beverage and tourism.

The delegation, which is the largest trade mission

ever to leave Australia, hopes to make the most of

opportunities created with the signing of the China-

Australia Free Trade Agreement (ChAFTA) signed in

December last year.

Trade Minister Steven Ciobo, who is leading the

delegation, said a highlight of AWIC is the first ever

innovation-focused program.

The program brings together Australia’s and China’s

fast-developing innovation ecosystems for the first time.

It includes a series of events promoting Australia as a

premium investment, education and tourism destination,

including the Chinese launch of Tourism Australia’s

coastal and aquatic campaign.

The first Australia Week in China promotion resulted in

significant trade and investment outcomes for Australia.

About $1 billion in export sales were generated and more

than $3 billion in investment followed the event.

“We anticipate that the breadth and scale of AWIC 2016

will generate similar outcomes and be the catalyst for

significant export sales and investments into Australia,

further driving jobs and growth,” Mr Ciobo said.

Tourism Minister and Minister Assisting the Minister for

Trade Senator Richard Colbeck said China is now our

largest source of international students and our highest-

spending tourism market, with both sectors experiencing

strong growth.

“The Australian Government recognises tourism and

international education as key economic super-growth

sectors for the next decade,” Senator Colbeck said.

Senator Colbeck is leading the tourism and education

streams of Australia Week in China (AWIC) 2016.

The program includes meetings, site visits and events

focused on promoting Australia to Chinese businesses,

students, tourists and consumers.

AWIC will also help tourism and education providers

explore new opportunities arising from the China-

Australia Free Trade Agreement.

“It will also allow them to see first-hand how China’s

transition to a consumer-driven economy is affecting

demand for services like tourism and education, which

are currently our top two services export earners,”

Senator Colbeck said. •••

Steven Ciobo … ‘significant export sales’

// 5// APRIL / MAY 2016

news

Is your busIness reAdy For the world stAge?

Are you ready to go global?This half-day workshop will cover the basic fundamentals required to access and prepare your business for entering global markets. The workshop has been created to help you to develop a successful international strategy and tools to identify global opportunities to ensure you are ready for international business success.

ViCDate: Tuesday, April 12 Venue: Melbourne CBDTimes: 9am – 2pmRegister: Click here to register

QLdDate: Tuesday, April 19 Venue: Brisbane CBD Times: 9am – 2pm Register: Click here to register

wADate: Wednesday, April 27Venue: Perth CBDTimes: 9am – 2pm Register: Click here to register

Getting the documentation rightPreparation of export documentation can be confusing, time consuming, costly and, unfortunately, prone to human error, but correct export documentation is vital for any exporter to transact business in an efficient and cost effective way. The ECA has developed a one-day workshop for companies looking to not only understand export

the Export Council of Australia’s (ECA) has announced a series of upcoming workshops this month to help you grow your business overseas. the workshops are designed to help you build your capacity and capability to become a confident participant in the world of international business.

whether you’re just starting out on your international journey or you’re a seasoned professional you can follow the ECA’s pathway to international success. the program includes:

documentation requirements but who are also looking for assistance in training up their team to process documentation correctly and efficiently.

ViC Date: Thursday, April 14Venue: Melbourne CBDTimes: 9am – 5pm Register: Click here to register

wA Date: Monday, April 18Venue: Perth CBDTimes: 9am – 5pmRegister: Click here to register

nsw Date: Monday, April 27Venue: Sydney CBDTimes: 9am – 5pmRegister: Click here to register

QLdDate: Tuesday, April 28Venue: Brisbane CBDTimes: 9am – 5pmRegister: Click here to register

Marketing for international growthDoing business in international markets requires know-how and companies need to understand how to easily navigate the “how to finance for global growth”. This half-day workshop provides an overview of what you need to know when it comes to managing and preparing for global growth and also provides you with key contact information for experts in the field.

nsw Date: Wednesday, April 20Venue: Sydney CBDTimes: 9am – 2pmRegister: Click here to register

international payments and understanding documentary creditsThis workshop will help all importers or exporters to obtain essential information on how to use letters of credit as a safe payment method for handling overseas transactions.

wADate: Friday April, 18Venue: Perth CBDTimes: 9am – 5pmRegister: Click here to register

Pricing your product or service for international successGetting your international pricing strategy right is crucial to the success of your business. It is difficult to go back and renegotiate your price once this has been set and also you ultimately cannot risk potentially not getting paid.

nswDate: Wednesday, April 13Venue: Sydney CBDTimes: 9am – 5pmRegister: Click here to register

ViC Date: Thursday, April 21Venue: Melbourne CBDTimes: 9am – 5pmRegister: Click here to register

// 6// APRIL / MAY 2016

FeATURe

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

the survey on

corporate credit

risk management,

to which 1,000

Chinese companies

responded, was conducted

on behalf of Coface, a

leading global credit

insurance group.

And Coface is forecasting

GDP growth in China to

slow to 6.5% this year –

about 0.4% lower than the

previous year.

Businesses in China

are facing increasing

challenges, such as high

leverage with steep costs

of financing (despite

monetary easing), low

profitability (driven by large

overcapacities in certain

sectors) and volatility on the

foreign exchange and stock

markets.

Coface, a global leader

in credit insurance and

risk management, does

not expect non-payments

will improve in China in the

short term.

Last year, the average

credit terms offered

by China-based firms

decreased again, reflecting

a more prudent approach to

granting credit facilities to

customers.

And risks have increased,

with 80.6% of respondent

companies experiencing

overdue payments in 2015

(compared to 79.8% in 2014).

Over 58 percent of these

firms also reported an

increase in the amount of

overdues.

And a higher percentage

of respondents (about 10

percent) said that average

overdue periods have been

longer than 150 days.

Of companies surveyed,

// 7// APRIL / MAY 2016

FeATURe

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

www.coface.com.au

nearly 18 percent have

had to deal with ultra-long

overdue amounts (of more

than 180 days) exceeding

5 percent of their annual

turnover. The rise of ultra-

long payments is putting

increasing pressure on

company financials.

Jackit Wong, a Coface

economist for the Asia-

Pacific region, says the

results of the survey were

not surprising given the

slowdown in the Chinese

economy.

Australian exporters are

now facing an increasing

risk of overdue payments

and bad debts when trading

with China, she says.

Should they be

concerned?

“Of course,” Ms Wong says.

“An increasing number of

exporters will be harmed.”

She advises exporters

to China to “fasten their

seatbelts and stay alert.”

Ms Wong says goods

exporters are facing a

higher risk of overdue

payments than service

exports.

The survey identified

construction, metals and

IT-telecoms as the highest

risk sectors.

The risk of overdue

payments also increase in

the following sectors in 2015

compared with the previous

year:

• Chemicals

• Household electronics

• Industrial electronics

• Textile-clothing

At the same time,

automotive and transport

has stabilised, while the

risk in the paper-wood and

pharmaceutical sectors has

improved.

Coface warns that Chinese

firms that are suffering

from overcapacity and low

profits now have a higher

probability of default.

And even though credit

growth is slowing, private

debt is continuing to grow

faster than GDP. China

has not yet entered a

deleveraging process and

the risks are increasing.

Outstanding debt held by

the private non-financial

sector reached 201% of GDP

in June 2015, compared to

114% in June 2008 and 176%

in June 2013.

China’s 6.9% GDP growth

in 2015 was the lowest in

25 years, while Coface’s

forecast of 6.5% in 2016

would be another record.

Momentum is on a

downward trend, due to

the process of rebalancing

and low global demand.

The authorities are

implementing reforms

needed to rebalance growth

in favour of consumption

and services.

Ms Wong says Australian

exporters should be aware

of the increased risk of

overdue payments when

trading with China.

“This could be a very

difficult year for Australian

exporters that rely so much

on China,” she says.

Ms Wong believes

Australian exporters should

not abandon China as a

trading partner, but they

should investigate ways to

manage the risk.

“The best solution would

be to find the right partner

and hedge against the risk.”

Factoring, she says is a

logical option.

This is where a business

sells its accounts

receivable, or invoices, to

a third party commercial

financial company.

This means a business can

receive cash more quickly

than it would by waiting 30

to 60 days for a customer

payment. •••

‘Exporters to China should fastentheir seatbelts and stay alert’

// 8// APRIL / MAY 2016

FInAnCe

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

if you don’t have a hedging strategy you are often

exposed to uncertainty and as Benjamin Franklin once

said: “By failing to prepare, you are preparing to fail.”

Whether you’re looking at a one-off transfer overseas

or importing/exporting hundreds of containers a year, using

the right combination of payment and cash management

strategies means you can improve cash flow and protect

profits.

1. save money on transfers. Most people and businesses

will use their bank to make a money transfer as they’re

probably unaware of alternatives that can make the

process easier and save them a lot of money. You have

to be aware of real transaction costs on international

money transfers, as they are not always that transparent.

When transferring funds internationally you have two fee

structures – direct and indirect.

direct: Most banks charge a high upfront fee to process

the transfer and receiving fees are charged by the bank you

send to, if it’s sent internationally.

indirect: These are (hidden) costs in the exchange rate

itself and known as the margin. Banks often have the

largest margins and can be as high as 5 percent.

In comparison OFX (formerly OzForex) have minimal or no

direct fees and offer far better margins than banks, allowing

you to save hundreds if not thousands when settling your

international invoices.

2. Hedging: Whilst this may sound complicated, hedging

is actually quite easy to do and can provide some certainty

in your costs.

By taking out a Forward Exchange Contract (FEC) you can

fix the exchange rate at a fixed time in the future with just

a 5 percent of the total amount you need. This will remove

the exchange rate risk, give you piece of mind, and protect

your margins.

Next time you have an upcoming future expense ask

OFX about hedging and they can walk you through your

Forward Exchange Contracts or other products that may

suit your needs.

3. now create a strategy

It’s important to look at your business needs and build a

plan around it.

First you should find out at what rate makes your

international trade worthwhile or unprofitable. This will give

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

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

your cross-border payment needs are, both incoming and

outgoing, and set your actions accordingly.

This allows you to decide as and when you use a spot rate

(for imminent payments, due now) or hedge forward using

Forward Contracts (for future payments) when the rates are

worthwhile.

Now relax knowing your business has been de-risked and

focus on running your company. •••

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

// 9// APRIL / MAY 2016

With a lower Australian dollar and a host of new trade agreements in place, many small businesses are considering expanding operations

internationally to boost growth. However, despite an apparently favourable export

environment, many small to medium enterprises (SMEs) are still finding access to finance a key barrier. It’s this factor that ultimately prevents them from implementing export initiatives.

In February this year, Efic’s SME Exporter Index* found that, of the more than 500 small businesses surveyed, more than half expected greater difficulty in sourcing financing solutions for their export endeavours in the year ahead.

The survey also found that the smaller the business, the greater the difficulty accessing credit, with one in four SMEs reporting they’ve had new credit applications refused.

Andrew Watson, Executive Director of Export Finance at Efic, says “Our new Small Business Export Loan has been developed specifically to meet the needs of small businesses with a turnover of less than $5 million per annum.”

Getting financing secured quickly is often essential for export contracts so a key feature of the product is that it is approved in as little as 7 business days.

Applications can only be made online through EficDirect, Efic’s online application portal.

“Small businesses are often time-poor, and the online application process allows them to complete an application at a time that suits them,” says Andrew Watson.

Another key feature of the Small Business Export Loan is that it is unsecured, with the small business’s ability to repay the loan, rather than taking security, one of the aspects considered in the loan approval process.

In addition to this, applying businesses will (amongst other things) need to show that they are unable to secure funding through their bank, and that the export product meets Australian content criteria.

“At Efic, our objective is to help small businesses achieve export success“ says Andrew Watson.

“We are confident that our new Small Business Export Loan will address some of the ‘access to finance’ issues that SMEs encounter today, and ultimately enable them to take on the world.”

Efic unveils its new Small Business Export Loan *Efic’s SME Exporter

Index, February 2016

// 10// APRIL / MAY 2016

FInAnCe

Peter Langham … ‘significant concerns’

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

Scottish Pacific’s latest SME Growth Index

found that 9.4 percent of SMEs surveyed

were seeking overseas expansion in March

this year, compared to 5.6 percent in

September 2014.

And those looking at expansion both at home and

overseas, in the same timeframe, grew from 11.6 percent

to 15.3 percent.

“The proportion of growth SMEs seeking overseas

geographic expansion, and a combination of domestic

and overseas geographic expansion, is on the rise,” said

Scottish Pacific CEO Mr Peter Langham said.

The SME Growth Index also found that an alarming two

thirds of Australia’s SME owners use personal finances to

support their business.

One in five of business owners survey admitted to

regularly dipping into their own pockets to fund their

business.

And nearly 50 percent said they resort to using personal

finances occasionally.

This included using credit cards with high interest

charges.

Only 10 percent of SME owners had never settled

business expenses using non-business sources.

The Scottish Pacific SME Growth Index is a twice yearly

look at the growth prospects and concerns of more

than 1200 Australian small and medium sized business

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

largest specialist provider of working capital solutions for

SMEs in Australia and New Zealand.

Scottish Pacific CEO Mr Peter Langham said the findings

on personal credit card use posed significant concerns,

because there were better funding options available to

help SMEs grow.

“How SMEs are funded has a significant bearing on

operations, from how well they can manage cash flow to

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

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

“Personal finance may appeal from a convenience,

speed and accessibility perspective – the downside is

// 11// APRIL / MAY 2016

FInAnCe

that higher than necessary funding costs cut directly into

margin, and personal financing can impact on lifestyle

and leave owners open to family conflict which can

destabilise the business.

“I’d strongly encourage SMEs, whether product or

service orientated businesses, to seek smarter funding

options. Look beyond the banks as this is an active,

innovative space trying to offer a better alternative.”

Mr Langham said another significant finding was that

SMEs were more than willing to pay higher rates to

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

estate security.

“This reflects a growing awareness amongst SME

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

given and suggests openness to alternative, innovative

funding solutions such as trade and debtor finance.

“This is key for up and coming entrepreneurs who have

great ideas but may not own any real estate.”

Despite the rise of online and automated funding

solutions being offered for SMEs, he said it was worth

noting the high importance SME owners still place on

being able to talk directly to the lending decision maker.

The funder should be an expert who can provide

guidance and support, not just dollars.

Since September 2014, the Scottish Pacific SME Growth

Index has twice a year tracked the optimism for growth

of a range of small business across many industries in

Australia.

“Of note is that the number of optimistic enterprises

is relatively unchanged since we started the Index –

dipping 1.5 percent in March 2016 from the finding of 58.9

percent a year ago – yet the average revenue growth

forecast in that time has contracted sharply from 6.7 to

5.2 percent,” Mr Langham said. •••

// 12// APRIL / MAY 2016

PROFessIOnAL seRVICes

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

And Australian exporters are perfectly

placed to service the growing demand.

Department of Foreign Affairs and Trade

statistics show services exports accounted

for about 20 per cent of Australian exports

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

our domestic economy.

Services exports increased 9.4 per cent in the year to

June 2015.

This was fuelled by demand for education-related

travel services (14.5 per cent), personal travel services

excluding education (6.4 per cent), financial services

(25.4 per cent) and telecommunications, computer and

information services (35.8 per cent).

The government has attributed the growth to the

transitioning of the Chinese economy from an industrial-

construction focus towards middle-class consumerism.

Other contributing factors include the devaluing of

the Australian dollar and the recently signed free-trade

agreements with our three biggest Asian trading partners

– Japan, Korea and China.

It has opened opportunities for services firms, small and

medium enterprises (SMEs) in particular, Export Finance

and Insurance Corporation (Efic) chief executive Andrew

Hunter told The Australian newspaper last month.

Between 2012 and 2015, services exports grew 33 per

cent, he said.

“Regulation and red tape is the biggest trade barrier for

services exporters,” says Mr Hunter.

“Business owners tell us that they don’t care too much

about the country itself – they care about the market and

prices, and regulation and red tape.”

But Australian SMEs should not be deterred by

regulatory barriers, HSBC Australia head of global trade

and receivables Rohit Garg told The Australian.

“It is not an excuse for doing nothing.

“This is a time for services firms with existing

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

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

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

exporting. The opportunity is enormous.”

The Australia-China Free Trade Agreement is one of the

most comprehensive FTAs when it comes to services.

However, its allowance of wholly owned Australian

operations in China is limited by industry (software,

building and cleaning services, real estate,

manufacturing services, environmental services and

interpretation) or limited by territory, such as the

Shanghai Free Trade Zone (telecommunications,

legal) and Beijing, Tianjin, Shanghai, Jiangsu, Fujian,

Guangdong and Hainan for Australian medical services.

“Whereas Australia’s gross domestic product is 80

per cent services, China’s services economy is still

developing and contributes just 50 per cent of its GDP,”

Mr Garg says.

“The growth of the Chinese services sector is the next

// 13// APRIL / MAY 2016

PROFessIOnAL seRVICes

the written word can be crucial to export success

big story in that country,” he says. “Two-

thirds of their economic growth now

comes from the services sector, and

services is something that Australia does

very well.”

Mr Garg says the commodity boom in

Australia-China trade is not “over” in the

true sense because the next phase of the

commodities trade is the services that

accompany the hard goods.

“Australia doesn’t just have the

opportunity to export dairy, meat and

grains. China’s demand for these products

is growing, so they want expertise in

logistics and cold chain logistics. It

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

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

temperature, every day?’”

Managing supply chains for agriculture, food

and mining products is an expertise developed

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

Chinese who need the expertise, he says.

“India is now looming as a really big opportunity

for Australia. Like China, they have many mouths to

feed and they see the value in developing their own

agriculture and supply chains rather than relying on

imports.”

Large countries such as India and China

understand that they need to attract expertise in

key industries from countries such as Australia, he

says. However, the deep and complex regulatory

arrangements in both of those countries cannot be

changed overnight.

“Services exporting is always more complex than

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

“You’re living and operating in that country.”

The China-Australia Free Trade Agreement

addresses services and makes material

concessions to attract Australian companies to

operate in China, he says.

“Now we have the India FTA. There are no

guarantees, but we know Andrew Robb has been

visiting there a lot, and we know that the Indian

government needs partnerships with expert firms,

especially in the agricultural sector.” •••

Innovation alone is not always enough to secure

commercial success in a competitive globalised world

economy.

Another important factor of success is quality of finish,

which is often overlooked or undervalued.

According to BizTechWrite, it receives enquiries from

inventors and start-up companies that consider export

planning, product documentation and written language

translation as an afterthought.

In worst case scenarios, some companies attempting to

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

without having a local language document or having a

poorly written technical data sheets in disjointed English.

Some even use Internet translation software, which is

more likely to attract ridicule than paying customers.

For example, one Australian exporter did not translate

a payment terms contract with an international customer

ultimately missing important information that meant they

had to wait over 120 days beyond the expected date for

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

Concise, well written, translated and illustrated product

documents and commercial contracts are crucial steps

for ensuring business are treated with respect in different

export markets.

BizTechWrite offers technical documentation, technical

drawing, language translation, contract translation and

export planning and their customers include some of the

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

www.biztechwrite.com.au

// 14// APRIL / MAY 2016

PROFessIOnAL seRVICes

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

Anthony Fensom

For the Turnbull government, the latest data

makes happy reading in its push to transition

the economy from the former mining boom to

the so-called “ideas boom.”

According to the Department of Foreign

Affairs and Trade (DFAT), services exports expanded by

more than 9 percent to nearly $63 billion in fiscal 2015,

contrasting with a fall in the value of goods exports,

particularly minerals and fuels.

Strong growth was recorded in the nation’s top three

services exports markets, with China up nearly 18 percent

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

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

billion.

According to DFAT, services exports to China have risen

by 9.2 percent a year since fiscal 2010, with a 6.8 percent

annual gain for US exports and 4.2 percent for Britain.

Among the services sectors, education stood out, with

international student expenditure growing by 14.5 per

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

2015, the sector is estimated to have racked up more than

$19 billion in exports, with education currently the top

// 15// APRIL / MAY 2016

PROFessIOnAL seRVICes

services export and the third largest overall behind coal

and top-ranked iron ore.

Exports of business services rose by nearly 11 per cent

to around $17 billion, with financial services increasing by

25 percent to $3.5 billion and telecommunications and

information services posting a 36 percent gain to $2.7

billion.

The tourism sector also benefitted, with short-term

international visitors to Australia rising by nearly 7 per

cent to 7.1 million, and expenditure on personal travel

other than education growing by 6 percent to almost $15

billion. The largest sources of visitors were New Zealand

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

with 666,200.

Commenting on the latest data, Trade Minister Steven

Ciobo said expanding services exports “is a key trade

policy focus for the government.”

“As the economy transitions from the mining boom to

the ideas boom, services will be a central element of

Australia’s transition to a broader-based growth model,

one that delivers more diversified sources of growth,

higher levels of productivity and job creation,” he said.

“There is tremendous scope for growth in our services

exports, given services account for around 70 percent of

our economy yet represent only about 20 per cent of our

total exports.”

While Australia’s relative geographic isolation “makes

it harder to deliver services compared to countries

that border other nations,” DFAT argued that traditional

measures underestimate the contribution of Australia’s

services industries to total exports.

According to DFAT, services’ contribution to exports

on a value-added basis exceeds 40 percent. The figure

may be even greater when considering that two-thirds of

Australian services provided to the world are delivered

by Australian foreign affiliates abroad instead of via direct

export, the department said.

The Trade Minister said recent free trade agreements

(FTAs) with North Asian trading partners had opened up

further opportunities for services exporters, with a further

lowering of trade barriers eyed.

“Following the entry into force of the China, Japan and

Korea FTAs, Australia is pursuing early ratification of the

Trans-Pacific Partnership Agreement,” Mr Ciobo said.

“We are also actively participating in negotiations to

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.

secure a WTO-plus Trade in Services Agreement, which

involve 50 economies.”

However, Australian businesses have been urged to take

advantage of the competitive gains from the FTAs, or risk

losing an edge to rival exporters.

According to HSBC, only 19 per cent of Australian

exporters are using FTAs, compared to 26 per cent of

Asian competitors. Another study, AIBS 2015, showed that

around 20 per cent of Australian exporters consider FTAs

useful to their business, but nearly half were uncertain

about whether such deals are applicable.

With China engaged in 22 current or planned FTAs,

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

Australia’s underutilisation of FTAs could put exporters at

a commercial disadvantage.

Typical reasons

given for such lack of

use include a lack of

understanding of FTAs

and their benefits, a

lack of awareness of

the Rules of Origin

requirements, compliance issues and a belief that

accessing the benefits is “too costly and burdensome.”

In a bid to ensure Australian exporters benefit, DFAT

and Austrade have rolled out a series of information

seminars across the nation on the latest North Asian FTAs,

including a promotional campaign and grants for industry

trainers.

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

austrade.gov.au/Australian/Export/Trade-Agreements/

seminars

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

services exports are crucial in ensuring the nation

continues its record-breaking run of economic growth.

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

government has proclaimed in its innovation agenda as

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

‘Among the services sectors, education stood out’

// 16// APRIL / MAY 2016

FOCUs On AsIA

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

Australian Ambassador to the Philippines

Amanda Gorely says trade between the two

countries has been steadily increasing in recent

years and the trend is set to continue.

“Trade between Australia and the Philippines is at $4.2

billion and increasing fast at the rate of 10 percent over

the last five years,” Ms Gorely told BusinessMirror in a

recent interview.

Beef, lamb, wine, wheat, consulting services, services

and engineering are Australia’s main exports to the

Philippines.

Also, there are 200 Australian companies now operating

in the Philippines. They employ more than 30,000 Filipinos

in the business-process outsourcing, finance, oil and gas,

manufacturing and infrastructure sectors.

On the Philippine side, main exports to Australia include

heating and cooling equipment, electrical machinery and

parts, mechanical machinery, pumps, coconut and rubber

tyres.

And Philippine companies like International Container

Terminal Services Inc., Monde Nissin and San Miguel

Corp., have a strong presence in Australia.

The Philippines ranks Australia among its top 20 import

sources, while Australia is also in the top 20 among

countries the Philippines sends exports.

Australia is looking toward sustained trade growth

and investment links with the Philippines and views the

economic reforms implemented by President Aquino as

positive steps towards greater

cooperation and building

investor confidence.

The Philippines is also a

signatory in the ASEAN-

Australia-New Zealand Free

Trade Area, which opens and

creates new opportunities for its 600 million population

and combined economic output of $.265 trillion.

This agreement will:

• Progressively reduce tariffs

• Facilitate movement of goods through flexible rules

of origin

• Simplify custom procedures

• Liberalise trade barriers

• Facilitate movement of individuals engaged in trade

and investment

• Install an investor-state dispute settlement

mechanism. •••

‘trade is at $4.2bn and increasing fast’

// 17// APRIL / MAY 2016

China’s economy continues to underperform

and its stockmarket remains volatile.

But Chinese consumers are still spending

strongly – and that spells good news for

Australian exporters, says financial expert Michael Sarpi.

Mr Sarpi, the Chief Operating Officer for Compass

Global Markets, a company specialising in foreign

exchange payments, hedging and advisory services, says

domestic sales in China remain strong.

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

with the exception perhaps of commodities such as iron

ore,” Mr Sarpi says.

“It is more industry and infrastructure where China has

slowed in recent times.”

And Mr Sarpi says consumer spending in China is

unlikely to slow in the short term.

“I think they will continue to spend,” he says confidently.

“We are talking about wealth that has been developed

over the past 10-20 years or so – and the Chinese middle

class continues to grow.

“So there will still be a strong need for consumer

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

China.”

Mr Sarpi says the new China-Australia Free Trade

Agreement (ChAFTA) is also helping to boost trade

between the two nations.

“China is not an easy market to get in to,” he says.

Financial companies such as Compass Global Markets

can assist exporters to crack the challenging, yet

lucrative Chinese market.

“We have a dedicated Asia Desk that can connect

exporters with key trading partners in China, Malaysia,

Singapore and Indonesia.”

Mr Sarpi says when exporting to Asia it is vital for

FOCUs On AsIA

China’s economic slowdown: are you at risk?

tim michAel

michael sarpi … ‘not every exporter is the same’

companies and individuals to secure competitive

foreign exchange rates.

Boutique Forex solutions providers like Compass offer

a more personalised service than major banks – with

highly competitive rates due to lower overheads.

And with the Australian dollar trading about .75c

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

export sectors.

So where is the dollar heading in 2016?

Mr Sarpi, a former senior executive with the

Commonwealth Bank, predicts the downward trend

will continue over the next 12 months.

“The US currency will remain the dominant currency

in that period,” he says.

“The market was

expecting further rate

immediately in the US

that didn’t eventuate.

“But I still believe

there will be at least

two rate hikes this year

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

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

For more information visit: www.compassmarkets.com

‘chinese consumers will continue to spend’

// 18// APRIL / MAY 2016

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

FOCUs On AsIA

I had never before put “fashion” and

“China” in the same column.

When I talk with friends about

shopping destinations in Asia

the list will run from Hong Kong to

Singapore to Tokyo or Kuala Lumpur

before anyone even contemplates

Shanghai.

Angelica Cheung admits China

was late to the party – the Chinese

subsidiary of the world’s most

iconic fashion magazine was only

established in 2005.

As it turns out being strategically, if

not fashionably, late meant Cheung

and her team made it just in time to

join the back of the catwalk.

China’s fashion market has tripled

since Vogue China’s inception. At

dressed for success: Why Aussie fashion designers should target China

hAnnAh Bretherton

that time there were no Chinese

supermodels.

Currently valued at $85 billion it’s

only now that the Chinese fashion

industry can take centre stage.

When asked about the Australian

fashion industry Cheung said it wasn’t

really on the collective radar of her

readers. But she was quick to point

out how impressed she was during

her visit by Australia’s dining scene.

Observing a knowledgeable yet

laid-back feel in hospitality service,

as well as the finest, unrecognizable

ingredients in fusion cuisine, Cheung

admired what she thought of as a

unique and quintessentially “Aussie”

offering.

It seems that 76 percent of the

one million Chinese visitors to

Australia agree with her, associating

Australia with “good food, wine, local

cuisine and produce” according to

survey data by Tourism Australia.

With Chinese tourists ranking these

commodities as the second most

important factor when choosing

any holiday destination, it dawned

on me that Cheung’s comments

weren’t necessarily that off-topic.

When thinking about the huge

market potential in China, Australian

businesses need to go back to basics

and highlight a uniquely Aussie

competitive advantage that speaks to

Chinese consumers.

The latest figures on the Chinese

middle class make Australian

// 19// APRIL / MAY 2016

FOCUs On AsIA

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

opportunities in China more

conspicuous than a fake Louis Vuitton

bag.

China’s middle class now

outnumbers the US equivalent by

roughly 17 million.

In 2015, Chinese tourists in Australia

spent $7.7 billion, up from $3.3 billion

five years earlier. Currently only six

percent of the Chinese population

holds a passport. It’s not difficult to

see the scope for growth.

Back to the F word. The typical

Chinese fashion consumer is depicted

as buying high-end, heavily branded

luxury apparel.

But Cheung underlined the growing

sophistication in the Chinese market;

the Chinese fashion consumer is

increasingly willing to take risks.

Why does that matter for Australia?

It makes room for high-quality

Australian designers who may not

have the same name value as the

perennial Italian or French labels.

These designers appeal to the

consumer who sees an “Australian

Made” label they know they can trust.

Alice McCall for example became

the first Australian designer to open

a stand-alone boutique in China last

year, a move that could pave the way

for others.

The doom and gloom about

China’s slower growth coupled with

Australia’s post-mining boom anxiety

disorder has led many Australians

to prematurely don black mourning

suits. But if they swap their synthetics

for more natural fibres they might find

there are many industries in Australia

just starting to find some momentum.

China buys 80 percent of Australian

wool exports.

Although much of this is in raw

exports, the Australian wool industry

is looking at ways to innovate and

adapt to a market that is moving from

manufacturing towards consumption.

Clothing expenditure in China is

projected to grow by 11 percent

annually over the next five years,

more than two and a half times that

of the US Australian Wool Innovation

is developing highly advanced

technologies in wool processing

enabling lightweight, waterproof

outdoor wear as well as breathable

sportswear to be made from 100

percent wool.

This appeals to the Chinese market

on two levels – one is the huge

growth in the sportswear market

and the other is the demand for

environmentally sustainable products.

Eighty percent of Chinese consumers

think of wool as a sustainably

produced commodity and Australian

wool is seen as the best in the world.

This is not to simplify the complex

challenges facing the wool sector, but

to highlight the simple lesson at the

heart of this story.

Rather than be depressed about

China’s move from manufacturing to

consumption, Australian industries

should see this massive market as

its biggest economic opportunity

yet. It can move from exporting raw

resources to producing innovative

high-quality, distinctively Australian

products and services – whether they

may be in the form of fashion, food or

anything else that might be financially

lucrative.

Yves Saint Laurent once said that

“fashion fades but style is eternal.”

Australian producers and service

providers will always have their

competitors but no other country can

replicate the genuinely Australian

brand. The lesson from Vogue China

was that demand for any industry can

wax and wane but true Aussie style

will never fade. •••

// 20// APRIL / MAY 2016

THInK CHInA

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

BenjAmin sun

Whether they’re a

“mummy blogger”

who shares their

thoughts on the

latest products as a hobby, or a

glamourous film celebrity known in

households around China, working

with an influencer can strengthen your

relationship with Chinese consumers

and expose your business to a broader

audience.

These are the ways an influencer can

help Australian businesses boost their

brand.

The behaviour of Chinese online

consumers means influencers have

a great power, possibly more so than

their Australian counterparts. With 46

per cent of Chinese online consumers

reporting they find out about overseas

products from friends, and another

34 per cent discovering new overseas

goods from social media, according to

research from Think China, the reach of

micro-influencer isn’t so little after all.

The reviews of friends and trusted

influencers are particularly important

in China due to the abundance of

counterfeits products. With consumers

often coming across fake clothing,

handbags, and even counterfeit

food, a trusted recommendation or

// 21// APRIL / MAY 2016

THInK CHInA

warning from a fellow customer can

give a consumer the confidence to try

your product or even abandon their

shopping trolley.

The wariness of Chinese consumers

mean influencers can help Australian

SMEs gain trust in their brand and

products, which is especially important

if they are beginning exports to China

for the first time or are relatively

unknown in the region.

Although a so-called “micro-

influencer” may have only 500 friends

on social media platform WeChat, their

relationships with these influencers are

more likely to be stronger. A micro-

influencer’s contacts are more likely to

be “offline” relationships, such as those

with family, friends, colleagues, and

classmates, and as result, their opinion

can have an equal, if not greater,

impact than that of a more prominent

celebrity influencer.

One of the most underappreciated

types of micro-influencers are

“mummy bloggers,” those that review

baby and pregnancy products. These

women are powerful as they often

have a tight-night community of

friends going through a similar life

stage of pregnancy or raising a young

family. With 85 per cent of Chinese

mums naming safety as their top

concern when buying baby goods

online according to research from

CTR, achieving trust from this group is

particularly important.

More prominent celebrity influencers

can have a large impact on your brand.

Even a small engagement such as a

repost or mention on Chinese micro-

blogging platform Weibo can amass

a significant number of new fans,

assisting a brand to broaden their reach

to an untapped wider audience.

Being an influencer isn’t a full-time

job for micro-influencers – most do

it as hobby. They genuinely love the

products, sharing their opinions, and

trying new brands.

Since micro-influencers are genuine

fans of the products they review and

don’t rely on being an influencer alone

for their income, it is often simpler to

negotiate a deal which suits both your

business and the blogger.

On the other hand, self-professed

KOLs are more likely to make a

career out of becoming an influencer.

Although this means they may have

more experience in reviewing goods

and dealing with brands, you can

bet that they are also working with a

number of other businesses – some

of which may be your competitors.

Working with a “professional” KOL

means running the risk of having them

recommend your brand this week, and

your rival’s the next.

For the majority of Australian SMEs

looking to enter the China market for

the first time, their budget is often a

chief concern. Since micro-influencers

don’t rely on being an influencer

as their main source of income,

arrangements with them are often

much cheaper, and as a result, are

often a better choice for brands with a

limited budget.

Many micro-influencers will be happy

to receive samples of your products in

lieu of payment.

Working with a professional KOL

can be expensive, depending on the

size of their fans and the commitment

required. For example, providing a

product mention or simple product

review on one social media platform

will be less expensive than requesting

multiple mentions and instructional

videos on multiple platforms as this

will require a larger investment of

their time. However, for larger brands

looking to make the greatest impact

in the Chinese market, working

with Chinese celebrities, such as

engagements from actors, musicians

or socialites, can attract plenty of

attention to your business.

Engaging with

influencers will have

a greater impact

for certain products

and industries.

Women are more likely to be swayed

by influencers and reviews, with 37

per cent of females reporting a peer

influence as a reason for buying

an overseas product, compared to

only 29 per cent of men. With this

in mind, it can be more effective to

use influencers for products that

are purchased by women, such

as vitamins, beauty products, or

pregnancy goods. •••

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

‘There are influencers for every budget’

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

www.thinkchina.com.au

// 22// APRIL / MAY 2016

AUssIe MADe

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

Mr Forrest, who

addressed the

Boao Forum on

China’s Hainan

Island last month, said

Australian food suppliers

are missing opportunities

in China because of poor

branding.

“This is because we

insist on having our own

little corporate brands

or our little State brands

competing with each other,”

he said.

Mr Forrest said a host of

Chinese business leaders

had urged Australia to

export food and produce

under one brand and logo.

“We might be reasonably

sized fish in a little pond in

Australia but get up here

and no one has ever heard

of you,” he said. “What they

are really interested in is are

you Australian or not and

is your product genuinely

Australian.

“Their message is ‘it is

Australia we have heard

about since school, we

haven’t heard of your

industry association, we

haven’t heard of your

company, we haven’t heard

that much about your State,

but we all know Australia

to be clean, green, well-

managed, reliable, have

a strong legal system

and excellent quarantine

standards’.

“That is what they want to

buy.”

Mr Forrest said the world

was not in danger of running

out of food and that it was a

mistake to think that much

of China’s population did not

already eat well.

“There will be no shortage

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

// 23// APRIL / MAY 2016

AUssIe MADe

of food. There will be a

shortage of quality food,

reliable food, of source-

identifiable and sustainably

supplied food,” he said.

Mr Forrest said he hoped

the Federal Government

was close to endorsing a

national brand and logo.

Tourism Minister Richard

Colbeck, who was at the

forum, has said he will lead

the push for an Australian

brand to sell food and a

range of other products.

Senator Colbeck cited

100% Pure New Zealand as

an example of a national

brand that worked to the

benefit of that country’s

agriculture sector.

The Australian Made

Campaign has supported Mr

Forrest’s call for a national

brand and logo on food

exports.

Australian Made Campaign

Chief Executive, Mr Harrison

said Australia’s food and

agriculture sectors should

work closely together to

promote their products

using a “Brand Australia”

strategy.

“The power of consistent

branding, both here and

overseas, cannot be

overstated,” Mr Harrison

said.

Mr Harrison said the

already well-established

Australian Made, Australian

Grown logo should form

part of the food labelling

system envisaged by

Mr Forrest, to provide

consumers in markets

everywhere with better

surety of the true origin

of the food they are

purchasing.

“The iconic green-and-

gold kangaroo logo has

been clearly identifying

Australian produce in export

markets for 30 years with

great success, so there is a

pivotal role for the symbol to

play in any ‘Brand Australia’

strategy,” Mr Harrison said.

“Australia enjoys a strong

reputation internationally for

its clean, green environment

and high standards for

the production of food, so

it makes sense to place

a strong emphasis on

promoting the Australian

brand and defending

the authenticity of food

supplied from this country.”

•••

// 24// APRIL / MAY 2016

TRAVeL

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

The new service is

expected to bring

an additional $240

million to the local

economy each year.

The airline has also

announced a new service

between Dohar and

Adelaide later this year.

Qatar Airways Group Chief

Executive, His Excellency

Akbar Al Baker said the new

services would double the

airline’s capacity to and from

Australia in the first half of

2016.

“There are many

similarities in our cultures

and home countries – Qatar,

like Australia, is known for

its hospitality, its warm

welcome and its forward

thinking, Mr Al Baker

said. “These qualities are

reflected in the strength of

our current trade, totalling

$1.56 billion in 2014. We look

forward to building on this

success and to going places

together.”

Qatar Airways has been

serving Australia since 2009

when it began flights

from Melbourne. In 2012 it

added flights from Perth.

The award-winning airline

will fly a Boeing 777-300

daily from Sydney to Doha

connecting Australian

passengers to its global

network of more than 150

destinations.

And the new service will

connect Australia’s leading

exporters to Qatar Airways

Cargo’s global network,

providing 84 tonnes of cargo

capacity per week.

Qatar Airways Cargo is the

third largest international

cargo carrier, already

carrying 301 tonnes of

freight in the belly hold of its

passenger aircraft into and

out of Perth and Melbourne

each week.

“Qatar Airways’ new daily

service will boost tourism,

providing an additional

245,000 seats per year,

generating an estimated

3,000 jobs and contributing

more than $240 million to

the Australian economy, said

Sydney Airport Managing

Director and Chief Executive

Officer Kerrie Mather.

“It will also foster trade,

providing greater air cargo

capacity and access to

the Middle East. Australian

exports to Doha grew by

23 per cent last year, and

the State of Qatar’s high

demand for livestock,

cereal, meat, dairy products

and crops provides a

significant opportunity for

Australian exporters.”

Qatar Airways’ hub, Hamad

International Airport in Doha,

offers passengers travelling

from Sydney a comfortable

and efficient transit with

an average connection

time of just 90 minutes.

The luxurious and modern

airport, less than two years

old, has more than 40,000

sqm of retail space and

restaurants including more

than 70 retail and 30 food

and beverage outlets, as

well as a 25m swimming

pool, gym, hotel and spa.

Passengers travelling on

board the Qatar Airways

Boeing 777 to and from

Sydney in Business Class

will be treated to fully-flat

beds as well as an on-

demand à la carte menu

service at any time during

the flight.

The aircraft also features

the state-of the-art Oryx

One entertainment system,

with more than 3,000

entertainment options on

individual screens in all

classes. •••

// 25// APRIL / MAY 2016

FReIgHT

Germ free flights: Boeing develops self-cleaning toiletsBoeing has developed a self-cleaning toilet prototype that uses ultraviolet (UV) light to sanitise its surfaces.

Engineers and designers estimate that 99.99 percent

of germs are killed with all surfaces disinfected in

just three seconds.

The lavatory uses Far UV light, which is different

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

harmful to people.

Nevertheless, the Far UV light would be activated only

when the lavatory is unoccupied.

“We’re trying to alleviate the anxiety we all face when

using a restroom that gets a workout during a flight,” said

Jeanne Yu, Boeing Commercial Airplanes Director of

Environmental Performance. “In the prototype, we position

the lights throughout the lavatory so that it floods the touch

surfaces like the toilet seat, sink and countertops with the

UV light once a person exits the lavatory. This sanitising

even helps eliminate odours.”

The cleaning system, which will require further study

before it can be offered to airlines, would lift and close the

toilet seat by itself so that all surfaces are exposed during

the cleaning cycle. The design also incorporates a hands-

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

and a hand dryer. A hands-free door latch and a vacuum

vent system for the floor are also under study, all to keep

the lavatory as hygienic as possible between scheduled

cleaning.

“Some of the touchless features are already in use on

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

with the new UV sanitising will give passengers even more

protection from germs and make for an even better flying

experience.” •••

// 26// APRIL / MAY 2016

FReIgHT

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

The sale – one of the nation's largest privatisations

– is expected to reap the Victorian government

more than $6 billion.

VIC Treasurer Tim Pallas launched the formal

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

month, calling for expressions of interest.

The deal is expected to be finalised before the middle of

next year.

Overseas bidders, including those connected to foreign

governments, will be welcome to bid, but they will be

subject to the approval of the Foreign Investment Review

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

earlier this year sparked controversy and concern from

the United States, underlining the strategic importance of

major port facilities.

The Port of Melbourne will be sold as a 50-year

lease, with the proceeds to be allocated to roads and

infrastructure projects across Victoria.

A new $200 million Agriculture Infrastructure and Jobs

Fund will also be established.

"This will drive economic growth in our regions, boosting

exports and supporting Victorian farmers from paddock to

port,” Mr Pallas said.

"The lease will make our port even better, increasing

efficiencies and competitiveness, and will reinforce

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

nation."

The government expects to announce a preferred

// 27// APRIL / MAY 2016

FReIgHT

leaseholder before the end of 2016. The deal should be

finalised by mid 2017.

"We're moving to market quickly because of the strong

bidder interest in the Port of Melbourne and we're

confident the lease will deliver significant, long-term

economic benefit to Victorians," Mr Pallas said.

It is understood that major Australian super and

investment funds, including IFM and Hastings, are likely

to bid for the port. International consortiums are also

likely to express interest. Morgan Stanley is advising the

government on the process.

The bill enabling the leasing of the port was passed by the

Victorian Parliament on March 10, following a stand-off with

the opposition.

The Labor government eventually agreed to dramatically

water down a controversial clause exposing the state to a

compensation payment to the future owner if a rival port is

built that undercuts its business.

Labor previously insisted the compensation regime apply

for at least 30 years.

But under the new agreement, the compensation regime

only applies for 15 years from the day the port is sold,

meaning it will expire in about 2031.

A source close to the bidding process said there would be

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

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

less strategically sensitive than the port in Darwin".

The sale of the Port of Darwin to Chinese investors

attracted widespread criticism, including from Australian

Defence officials.

Following the controversy, the federal government

directed the Foreign Investment Review Board to review

what are known as "critical infrastructure assets" sold by

state and territory governments to private investors.

The Victorian Chamber of Commerce and Industry said

the lease of the port will have a significant impact on

Victoria’s economic future.

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

progress our state’s infrastructure priorities,” the Chamber

said in a recent statement.

“The port will continue to be a significant piece of

infrastructure to Victoria as container throughput is

expected to more than double to nearly six million units

per annum in the next 15 years.” •••

// 28// APRIL / MAY 2016

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

logistics executive group promotes Australian business in Jafza

FReIgHT

Located between a top

container terminal (Jebel Ali

Port) and a top international

airport (Al Maktoum

International Airport), it is the region’s

most efficient logistics hub.

The flagship free zone entity of

Dubai has always been an attractive

destination for Australian companies

looking to expand their business in

the Middle East, North Africa, South

Asia (MENASA) region.

An Australian company, Logistics

Executive Group, was recently chosen

to represent Jafza in the ANZ region

for the third consecutive year.

Established in 1999 Logistics

Executive Group has a well-

established global office network.

The company has been operating in

Dubai since 2004 and boasts offices in

Sydney, Melbourne, Perth, Singapore,

Hong Kong, Shanghai, Chennai,

Mumbai and London.

Logistics Executive Group has

developed a strong reputation

for assisting Australian and new

companies to establish and grow

businesses in the Middle East, Africa,

South, South East and North Asia

markets.

Making the announcement, Khalid

Al Marzooqi, Senior Manager-Asia

Pacific Region said 55 Australian

and New Zealand companies are

represented in Jafza with trade worth

US$262 million in 2014.

“We have some of the renowned

companies operating in various

sectors such as equipment and

machines, building materials trading,

food & beverage, electronics and

electrical, readymade garments

group and motor vehicles and auto

spare parts.”

Al Marzooqi said Jafza has

geographical advantages that give

inroads to the regions such as the

Middle East, Africa and North Asia

regions, including the Jebel Ali Port,

Dubai International and Al Maktoum

International Airports.

“We have been attracting

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

// 29// APRIL / MAY 2016

Cargo theft remains top supply chain risk in 2016

FReIgHT

and the West, contributes 20 per

cent of Dubai’s economy. It is well

connected to all corners of the world

by land, sea and air.

In 2014 the Free Zone generated

trade worth US$96.5 billion.

The Free Zone offers world-class

infrastructure, logistics, zero tax

regime and a 100 per cent foreign

ownership to mention a few of the

advantage.

Jafza’s product offerings include

plots of land, warehouses,

showrooms, customised

development solutions, offices, retail

outlets, a business park and on-site

residences. •••www.logisticsexecutive.com

companies from Australia to set up

manufacturing and processing units

providing them with all the support

to set up an operating base here,” he

said.

Jafza, the bridge between the East

Supply chains across the

world face a number of

challenges and one of

the biggest threats to the

global supply chain is cargo theft.

Last year, according to BSI’s Supply

Chain Risk Exposure Evaluation

Network, damages caused by cargo

theft amounted to $22.6 billion – and

that figure is estimated to grow by a

further $1 billion this year.

There are increased concerns

particularly in China, Germany, India,

Mexico, South Africa, and the US, BSI

says in its latest report.

BSI says most cargo thefts in 2015

could be attributed to security

issues.

South Africa has seen a 30%

increase in cargo truck hijackings

over the last year, with thieves using

high levels of violence and switching

from targeting only high value goods

to also targeting lower value items.

Daring vehicle shipment thefts have

become increasingly commonplace

in China, with a recent series of in-

transit vehicle thefts occurring along

the busy G45 highway.

More sophisticated attacks were

observed in India throughout 2015,

where criminal gangs masterminded

new techniques to steal goods

without breaking customs seals in

order to avoid detection – a major

risk for companies participating in

international supply chain security

programs.

In Europe, disruptions in trade

caused by the ISIS terrorist group

clearly highlighted the link between

terrorism and the supply chain.

Border controls in France following

the November attacks in Paris are

estimated to have cost the Belgian

shipping industry $3.5 million.

Terrorist-linked smuggling rings

were also identified to be colluding

between Spain and the Middle East,

the groups illegally transporting

shipments of stolen electronics,

drugs, weapons and other

contraband.

In addition to theft, business

continuity-related threats such as

extreme weather events and political

and social unrest, led to significant

losses for individual companies and

national economies last year.

The top five natural disasters in

2015 caused a collective $33 billion

of damage to businesses. •••

// 30// APRIL / MAY 2016

FeATURe AgRICULTURe

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

and the figures are edging closer to Australia’s

top export earner – mining-iron ore – which is

currently tracking at $49 billion.

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

billion.

Addressing the recent ABARES Outlook conference in

Canberra, the Minister for Assisting the Minister for Trade

and Investment, Senator Richard Colbeck, said Agriculture

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

sectors.

Other sectors include tourism, international education,

gas/energy and wealth management.

“The size of these five collectively match that of mining at

its peak,” said Senator Colbeck.

“Together these sectors are predicted to add more than

$250 billion (to the Australian economy) over the next 20

years.

“With the right tail winds there is a very real possibility

we could see much more than that added to the economy

and there is every reason to believe now is the time to

capitalise on Australia's advantage.”

Senator Colbeck told the conference exports to Asian

markets, in particular, are expected to grow even more as

a result of the entry into force of free trade agreements

Agriculture on track to become Australia’s top export earnertim michAel

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

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

eventually the TPP.

And Asia is not the only success story.

“Last year US demand for Australian beef was so high

that export volumes exceeded the US’s WTO beef quota,”

Senator Colbeck said.

“Our producers had recourse to the special beef quota

negotiated under the Australia-US Free Trade Agreement

for the first time since it came into force.”

Senator Colbeck said Australia is perfectly positioned to

grow its exports in key sectors, with access to more than

600 million people in neighbouring countries alone.

“Of great significance is that this population has age

profiles that align to our service strengths, particularly

tourism and education, and a growing middle class

seeking what we have to offer and that’s protein/food,

energy and wealth management,” he said.

“The increasing middle class of our major trading

partners means the demand for protein is increasingly

rapidly.

“The world wants what we have got. And the more we

play, the stronger we get.”

Free trade agreements are now in place with Korea,

Japan and China.

And the Trans-Pacific Partnership trade pact, signed by

// 31// APRIL / MAY 2016

FeATURe AgRICULTURe

Australia and 11 other countries earlier this year, would

provide further benefit to exporters.

“The Government has recognised the importance of

active implementation and follow-up of these FTAs,” said

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

great agreement – we need to explain to producers how to

use it.

“Accordingly, we have invested significant resources in

explaining to business the opportunities these agreements

have opened up, through FTA information seminars across

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

which provides easy access to clear technical information

on how to use FTAs.”

Senator Colbeck said good progress is also being made

in bilateral negotiations with India and “reinvigorated”

negotiations Indonesia.

And the Government is also moving toward establishing

a comprehensive, high-quality FTA with the European

Union. (EU).

“This is important for the agriculture sector, as the EU is

the only one of our top ten export markets with which we

have not already negotiated an FTA or with which we do

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

ABARES Executive Director, Karen Schneider said

a relatively weak Australian dollar, newly signed free

trade agreements and strong international demand

are expected to provide ongoing support for Australian

agriculture in world markets.

Ms Schneider told the ABARES Outlook Conference

these factors would underpin future opportunities for

agriculture in export markets.

“The weaker dollar has supported average export

prices in Australian dollar terms across the board, and

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

forecasting the gross value of farm production will reach

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

support exports of around $45 billion.

“The recent trade agreements finalised with major

regional trading partners and new market access protocols

will provide opportunities in both new and established

markets.”

Ms Schneider also discussed the domestic factors

affecting farm performance and trade opportunities.

“On the home front the challenge is increasing

productivity to remain competitive in global markets,” Ms

Schneider said.

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

markets from countries such as Brazil and Argentina, which

have invested significantly in reducing costs and boosting

productivity in their beef and grains industries.” •••

‘the world wants what we have got’

About the ConferenCe

The ABARES Outlook conference

is Australia’s premier information

and networking forum for public

and private sector decision-makers in the agriculture

sector. The conference was

held in Canberra on March 1-2.

// 32// APRIL / MAY 2016

news

Boutique manufacturers Astir Frames,

Bouwmeester Composites and Finch

Composites are taking advantage of South

Australia’s strong manufacturing history and

access to university testing facilities to gain a foothold

in the potentially lucrative cycling market.

The global bicycle industry was worth $US48 billion

in 2014, driven by the sale of about 133 million bikes. It

is expected to reach an estimated $65 billion by 2019

on the back of rising fuel prices and growing traffic

congestion.

General Motors Holden’s car manufacturing plant

in Adelaide will close next year, costing thousands

of jobs not only at the plant but also at component

manufacturers that have supplied it for decades.

Astir Frames specialises in long-lasting tailor made

titanium bicycles. The bikes are built using parts from

around the world and assembled in Adelaide, South

Australia’s capital city.

Founder James Moros said the decline of the

automotive industry in the state was opening doors

for him.

“If there are factory machines that are idle, I’ll ask

to use them. I’m not scavenging, but I’m utilising

available equipment that other people aren’t using at

Bicycle manufacturing keeps export wheels turning in SA

cAleB rAdFord

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

‘titanium is a beautiful material’

// 33// APRIL / MAY 2016

news

the time,” he said.

“Titanium is a beautiful material. It is

precious, low maintenance, and you can leave

it out for years without painting it.”

Moros has exhibited at the Tour Down Under

for the past two years, and said it was a great

opportunity to showcase his brand.

“People who

bought my bikes

saw me and

talked about how

pleased they were

with my bikes. It’s

a testament that

the bikes that I made for them are working

fantastically,” Moro said.

South Australia has hosted the southern

hemisphere’s biggest cycling race the Tour

Down Under since 1999. It has also produced

many of the nation’s best riders including

Rohan Dennis, Stuart O’Grady and Jack

Bobridge.

Astir Frames sold 30 bikes last year and is on

track to increase sales by more than 30 per

cent this year.

Bouwmeester Composites is another

company that has found success in South

Australia.

Since the launch of its product at the

end of 2014, sales have been in line with

the forecasts with 50 per cent of sales

contributed coming from exports.

The company manufactures high

performance carbon fibre wheels for off-road

racing bikes.

Founder and CEO Mello Bouwmeester

brought the composites work to Adelaide

after previously manufacturing overseas.

“We wanted to have total control over our

manufacturing and intellectual property,” he

said.

“Manufacturing in SA allows for us to speed

up our R&D cycle and also maintain strict

quality control practices.

“A wheel set sells for $3500. Which is

competitive against some of the big overseas

brands that predominantly have their wheels

made in Asia.”

Finch Composites is another company

showing promise.

The company is working on prototype

carbon wheels equipped with disc brakes for

racing bikes.

The UCI is allowing the use of disc brakes

in 2016 and if this testing phase is a success,

disc brakes will be permitted across the sport

from 2017.

Finch is looking to partner with car

component manufacturers who are looking to

shore up new business ahead of the Holden

closure.

Co-founder Ben Tripodi said he was able to

work with one of the local universities to test

the quality of the products.

“We partnered with Flinders University

last year and we had access to their

computational fluid dynamics (CFD), which

allowed us to simulate many different wind

conditions,” he said.

Tripodi said disc brakes increased stopping

performance for cyclists and the extra

responsiveness made them safer.

“It allows them to brake a lot later so they

can keep their maximum speed a lot longer

into a corner, particularly downhill,” he said.

“Our target market really is professionals

like lawyers and accountants who like to

ride on the weekend but have the money to

spend and demand the highest quality and

professional racers.

“We believe the majority of them we can

sell in Australia however, we do really want to

target the American market.”

Prototype manufacture and final testing of

Finch’s carbon wheels is expected to take

place in the coming months with the first

production run coming towards the end of the

year. •••

Source: The Lead

‘A wheel set sells for $3500’

// 34// APRIL / MAY 2016

wHAT’s On

SEPTEMbER 9

SEPTEMbER 10

SEPTEMbER 20-23

OCTObER 6

OCTObER 7

OCTObER 28

OCTObER 30 - NOVEMbER 1

SEPTEMbER 15

www.austrade.gov.au/events

www.australia-germany.com

www.divcom.net.au

www.austrade.gov.au

www.tiq.qld.gov.au

www.exportawards.com.au

www.divcom.net.au

www.industry.gov.au

1

2

4 6

5

7

8

3

China eCommerce Seminar Series 2015

Australia-Germany Business Conference

Fine Food Australia Trade Show

EMDG Coaching/Information Session, Brisbane

Premier of Queensland Export Awards 2015

Premier of NSW Export Awards 2015

Good Food Show

Industry & Innovation Workshop

Host: Austradewhere: National Wine Centre of AustraliaExhibition HallCnr of Botanic & Hackney RdsAdelaidePh: 13 28 78

Host: German-Australian Chamber of Industry & Commercewhere: International Chamber House, Conference Centre L5121 Exhibition Centre, MelbournePh: 03 9027 5618

where: Sydney ShowgroundSydney Olympic ParkPh: 03 9261 4500

Host: Austradewhere: Level 16, 307 Queen StBrisbanePh: 13 28 78

where: Brisbane Convention & Exhibition CentrePlaza BallroomSouth Bank, BrisbanePh: 07 3514 3134

where: The Star, 80 Pyrmont St. Pyrmont, SydneyPh: 02 9251 6492

Where: Brisbane Convention & Exhibition Centre, Merivale StSouth BrisbanePh: 03 9261 4500

Host: Department of Industrywhere: ANU Commons Building – Function RoomGround FloorCnr Barry Drive & Marcus Clarke St, Canberra.Ph: 02 6125 0228

// 35// APRIL / MAY 2016

wHAT’s On

APRIL 11-15

MAy 10-13

MAy 31-JUNE 3

MAy 19-21APRIL 13-15

APRIL 12-15 APRIL 25-27

APRIL 25-29

http://www.austrade.gov.au

www.seoulfoodnhotel.co.kr/

www.broadcast-asia.com

www.austrade.gov.au/events

Where: Shanghai, China

Venue: Singapore Expo

Where: Seoul, Korea

Where: Marina Bay Sands, Singapore

Where: Bali, Indonesia

Where: Hanoi, Vietnam

Where: Huechuraba, Santiago, Chile

http://www.eeaa.com.au/

http://www.nab.com.auhttp://www.austrade.gov.au

http://www.expomin.cl/

1Australia Week in China 2016

Seoul Food & Hotel 2016 Food & beverage, hospitality

Broadcast Asia Technology Exhibition & Conference

Australian Culinary Trails 2016Flavours of Australia

China Luxury Travel Showcase 2016

Food&HotelAsia (FHA) & ProWine Asia (PWA) 2016

Australian Agribusiness Research and Innovation Showcase 2016

Expomin 2016 - Santiago, Chile Mining & minerals exhibition

// 36// APRIL / MAY 2016