Exporters Guide

2010-2011
Local knowledge, global expertise.
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Contents
Foreword 2 Editor: Marilyn Kitchin
Getting Started Printed by: Geon Impact Pty Ltd
Economic Outlook 4
A recipe for Export Success 8 Published by:
Export Market Planning 12
Financial & Management Resources 14
Trading Overseas 20
The Company Profile 21
Selecting and researching your export markets 22 Executive Media Pty Ltd
Developing a market entry strategy 27 ABN 30 007 224 204
Visiting the market 30 430 William Street,
Participating in foreign trade shows and exhibitions 32
Melbourne Vic 3000
Going Global Telephone: (03) 9274 4200
EFIC: Working with Australian exporters 36
Facsimile: (03) 9329 5295
Internal business review and export readiness 37
Hague-Visby Rules limitation 39 Email: media@executivemedia.com.au
Export costing and pricing guidelines 41 Web: www.executivemedia.com.au
Government funding 46
Business seeks greater government engagement 49
Environmental Credentials 54 The editor, publisher, printer and their employees
Australian Made drives sales 56 and contractors are not responsible for the accuracy
or correctness of the text or contributions contained
Customs & Logistics in this publication and are not liable for any
International Trade Documentation 57 consequences of any use made of the products, or
Managing the volumes of international documents 61 reliance on the information referred herein.
Navigating export risks 64
Any fool can stuff a container 66 © Copyright 2010 The Australian Industry Group,
51 Walker Street, North Sydney NSW Australia.
Focus on the Americas Except where expressly reserved to authors or
Overview of the relationship & opportunities – Americas 72 contributors in this publication, the copyright is
Opportunities in Brazil 75 reserved to The Australian Industry Group and aside
Changing perceptions in Colombia – Latin America could be the next Asia 77 from permitted use under the Copyright laws of
Colombia: Land of opportunities for exporters and investors 79 Australia, no part may be reproduced by any process
Doing business in Chile 82 or means without prior wirtten permission of
Australia & Chile sign new tax treaty 84 The Australian Industry Group.
IP rights Latin America 85
Powers of attorney in Latin America 86
Doing business in the United States: Legal issues 88
An overview of selling to the US retail sector 90

Getting Help
Australia to heed safety standard deadline 92
Industry & Investment NSW 94
TradeStart 95
Brand Australia 96
Enterprise Connect 97
Support for Victorian Exporters 98
Support for Queensland Exporters 100
Sustainable approach underpins good business 102
Ai Group Assistance 104

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 1

Foreword
By Innes Willox, Director International and Government Relations, The Australian Industry Group

The Australian Industry Group is Australia’s largest national industry body, representing
around 10,000 large and small manufacturing, construction, engineering, defence,
IT and service industries in every state and territory.

M
anufacturing is a major sector of the Australian economy, with output and employment levels that remain greater than
mining and agriculture combined. It is the source of employment for over one million Australians, constitutes about 13 per
cent of GDP, and generates about 40 per cent of Australia’s exports.
In an increasingly globalised world, where global supply chains are becoming more relevant to industry growth and success, Ai
Group is dedicated to developing an export culture within Australian industry and providing the skills and resources to effectively
transition companies to exporting as part of their normal business activities.
Ai Group has a nearly 140-year history, and over the last 20 years has placed an increasing focus on assisting member companies
(particularly small and medium sized enterprises) to develop an export culture by:
• Providing cost-effective and accessible trade facilitation services;
• Building cooperative relationships with Austrade, State Government trade and investment organisations, and like-minded industry
associations;
• Establishing formal cooperation agreements in over 20 key overseas markets with sister organisations;
• Employing full-time experienced trade facilitation staff to assist companies to develop offshore trade opportunities;
• Providing export-oriented training and information programs;
• Providing individual market-entry planning and business matching services; and
• Developing programs for trade missions and exhibition participation.
Ai Group also actively contributes to the development of Australia’s trade policy, with the aim of reducing both the direct and
indirect barriers faced by Australian companies in export markets, as well as assisting Australian companies who face unfair market
competition from overseas suppliers.
Ai Group is closely involved in the FTA negotiations embarked upon by Australia in recent years – bilateral agreements with China,
South Korea and Japan, as well as regional negotiations on a transpacific FTA and negotiations with the Gulf Cooperation Council in
the Middle East. Ai Group is also involved with the recently implemented regional agreement between the ASEAN countries, Australia
and New Zealand.
Ai Group takes an active role in each of these areas, and continues to work with member companies to ensure that these
agreements reflect industry’s broad interests.
Ai Group also remains closely involved in the negotiations for multilateral market access under the World Trade Organization.
The negotiation of bilateral and regional FTAs is a necessary tool, however, to obtain more immediate market access for industry,
given the slow rate of progress under WTO auspices.
Ai Group delivers the Federal Government’s TradeStart program in Victoria, which helps small and medium sized enterprises
achieve their first export sales and future success. We also ensure our member companies are informed of the full range of
government funding and programs available to assist their export development activities.
This guide gives an excellent overview of the resident expertise within the Ai Group Trade and Export Development Department,
with many of the team having contributed articles to the publication. We have given particular focus to providing practical
information which will help you make a positive contribution to Australia’s export success and, more importantly, will in assist you to
secure growth for your business.
I know that you will benefit from the information in this practical guide, and I encourage you to make full use of the excellent
resources available through Ai Group’s Trade and Export Development Department.

2 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

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G E T T I N G S TA R T E D

Economic outlook: global trade

outlook more optimistic, but
uncertainty persists
By Martin Petch, Senior Economist, The Australian Industry Group

There are now signs that the world economy, and therefore global trade, is on the
mend following the ‘Great Recession’ of 2009. For Australian exporters this will mean
a broader base of potential areas of market growth.

W
hile the collapse in trade flows Chart 1: Growth performance in Australia’s key trading partners - 2010 and 2011
at a global level in 2009 was
the most significant in the
post-war period, Australian exporters
with significant exposure to the emerging
markets, particularly in Asia, were
shielded from the worst effects of the
downturn. For those firms primarily
exposed to the key industrial economies
of the United States, Europe, the United
Kingdom and Japan, the experience was
much tougher.
The current economic outlook is that
the key industrial economies will continue
slow recoveries. The emerging economies
with exposure to these markets will see
growth assisted by this development,
though domestic demand, driven by
the effects of recent policy stimulus, will Source: Australian Bureau of Statistics Cat No. 5368 and International Monetary Fund World Economic Outlook April 2010.
continue to play a major role in their The Commonwealth Budget forecast for 2010-11 confirmed the overall positive
growth outcomes. outlook in Australian exporters’ key markets through the period to 2012 as illustrated
Looking ahead, as Chart 1 shows, in Table 1.
based on the International Monetary
Fund’s (IMF) April 2010 forecasts, Table 1: Economic performance in major economies and Australia’s main trading partners
Australia’s key export markets are 2009-11
expected to see an improvement in
Estimates Forecasts
economic growth during 2010, though
2009 2010 2011
from different starting points.
Major trading partners 0.0 4.75 4.75
Japan, the United States and United
United States -2.4 3 2.5
Kingdom will see growth recover from
recession in 2009, with the US seeing Euro area -4.1 0.75 1.25
the best growth performance. China and Japan -5.2 1.75 2
India will see growth pick up in 2010, China 8.7 10 9.5
following relatively mild slowdowns in the India 6.4 7 8.25
previous year. World -0.6 4.25 4.25
(continued page 6) Source: Commonwealth Budget Paper No. 1 2010-11.

4 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

G E T T I N G S TA R T E D
Overall, the global economy is still
in the early stages of recovery though
it remains patchy with the advanced
economies sluggish compared with the
more robust conditions seen in emerging
markets.
Sovereign debt market instability,
most notably in Greece, provides the
key current uncertainty for economic
outlook, particularly in the industrial
economies. To date, however, though
equity and foreign exchange markets
have seen volatility as a result of
sovereign debt concerns, broader
financial market conditions have
improved and, of particular importance,
bank lending constraints have eased.
The improvement in overall financial
conditions, signs of improvement in
confidence, and ongoing policy stimulus
measures should see the world economy
grow by just over four per cent in both
2010 and 2011.
The patchiness in the global recovery
is reflected in the outlooks for Australia’s
key export markets.
China has been a key support for
Australia’s export and broader economic
growth during the global downturn,
through the domestic incomes boost
derived from solid export demand and
above-trend commodity prices.
The Chinese economy continues
to grow strongly, driven by domestic
demand that is reflecting investment
supported by the Chinese Government’s
fiscal stimulus program and stimulatory
monetary policy.
China’s economy is expected to grow
by 10 per cent in 2010, before easing to
around 9.5 per cent in 2011 driven by
Government policy and an improvement
in export demand.
An important risk to China’s strong
economic recovery is that growth has
been, and continues to be, reliant on
government stimulus. For strong growth
to continue into 2011 there will need
to be a sustained recovery in Chinese
consumer demand, private business
investment and global demand for
Chinese exports.
However, strong credit growth has
increased the risk of high inflation and
6 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
asset price bubbles, particularly in the
housing sector. Chinese policymakers
have tightened policy to offset
overheating, and further market-based
and administrative measures are likely,
with uncertain impacts on the level of
China’s growth over the next year or so.
Japan’s economic outlook remains
quite weak following the 5.25 per
cent decline in GDP in 2009 — the
worst performance of any of the
major industrial economies. Into 2010,
in a climate of soft investment and
consumer demand, exports have been
the main driver of the Japanese recovery,
supported by the resilience of emerging
economies, in particular China.
The Japanese economy is expected
to grow by 1.75 per cent this year,
though this is subject to a number of
risks, including the sustained falls in the
prices of consumer goods and services,
which are causing households to delay
purchases and contributing to a climate
of weak domestic demand growth.
Another risk is that the sovereign
debt issue currently affecting global
equities and currency markets may
cause a significant increase in global risk
premiums and slower than expected
economic growth, particularly in the Euro
area, with flow-on effects into demand
for Japan’s exports.
India’s economy has been resilient
despite the global financial crisis and
severe drought conditions. Growth of
seven per cent is expected in 2010,
reflecting improved business and
consumer confidence, better weather
conditions, and stronger foreign capital
inflows. As with China, the strength of
the domestic economic recovery has
provoked concerns about potential
inflationary pressures and, in response,
India’s central bank has tightened
monetary conditions.
The United States’ economic
outlook has improved, with the US
economy growing at its strongest rate in
over six years by the end of 2009.
There have been some positive signs
that consumer spending and business
investment are beginning to pick up.
Consequently, the US economy looks like
recording growth of three per cent in
2010.
Despite this improved outlook,
US consumer demand continues to
be constrained by weak employment
prospects, reduced credit availability and
falling asset prices, which have eroded
household wealth.
In addition, and reflecting recent
weak consumer demand, capacity
utilisation remains well below its
historical average, although the
corporate sector is recovering, with
corporate profits returning to near
historic highs. Business credit constraints
have eased, although they remain tight
relative to pre-crisis levels, particularly for
small businesses.
Small businesses, which drive US
employment growth, remain relatively
pessimistic and this will restrain the
recovery in the US economy in the short
term.
The economic outlook for the Euro
area remains soft, with a number of the
peripheral regional economies including
Spain, Ireland, and Portugal putting in
place rapid fiscal consolidations. This will
significantly affect economic growth in
these economies and the Euro area as a
whole.
The Euro area recovery is expected
to be modest, with GDP forecast to rise
by only 0.75 per cent this year, and the
outlook will rely on the extent to which
the core Euro area countries, notably
France and Germany, can boost domestic
demand to offset the contractionary
impetus on the periphery.
Overall, the outlook for Australia’s
key markets remains promising over
the next two years. The prospects of
better growth in the US and Japanese
economies will add to the overall gains in
growth of Australia’s key regional trading
partners.
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G E T T I N G S TA R T E D

A recipe for export success

By The Australian Industry Group

To produce a successful exporter,

Mix equal parts of the following ingredients:
1. A long-term view
2. Thorough planning, including of financial and management resources
3. Excellent preparation of:
• Presentation Materials
• Product
• Market Intelligence
• Cultural Differences
4. Know how to cost and place products
• Product Pricing
• Distribution Agreement
• Strategic Partnerships
5. Regular visits to the target market
6. Business relationship management skills
7. Attention to detail and quality

8 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011


Let’s examine the ‘ingredients’ of this
recipe in closer detail.
1. Long-term view
There is no concrete profile for a
successful exporter, although the main
attribute for success is the definitive
“commitment”.
A company’s size has little influence
on the success of an overseas market
entry; indeed success can be attributed
to the long-term commitment by senior
management to follow through the
export venture with both financial and
human resources. A sustained effort is
required in order to reap the rewards.
It is inevitable that an export venture
will experience problems and difficulties,
which will require additional effort by
company representatives over and above
their usual responsibilities. In this respect,
the support of senior management is
essential. The organisation must be seen
to support their personnel over the long
haul that all company representatives will
experience.
2. Thorough planning
Thorough planning is covered in
detail in the successive articles in this
publication titled: ‘Export market
planning’, and ‘Financial and
management resources required for
export’.
Breaking into any new market
requires considerable funds. One of the
major impediments firms experience
in realising their export potential is
the cost associated with developing
their distribution networks and general
marketing activities. In basic terms,
creating an export market is equal to
creating a whole new business, and
requires budget planning which is quite
separate from normal business costs
incurred in Australia.
3. Preparation
Presentation materials.
The preparation of presentation materials
is covered in the successive article in this
publication titled: ‘The company profile
– a passport to trade’.
Product preparation. Aside
from the preparation of presentation
G E T T I N G S TA R T E D
materials, it is probable that market
research you undertake may highlight
A company’s size
a need to adapt the product and its
characteristics to suit the target market.
has little influence
For example:
• there may be a prejudice against the
on the success of
packaging, which may
prohibit market entry;
an overseas market
• the brand name may have to be
modified, translated or changed to
entry; indeed success
suit the market needs;
• apparel or furniture sizes, for
can be attributed
example, may have to be changed;
• fashion trends, seasonal differences
to the long-term
and consumer preferences for taste
or colour may be critical; and
commitment by
• market research may reveal the
need to adapt to foreign government
senior management
standards, including the labelling
regulations in the target market.
to follow through the
Market intelligence. From the
above examples, the need to thoroughly
export venture with
explore your potential new market is
clear. Market research will pave the way
both financial and
for you, eliminating many problems
before they begin, and before you
human resources.
have gone too far to avoid the mistake
becoming a costly one.
A sustained effort is
This aspect is covered in detailed in
the article ‘selecting and researching
required in order to
your export markets’ in this
publication.
reap the rewards.
Cultural differences. Finally,
business cultures and ethics differ from
country to country. The exporter must
negotiate by the host market’s rules, or
not at all.
There may be language limitations in
a non-English speaking country that may
require your product and promotional
literature to be modified.
Where English is not the prominent
language of the country, negotiations
may be frustrated by misinterpretations
and misunderstandings. Ensure you
understand the culture to which you are
about to introduce your product. It may
be the difference between success and
failure.
4. Costing and placing products
Product pricing. The final
determination of a product’s export price
should be left until the completion of
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 9
G E T T I N G S TA R T E D
your market research. The price of the
product will be determined by many of
the factors that are particular to the target
market.
The first aim of an exporter is to
establish the product in an overseas
market. For this purpose the exporter
may seek to set the lowest possible price
with the narrowest of margins above
export costs. A loss may be acceptable
at first, especially if establishment and
promotional literature costs are likely to
be high.
Market research, to date, should have
uncovered components that will affect the
final costing, some of which will include
tariffs, quotas and sales tax requirements.
It could also have uncovered non-tariff
add-on costs.
Most importantly, there is also the
consideration of how much the target
market is willing to pay for the product.
Given all of our research so far, you might
find that you need to modify your product
considerably so as to reduce the cost to
suit the market.
Distribution agreement. The
distribution agreement is a document that
sets down in writing the understanding
between the vendor and distributor with
regard to the sale of a particular product
or products in a given territory at a given
price, including payment terms, sales
terms, and so on.
Perhaps even more than the written
word, the spirit behind the words that
seek to work toward your mutual benefit
is of paramount importance. Particularly in
Asian countries like Japan, such contracts
are not viewed as documents that should
be carried out to the letter, but rather as
a statement that sets out to do business
in accordance with agreed procedures,
providing there are no major changes in
either party’s circumstances. They regard
the moral obligations that accrue from
building trust between individuals as the
key to solving any unexpected difficulties.
Court actions would mean a tremendous
loss of face and reputation, and would
evidence a sad lack of human trust.
10 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
In the west, too, continual reference The Asian example aside, remember
to the distribution agreement, or even how much time you invest in your
worse, legal contest of the document, interstate agents so as to ensure they
would indicate a lack of willingness to continue to pursue your (and their) best
achieve mutual benefit, not to mention an interests. Factor in cultural, language,
expensive and damaging exercise. geographic and other differences, and
There are numerous distribution options you are coming close to seeing how much
for a given product and territory, and input is required of you.
selection of the best option will arise only
7. Attention to detail and quality
after examining issues such as:
Australian companies are often
• how many mark-ups the product
criticised for not paying enough care
can sustain (given lengthy
and attention to detail, particularly with
distribution chains);
paperwork and commitments. This can
• trading terms expected from the
seem to be a rather petty complaint,
distributor;
but the ramifications can be serious.
• infrastructure offered by the
Successful exporters stand out through
distributor such as warehousing,
their attention to detail, commitment
transport, showrooms;
to timeliness and (contractual or other)
• services offered by the distributor
obligations, as well as quality assurance
such as contribution to advertising,
systems to ensure consistent provision of
product liability insurance, ability to
high-quality goods.
speak English;
• the distribution territory and final If you think that your company needs an
outlets covered by the distributor; export audit to see if the ingredients of
and your export success are right, please email
• size and reputation of the distributor. trade@aigroup.asn.au and request a free
In considering whether distribution or consultation.
other arrangements are most suitable for
individual requirements, refer to the article
‘Developing a market entry strategy’
in this publication.
5. Visit the target market
This aspect is covered in detailed in
the article ‘Visiting the market’ in this
publication.
6. Managing business relationships
One thing successful exporters have in
common is a close involvement with their
contacts in their chosen export market.
One of the greatest faults of would-be
exporters is inadequate attention to
prospective agents/importers after initial
contact has been made. Particularly in
Asia, frequent contact is expected in order
to show your earnestness and long-term
interest. A lack of communication from an
Australian company could be perceived as
a lack of interest in the relationship, and
the Asian company may feel neglected.
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G E T T I N G S TA R T E D
Export market
planning
By Len Philips, Business Advisor, The Australian Industry Group
Why plan?
The rationale for exporting is usually
self-evident, whilst the reasons for
planning may not be as obvious. The
final plan is the guide to what you intend
to do, how you will go about it, who is
responsible for what, and when, and the
anticipated results.
What is far more important than
the plan is the process. The systematic
process of analysing all aspects of
your business, your competitors and
potential export markets provides a solid
base for a move into exporting. It will
indicate the weaknesses that you will
need to overcome and it also unearths
opportunities.
General Dwight D. Eisenhower was a
little more succinct in his quotation:
“Planning is everything. The plan is
nothing.”
Australia is unlike any other continent,
as we have to send goods by sea or air
to sell to another country. In most of
Europe and the USA, exporters can deliver
their goods by road or rail using the same
packaging and delivery processes they
would for local sales. To a great extent,
the Europeans and Americans export
using the same currency.
The decision in Australia to develop
a company into a long-term sustainable
exporter is significant and will determine
the future direction of the organisation.
It requires a serious commitment initially
from the decision-makers and then from
all in the company. Simply by default
there will be change of culture in the
organisation as the business becomes
involved and affected directly by the
international markets and the people
involved in those markets.
12 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
The planning process
1. Examine your existing business,
products or services
• How important is export?
• Export is just one of a range of
strategic options.
• Is the company and its products or
services ready for export?
2. Preliminary market research
• Is there a demand for your product/
service, and is it acceptable in the
market? Do you have to change
any aspects of your products or
services? What is the size of the market
and your potential sales level? Who are
the customers and end users?
• Who are the competitors?
What are their quality levels and price?
Can you compete?
• What are the costs to develop the
market?
• Which is the preferred way to operate:
through distributors or agents or sell
direct? In some markets (often those
that have developed in recent years)
the business must have the facility to
sell via the Web direct or through
distributors to be able to access the
market.
• Who are the potential distributors or
agents?
One of the
best and often most
cost-effective ways
of carrying out research is to make a
preliminary but well-planned visit to the
markets you are considering. This is a
suggestion I make to all of my clients
as in my experience, a few days in the
market allow the clients to meet a
number of people in their own industry,
and simply through mutual interest they
obtain significant knowledge even from
potential or direct competitors. From my
observations, where language is a barrier,
if you sit two individuals together –
especially those with long term experience
in an industry – their understanding
of what they are trying to convey to
each other is often in advance of the
translator’s explanations.
From this visit you would normally
prepare a well-focused market brief and
have a good idea of the markets you will
consider.
3. Target market selection
This is really a process to prioritise the
markets you will approach; often the
opportunities are more numerous than
the resources available to address them.
Limited finance is normally a barrier,
particularly for SMEs, but often the
biggest issue is sufficient experienced and
skilled staff.
• Carry out a market portfolio analysis
• Prepare a strategic mission for each
market
• Determine the specific opportunities
and problems associated with each
market

• Prepare a financial analysis and
financial framework for the market
entry and development strategies
• Place the markets in a priority list,
which shows the timing for
initial markets and future markets
4. Strategy development
• A range of options are considered,
including:
- Indirect exporting through a
local customer
- Exporting via agents or
distributors
- Manufacturing or supplying a
service under licence
- Joint venture
- 100 per cent offshore ownership
• Pricing policy
• How you are going to promote you
product or service?
• Detailed market entry plan.
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5. Writing the export market plan
The final step is to translate the
strategies into the plan. Comprising an
action plan, time plan and a financial
plan, the final plan should specify:
• Key actions
• Key responsibilities
• Milestones and outcomes
• Associated time frames
• Allocated resources
• Cash flow projections
6. Performance monitoring
Export market planning is a dynamic
process and becomes part of the usual
review of company operations. The
review process should assist in periodical
updating of the plan and in ensuring
that opportunities are being maximised
and that previously identified market
potential has been turned into reality.
Plan monitoring occurs at three levels:
• Strategic
• Tactical
• Operational
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 13
G E T T I N G S TA R T E D
Conclusion
The PAN’AGRA research program
of the London Business School, which
was supported by the British Overseas
Trade Board and the Australian Trade
Commission, carried out a project,
‘First steps to export success’ in 1997.
Although this report is over ten years old,
its relevance remains. They came up with
three recommended first steps to success:
• Make well-prepared market visits to
build local knowledge and confidence
• Seek relationships with local
distributors and they will
ultimately lead to cooperative,
long-term partnerships.
• Choose export managers for their
people skills and learning skills, as
much as for their technical skills.
Ai Group staff are able to conduct an
export audit for companies and advise
on their export planning needs. For more
information, please email trade@aigroup.
asn.au
AM5095
G E T T I N G S TA R T E D

Financial and management

resources required for export
By The Australian Industry Group

The development of a new export market involves much more than simply achieving
an initial sale. Rather, it involves the successful identification and development of
a range of factors necessary to allow long-term profitable business results to be
achieved. This is particularly important as initial trial sales are in most cases not going
to justify the considerable time and financial investment in export marketing.
Specifically, the new market markets that are typified by change for export, the importance of having an
development will involve some or all of • Developing a plan or strategy that export plan cannot be overstated. (Refer
the following: is realistic, affordable and flexible to the article on export market planning
• Building new relationships, usually enough to grow with market in this publication.)
in unfamiliar cultural and business penetration.
Management resources required for
environments. Development of a new export
export development
• Adapting for new market needs as business is essentially similar to the
Without doubt the single most
foreign markets vary from the familiar creation of any new business. This
important success factor common to
domestic market requires financing an initial investment,
exporters is commitment to export from
• Arranging efficient and reliable a great deal of management time and
top management.
distribution. commitment, and good planning.
• Establishing methods of monitoring Whilst this article focuses on financial
the market, particularly for consumer and management resources required (continued page 16)

14 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

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G E T T I N G S TA R T E D
One of the This commitment is required to
ensure that export development receives
priority within the company and to allow
immediate effects adequate resources to be made available.
It also encourages all employees to
of commencing contribute to the success of any export
process. In this regard, it should be
overseas market noted that in addition to marketing, the
involvement of production, warehousing
research could be and administration personnel is necessary
to deliver export orders on time and to
the generation of specification.
In a practical sense, it is important
enquiries from to define who will be responsible for
doing what and when. The tasks to
the market as your be undertaken will at least include the
following:
product or name
Marketing and research tasks
becomes known. • Market selection and market
research. This would involve
analysing the most suitable
market, identifying the nature of
the opportunities, gaining an
understanding of distribution,
competitors and likely customer
needs, and establishing initial
This is where the contacts.
• Assessment of market
ready availability entry strategies. This involves
effective methods of introducing your
products and establishing importation
of company profiles and distribution. These strategies
may involve trade show participation,
and suitable marketing agency or distributor agreements,
special arrangements for customer
can be very helpful. testing, and trial orders. Ultimately,
it will involve ongoing marketing
activities.
• Preparation of a company profile
and other marketing material.
A company profile is a key tool in
international marketing for
introducing your company and its
products or services to potential
business partners or customers.
The profile is both a marketing and a
planning document as its preparation
requires the gathering of a broad
range of information.
• Planning preparation and
undertaking market visits.
Eventually it will be
necessary to make a series
of visits to the market during
16 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
both the initial and market
development phases. In fact, regular
visits on an ongoing basis will
normally be required as the
market develops. Market visits
are expensive regarding both time `
and money, so maximum benefit
should be derived from the time spent
on this activity. It is also important to
remember that time spent overseas
is time spent away from the business
in Australia, so it may be necessary to
train suitable people in order
to maintain continuity in the domestic
management role.
• Handling enquiries. One of the
immediate effects of commencing
overseas market research could be
the generation of enquiries from
the market as your product or name
becomes known. It will be necessary
to put mechanisms in place to
evaluate and respond to these
enquiries. This is where the ready
availability of company profiles and
suitable marketing can be very helpful.
• Identifying sources of assistance.
The Federal Government and most
of the state governments operate
a number of schemes that potentially
provide assistance to exporters.
Companies should familiarise
themselves with these sources of
assistance and how they can be used
to best effect.
• Negotiating sales and distribution
agreements. Inevitably companies
will be seeking to negotiate
appropriate agreements to lock in
distribution and sales arrangements.
This can be a long and difficult
process, taking up considerable time
and often requiring multiple market
visits.
Product related tasks
• Undertake proper export costing
and reverse pricing. It is essential
to determine the cost competitiveness
of your product. On the basis of this,
it may be determined that
modifications are required for the
product to find an appropriate value/
cost niche within the particular market.
(continued page 18)
“To see our product Export assistance from the Victorian
government has helped Marilyn
Lanyon of Simply Tomatoes find a
selling out in the Middle East niche market in the Middle East for
her gourmet green tomatoes.

is simply fantastic!” A delicious blend of green tomatoes,

olive oil, herbs and garlic, her product
Marilyn Lanyon, Simply Green Tomatoes has taken
Simply Tomatoes, Boort, Victoria Marilyn, from Boort in North West
Victoria, to the gourmet food capitals
of the world.
“We were thrilled when the Victorian
Government suggested we export,
because we saw it as an opportunity to
discover what the world thought of our
product,”says Marilyn.
“From our first trade show in Singapore
we got orders from South East Asia
and Europe. But now we’ve found a
niche area in the Middle East, where
Simply Green Tomatoes is really loved
and appreciated.
“I have a motto when it comes to
exporting - take small steps but think
big. If you do your research and
believe in your product you can export”.

To find out how the Victorian Government can assist your company to
export, visit Export Connections at www.export.vic.gov.au
G E T T I N G S TA R T E D
• Product Development and
Modification. The task of altering
products, and possible consequent
changes to manufacturing
requirements, will also need to be
undertaken. This may mean changes
to sizing, additions to ranges, or
options on complete product
re-engineering. This will require
cooperation between marketing,
development, and manufacturing
personnel.
• Identifying production
requirements. The expansion, or at
least possible changes to production
requirements, will require careful
planning and scheduling. There
is always potential conflict
between meeting existing customer
requirements, and slotting in new and
often novel requirements for overseas
customers on short notice.
Administrative and logistical tasks
The development of exports places
a number of ongoing administrative
demands on companies. These include:
• handling of export documentation
involving new methods of payment;
• meeting customs requirements both in
Australia and in other countries;
• working with banks to ensure
appropriate finance and
payment arrangements;
• working with both marine and export
credit insurers;
• arranging shipping through freight
companies, shipping lines, or other
parties;
• liaising with customers in the export
market;
• coordinating budgets and monitoring
the overall plan.
In many cases these tasks, whether
marketing, product related, or
administrative, will need to be undertaken
in addition to existing activities.
Nevertheless, it is necessary that they are
seen as an integral part of the business.
As input and cooperation will be required
from various people, particularly in larger
organisations, the best results will be
obtained when people believe that it is
part of their core activities.
18 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
Financial resources • Equity in joint ventures.
The development of a new offshore
Financing Costs
market will always involve expense. The
• Additional raw material and finished
types of areas where new or additional
products inventory costs.
expenditure may be required are
• Extended credit terms.
listed below. Naturally, the size of the
• Currency and credit risk.
expenditure will depend on the nature
• Financing of additional transport costs.
and scale of the project involved.
• Marine and credit insurance
Marketing expenditure requirements
• Production of marketing materials
Export administration and other
including multilingual material.
costs
• Market research, either through the
• Documentary credit arrangements.
Australian Industry Group, Austrade or
• Cost of overseas intellectual property
consultants.
protection.
• Travel and accommodation for market
• Cost of extended product liability
visits.
insurance (note: this in particular
• Trade show participation including
is often overlooked and can be
development of display material.
significant).
• Updating of the company website
• Customs and other export
is necessary in a number of emerging
administration costs.
markets to be able to carry out
Companies should determine as early
ordering and payment on the
web either directly or through as possible the likely size of all these costs,
distributors. and take appropriate account in their
export costing. It may also be necessary to
Product development and modify or stage the export development
modification plans to allow an appropriate cash flow
• Resizing of products. position to develop.
• Development of new tooling, patterns etc.
Conclusion
• Design of new product lines.
This article introduces the areas that
• Modification of consumer and/or
are likely to take up management time
transport packaging.
and financial resources when entering
• Achievement of quality accreditation.
new export markets. Proper planning and
• Meeting of government requirements
management of the people involved is
– health certification, product safety
essential to minimise both the time and
standards etc.
costs involved.
• Provision of training and in-market
product support. The Trade and Export Development
Capital expenditure team at The Australian Industry Group
• Acquisition of new or additional is available to assist you in addressing
production equipment. these issues. Please email your details and
• Establishment of offshore offices, requests to trade@aigroup.asn.au
support arrangements, warehousing
and distribution.
G E T T I N G S TA R T E D
Trading overseas
from them.
F
or young tourists, the two greatest
risks associated with travelling are
getting lost and losing their money.
Either is traumatic, but having both occur
simultaneously can devastate the best and
most meticulously planned itinerary.
Australian businesses travelling offshore
in either an import or export capacity are
equally at risk of ending up in an unfamiliar
the unique risks associated with importing
and exporting. But these risks can be both
managed and transformed into
the business.
Importers and exporters need to be
absolutely certain of their access to funds.
Trading cycles—both domestically and
internationally—can be volatile depending
on macro-economic and sectoral factors, so
Australian businesses need to make sure
they partner with an organisation that can
facilitate transactions as needed. National
Australia Bank’s Trade Finance specialists
provide solutions based on working capital
businesses—from large retail, wholesale
20 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
and institutional clients to small to medium-
home and abroad.
Two key risks Australian exporters and
importers face are related to interest rates
and foreign exchange (FX). Adverse
movements in either of these markets can
inability to take advantage of growth
opportunities.
When a client borrows money for trade
requirement they are taking on risk related
to interest rates. The Reserve Bank of
Australia has indicated that Australian
interest rates will continue to rise towards
average historical settings, so mitigating the
risk of an adverse interest rate movement is
critical for Australian businesses. Depending
the trade cycle lasts, there is an opportunity
to manage that interest rate risk with a
tailored solution that can deliver a known
interest rate level or map out a worst case
scenario.
Businesses dealing with suppliers or
customers offshore are also exposed to FX
markets. Movement in FX markets can have
as many clients, such as importers and
exporters, make or receive payments
denominated in foreign currencies.
On conversion to the AUD, these
payments can change in value from one
day to the next depending on the relative
value of the currencies involved. With the
recent trend of the AUD now rising
towards parity with the USD, importers and
exporters may wish to think through how
mitigate its effects on their business by
speaking to a NAB FX Specialist.
Journeying offshore can be both
exciting and risky, but you don’t need to
travel alone—NAB can go with you. So, if
that’s prepared to understand your
business as well as it understands foreign
trade, let’s talk.
Talk to a NAB FX Specialist on 1800 019 215,
or a Trade Finance Specialist on 13 10 12 or
visit www.nab.com.au/tradeoverseas.
 G E T T I N G S TA R T E D

The company profile –

a passport to trade
By Craig Malcolm, TradeStart Export Adviser, The Australian Industry Group

International marketing involves a systematic approach to introducing both your

company and product to a new market, and to developing relationships in the market
in order to build a long-term, profitable business. It is customary in the international
market to formally introduce your company to a prospective overseas business partner
by presenting your company profile.

A
company profile is a powerful The contents of the profile
marketing tool, designed to convey The profile does not need to be an expensive or glossy production. It does, however,
your corporate image and aims need to contain comprehensive information in a clear and concise format. The company
to influence, inform and persuade the profile can contain many of the following subject headings:
reader.
Name What sells the product
What is a company profile? Address Samples
A company profile introduces your Postal address Packaging/promotion
company and its products to prospective
Contact person Quality
customers or business partners such as
Telephone Distribution methods
importers and distributors.
From your company profile, an Fax Trading terms
overseas prospect forms an initial opinion Email/website FOB and CIF prices in A$ and the export
of your company and its products/ History of company currency
services, and is then able to consider Business strategy Minimum orders
further negotiations, either in the form Role of export in business strategy Export potential
of continued correspondence or by Why this export market now? Export experience
meeting with your company’s export Description of all product lines Knowledge of the target market
representative. Number of employees Product availability
The company profile aims to generate
Number/location of manufacturing facilities Preferred distribution
interest and inspire a willingness to enter
Company turnover Australian content
negotiations.
In summary the company profile: Sales by units Willingness to adapt product
• is a basic tool of international trade; Product specification Willingness to travel
• introduces your company to the Manufacturing methods Freight specifications
international market; Wholesale cost/unit Market segments
• contains information describing your Age of product Existing competitors
business, its objectives, capabilities Typical use of product Potential competitors
and product(s);
Typical users Distribution mechanisms
• has universal application;
Competitive products Key sales and distribution outlets
• is your corporate signature in the
Features/benefits of product Seasonality
market place;
Current marketing strategy Regional variances
• is your communication tool for market
research purposes; Target markets Current market position
• is your passport to successful business

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 21

G E T T I N G S TA R T E D

Selecting and
researching your
export markets
By The Australian Industry Group

There is a wide range of export markets a company could consider. It is important

to select those export markets that offer the greatest opportunities, keeping your
company’s capabilities in mind. Targeting the right market is an important first step
in export market development. Nothing is worse than working on the most effective
market entry strategies aimed at the wrong market.

O
ne of the quickest ways to
select your market is to build a
list of potential target markets
while slowly building market data and
other pertinent information on market
opportunities for the company’s range
of products or services for export. Not
only will this help to build an initial list of
possibilities, but it will also help to ensure
that no hidden agent will potentially block
or retard the export development process.
This initial discussion of various
options is also useful in identifying
information requirements – in other
words, critical assumptions we are making
about potential target markets that need
to be checked.
In summary, the objectives are to:
• clarify the current market preferences
of the senior management and their
reasons for these preferences;
• identify important information gaps as
a basis for the development of a
market research brief; and
• decide on a shortlist of potential
export markets.
This should lead to the following
outcomes:
• A shortlist of potential export markets
to consider further (companies
exporting already will have reviewed
their existing export markets as well as
potential new markets);
• A summary of high priority
information required to make this
market choice.
Selecting your target markets
The choice of which overseas market
to target is arguably one of the most
critical steps in planning for export.
Selection of the right market will lead to
early success and further encouragement
from your shareholders, financiers,
employees and customers.
(continued page 24)

22 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

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However, this is also one of the most
expensive steps because of the need for
market research data, and is the most
time consuming. In order to reduce
financial risks, a staged approach has
been adopted for the selection of target
markets. This approach will reduce the
likelihood of researching inappropriate
markets. There are two steps in this phase
of research:
1. Identify unsuitable markets – eliminate
those with hostile domestic
environments or those where
your products or services may not be
acceptable.
2. Identify market potential – ascertain
those that present good opportunities
for your product/services.
Step 1 - Identify markets that are
unsuitable
The primary focus is to find out
if there are any prohibitions against
your product or service in the export
markets you are considering. Always be
prepared to look further than the obvious
regulations. There are often rules that
restrict access to other markets. This
initial investigation should allow you to
eliminate unsuitable target markets.
Once you have established whether or
not your product/service is permitted, your
next step is to establish what restrictions
may be imposed on your product/service
in those countries. Key non-tariff barriers
facing Australian exporters may include:
• Buy national products campaign
• Rules and marks of origin
• Technical standards and certification
• Nominated importer requirements
• Customs delays
• Export subsidies
• Financial and counter-trade
obligations
• Anti-dumping law
• Sanitary regulations and protocols
• Quarantine restrictions and
pre-shipment inspection
Step 2 – Identify potential markets
The rest of the potential markets will
be assessed for the opportunities they
offer. You will need to conduct research to
determine factors relating to:
• Size of market (population and
spending power)
• Political and economic stability
• Market growth potential
• Level of competition
• Practicality of supply or servicing
from Australia, compared with
suppliers geographically closer
• Local culture such as religion,
customs, lifestyles and business
practices that may impact on
your success (For example, marketing
of alcoholic products to Muslim
customers would be culturally
unacceptable).
Setting priorities
Your company would have export
market preferences on the strength of
your knowledge of the products, domestic
market experience and interaction or
networking within the industry in which
it operates. It is important to continuously
review these possible export target
markets and to identify their particular
advantages and disadvantages as new
information comes to hand.
The two key questions that need to be
addressed are:
• How attractive are each of the export
markets to your company?
• How effectively can you compete in
these markets?
(continued page 26)

Checklist for potential export markets

• Which markets/segments are your competitors targeting?
• Which countries are major importers of the products/services?
• Which countries are major suppliers?
• What level of economic development is ideal for the use or consumption of the products
or services? Which countries are at this stage of development or fast approaching it?
• What are the sizes of the various markets being considered and a rough estimate of the
market supply structure – proportion of demand met by domestic production vs. imports?
• How fast are the imports growing?
• What are the potential market barriers? How costly is it to enter the market?
• How large/well-developed are the potential industry, commercial or consumer users?
• What is the product life cycle of this market?
• In which markets does your product/service have a natural competitive advantage?

24 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

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G E T T I N G S TA R T E D

Preparing the market Researching the market

After the process of target market
•
•
Market share
Established brands
research brief selection on the basis of the available
information, you are now ready to
•
•
Established distribution network
Competitive price
In the process of proceed with in-depth research of three to
four target markets. Initially, research will
• Innovative product/services or
marketing
selecting your target focus on product potential by looking at
the following issues:
•
•
Prestige image
Product/service quality
markets, gaps in • Size of the market
• Competition
•
•
Superior packaging or presentation
Network of contacts
information would • Pricing
• Market entry barriers
• Patents/copyrights

have been defined • Distribution channels

and listed as needing
further research.
It is important that
the objective of
the research is well
defined and designed
to address the key
issues relating to the
target markets.
Depending on the market and Preparing the market research brief
the nature of the product, a low-cost
electronic search of business databases
In the process of selecting your target
markets, gaps in information would have
should yield basic data to complement
previous knowledge of the target market.
been defined and listed as needing further
research. This information list should form
This process will further reduce the initial data requirements that can be built
the target markets to two to three key into a well-planned, focused research brief.
markets for in-depth research. You can It is important that the objective of
analyse and prioritise target markets and the research is well defined and designed
identify major research issues that need to address the key issues relating to the
to be addressed. The analysis should look target markets.
at the relative market attractiveness and
competitive position of a given market
Generally, a well-planned research
brief should contain the following basic
for your range of products or services.
This will be helpful in resource allocation
information:
• Aspects of the market to be
decisions, particularly in allocating
resources to developing markets with high
investigated and in what depth
• Why the information is needed and
growth trends and future profit potential. how it will be used
• Information about the products to be
Market attractiveness and
exported
• Information about the client company
competitiveness attributes
Attractiveness:
commissioning the research
Market research briefs are built upon
• Market size, growth trends
• Entry cost, investment requirements
the company profile document, which
is discussed in the article ‘The company
• Degree of price and supplier profile – a passport to trade’ in this
competition publication.
• Buyer’s strength and level of product/
The Australian Industry Group Trade &
market understanding
Export Development Team can assist
• Level of market entry barriers
in developing a research brief and
• Level of technological /product
conducting overseas market research on
innovation and development
your behalf. Please email trade@aigroup.
• Ease or difficulty of doing business
asn.au for more information.
(language and cultural barriers)
• Political and economic stability

Competitiveness: Competitiveness
relates to attributes that would give any
company a strong competitive position in
the market under consideration from an
industry perspective.

26 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

 G E T T I N G S TA R T E D

Developing a market entry

strategy
By The Australian Industry Group

Having obtained knowledge and understanding of the selected market, the business
must now determine the best market entry strategy for that market. It may be direct
export/distributorship, joint venture/partner, or alliance arrangements.

I
t is interesting to note that the most
appropriate market entry strategy is
often a trade-off between:
• Costs of alternative strategies:
Generally speaking, the closer to the
consumer, the more expensive the
option.
• Control over decision-making and
your products: The closer to the
customer, the better the controls.
• Risk: The more control, the less risk.
However, greater control means
higher costs, which increases the
financial exposure: a different type of
risk.
• Price: The closer to the customer, the
higher the return to your company.
• Government regulations: Certain
strategies may have to be adopted to
comply with government regulations.
• Management skills: Operating
on an international basis requires new
management skills. Until such skills
are developed or acquired it is wise to
start slowly.
The following checklist may be a
convenient way to quantify some of
the aspects you need to consider when
selecting your market entry strategy. You
will need to modify this list to make it
relevant for your products/services and
target industry; cross out irrelevant items,
add additional items, and so on.
Evaluating market entry options
1 Costs
a) How will you support your market
entry? Is finance a limiting factor?
b) Are the gross margin and volume
potential high enough to afford an
aggressive presence in the market
(e.g. local office)?
c) Could turnover be improved with a
more aggressive presence in the
market to be able to gain economies
of scale?
d) Could production costs be reduced?
(e.g. local assembly or contract
packaging?)
e) Has a reasonable payback period been
allowed when considering an
aggressive market entry strategy?

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 27

G E T T I N G S TA R T E D
A market visit is
essential before
finalising your market
entry strategy.
There is nothing to
replace a firsthand
view of the physical
market conditions
together with meeting
with counterparts in
your industry.
28 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
2 Control
a) How important is it to control:
• How aggressively your product is
marketed;
• How your brand is promoted;
• How your product is serviced; and
• How much market information is
fed back to you?
3 Risk
a) How stable are expected sales?
b) How politically stable is the market?
c) What is the risk of losing market
share?
d) Would risk be reduced by a more
aggressive presence in the market?
e) What are your competitors’ strategies?
f) Do currency fluctuations pose a risk?
If so, what is the level of sensitivity?
g) What is the risk of non-payment?
Should you insure against this?
h) What are the risks and consequences
of not meeting orders on time?
4 Price
a) Could a better price be won for
your product if it were marketed more
aggressively?
b) How much control do you have over
pricing?
c) Do you apply a ‘cost plus’ or ‘what
the market will bear’ approach, or a
combination of both?
d) Could prices be cut by having some
or all of the product manufactured or
packed locally?
5 Government regulations
a) Do local government regulations
restrict or encourage a more
aggressive presence in the market?
b) What incentives are available from the
target market government?
6 Management Skills
a) What skills are required to have a
more aggressive presence in the
market?
b) Are these skills available within your
company?
c) If not, are they difficult to acquire or
develop? What will they cost?
d) How long will it take to acquire or
develop these skills?
A market visit is essential before
finalising your market entry strategy.
There is nothing to replace a firsthand
view of the physical market conditions
together with meeting with counterparts
in your industry. A market visit may be in
conjunction with a trade fair/trade show
display or instore promotion.
Participation in an overseas buyers’
mission visiting Australia can also achieve
worthwhile results.
For assistance in developing a market
entry strategy for your business, email
trade@aigroup.asn.au.
 G E T T I N G S TA R T E D

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G E T T I N G S TA R T E D

Visiting the market

By The Australian Industry Group

After a company has researched and identified potential markets and devised
strategies to enter those markets, the next step is to actually locate a buyer. If that
buyer is the end user of a company’s product/ service, a relatively simple transaction
may result. In many cases, however, Australian exporters generally need an in-country
presence through a representative or distributor to reach the eventual buyer. Whilst
customers may be identified through attendance at trade shows, virtual showcases,
trade missions, direct mail campaigns, and advertising either through print or digital
media, whatever method is chosen, an initial trip to the market (and potentially many
trips) will be required.

I
t is essential for companies to develop a planned approach to target export markets. Visiting a market provides an opportunity to
meet with counterparts in your industry, and also provides a valuable firsthand view of the market conditions and business culture.
You are able to experience direct reactions to your company, and its products/services. A number of market entry methods are
available to Australian companies, and include:
• Individual market visit program;
• Visiting or exhibiting in an overseas trade show;
• Participating in a virtual showcase; and
• Participating in a trade delegation.
Ai Group can assist members with all options.

30 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011


Preparing for business travel abroad
Business travel abroad can identify and
uncover new customers, and improve
relationships and communication with
established foreign representatives and
associates. As in domestic business, there
is nothing like a face-to-face meeting
with a client or customer. The following
suggestions can help companies prepare
for a trip.
• Be very familiar with the latest market
research data you have obtained prior
to the visit.
• Prepare processes for dealing with the
follow-up actions required after the
visit.
• Decide on who is to travel and
ensure that they are authorised
to make decisions.
• Accomplish as much as possible
before the trip begins. Connect with
federal and state government
organisations, industry and alliance
bodies, have the names of possible
contacts, arrange appointments,
check itinerary and transportation
schedules, etc. All important meetings
should be confirmed before leaving
Australia.
• Send company profile and/or samples
to potential customers in advance of
your trip. Provide ample time for them
to be shipped to the destination.
• Become familiar with local culture/
protocols. This is important to
ensure you do not offend the
local community.
• Ensure that your hotel is in the right
area – have address in local language
as well as in English. A good idea is
to have a map of the hotel’s location
(this can be done through Google
Maps).
• Learn some key words/greetings.
• In the current international security
climate – ensure that passports are
current (with at least 6 months before
expiry), and the appropriate visas are
obtained.
A well-planned itinerary enables a
traveller to make the best possible use
of time abroad. Although travel time
is expensive, care must be taken not
to overload the schedule. Two or three
definite appointments, confirmed well
in advance and spaced comfortably
throughout one day, are more productive
than a crowded agenda that forces
the business person to rush from one
meeting to the next before business is
really concluded. The following travel tips
should be kept in mind:
• The travel plans should reflect what
the company hopes to accomplish;
give some thought to the desired
outcomes and priorities.
• Remember that you will be required
to make notes after meetings, and
potentially fulfil actions agreed to in
the meeting, all the while dealing with
outstanding issues from Australia.
Allow reasonable time between
meetings to complete all that needs
to be done. Also take into
consideration time zones, as this will
have a huge impact if you are visiting
the UK, EU region, Middle East and
the Americas.
• Keep the schedule flexible enough to
allow for both unexpected
problems (such as transportation
delays) and unexpected opportunities.
It is important that you familiarise
yourself with destinations and travel
times within a city. Knowing
that it takes two hours to get from
one meeting to another, even though
on a map it looks close, is important
when you are setting meetings.
• Check the normal workdays and
business hours in the countries to be
visited. Be aware of public,
religious and summer holiday periods,
as some markets can come to a crawl
during these times.
• Check whether individuals to be
met are comfortable speaking English,
and if not, arrange for an
interpreter. It is important to
remember that you are working in
another culture, and it is necessary to
appreciate the export market’s
business protocols.
• Prepare a detailed list of questions
before departing and refer to it during
the trip.
• Be disciplined in note taking both
during and after meetings.
• Carry business cards printed both
in English and in the language of the
country being visited.
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 31
G E T T I N G S TA R T E D
• Business travellers who plan to carry
product samples with them should
be alert to import duties that they
may be required to pay, and to
ensure they can provide the correct
documentation to customs. Travellers
should also be aware of any
changes to luggage limits and security
arrangements. In some countries,
duties and extensive customs
procedures on sample products
may be avoided by obtaining an ATA
(Admission Temporaire) Carnet. This
is a standardised international customs
document used to obtain duty-free
temporary admission of certain goods
into the countries that are signatories
to the ATA Convention. In any case,
appropriate documentation, such as a
commercial invoice should be
prepared.
Post-visit actions
When people return from business
travel, they are often so busy catching
up on outstanding work that the most
important aspect of a market visit is
forgotten – follow-up.
Often after a trip, you will have a
pile of notes and business cards that will
require attention. Ideally your trip should
not be considered complete until you
have satisfactorily dealt with all these
outstanding actions. The following action
list may assist in setting your priorities.
• Review meeting notes and business
cards, and list contacts in order of
potential business.
• Confirm mutual expectations in
writing with everyone you met.
• Make a priority list of information that
was requested from you and respond
to the enquirer promptly.
• Maintain regular follow-up, including
religious/holiday greetings.
It is important to maintain your
connection and continue to develop
your relationship with your contact
through regular emails, phone calls and/
or video conference to ensure that your
opportunities are maximised.
Ai Group can assist with preparing for
a market visit, or can visit the market
on your behalf. We regularly organise
trade missions to key markets, thereby
maximising the impact your visit will
have. For further assistance email trade@
aigroup.asn.au.
G E T T I N G S TA R T E D

Participating in foreign trade

shows and exhibitions
By The Australian Industry Group

Trade shows and exhibitions are some of the most effective direct marketing methods.
However, there are many areas to cover in order to ensure success. Trade shows
can provide a convenient and efficient method of finding out more about market
opportunities as well as assisting in making valuable business contacts.

N
evertheless they can often be
costly in both time and financial
resources and therefore companies
should carefully assess the suitability
of shows as well as ensuring that the
maximum benefits are derived from
participation.
Choosing the right exhibition
Whilst it is true that exhibitions are the
most effective direct marketing medium,
caution should still be exercised over the
choice of event. Not all exhibitions work
or will work for you.
There are around 360 exhibitions
taking place throughout Australia each
year involving an estimated 10,700
exhibiting companies. The challenge is to
ensure that the right companies exhibit in
the right exhibitions. In order to conduct
the selection process you must establish
goals. Possible goals include:
• Generate sales;
• Gather business contacts for post-
show follow-up;
• Identify agents, distributors etc.;
• Launch a new product;
• Enhance existing customer
relationships ;
• Develop product awareness;
• Reach a new market;
• Demonstrate a complex product;
• Conduct market research; and
• Generate media coverage.
When you book space in an exhibition
you are not really buying floor space, you
are buying an audience. You must ensure
that you choose to exhibit in a show that
attracts the type of audience that will
purchase your products or services.

32 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011


In evaluating an exhibition you should
obtain the following information from the
organiser:
• Previous audience analysis
• Copy of show catalogue
• Is there computerised registration?
• How does the organiser plan to
promote the show?
• How will visitors find your display in
the exhibition?
• Is the visitor database available after
the show?
• References from previous exhibitors
• Will the organiser be conducting
a marketing campaign to your target
audience?
The reputation of the exhibition and
the organiser are also key elements in
your decision to exhibit. Find out what
others in the industry think of the event
and the organisation. Ask industry
associations whether they are supporting
or participating in the show and ask them
about the organiser’s reputation. Ask your
customers which shows they attend and
why. Check with industry publications.
Are they exhibiting and is the show
growing?
Pre-show administration
Okay, sure you are busy. We know
that you have many competing pressures.
There is never enough time to do
everything you want to do. But if you do
just one thing, read the exhibitor manual.
Why?
• You will save money
• You will get what you need, when you
need it
• Your show experience will be
productive
• You will reach your show objectives
If you don’t take the time to read the
manual now;
• You may encounter higher costs
• You may not be able to obtain the
services and supplies that you will
need
• You may encounter frustrating delays
and inconvenience
G E T T I N G S TA R T E D
Pre-show promotion
It really pays to begin selling prior
The reputation of the
to the show. You not only promote
higher attendance at the event, but,
exhibition and the
more importantly, you are letting your
customers and prospects know where
organiser are also
to find you at the show. Here are some
proven techniques to try.
key elements in your
• Let your customers know you will be
at the show and note the location,
decision to exhibit.
dates and times of the event
• Mail special invitations or show
Find out what others
admission tickets to your customers
• Use email to remind your clients to
in the industry think
meet you at the exhibition
• Schedule advertising to coincide with
of the event and the
the show dates. Find out when and
where advertisements promoting the
organisation.
show will appear and buy adjoining
advertising space
Ask industry
On-site/showtime associations whether
• Offer price discounts or value-added
promotions. they are supporting
• Target customers/prospects on-site
and schedule specific appointment or participating in the
times during the show.
• Develop easy ways to qualify new show and ask them
prospects such as collecting business
cards or conducting a prize draw. about the organiser’s
• Hand out unusual giveaway items
with your name and phone, fax reputation.
numbers and website address
imprinted on them. Ask your customers
• Distribute discount coupons valid for a
specified time period after the show. which shows they
Post-show follow-up/evaluation
Many companies fail to conduct the
attend and why.
appropriate post-show follow-up. They
can be inundated with leads, and not
Check with industry
have the necessary classification system to
prioritise the follow-up. Most post-show
publications.
follow-up can actually be prepared prior
to the show.
• Immediately following the show,
contact all prospects/customers who
visited your stand.
• Analyse coupon redemption patterns
and build a database for the future.
• Ask for referrals from prospects and
customers.
• Begin planning for your next show.
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 33
 GOING GLOBAL

HKTDC Food Expo

A Banquet of Delights

S
uccessful food business from all over
the world will gather in Hong Kong
for the 21st HKTDC Food Expo in
2010. This pre-eminent event in the Asian
fair calendar continues to grow from
strength to strength, attracting more than
600 exhibitors from 24 countries and
regions in 2009 – 23% more than the year
before. Adding spice to the fair were
exhibitors from new participating countries
including Brunei, Chile, the Czech Republic,
Indonesia, Mexico, New Zealand, Pakistan,
Palestine, Peru and Singapore.
The fair is specially designed to meet
the needs of different types of exhibitors
and buyers by being divided into the Trade
Hall and the Public Hall.

THE TRADE HALL: TIME FOR TRADE

The Trade Hall is an excellent brand
building platform for international food
retailers, suppliers, wholesalers, brokers and
sales agency representatives, and is
grouped into pavilions in which exhibitors
can market their specialties. The Trade Hall

34 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

 GOING GLOBAL

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 35

GOING GLOBAL

EFIC: working with Australian exporters

to overcome financial barriers
Export Finance and Insurance Corporation (EFIC) provides finance and insurance
solutions to help Australian exporters overcome the financial barriers they face
when growing their businesses overseas.

A
s the Australian Government’s
export credit agency, we help
successful businesses to win export
contracts, finance their export activities and
protect export trade or overseas
investments when their bank is unable to
provide all the support they need.
We work directly with exporters or with
their banks to provide loans, guarantees,
contract bonds and insurance products
which can be tailored to meet the needs of
both large and small exporters.
EFIC is uniquely placed to do this: we
use over 50 years of export finance and
industry expertise, contacts at financial
institutions around the globe, the strength
of our AAA credit rating and an
entrepreneurial business approach to make
export deals happen.
Here are some of the financial barriers
our clients have faced and the financial
solutions EFIC has provided.
TESCORP HYDRAULICS NEEDED
WORKING CAPITAL TO FINANCE
A CONTRACT FOR A MAJOR
INFRASTRUCTURE PROJECT IN
THE UK
EFIC’s solution: a working capital
guarantee
Cairns-based manufacturer Tescorp
Hydraulics won its largest-ever export
contract, worth A$1.5 million, for a UK
electricity sector project. The company was
contracted to supply a purpose-built system
to install new power cables to secure
electricity supplies for Greater Manchester.
In order to deliver the contract, Tescorp
needed additional working capital.
EFIC provided a working capital
guarantee for A$950,000 to Tescorp’s
bank, the Commonwealth Bank to help the
company fulfil its contract. The guarantee
enabled Tescorp to access additional
working capital from the bank without the
company being required to provide further
security.
EFIC provided bonding support for Park Assist’s Seattle CBD parking contract.
‘Having provided similar machines for
projects elsewhere, we were confident we
could meet our UK customer’s
requirements’, said Tescorp’s general
manager Andrew Sands. ‘However,
financing the initial production for a project
of this size presented a new challenge. We
were impressed with EFIC’s ability to work
with our bank and put together a financing
package.’
PARK ASSIST NEEDED SUPPORT TO
MEET ITS BONDING OBLIGATIONS
FOR ITS FIRST GOVERNMENT
CONTRACT IN THE US
EFIC’s solution: a performance bond
arranged through EFIC’s US bonding
line
Park Assist, a specialist in parking guidance
based in Sydney, secured a US$780,000
contract with the City of Seattle to provide
an electronic parking guidance system. The
system will include dynamic LED message
signs that give motorists real-time
information on parking space availability in
the central business district.
The contract required the company to
lodge a performance bond worth 100 per
cent of the contract value, with scope for
the bond value to increase by 25 per cent
in line with possible increases in the
contract value.
EFIC underwrote the performance bond
to help Park Assist fulfil its contract. The
bond was issued by Liberty Mutual
Insurance Company (Liberty Mutual), a
bond provider in the US, under an ongoing
arrangement between EFIC and Liberty
Mutual known as a US bonding line.
In the US, contractors are typically
required to provide performance bonds to
guarantee the entire contract value,
compared with 10 to 15 per cent of the
contract value elsewhere. The relationship
between EFIC and Liberty Mutual makes it
easy for EFIC to provide eligible SME
exporters with access to performance
bonds in the US market.
‘Our company is growing dynamically in
Australia and overseas’, said managing
director Daniel Cohen. ‘EFIC’s support with
the US bond freed up a significant amount
of our working capital, helping us to fund
our strong export growth.’
For information about how EFIC can assist
your export business, call 1800 093 724 or
visit www.efic.gov.au.

36 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011


Internal business review and
export readiness
By Len Phillips, Business Advisor, The Australian Industry Group
Export development usually requires a high level of investment and resources, and the
timeframe can be years before a satisfactory economic return is obtained, therefore
planning is critical for a successful outcome.
A
given in exporting is that the
business must be able to compete
within the chosen markets in
quality, price and service. To succeed
in building a sustainable and profitable
export business, organisations must
continue to be competitive and also
develop long-term mutually beneficial
export market business relationships.
The investment made in carrying out
a review of an existing business, and
determining the potential and level of
export readiness of the business prior to
moving into a market, is usually a smart
investment, even if the decision is to focus
on the local market and not export.
Quality, price and service are a
constant consideration in Ai Group’s
process for carrying out reviews and
determination of export readiness for
clients. The process will determine how
exporting will affect the current business,
its capabilities and needs to commence
exporting.
The review and export readiness looks
at the following:
1. Policy
2. Products and/or Services
3. Processes
4. Finance
5. Market Conditions
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 37
GOING GLOBAL
1. Policy
• Are the board/owners committed to
exporting?
• Has the CEO allocated time to be
involved in developing export sales?
• Has the company considered and
developed all recognised opportunities
in all of the domestic markets?
2. Products and/or services
• Is the product or service selected
for exporting compatible with the
potential export market? If not,
what changes have to be made before
the product or service can be sold in
the selected markets and what will
they cost?
GOING GLOBAL
The investment made
in carrying out a review
of an existing business,
and determining the
potential and level of
export readiness of
the business prior to
moving into a market,
is usually a smart
investment...
38 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
• What is the products’/services’
sustainable competitive advantage
costing system require upgrading to
take into account currency variations?
• Is there an understanding of grants
locally and in potential export
markets? and assistance available from state
and federal governments?
• Are the products/services of high
quality? • Does the company have a formal
business plan?
• Are the products’/services’ prices
competitive in the export market? 5. Market conditions
• What is the Australian Harmonised
Export Commodity Classification
• Are there any product/service
restrictions in the market being
•
(AHECC)?
Are the packaging and/or instructions
developed? If there are restrictions,
has the company obtained the
compatible with the potential market?
If not, what changes have to be made
necessary licence or agreement to
operate in the market?
before the product/service can be sold
in the selected market and what will • Will your domestic marketing strategy
•
they cost?
Are there any product or service
have to be changed when used in the
overseas market?
restrictions in the market being
developed? If there are restrictions,
• What is the level of competition in
the market from your existing and
has the company obtained the local competitors in the proposed
necessary licence or agreement market?
to operate in the market? • How many visits have been made to
the potential markets?
3. Processes
• Who are the potential distributors in
• Does the company have an effective
the market?
and current web page that can be
The key success factors among long-
understood in relevant languages?
term sustainable exporters are:
• Does the company make performance
• High quality products or services
comparisons with major international
• High level of commitment from senior
competitors?
management
• Has a staff member been appointed to
• Cooperative, long-term relationships
lead the export project?
with local distributors
• Favourable market conditions
• Export marketing strategies similar to
• Are there sufficient management and
domestic marketing strategies
staff skills to commence exporting?
Having carried out your internal
• Do existing patents or trademarks
business review and export readiness,
cover overseas markets? What other
strategies are in place to protect your you will be in a position to decide on
intellectual property (IP)? the best way forward. If it confirms
• Does the company have the current the export potential, the next step is
production or service capacity to market research and development of
service an export market? an export strategy and plan.
4. Finance Ai Group is able to conduct an export
• Is there sufficient funding available review for organisations and advise on
to set up exporting and has it been export planning needs. For information
committed in the budget for email trade@aigroup.asn.au
developing export markets?
• Do the funding requirements take into
account the long term nature of
exporting and the potential that
profitability may be over one or two
years away?
• Does the current product and service

Hague-Visby Rules limitation of ‘package’
value and what it means to you.
“Shippers who rush completing the detail on their shipping documentation run the risk
of serious loss when it comes to a claim,” notes Stephen Ford, Managing Director,
Associated Marine.
U
nder the Hague-Visby rules, a
shipper is entitled to have
identification of the goods, the
number of packages or pieces (or weight)
as well as their condition at the time of
shipment, shown on the bill of lading.
However, as many exporters already know,
it is in the carrier’s interest to have as little
information as possible on the face of the
bill in an attempt to limit their liability per
package in the event of loss or damage.
The effect of how damaging this
limitation of liability can be for the shipper
was illustrated very clearly in the El Greco
case.1 The plaintiffs, El Greco, shipped
posters and prints stowed in a container.
On arrival at the destination, the goods
were found to be heavily damaged by
seawater. The plaintiff sued the carrier.
The defendant’s case was based on the
assumption it was entitled to limit its
liability to two SDR’s per kilogram because
there was only one package for the
purposes of the Hague-Visby Rules. This
argument was based, in part, on the bill of
lading issued by the defendant describing
the goods as “1 x 20 ft general purpose
container said to contain 200,945 pieces
posters and print”. However, it also showed
the number one in the column headed
“No. of Pkgs.” and, at the bottom of that
column, against the “Total number of
Packages” was also inserted the number
one.
The trial judge gave judgement for the
plaintiffs holding that there were 200,495
“units” for the purposes of Articles 4, rule
5 (a) not one “package”.
The defendant appealed and the Full
Court of the Federal Court of Australia held
that the carrier was entitled to limit its
liability to two SDRs per kilogram of the
cargo damaged. This decision was based
on Article 4 rule 5 (c) which provides that
where goods are consolidated in a
container, the number of packages or units
stated in the sea-carriage document as
packed in the container shall be deemed
the number of packages for limitation
purposes.
To be effective, suggests Ford, the
enumeration on the face of sea-carriage
documents must clearly identify the
number of packages or units “as packed”,
using words that make clear the number of
packages or units separately packed for
transportation. “The risk for loss is high,
as in the El Greco scenario, if
documentation is ambiguous when
detailing the number of items “packed”,
especially if there is only one package or
unit, which is the container itself.”
Ford goes on to say that the findings in
the El Greco case demonstrate the gap in
the detail on the bill of lading, the exposure
for the exporter and the unfortunate
consequences for El Greco. “Even though
200,945 pieces were packed into
approximately 2,000 packages for
shipment, there was no reference to those
packages on the bill. The court, therefore,
had no other recourse but to award an
amount of two units per kilogram of gross
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 39
GOING GLOBAL
weight or approximately $38,000. If the
accurate number of packages were shown
on the bill of lading, the case against the
carrier would have been much stronger and
an award to reimburse a sum closer to the
total amount lost more likely.”
It is vitally important then, that any
shipper accurately completes the
application for shipment form and does not
just “tab” through the fields to get the task
completed quickly. Shippers should take the
time to complete the fields accurately and
once the bill of lading is produced check
the details are correct before continuing
with the transaction. Remember it is in the
carrier’s interest to have as little detail
shown on the bill of lading as possible.
Ford notes that: “Insurance for
importers/exporters is a complex area. It is
critical that shippers understand the risks
and exposures they are facing and have
appropriate insurance cover in place.
Associated Marine recommends that the
first step is for shippers to have a discussion
with their insurance brokers for the most
appropriate solutions. The El Greco case
demonstrates that the risk was in the detail
and, with the insertion of the number one,
the loss was significant”.
REFERENCES
1 El Greco (Australia) Pty Limited & Anor v Mediterranean Shipping
Co. SA 2004
OTHER REFERENCES:
Shipping Law - Martin Davies & Anthony Dickey, Thompson Lawbook
Co 2004
Presentation ‘Recent Development in Maritime Law 2004-2005’
delivered by Professor Martin Davies at Blake Dawson Waldron
Brisbane, Sydney and Melbourne, August 2005
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 GOING GLOBAL

Export costing and pricing

guidelines
By Craig Malcolm, TradeStart Export Adviser, The Australian Industry Group

In today’s international market, knowing your own business cost base may not be
sufficient. Market intelligence is now becoming imperative to success. Knowledge
about the business practices and pricing policies of your offshore business partners,
particularly in exclusive distribution arrangements, could be the key to your success.

F
or instance, if your offshore distribution chain is seeking margins well above your competitors, your export price may be under
constant negotiation. This is undesirable and is not conducive to the continuation of a harmonious distribution arrangement.
Consideration of reverse pricing, duties, other charges and margins along the distribution chain will enable the exporter to be in
a better negotiating position.
Companies are in a position to enhance international market opportunities in relation to cost by:
• Establishing if any imported components are subject to import duty and seeking duty drawback (your freight forwarder/customs
agent is in a position to assist with your entitlements);
• Improving stock turns, which will enable inventory holding costs to be reduced;
• For small and medium enterprises, getting a freight forwarder to handle your forwarding and documentation requirements
can be advantageous. Forwarding agents may be in a better position, due to their relationship with shipping and insurance
companies, to negotiate reduced rates; and
• Being well informed about the various foreign exchange risk management tools available.

5.1.3 Mark-up/Margin
Before consideration of costing logistics for export, it is important to clarify the difference between mark-up and margin. Margins
are referred to in the worked costing logistics example below. Confusion with mark-ups will affect the outcome of pricing and reverse
pricing analysis.

Mark-up
Definition: sale price minus cost (i.e. gross profit) expressed as a percentage of cost.
Cost A$100.00
Sell A$154.00
Mark-up 54 per cent

Margin
Definition: sale price minus cost (i.e. gross profit) expressed as a percentage of sale price.
Cost A$100.00
Sell A$154.00
Gross Profit A$54.00

Gross margin = gross profit A$54 x 100 = 35 per cent

Sales value A$154

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 41

GOING GLOBAL

Easy reckoner which prices cannot be set without • Import duty

incurring a loss. This would include any • Inland charges
Mark-up Gross margin
product modifications, plus economy of • Warehousing
% %
scale savings, as the incremental cost of • Agents’ commission
5.26 5.00 producing additional products for export • Market visits
11.11 10.00 should be lower than the earlier average • Advertising and promotion
17.65 15.00 production costs for the domestic market. • Product liability insurance
25.00 20.00 Buyer based. Perceived value. More
33.33 25.00 psychological than based on economics. Note – There is no GST on exports
42.86 30.00 Competition based. Benchmarked to
Tips for exporters
53.85 35.00 competitors or market average.
• The exporter should attempt to make
66.66 40.00 Price adjustment strategies.
the buyer’s decision process as easy
100.00 50.00 Discount pricing and allowances, rebates;
as possible by preparing your export
discriminatory pricing; and promotional
price list CIF in the currency of the
pricing (loss leaders to attract customers).
How does the exporter determine the country and port of product
selling price for their products? Shown Export Costing destination.
below are a variety of commonly used There are a number of additional • Make an effort to understand the
methods: charges to take into account when way business is done in the export
Cost-plus method. In the cost-plus exporting your product. The list below market and conduct your business
method calculation, the exporter starts shows some of those factors to be similarly offering the same value
with the domestic manufacturing cost considered: proposal as local suppliers. Payment
and adds administration, research and • Rate per kilo or container terms, delivery and after-sale servicing
development, overhead costs, freight • Export packaging are important considerations. Include
forwarding, distributor margins, customs • Cartage a proviso in your price list – ‘Prices
charges and profit. The net effect of this • Documentation subject to change’.
pricing approach may be that the export • Local surcharges • Consider currency fluctuations
price escalates into an uncompetitive • Insurance when preparing the price list.
range. • Finance charges Include a clause that the price is
Marginal cost pricing. This method • Certification subject to exchange rate fluctuations
considers the direct, out-of-pocket • Local permits and/or certificates and allow a percentage variation.
expenses of producing and selling • Stocking fees
products for export as a floor beneath • Labelling

42 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

A world of trade information
at your fingertips
The Department of Foreign Affairs and Trade (DFAT) offers a range of trade-
related services to help Australian businesses access global markets:
3 Information on how the Government is pursuing better market access for
Australian goods and services overseas

3 Information on Australia’s Free Trade Agreements and the World Trade

Organization

3 Free country trade/economic fact sheets

3 Statistical publications and specialised statistical services

www.dfat.gov.au/trade

3 For information on the practical aspects of exporting:

www.austrade.gov.au

For business liaison officers in your State/Territory, contact:

3 DFAT Victoria, phone (03) 9221 5555 or email vso@dfat.gov.au
Website: www.victoria.dfat.gov.au

3 DFAT NSW, phone (02) 9356 6222 or email dfat.nsw@dfat.gov.au

Website: www.dfat.gov.au/sydney

3 DFAT Queensland, phone (07) 3405 4799 or email dfatbris@dfat.gov.au

Website: www.dfat.gov.au/brisbane

3 DFAT Western Australia, phone (08) 9231 4499 or email dfat.wa@dfat.gov.au

Website: www.wa.dfat.gov.au

3 DFAT Tasmania, phone (03) 6238 4099 or email dfat.tasmania@dfat.gov.au

Website: www.dfat.gov.au/hobart

3 DFAT Northern Territory, phone (08) 8982 4199 or email dfat.darwin@dfat.gov.au

Website: www.dfat.gov.au/darwin

3 DFAT South Australia, phone (08) 8403 4899 or email adelaide.sa@dfat.gov.au

Website: www.dfat.gov.au/adelaide

DFAT – ADVANCING THE

NATIONAL INTEREST
GOING GLOBAL

Australia’s trade with the world

A
ustralia’s trade in goods and services
with the world totalled $563.3
billion in 2008-09 – an increase of
14.5 per cent over the previous year.
Australia’s integration in the global
economy, and particularly the dynamic
Asia-Pacific region, is a modern economic
success story.
In 1988-89, Australia’s exports of goods
and services were worth $55.5 billion.
Twenty years later, they had risen to $284.7
billion.
Trade contributes to one in five
Australian jobs, and has lifted the
prosperity of working Australian families by
up to $3,900 per annum (source: Centre
for International Economics, 2009).
For more information, go to:
http://www.dfat.gov.au/trade
TRADE FAST FACTS
3 In addition to being a major global supplier of mineral exports — like coal, iron ore
and gold — Australia is also a significant exporter of:
3 services such as education and tourism, intellectual property, professional and
business services;
3 energy commodities of natural gas and petroleum;
3 manufactured goods including aluminium, cars and parts and medical
products; and
3 agricultural products such as beef, wheat and wine.
3 Major trading partners are located in Asia — China, Japan, Republic of Korea,
ASEAN; North America — the US — and Europe — United Kingdom and
Germany.
3 Australia’s trade diversity was a considerable asset in the Global Financial Crisis.
3 Two million Australians are employed in trade-related industries
3 Australia has thrived as a liberal trading nation
3 Since lowering tariff barriers, Australia’s GDP has surged and trade has become
a more important part of the economy.

SUMMARY OF AUSTRALIA’S TRADE, 2009

Trend growth
2008 A$b 2009 A$b % change 5 year (%)

Goods and Services Ranking – Exports

1 Coal 46.6 39.4 -15.5 —
2 Iron ore and concentrates 30.1 30.0 -0.6 —
3 Education-related personal travel services 15.1 17.7 17.1 —
4 Gold (a) 14.7 15.6 6.1 —
5 Personal travel (excl education) services 11.7 12.1 4.0 —
6 Natural gas 9.2 7.6 -17.3 —
7 Crude petroleum 10.3 7.2 -30.6 —
8 Aluminium ores and conc (incl alumina) 6.5 4.8 -25.9 —
9 Wheat 3.8 4.7 25.2 —
10 Beef (f.c.f.) 5.0 4.3 -13.3 —
Top 10 Merchandise Export Partners (b)
World (BOP basis) 224.3 196.5 -12.4 12.0
1 China 32.3 42.4 31.0 29.2
2 Japan 50.8 38.2 -24.8 13.5
3 Republic of Korea 18.4 15.6 -15.4 13.0
4 India 13.5 14.5 7.2 21.9
5 United States 12.1 9.6 -20.5 2.5
6 United Kingdom 9.3 9.0 -3.4 14.2
7 New Zealand 9.3 7.9 -15.3 -1.0
8 Taiwan 8.3 6.5 -21.4 10.4
9 Singapore 6.1 5.4 -12.6 11.1
10 Thailand 5.3 4.2 -20.6 7.2
(a) Balance of payments basis. (b) On a recorded trade basis. Sources: ABS trade data on DFAT STARS database and ABS catalogue 5368.0 Updated: 12/03/2010

44 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

 GOING GLOBAL

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 45

GOING GLOBAL

Government funding –
supporting your financing needs
By Jacky Millership, Associate Director, Government Programs and Policy, Grant Thornton Australia Pty Ltd

There is an enormous number of generous industry assistance programs offered

by various levels of government in Australia. Governments provide these funding
programs in order to support a broad range of their policy objectives, including
the development of export-oriented companies. However, we frequently observe
situations where businesses that have a legitimate opportunity to claim government
benefits are either unaware of the existence of these programs or do not maximise
available returns.

O
f course, accessing government
funding programs will, by its
nature, always require a significant
commitment of time and resources by
applicants. Programs almost always also
require a matching financial co-contribution
from the applicant and therefore it is very
important to carefully consider how any
potential funding will directly contribute to
achieving the company’s overall strategic
plans and objectives.
In this context it is fair to say at the
outset that government funding will
generally not solve a business’ finance
needs, however it is an important element here is the problem in a nutshell:
of the finance mix which many businesses • There are eight key departments at the
are not good at leveraging. federal level, which must be closely
monitored to determine what is on offer
Challenge number one: finding the
for manufacturing companies
right program(s)
• These eight key departments are
The difficulty for companies is that
responsible for around a dozen key
it is a very confusing picture to unravel:
agencies that each administer their
should I be looking to local government,
own subsets of government programs
state government or federal government
• These departments and agencies are
for support? Having ascertained that,
relatively ‘siloed’ and are either
with which department or number of
generally unaware of, or cannot
departments should I make enquiries?
advise on, other departments’/
Take programs for manufacturing
agencies’ programs
companies alone as an illustrative example –

46 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011


• There is a rapidly changing policy
and program mix; what you ascertain
is available today may have no bearing
on what is offered next week
• State governments often have a
similar number of departments and
agencies providing funding
programs, some of which may be
able to be utilised either in
conjunction with federal government
programs or separately in areas where
federal funding may not be available
• Funding may even be available at the
local government level although such
programs are usually of a more
modest nature.
Challenge number two: creating
successful applications
Once a company has determined the
best program, or mix of programs, to suit
its strategic objectives, it then has to go
about creating a successful application.
Some programs can be relatively
straightforward to access, while gaining
access to others can be an extremely
arduous and time consuming exercise.
Many companies do not have the
time or human resources to dedicate
to the task nor do they have a good
understanding of the government
approval processes involved. They also
often lack experience in structuring
applications to suit the government
program merit criteria or in many cases
the diverse skillsets required to assemble
the data to support an application.
Often the project a company is
looking to have supported does not
perfectly fit the identified funding
program mould. What would be
considered an eligible/non-eligible activity,
what would be considered eligible/
non-eligible expenditure and what
project outcomes meet the specified
program objectives? In summary, how
can a company present the best case for
support?
While applications can be time
consuming to prepare, receiving a
decision from Government can be an
equally lengthy process. Factor in a
number of months for any funding which
is provided on a competitive basis.
Challenge number three: managing
the compliance and reporting
obligations
As with the application process, the
management of compliance and reporting
obligations can be relatively straightforward
or very complex, depending on the scale of
the grant and the type of grant. That said,
grants which are considered straightforward
can certainly trip up the unwary; companies
banking on certain fund amounts can be
caught out when their claims are rejected
on the grounds of insufficient compliance
documentation.
In other cases, some programs
have complex legislation which sits
around them, making it very difficult for
companies to know enough to leverage
all the benefits.
Many companies prefer to outsource
the administration of their government
program access to an experienced service
provider so that they can remain focused
on the every day business concerns that
they handle best.
Entitlement programs versus
competitive, merits-based funding
A key delineator between programs
are so called ‘entitlement’ programs versus
‘competitive, merits-based funding’.
Entitlement programs usually enable
a company to claim a refund against
retrospective eligible expenditure. They
are called entitlement programs because
if a company meets the eligibility criteria,
spends money on eligible activities, and
submits a claim within the prescribed
program criteria, they are entitled to a
refund.
Competitive, merits-based funding,
on the other hand, is not guaranteed
even if on paper you appear to be eligible
in all respects. In these cases, funding
is released gradually or in ‘rounds’.
Applications are ordered from most
worthy to least worthy, and a percentage
of the top applications are funded,
according to their worthiness and the
amount of funding allocated in that
period, or to that round.
How to get started
1. Take a look at any entitlement
programs that enable you to claim a
refund against retrospective
expenditure.
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 47
GOING GLOBAL
• The Export Market Development
Grant (EMDG) enables companies to
claim up to 50 per cent of the past
year’s (or past two years for first time
claimants) eligible export marketing
costs
• The new R&D tax scheme
introduced for the 2010/11 year
enables companies to claim an
R&D tax credit, providing a 45 per
cent refundable credit for companies
with a turnover under $20 million.
This means companies will receive a
tax refund of 45 per cent of their
R&D spending when they lodge their
tax return. (Larger companies may
access a 40 per cent non-refundable
credit.)
• Tariff Concessions are a much under-
utilised benefit available to importers
of goods. There are a range of tariff
concession schemes which enable the
duty payable to be reduced or
eliminated. Companies that have paid
too much import tariff can reach back
four years for refunds.
2. Determine whether prospective
business activities can attract funding.
If your company currently invests
in, or intends to invest in any of the
below activities, it is likely that there
is a grant, scheme or program you
should be considering:
• significant imports;
• new or established exports;
• R&D or innovation activities;
• environment and sustainability
investment and/or innovation;
• infrastructure investment;
• venture capital raising;
• automotive industry investment and/
or innovation;
• textile, clothing and footwear
industries; and
• business development (small
companies).
3. Speak to specialist advisers who
have practical experience across the
full range of programs to ensure you
optimise legitimate benefits.
For more information, please contact
Jacky Millership, Tel: (03) 8663 6723
Email jmillership@grantthorntonvic.com.au
GOING GLOBAL
Entering China by design
Victorian architectural firm, Architektonic, brings sustainable design in China full circle
J
oburt Betadam, Director of Victorian
architectural firm, Architektonic, says
that he learned very early on that a
picture speaks a thousand words,
particularly in China. This comes back to
the fact, he says, that in the Chinese
language, each written character is a visual
representation of an idea.
Architektonic specialises in sustainable
‘green’ architecture and design, and Jobert
has had great success using 3D animation
when presenting to Chinese clients.
“The Chinese see sustainable ‘green’
architecture as a very Western idea, but
we’ve discovered that we can show with
pictures how sustainable ‘green’ practices
have been used in traditional Chinese
architecture for millennia.”
Since his first exploratory fact-finding
visit to China in 2004, Joburt credits much
of the company’s expansion to the
assistance of the Victorian Government’s
Export Connections initiative.
“We have taken part in every Victorian
Government construction trade mission in
China for the past four years,” Joburt
explains. “Operating in China is all about
developing relationships, and these events
have opened doors and enabled us to be
introduced to important Chinese officials
that we would never have been able to
meet otherwise.
“Government to government
relationships in China are very important
and this is where the Victorian Government
has been great for me. As well as assisting
with introductions, the Government has
been able to act on our behalf in
negotiations when required.”
EXPORT CONNECTIONS – GO GLOBAL
The Victorian Government offers export
assistance through its Export Connections
initiative. The program is open to both new
and established exporters.
FIRST STEP EXPORTER
The First Step Exporter program provides up
to $10,000 in funding to help companies
research and explore opportunities in their
first export markets.
48 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
GROW YOUR BUSINESS
This program offers grants for strategic
reviews, business development plans, group
activities and networking. Grants are also
available to subsidise the cost of
participation in export-related workshops.
TRADE FAIRS AND MISSIONS
The Victorian Government provides funding
to project manage groups of Victorian
companies to participate in Overseas Trade
Fairs & Missions. Missions are conducted by
geographic location (e.g. South America) or
by industry sector (e.g. ICT, food and
beverage).
REGIONAL PROGRAMS
For regionally-based exporters, the Regional
Inward Buyer program provides one-off
grants to facilitate inward buyer missions to
regional Victoria, while the Targeted Trade
and Investment Missions program provides
support to regional companies and
industries to develop overseas markets.
EXPORT NETWORKS
The Export Networks program provides
funding of up to $10,000 for new and
existing business networks to provide
export information, training services and
mentoring programs to their members.
These networks can be organised along
industry lines, regionally or by market
focus.
EXPORT CLUSTERS
The Victorian Government helps create
clusters of companies with complementary
skills and services to build critical mass and
bargaining power in bidding for major
international projects.
ACCESS PROGRAM
The Access Program offers on the ground
support for Victorian companies and is
delivered through Victorian Government
Business Offices around the world,
including in the USA, China, Japan, India
and Middle East.
For more information about Victorian
Government Export Connections programs,
visit www.export.vic.gov.au
 GOING GLOBAL

Business seeks greater

government engagement to
improve free trade agreements’
effectiveness
by Nicole Forrester, Senior Adviser – Public Policy, The Australian Industry Group

In recent years, successive Australian governments have attempted to deliver industry

with better access to export markets through multilateral, regional and bilateral free
trade negotiations. Government has encouraged Australian industry to recognise that
the benefits of these efforts go beyond mere tariff reductions for exported goods.

I
ndeed, comprehensive preferential
trading arrangements do have the
potential to open opportunities
and reduce business costs and time for
Australian exporters. They do this by
addressing behind-the-border non-tariff
barriers and streamlining regulatory
arrangements such as licensing and
reciprocal recognition of standards and
qualifications.
But are the potential benefits of
our existing agreements being realised?
How do Australian companies perceive
the outcomes of the government’s
negotiating efforts?
In late 2009, Ai Group surveyed
members with annual exports valued
between $40,000 and over $1 billion
across industries including manufacturing,
construction, printing and publishing,
ICT, retail, and food and beverage on the
effectiveness of Australia’s existing free
trade agreements (FTAs).
On average, a little over one-third of
exporters reported that they had received
any benefit from exporting to destinations
with existing free trade agreements. Of United States FTA as being effective, with Thailand, 25 per cent; Singapore, 18 per
the individual agreements, only 55 per effectiveness figures for other agreements cent; and Chile, 17 per cent.
cent of respondents saw the Australia- being: New Zealand, 48 per cent;

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 49

GOING GLOBAL
Reported effectiveness of FTAs
There are, of course, pockets
of true success in each agreement.
Members were encouraged by benefits
from reduced import duties, improved
market opportunities and, under some
agreements, increased labour mobility.
While existing exporters reported
some moderate benefits in the markets
they already serve, members reported that
an agreement doesn’t necessarily motivate
companies to seek export opportunities
in new markets, or encourage companies
that don’t currently export to do so.
A range of other factors is at play,
including the continuing high value of
the Australian dollar, domestic economic
circumstances, the overall market
maturity, industry capability, and the
usual risk factors that industry takes into
account when moving into new markets,
including political, economic, legal and
technological risk.
Even with an FTA in place, the
challenges for Australian exporters remain
high. In some cases, an agreement, when
implemented, hasn’t been able to deliver
the liberalisation agreed to because of
old, or new, behind-the-border measures
that act as barriers to free trade. Exporters
to FTA markets continue to face serious
non-tariff barriers, such as quarantine and
other health, safety and environmental
measures, and standards which are
used at the border to protect domestic
industries.
In addition, FTAs are extremely
detailed, complex agreements that are
crafted in legalistic language making them
particularly difficult for SMEs to decipher
and to comprehend exactly ‘what’s in it
for us?’
In essence, the potential benefits
of these agreements are not being fully
realised by Australian industry.
50 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
Why is it so critical to get this right?
Over the last two decades of unilateral
trade liberalisation, Australia has become
one of the world’s most open economies,
with tariffs averaging less than 3.9 per
cent. This provides increased market
access for importers and makes increasing
our exports a critical goal if we are to
avoid a balance of payments blowout.
There is also no doubt that
international trade is fundamental to
the ongoing growth of the Australian
economy. Industry is aware – now more
than ever – that in order to grow, it has
to maximise its participation in the global
supply chain.
Beyond representing our best
means to long-term economic growth,
exporting forces Australian companies
to increase their competitiveness. It also
helps them to access global innovation
and technology and to develop new
management and marketing techniques.
A review into Australia’s trade
performance by Mortimer1 found that
export industries, and successful exporters
within industries, have higher productivity
Exports of goods and services as a percentage of GDP 1987 to 20071
levels than those focused only on the
domestic market.
In the face of increased pressure from
global competition at home and abroad,
Australian industry knows that it must
compete on productivity, price and quality.
But to do so successfully, the government
must deliver domestic and foreign policy
settings that support an internationally
competitive and sustainable Australian
export sector.
According to Mortimer1, ‘the growth
in export volumes has been markedly
slower in this decade than in the previous
two decades. Australia has lost global
market share in manufacturing, services,
agricultural and resource exports’. After
rising rapidly from the late 1980s until
2001, the share of exports in our gross
domestic product (GDP) has also declined
as shown below.
And despite our comparative resilience
during the recent global financial crisis,
the global economic slowdown has taken
its toll on our export. Australian export
income for the 2009 calendar year was
valued at $27.4 billion – 10 per cent lower
than in 20082.
 GOING GLOBAL

Given this reality, substantially has had a huge impact and a great return programs. It also reflects the need for a
increasing the number of exporters, as well on investment with limited resources. Since more strategic, long-term coordinated
as the volume of our exports, remains a 2002 it has assisted 2000 businesses to approach to export development rather than
fundamental goal for Australian industry. achieve more than $750 million in exports – an ad hoc programmatic (essentially, budget
It also needs to be a fundamental goal for its funding from 2006 to 2010 was a total of to budget) management of trade policy.
Australian governments. $23.3 million. Greater engagement across, and within,
These programs must be understood as government is also needed. There are
So where to from here?
investments in Australian productivity and clear advantages to creating a closer policy
While acknowledging that some ground
ingenuity, not handouts. They are crucial to bridge between DFAT and Austrade, such as
can and has been gained though FTAs, the
assist Australian businesses to explore the maximising cooperation and joint planning
signing of such agreements simply can’t
potential of entering new markets more and formulation. A closer, formalised policy
resolve all the issues nor fully realise the
successfully. development relationship between DFAT
potential of Australia’s export growth.
The Mortimer Review1 reported that the and Austrade would better harness the
To truly capitalise on FTAs, the challenge
federal government devotes a modest $675 intelligence gained from the daily battles
is twofold; on one hand increasing industry’s
million per year to trade and investment fought by exporters on the ground.
understanding of what agreements can
programs and clearly identified the need to This would better inform negotiations,
deliver, and on the other, improving the
strengthen the linkages between market implementation and evaluation of priority
capacity of industry to take advantage of the
access negotiations, trade and investment market development and subsequently allow
agreements that have been negotiated.
promotion and facilitation and market for tailoring of Austrade programs based on
Meeting these challenges and turning
development. the specific gains achieved in market access
the potential benefits of FTAs from a theory
There is a serious disconnect between through these agreements.
to a reality requires clear and strong follow-
the level of government resources invested While FTAs cannot alone resolve all the
through assistance from government. Such
in negotiating necessarily complex FTAs, barriers that confront Australian companies
assistance includes programs to encourage
compared with the resources applied to in the international trading environment,
industry to look beyond these shores – an
ensuring their successful application. This is the potential benefits of existing FTAs are
extremely costly enterprise for a small
a cause for concern and an opportunity for simply not being fully realised by Australian
business – to develop and maintain contacts
engagement. exporters.
and credibility in new markets.
More funding for these programs, not FTAs should be seen as only one part
Support for export market development
budget cuts, is the best way to continue to of a much larger strategy of increasing
plays a huge role in industry’s ability to
deliver highly effective support mechanisms Australian exports – not a strategy in and of
actually capitalise on the market access
to small and medium Australian enterprises themselves. Equipping Australian firms with
gains delivered by FTAs. On this front,
to grow their exports. the tools required to seize better market
industry needs greater engagement from
The Department of Foreign Affairs and access opportunities is equally as important
government.
Trade (DFAT) says that ‘it is too early for any as negotiating FTAs.
Disappointingly, while the 2010 Federal
econometric modelling to be conducted Industry and Government share an
Budget saw a continuation of government
with any confidence on the impact of important responsibility to better educate
programs to support exporters, funding for
Australia’s FTAs’3. But it has become clear businesses about the opportunities that
these programs was cut not expanded.
to industry that the hard work actually these agreements present. Doing so will
The Export Market Development
starts when an agreement comes into greatly improve Australian industry’s ability
Grants (EMDG) scheme will be funded to
force. So the importance of maximising to capitalise on these agreements, which is
$150 million per year, which is a cut of
an agreement’s effectiveness through key to their effectiveness.
$50 million. With a return of at least $13
post-implementation strategies cannot be Ai Group is a strong and constant
in additional exports for each $1 granted,
underestimated. support for the principles of free trade,
the economic multiplier effect of the EMDG
Success will require better engagement which can create a more level international
Scheme and its strong cost-effectiveness
by both government and industry. Industry is playing field, and will continue to call
as a trade development program justifies
willing and able to do its share of the heavy for greater government funding to
expanded government support for the
lifting. Ai Group is already working with strengthen the linkages between market
scheme.
members to improve their knowledge and access negotiations, trade and investment
The TradeStart program, a national
understanding of FTAs, and is working with facilitation and market development.
network of export advisers providing SMEs
Australian governments through continuous 1: ‘Winning in World Markets: Review of Export Policies
assistance to commence and grow their and Programs’, by David Mortimer AO, 1 September 2008,
feedback on what is happening ‘in the field’. commissioned by the Department of Foreign Affairs and Trade.
exports, received funding in the Budget
Industry’s desire for greater government 2: Australian Bureau of Statistics.
for another four years, albeit at the much
engagement is not only about financial 3: ‘Review of Bilateral and Regional Trade Agreements’,
reduced level of $14.4 million. TradeStart Submission to the Australian Productivity Commission by the
assistance, like export development Department of Foreign Affairs and Trade.

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 51

GOING GLOBAL
Concessions help zebra find its stripes
When he was 14, John Cox saw the original King Kong on
late-night TV, and he knew that all he wanted to do was
make creatures for movies.
J
ulie Anderson – project coordinator at John Cox’s Creature
Workshop – said that for the next few years, John spent every
weekend in his father’s garage, working with plasticine,
borrowing books from his local library and writing to people in the
industry.
When he was 19, John set up his own company to produce
creatures and animals for television commercials and mini series.
Now, with the assistance of AusIndustry’s Tradex scheme, John
Cox’s Creature Workshop produces fantasy creatures, monsters
and realistic animals for multi-million dollar films such as Babe,
Racing Stripes and Scooby Doo. The widely recognised original
‘Bundy Bear’ is also another of John’s creatures.
Being registered for Tradex means John Cox’s Creature
52 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
Workshop does not pay customs duty or GST on the materials it
imports to produce for export.
The company registered for Tradex to import fur and fibres
from the United States, and to import specialist motors for its
control systems.
“The fibre company we deal with in the United States is a
world-leading supplier that specialises in making fur fabrics for
films,” Julie said.
“Another big plus is they’re used to dealing with the sort of
deadlines that come with films.”
The company also imports specialist motors to recreate lifelike
movements, and to pre-program voice and action sequences.
“Our animals are very realistic,” Julie said. “In the movie Babe,
 GOING GLOBAL

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 53

 Get
TENDERING

Ready
Pack
Q Keep up to date records on their environmental legal
obligations
Losing contracts or missing Q Develop an accredited environmental management system
opportunities because you i.e. ISO 14001
Q Develop environmental procedures relevant to their
cannot demonstrate your operation(s)
environmental credentials? Q Conduct audits (energy, water and waste) to identify
opportunities to reduce their environmental footprint and
implement actions
Q Conduct environment training for staff
Companies tendering for Government and Non-Government
projects are being increasingly required to show that they Depending on the size and operation of a business, it may not
have environmental policies and procedures in place as well be necessary to develop all those outlined above. Companies
as demonstrate how they are reducing their environmental should identify and prioritise what actions need to be
footprint. Companies that are unable to display their developed first.
environmental credentials may be at risk of being unsuccessful.

For example tender documents are asking the following types What services are available
of environmental questions: to industry?
Q Do you have a company environment policy?
Ai Group provides the following services to assist companies
Q Do you have copies of current legislation in relation to the
fulfil their tender requirements:
Environment?
Q Do you have a documented Environmental Management Q Development of environmental policies and procedures
System? Q Development of environmental management systems (EMS)
Q Do you have documented environmental procedures for the Q Determine companies environmental legal requirements and
work you carry out? keep them up to date with changes to legislation
Q What environmental initiatives or recent improvements have Q Conduct on-site training
you implemented to limit the environmental impact by the Q Conduct audits (energy, water and waste)
services you provide?
Q Has your company developed and implemented any waste,
water or energy minimisation initiatives? ALL SERVICES ARE PROVIDED TO Ai GROUP MEMBERS AT
DISCOUNTED RATES

What should you be doing?

Companies tendering for projects will need to demonstrate
their commitment towards sustainable business practices in
order to fulfill all the tendering requirements. In order to do
this, companies may need to:
Further information
For further information contact Ai Group’s
Energy and Sustainable Help Desk on 1300 733 752 or
sustainablebusiness@aigroup.asn.au

Q Develop an environment policy to be signed by the

Managing Director
Frequent Flyer
Did you know that we export
freight to over 180 countries?
Get an airfreight quote online now at:

www.tnt.com.au

At TNT Express we make

exporting easy and fast.
With state-of-the-art tracking,
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We can handle customs For more information on our

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world-wide, so you know that 13 11 50 or visit www.tnt.com.au
GOING GLOBAL
Promoting products as Australian
drives sales: survey
A
new survey has confirmed that
promoting products as Australian in
foreign markets can have a positive
impact on sales. The survey, conducted by
YSC Online in February 2010, found that
products carrying the Australian Made logo
were much more likely to have experienced
increased sales over the past two years than
products that do not.
“The findings of the survey are exciting
because they clearly show that marketing
products as Australian gives businesses a
competitive advantage. This is entirely
consistent with Australia’s ranking as one of
the strongest nation brands in the world. In
spite of a challenging financial climate, it is
encouraging to see that the number of
exporters using the logo has grown in
almost all surveyed markets,” says Ian
Harrison, Chief Executive of the Australian
Made, Australian Grown Campaign
(AMAG).
56 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
Clearly branding products as Australian
made or grown makes business sense – not
just because consumers around the world
think positively about Australia, but also
because research from selected export
markets show that importers hold our
products in high regard. According to a The Australian Made, Australian Grown
2009 Horizon Consumer Science research logo has been promoted in a number of
project, 1 in 3 importers in Dubai are export markets during the past three years
interested in importing Australian made as part of a government funded project
products if they are not already doing so administered by the not-for-profit AMCL.
and consider our products to be of high
The logo can be found on more than
quality (60%), reliable (60%), pure and
10,000 products, sold here and around the
natural (56%) and innovative (52%).
world. In 2009, AMCL experienced record
“All these positive views of Australia
growth in the number of new products
combine to give our exporters a fantastic
being registered to carry the symbol.
opportunity to give their products a
competitive advantage by branding them To learn more about how to register to use
as Australian. The survey from Dubai the logo and participate in export
showed that 89% of importers want to see promotions, please visit
Australian branding on Australian www.australianmade.com.au or freecall
products,” says Ian Harrison. 1800 350 520.

International trade
documentation
By TridentGLOBAL Pty Ltd
The export of goods outside of Australia is heavily controlled by laws and other
government enforcement policies. The purpose of this is to restrict the exporting of
specific goods, ensure compliance and to enable accurate international trade statistics.
International trade documentation
falls into five main groups:
• Australian government
• Commercial
• Transport
• Importing country
• Miscellaneous
Australian government documents
There are 26 government permit
issuing agencies in Australia that are
responsible for exercising the controls
over exports and providing assistance to
exporters. Some of the main agencies are:
• Australian Customs Service (ACS)
ACS administers the control of
exports from Australia in terms of the
customs (prohibited export)
regulations. Documents required by
ACS are principally for statistical
purposes (export declaration number
– EDN), prevention of prohibited
exports and sub-standard
commodities (restricted goods permit).
• Australian Quarantine & Inspection
Service (AQIS)
The function of AQIS is to provide
the inspection and certification necessary
to enable the maintenance of market
access for most of Australia’s agricultural
exports. AQIS has implemented a system
known as EXDOC to manage request
for permit (RFP), custom declaration and
health certificates for meat, dairy, fish,
grain, horticulture, wool, skins and hides.
It helps ensure that primary products
meet the required standards for Australian
exports and health regulations of the
importing country.
CUSTOMS & LOGISTICS
• Department of Defence
This department is responsible for
the control of dual-use technology items,
i.e. those items that have a commercial
use but may conceivably be used for
military purposes, e.g. encryption or
cipher devices used for scrambling radio
transmissions. (export permit)
• Australian Maritime Safety Authority
(AMSA)
AMSA control the shipment
of hazardous goods by sea freight
(dangerous goods declaration).
Control of hazardous goods by air is
the responsibility of the international
organisation of airlines – International Air
Transportation Association (IATA).
• Australian Wine and Brandy
Corporation (AWBC)
The AWBC regulates and ensures
compliance with all wine exports from
Australia. They assist in increasing and
sustaining demand for Australian wine.
Wine exporters must obtain export
documentation through the Wine Export
Approval System (WEA) and receive
approval of the Australian Customs
Services prior to shipment. This can be
processed a number of ways including
electronic data transfer (EDT), online or
manually.
Commercial documents
• Commercial invoice
The commercial invoice is prepared
by the exporter or seller of the goods and
assumes additional importance in the
international transaction to its importance
in the domestic market. This is particularly
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 57
true when the method of payment is by a
documentary letter of credit as inaccurate
completion of the export invoice may
result in delays or non-payment for even
minor typographical errors. Please see
example on page 59
• Packing list
The packing list advises the consignee
of the details of the contents of
packages and their individual weights,
measurements, marks and numbers. A
detailed packing specification assists the
customer in clearance and handling of
goods. In some countries it is a mandatory
document required by the authorities
of the importing country. Please see
example on page 60
• Certificate of insurance
When required by the terms of sale,
this document is normally obtained by the
exporter on behalf of the buyer. The cost
of the premium is inclusive of the price
shown on the commercial invoice and
protects the buyer in the event of loss or
damage to the goods during transit.
• Bill of exchange or draft
The terms of sale agreed between
buyer and seller will dictate whether
the bill of exchange will be used in a
consignment. The draft provides some
security for the seller by covering the
transfer of shipment documents to the
buyer through the banking system. The
buyer will not be able to take possession
of the documents, and thus the goods,
until he/she has made payment to the
overseas bank, or accepted the draft for
payment at a future date.
CUSTOMS & LOGISTICS
Transport documents
Transport documents will be
encountered in most shipments, and will
vary according to the mode of transport
chosen to export the goods.
• Forwarding instructions (FI)
The principle purpose of the FI is to
instruct the shipping company or agent
of the shipper’s instructions for the
preparation of the bill of lading.
• Pre-receival advice (PRA)
Export receival advice (ERA) has been
replaced by the electronic pre-receival
advice (PRA). It is an electronic system
that approves the container transport to
the wharf. The details can be processed
electronically which will aid in reducing
errors.
• Bill of lading (B/L)
The B/L is the most important
document associated with the movement
of goods by sea. It is a receipt for the
goods, evidence of the transport contract
between the shipper and the shipowner,
and a document of titles to the goods.
The shipping company will not normally
release the B/L until the goods have
been loaded onboard and the vessel
has departed from the port of loading,
the exception being when the shipper
requires a Received for Shipment’ B/L.
• Shipper’s letter of instruction (SLI)
The SLI performs a similar function
for air freight consignments to that of
the FI for sea freight consignments. It is
used to give details of the cargo to the
airline or agent and provide instructions
with regard to the preparation of the air
waybill. Please see example on page 60
• Air waybill (AWB)
The AWB is issued by the designated
airline or freight forwarder. It is a receipt
for the goods and evidence of the
contract of carriage between the shipper
and carrier. However, unlike the B/L the
AWB is not negotiable. Similar documents
are issued for goods sent by courier
services.
Importing country documents
The following documents are
those most commonly required by the
authorities of importing countries:
• The certificate of origin
58 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
This is a simple document issued
by organisations such as the Australian
Industry Group. As the name implies it is a
certification that the goods to be exported
are of Australian origin or growth/
manufacture. This document cannot be
used to certify goods of foreign origin.
Please see example on page 59
• The invoice and combined certificate
of value and origin
Former countries of the
Commonwealth allowed each other
preferential rate of duty. This document
was primarily developed for that purpose;
it does not require certification by a
Chamber of Commerce and is prepared
by exporters to provide a more detailed
price structure for the calculation of
import duty.
• Consular invoice
The consular invoice is normally issued
by the consulates or embassies of those
countries resident in Australia. A fee for
the set is sometimes charged in addition
to the legislation fee payable once the
documents have been processed and
presented for legalising.
• Clean report of findings (CROF)
Many developing countries now
require that the CROF document is
presented as one of the mandatory
import documents, normally under the
terms of a documentary letter of credit
and associated import licence. The CROF
is obtained from inspection agencies
such as SGS and Bureau Veritas who are
employed by the importing country.
Miscellaneous documents
Documents falling into this category may
vary and are normally required either as
a result of the regulations peculiar to a
particular industry or for a specific country
or region of the world.
• ATA Carnet
The ATA Carnet document allows
the temporary importation of samples
and exhibition goods into certain
countries without the payment of
duty or bonds. It is controlled by the
International Chambers of Commerce
(ICC). Application for the issue of a
carnet is made through the Chamber of
Commerce.
• Health and halal certificates
These documents are relevant to the meat
industry and provide certification that the
animals were free from disease and were
killed in accordance with the religious
beliefs of the importing country.
• Certificates of conformity to
specifications and inspections
certificates
Certain industries and contracts
demand that the goods are inspected
prior to shipment. The inspection may
be performed by an independent
organisation or the exporter’s own quality
control department. The inspecting
authority issues a certificate to the
effect that the goods meet the contract
specifications. Although the inspection
may be completed by one of the
agencies mentioned previously, it is not a
requirement of the importing country but
one associated with the specific contract
between seller and buyer.
• Dangerous/hazardous goods
certificates
Goods falling into the following
category must be carefully documented
and handled to avoid risk to life and
damage to the vessels or aircraft in which
they are transported. Subsequently
there are very specific regulations which
exporters should obey if they wish to
avoid severe penalties.
All of the documents outlined above
are based on the United Nations Layout
Key for Trade Documents. Exporters
using less standardised documents (e.g.
word processing or spreadsheets) do not
fully integrate with the standard of the
UN layout. The United Nations layout is
highly recommended for export trade
documentation as it ensures the highest
standard of consistency and accuracy
internationally.
For further graphical representation of the
documents listed, please see Malbon J and
Bishop B, (2006), Australian Export –
A Guide to Law and Practice.
 CUSTOMS & LOGISTICS

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THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010

2010-2011
201
011 ● 59
 CUSTOMS & LOGISTICS

Exporter Packing List No & Date Page Pages

Manchester Manufacturers Pty Ltd 1 1 of 1
1340 Commercial Road, Export Invoice No & Date Exporter's Reference
Torrensville SA 5031 IE4002 4 Aug 2005 QA5125A
Australia Buyer's Reference & Order Date
ABN: 89 094 091 342 Email 03/08/05 4 Aug 2005
Consignee BUYER (if not Consignee)
Majestic Stores As Consignee
IBN Dahar Street
Doha
Qatar

Aircraft Flight No
Royal Emirates Airline EK69/EK223 PACKING LIST
Port of Loading Departure Date
ADELAIDE AIRPORT 8 Aug 2005
Port of Discharge Departure Date Method of Despatch Sea Air Post
DUBAI 10 Aug 2005
Final Destination Arrival Date C/Nos Letter of Credit No
DOHA 10 Aug 2005
Packing List Details Unit Net Gross Cubic
Product Code Quantity Wt. KGS Wt. KGS Vol. (m3 )
Units
QS004G 1/25 - 6/25 Queen Size Towels - 6 cartons 48 25.300 30.300 0.300
KS006W 7/25 - 18/25 King Size Towels - 12 cartons 48 42.000 51.000 0.600
KS006DLV 19/25 - 20/25 King Size Deluxe Towels - 2 cartons 48 48.500 50.000 0.220
FW001B 21/25 Face Washers - 1 carton 100 6.500 7.250 0.050
BM003S 22/25 - 25/25 Bath Mats - 4 cartons 48 16.600 19.600 0.200

bill No
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60 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010

2010-2011
2011

Managing Export Documentation
By TridentGLOBAL Pty Ltd
International trade is recognised as being extremely complex due to the compliance
requirements of exporting and importing countries. It involves understanding the
correct use of documents, customs compliance and the management of payment and
delivery risks.
A
number of key areas that need
to be covered in international
trade include packing, labelling,
sea/air freight, marine insurance cover,
financial payment methods, government
regulations and international commercial
terms (incoterms). Obtaining the
necessary permits for import/export can
take weeks.
According to the United Nations
Conference on Trade and Development,
the average international transaction
involves 27-30 different parties, 40
documents, 200 data elements (30 of
which are repeated at least 30 times) and
the re-keying of 60-70 per cent of data at
least once.
One of the main setbacks for
exporters includes document preparation.
CUSTOMS & LOGISTICS
There is an endless list of compliance • Developing export software in-house
required documents depending on the • Purchasing a dedicated system like
exporter’s terms of trade and forms of TridentGLOBAL to manage the whole
payment. These include export declaration process
numbers (EDN), health certificates, letters
Pitfalls of outsourcing
of credit, certificates of origin, commercial
Outsourcing export management and
invoices, bills of lading etc. Completing,
compliance to a third party can prove to
and sending/receiving these documents
have many disadvantages. These include:
manually, can cause many discrepancies.
• The exporter’s loss of control due to
Exporters may often find that their goods
the process being independently
have been delayed or even rejected due to
managed by a third party
inadequately prepared documents.
• Manually re-entering the data which
TridentGLOBAL research indicates
allows greater room for error
that organisations generally adopt one of
• Prolonged turnaround time on
the following methods to manage their
documents including customs
international trade:
clearances, PRAs and health
• Outsourcing documentation and
certificates.
compliance to a third party
• Modifying their existing ERP software
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 61
CUSTOMS & LOGISTICS

Simplify the process
According to TridentGLOBAL,
companies looking to export need not
be deterred as there are many ways
to help simplify the process. Export
software solutions with different levels of
capability may be purchased to assist with
managing the international trade process.
Things to look for when purchasing a
solution:
• An organisation that thoroughly
understands international trade and
holds extensive industry experience;
• Software that is modular and can
be tailored to your unique business
circumstance if necessary;
• The provider is able to deliver the
export management solution with a
high level of service and support.
Integrating with enterprise resource
planning
ERP is a single software solution that
optimises internal business processes by
coordinating operational planning.
Exporters are increasingly benefiting
from solutions that not only manage
export requirements, but also link with
ERP systems that manage order entry,
inventory, production and distribution.
TridentGLOBAL customers have the
advantage of this ERP integration which
means that their customers’ time to react
to market is accelerated significantly by
being able to transfer the data within the
two systems quickly.
The solution should have a focus on
achieving cost savings on internal and
external processes. A seamlessly integrated
ERP and global trade solution will increase
operational efficiency and provide visibility
of shipping schedules. Integrating an
organisation’s distribution process within
an export management solution will
sustain growth and maximise efficiency.
Tips to help make the export process
easier
• Keep up-to-date with government
agencies including AQIS, customs,
chambers, and financial institutions
and industry associations.
• First time exporters may benefit from
outsourcing the export process to
an agent whilst transactions are low.
Once transactions start to increase it is
advisable to manage the export process
in-house with fully trained staff.
Appropriate training can take place
with relevant bodies such as Australian
Industry Group, and the Australian
Institute of Export and Chambers of
Commerce.
• High volume exporters should look
at integrating their existing ERP solution
with a global trade solution to ensure that
internal processes are accurate, productive
and cost-effective.
By following the tips outlined
above, your organisation can maximise
the benefits of your chosen export
management process.

Export solution market summary

Small exporters
Most entry level exporters process less than 20 consignments a month. For that reason it
is reasonably cheap to purchase software that can manage some export processes and limit
the reliance on third parties.

Medium/large exporters
Developed exporters can process anywhere from 20 to 1,000+ consignments per month.
To capitalise on the exporter’s potential, an integrated software and services solution, which
can be easily managed in-house, is required.

62 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

 Con

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CUSTOMS & LOGISTICS

Navigating Export Risks

64 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

 CUSTOMS & LOGISTICS

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 65

CUSTOMS & LOGISTICS

If you think any fool can stuff a

container … think again!
By Russell Burke, ICAL International Customs and Logisitcs Pty Ltd

This phrase is the title of an excellent and valuable short film produced by the marine
mutual insurer, The UK P&I Club in London. The film logically depicts and describes the
correct processes that traders should follow when arranging for the receipt, stowing,
sealing, and dispatch of containers.

T
he P&I Club states, in the opening of
its film, that as many as one in every six
container journeys results in damage to
cargo, and the annual costs associated with
this damage add up to more than $5 billion.
They also state that inadequate packing
and stowage cause many of the losses and
damage. They emphasise that despite their
reassuring appearance, steel containers
can easily become a sauna, a steam bath,
a refrigerator, or a rubbish bin if proper
consideration is not given to the choice of
container for the cargo and the voyage, and/
or proper stowage, security, sealing and
ventilation of the unit.
In our continuing efforts to help shippers
avoid damages and loss, we have been
using the film in our Ai Group lectures on
international logistics for the last 12 years.
There is no better name for this article on
container stowage than the title of the P&I
Club’s film.

Make a packing plan and choose the

right container for the job.
Depending upon the kind of cargo, the
transit route and ultimate destination of the
container, a shipper may require a particular
kind of specialised container, or may require
a general purpose dry container in either a
20 foot or 40 foot length.
If necessary, make a packing plan, taking
into account the sizes, weights and kind of
goods that will be loaded, and look at this in
relation to the internal dimensions, payload
limit, lashing points and other relevant aspects
of the containers available for your job.

66 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011


Here is a list of some of the kinds of
containers, most available in either 20
foot or 40 foot length, that are in use by
shipping lines in the Australian trades:
• Dry, general purpose steel containers
in 20 foot and 40 foot lengths (45
foot boxes are not used by shipping
lines in the Australian trades at this
point in time). Container external
heights range from 8 feet to 9 feet 6
inches.
• Tank containers (Tank-Tainer) for
carrying liquids
• Open top containers – with walls and
doors and a removal tarpaulin roof –
for crane access – for heavy or long
cargo that cannot be loaded using
forklift trucks
• Collapsible flat rack containers that
can be ‘nested’ when returned empty
• Flat rack container (with fixed corner
posts and removable side gates)
• Bolsters (flat beds with no ends or
sides)
• Half height containers
• Insulated containers
• Refrigerated containers with integral
refrigeration units.
It is important to choose the right
container for the journey and kind of
cargo. Such issues as internal height
clearance, strength of lashing lugs
along the container walls, ventilation
or refrigeration needs, floor strength,
cleanliness, and how to prevent damage
to cargo and containers are significant
considerations. If in doubt about the right
kind of container, consult with a shipping
line or forwarder as to what is available
and suitable for your purpose. Remember
that many lawsuits have arisen because
of damage caused to containers and
cargo by poor packing and inappropriate
choices of container type.
Check with your customer
Make sure, before embarking upon
the stowage of cargo into a container,
that your overseas customer can accept
and unload the container without any
undue or unexpected delay or cost arising.
CUSTOMS & LOGISTICS
The payload weight limit of the
container and weight limits for land
transport in Australia and overseas
As well as choosing the right kind of
container for the cargo and the journey,
it is also incumbent upon the shipper to
ensure that the weight limitations of the
box, and the legal weight limits of trucks
for land transport are not exceeded. Failing
to check this most vital issue could result in
serious accidents and criminal culpability.
Many countries have strict limits placed
upon the weights of trucks on their roads,
and in some cases these are considerably
lower than Australian legal limits. We
know of one case where an Australian
exporter loaded 75 tonnes of cargo into
a 40 foot container and caused major
damage to lifting equipment at the wharf
terminal when a mobile lifting machine
attempted to remove it from a train.
The P&I Club makes the profound
point that a voyage across the seas can
involve massive waves, and the consequent
rolling, pitching and yawing of the ship
and its cargo can result in a ‘white knuckle’
ride for the cargo. Add to that the fact that
temperatures can soar to above 50 degrees
Celsius inside a box and you have a case
for their statement, ‘if you think any fool
can stuff a container, then think again!’
Below is a comprehensive (but not
exhaustive) checklist of considerations and
processes that should be followed when
requesting, receiving, stowing, sealing and
dispatching containers.
Container stowing basics
Pre-stowing checks of the container
• Upon receiving an empty container
for packing/stowing, conduct at least
the following checks upon the
container:
i. Is the container seaworthy? Conduct
the following checks and inspections!
Do a ‘light’ test for holes and bad seals
by stepping inside the empty box and
closing the doors – any holes or bad
seals will allow light to penetrate and
therefore reveal the location of the
faults.
ii. Is the container straight and square,
and are the walls, floor and ceiling in
good condition?
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 67
All containers received for packing
should be inspected and a ‘container
condition report’ completed. Where
containers show signs of damage,
rust, or other deterioration it is wise to
photograph the box upon arrival.
These two measures will protect the
shipper against any false claims that
they damaged the container.
iii. Is the container clean?
Are there any residues, liquid, powder,
or soils, in the container? Be careful –
residues could be hazardous.
Make sure that breathing masks, safety
goggles and gloves are available for
such possibilities.
iv. If you have ordered a ‘food’ or
‘medical’ grade container – have you
received such?
v. Does the container have appropriate
‘lashing’ points along the container?
These need to be sufficient in terms of
quantity and strength for particular
kinds of cargo.
vi. The payload limit of the container
The load should not exceed the weight
limitations of the container or of the
packages in which goods are packed.
And, importantly – it is not wise to
leave the container loading until the last
day before loading onto the vessel or other
conveyance. Why? Because it is possible
that you could receive an unacceptable
container and if you have left it to the last
minute, you could find yourself in a very
bad situation. This is especially important
for shippers who are remotely situated
from the depots where empty containers
are held, and also for shippers who must
comply with precise delivery dates under
their sales contract or letter of credit.
Stowing the cargo in the container
Load distribution, placement, and
centre of gravity
• The cargo load should be as evenly
distributed as is practicable, both
laterally and longitudinally, to avoid
tilting.
• Heavy goods should be stowed under
lightweight goods – a high centre of
gravity can be very dangerous.
• Liquids should be stowed under dry
goods.
CUSTOMS & LOGISTICS
Bracing, cushioning, and prevention of
chafing, scratching or other damage to
the cargo and container
• The cargo load should be properly
cushioned, braced and secured, with
no void spaces that allow it to
move and be damaged, or cause
damage to other goods.
• Take action to prevent chafing,
scratching or other disfigurement of
the cargo.
• Designing package sizes to fit onto
pallets with a small indent between the
edge of the pallet and the vertical wall
of the packages will provide a useful
way of preventing chafing of the load.
• Some useful tools for these purposes
are, ‘airbags’, slip-sheets between
layers and between rows and ranks,
shoring beams, and other devices
that can maintain separation and
remove all void spaces that would
allow shifting of the load.
• Webbing straps with ratchets fitted
are very useful for securing loads,
but be aware of their breaking strength
capacity.
• Try to avoid hammering nails through
the floors of containers.
68 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
Cross-contamination and incompatible
cargo
• Do not place incompatible or
potentially contaminant goods near
other goods, or in a place that
would result in cross-contamination or
a hazardous situation.
• Do not load heavy goods on top of
lightweight or crushable goods.
Safety concerns regarding cargo
stowed near the doors
• When loading containers, ensure
That cargo near the doors is properly
secured so that no accidents can occur
when the container doors are opened
at the destination.
Safety concerns related to powders,
liquids and other possible hazards
• Do not allow any packages that may
leak or spill their contents to be
loaded in to a container. This
is especially important when
loading powders or liquids that could
cause contamination of the entire load,
and could produce a serious hazard
en route or for those persons receiving
the container.
Prevention of sweating and
condensation problems
• Where necessary, act to prevent
sweating by proper ventilation
of cargo.
• Containers have vents – taping over
these vent holes may cause moisture
problems by trapping moisture that is
inside the container.
• Use dry shoring and dry pallets
• Be careful of containers that have been
recently washed – the container floor
may contain a substantial amount of
water.
• Use desiccants to absorb moisture
en route. There are several ways of
doing this. There are many products
designed to sit flush inside the recesses
of container walls. Shippers can
construct their own absorbers by
using vermiculite or other inert
moisture-absorbing materials, properly
contained to prevent spillage during
transit.
• If moisture is an issue, then consider
not only the desiccants, but also
the use of container lining materials
that can cause any condensation on

the ceiling to flow down the walls and
into the desiccant, rather than drip
from the container roof onto the cargo.
• If loading containers on rainy days or in
otherwise humid conditions, take
account of the amount of moisture
that could be present in:
a. The ambient air;
b. Any wooden packing, shoring, or
pallets;
c. The container floor; and
d. The cargo itself.
Recognise that containers will be
exposed to the sun and can become
very hot inside. This, in the presence of
moisture, can cause the container to
effectively become a ‘steam-room’ during
transit. Therefore, the use of desiccants and
container ceiling liners may be imperative.
Sealing, documenting and
dispatching the container
Seals and security
• Use bolt seals instead of flimsy seals of
plastic or metal strip.
• Make sure that seals are handled
carefully, and that seal numbers and
colours are properly recorded on
shipping documents.
CUSTOMS & LOGISTICS
• Do not allow seals to be affixed
to containers by persons whose
trustworthiness is unknown.
• Check shipping documents to ensure
that the recorded seal number is the
same as the one affixed by the shipper.
Provision of packing lists and
fumigation certificates
• It is a good idea to affix any fumigation
or other treatment certificates to the
outside of the container doors in a
sealed plastic pouch. This will alert the
receiving parties, and/or any authorities
that may wish to examine the cargo, to
the possible presence of hazardous gas
or other chemicals.
• It is also a good idea to affix a
container packing list to the inside of
the container door.
Dispatch of the container from the
packing premises
• Do not allow your container to be
carried on a vehicle that is obviously
unroadworthy – it could result in
criminal damages.
• Ensure that the trailer on which your
box is carried is fitted with proper
twist-locks to secure the box, and that
the twist-locks are in working order
and are properly engaged before
leaving your premises.
• Ensure that the container’s doors are
properly secured, and the seal properly
fitted before dispatch.
Arrival of the container at destination
– issues of concern
Safety issues for persons receiving and
unpacking the container
• Safety glasses to prevent eye damage
must be worn by the person who uses
a bolt-cutting tool or angle-grinder to
remove a bolt seal. Gloves should also
be worn.
• Restraining straps should be placed
across the container doors to prevent
any cargo packed near the doors from
falling onto the person who opens the
container doors.
• Gas masks should be at hand to
prevent breathing any fumigant
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 69
or other hazardous chemicals upon the
opening of the container.
• The potential safety problems related
to fumigant gases such as methyl
bromide and sulphuryl fluoride
are great indeed, and one should be
careful of bringing containers in to
a closed warehouse for unpacking.
It is common to find that containers
that have been fumigated have not
been properly vented prior to shipment
and this means that whoever receives
and opens the container may be faced
with the presence of large amounts of
the fumigant gas.
Damage to, or loss of cargo,
discovered upon opening/unpacking
of the container
• It is of the utmost importance to follow
proper practice in situations where
damage or other loss is discovered
upon opening or unpacking a
container.
• Cameras should always be available to
photograph the stow, the damaged
cargo, or other evidence.
• The insurance policy or certificate
should also be readily available, and
its list of rules and obligations upon the
insured must be adhered to precisely.
• Carriers and other parties upon whom
you or your insurers may have a claim,
should be notified immediately.
• If the goods are imported from
overseas, there may be duty and GST/
VAT refunds involved. Therefore it may
be necessary to notify the customs
service of the damage or loss.
Other issues of significance in relation
to containers and stowage
Due diligence
The nullification of claiming rights
against insurers and shipping lines
If a shipper packs goods into a
container that is not seaworthy, or is
otherwise unfit to carry the goods, it is
most likely that any claim for damage or
loss that results from such unfitness for
carriage will be voided. This is a condition
of every marine and transit insurance policy
for cargo.
CUSTOMS & LOGISTICS
Likewise, the terms of carriage
under a bill of lading will have similar
provisions, thereby making it essential
that every shipper conducts a ‘due
diligence’ check on containers to be
packed with cargo.
For a freight forwarder or other party
who packs goods on behalf of others,
it is imperative that they understand
the consequences of packing cargo into
‘unfit’ containers. Where a ‘third party’
is doing the work of loading containers,
they could find themselves being sued
by their customers, or their customer’s
insurers, for having loaded goods into a
faulty container.
Being sued by a shipping line for
container damage
As mentioned above under the
heading of ‘Pre-stowing checks on the
container’, it is very wise to complete
a container condition report for every
box received for packing. Where the
box shows evidence of damage or
deterioration, it is even wiser to take
photographs of the container.
Trucking companies may cause
damage in transit, the depot operator
who has supplied the empty box may
cause damage, or the depot operator
may have failed to record damage caused
by previous users. The unwary shipper or
container packer, who has no procedure
for recording the condition of containers
upon receipt and dispatch, is a person
who is at risk of being wrongly sued for
damage to containers.
Requests for food and medical grade
boxes to be in written form
Again, it is wise to make only written
requests when you need a clean, food
grade, or medical grade container. The
reason is obvious. If you have to reject a
dirty or otherwise unfit container, who
will pay for the additional trucking and
lifting costs involved in returning the
unfit container and bringing a suitable
container to your premises. Containers
are subjected to very severe treatment in
their working life, and it is very common
70 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
to find great numbers of containers in loss prevention educational films can
poor condition still in use. be purchased from Marisec Publications
in the UK. Go to their website at www.
Data loggers in containers
marisec.org to order online. Also visit the
These tiny devices, capable of
loss prevention section of the P&I Club
measuring such phenomena as
website at www.ukpandi.com.
temperature, airflow, relative humidity,
We consider the process of container
shock impacts and tilting, are invaluable
packing to be an art at the very least,
tools for shippers of perishable and other
and in many cases, a scientific or
sensitive cargo. There are many small
complex undertaking requiring great
and inexpensive models available and
consideration and study. People who
they are able to upload recorded data
approach the issue with a cavalier,
into computers. The use of data loggers
careless attitude are not only asking
can protect the shippers’ and insurers’
for trouble for themselves, but are also
interests where goods have arrived at the
putting other people’s cargo, and even
destination in a damaged state. The data
lives, at risk.
logger will provide supporting evidence
in a claim. With the exception of the title, this
article comprises material that is part
Summary
of the textbook, International Logistics
Whilst this article provides coverage
and Freight Forwarding Manual, which is
of most aspects of container stowage
distributed by the author, Russell Burke.
and related issues, it is certainly not
© Copyright 2010.
exhaustive, and does not canvass
the special cases of the stowage of
dangerous goods, refrigerated cargo,
or the stowage of bulk materials in liner
bags for use in general containers, or the
use of Tank Containers.
However, information on those
subjects and detailed instruction on
every aspect of container packing is now
available on the Internet. A remarkable
work called The Container Handbook can
be freely downloaded (in English) from
the website of The German Insurance
Association (GDV e.V.) at www.
containerhandbuch.de
The Transport Information Service
(TIS) from the German Insurance
Association (GDV e.V.) provides specialist
information from German marine
underwriters on various aspects of
the transport sector, including cargo
Information for a total of 190 products,
technical information about containers,
technical information about fit-for-
purpose packaging, and articles dealing
with load securing. Visit their websites
at: www.gdv.de and http://www.tis-gdv.de
The ‘Any Fool Can Stuff a
Container’ DVD, and other relevant
 equip and sustain the Australian Defence Force

ASSISTING AUSTRALIAN DEFENCE INDUSTRY

TO EXPORT UNIQUE AND INNOVATIVE
PRODUCTS

A strength of
Australian defence
industry is its ability
to develop unique and
innovative products to
meet the demanding
requirements of the
Australian Defence
Force (ADF), which
Assistance is provided by: Working with the ADF and Assistance is conditional
operates in some
Department of Defence, on the company:
of the harshest » researching foreign defence
the Unit can facilitate
environments in the markets » having an Australian
opportunities for individual
world. Business Number
» indentifying overseas defence companies. Such
These are valuable acquisition opportunities facilitation can include: » performing a substantial
attributes when amount of work in Australia,
» advising on methods for » preparation of letters of
marketing in the global with the intellectual property
accessing foreign defence support
arena. However, owned by Australia
markets
Australian companies » assistance with incoming
» demonstrating a clearly
face many challenges » advising about foreign foreign delegation visit
defined business and
when competing defence industry and programs, such as the
export plan
for export business. acquisition policies, United States’ Comparative
Successive Australian including offsets policies Testing Office visits » having a product,
Governments have technology or service that is
» coordinating a whole of » assistance with access to
recognised this and mature, and not conceptual
government approach to foreign government and
have created a specialist or in development
exploit export opportunities military officials
unit within the Defence
» demonstrating an
Materiel Organisation » coordination of overseas
understanding of the
(DMO) to assist—the ‘Team Australia’ missions
commitment of resources
Defence Export Unit. and trade shows
(staff, time and dollars)
Launched in 2008, » cooperation with other needed when entering the
the Unit’s mission is DMO industry assistance export market
to assist Australian programs
defence industry to
export in order to
sustain strategically and
operationally important While assistance is available to all Australian defence companies, small to medium size enterprises
defence industry will benefit most from the services offered by the Unit. The Defence Export Unit is eager to assist
capabilities and in doing those companies whose products or technologies support Defence’s ‘strategic and priority
so better support the industry capabilities’, and enhance the support provided to the ADF.
ADF. To date, the Unit
has supported over 20
companies in achieving
export sales in excess
of $350 million and is email: teamaustralia@defence.gov.au
assisting many more web: www.defence.gov.au/teamaustralia
companies in future
export endeavours.

DEFENCE MATERIEL ORGANISATION | www.defence.gov.au/dmo

FOCUS ON THE AMERICAS

Overview of the relationship

and opportunities for Australian
companies in North &
South America
By Grame Barty, Regional Director – Americas, Austrade

The ‘Americas Region’ for Austrade comprises the USA, Canada, and Latin American
and Caribbean countries.

O
ur focus for supporting exporters
and investment to and from
Australia is in eight main countries
where we have an established points
presence across the USA, east and west
Canada and the ‘Latin 6’ – being Mexico,
Colombia, Brazil, Peru, Chile and Argentina
with increasing interest in trade relations
emerging from Cuba. Goldman Sachs
predict that three of the top five economies
– USA, Mexico and Brazil – will come from
the Americas Region. Canada will feature
somewhere in the top ten.
In the global financial crisis the Latin
6 economies held up well and are now
rebounding very quickly, and the USA will
remain the world’s largest consumption
economy.
Why is this and what are the drivers?
In essence they comprise the following:
• The USA remains the worlds largest and
most sophisticated consumer and
services economy
• The USA population will increase by
nearly 100 million by 2050 and a large
portion of that growth will come from
Hispanic origin (mostly Mexican)
compared to the flat or decreasing
population in Japan, China and Europe
• Mexico will remain a major beneficiary
of sustained USA economic growth and
is increasingly looking to Asian markets
to diversify
72 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

• Brazil is an economic powerhouse
– energy, food and water independent
with massive investments in
agriculture, advanced manufacturing
and an already urbanised population
(unlike China)
• Colombia is the rising star of the
region. With a population of 44 million
based in the Gulf and Pacific, it is
resource-rich and water, food and
energy secure
• Peru and Chile are resource giants and
are fuelling China’s growth in much the
same way that Australia does.
Opportunities for exporters in the
United States
• The USA remains Australia’s largest
economic partner when trade
and investment flows are taken
together. Austrade sees that substantial
and growing demand exists in the USA
for professional and financial
services, innovation in advanced
manufacturing, and particularly for
technology and services in the energy
and environment area.
• Austrade is working with many of
the top-rated advanced
biofuels companies in the US to
explore opportunities for doing
business in Australia. As emerging US
companies receive significant
government and or industry funding
– and as multinationals enter
the sector – they are seeking global
opportunities for research
collaboration, feedstock production,
demonstration sites, and new markets;
particularly in the Asia-Pacific region.
As such, a number of companies
have begun investigating Australian
opportunities, particularly in relation to
algae for jet fuel replacement,
but also Gen 2 cellulosic biopower and
ethanol solutions based on waste, or
crop feedstock such as sugar cane and
canola.
• Austrade is implementing a major
strategy to create linkages in policy,
programs, research and innovation
in water sustainability and
management, particularly in the
southern and western states of the
FOCUS ON THE AMERICAS
USA. The strategy is also receiving
interest from Mexico, Canada, Peru
and Chile. Processes, methodologies,
technology or devices or other
innovations for managing urban
consumption, precision agriculture
irrigation, water trading or
environmental management are
all keenly sought after.
• Austrade is working with a number
of major US based systems and service
integrators that hold a large share of
US Government contracts and that are
active in Australia. These organisations
are interested in both trade and
investment opportunities with
Australia, with energy and security
being major areas of activity.
• The USA is a major services market
for Australia and our largest market
for professional services. Services trade
with the United States is sophisticated,
broad-based, and unique in being
dominated by professional services
rather than travel. Sectors include
business services, project management,
franchising, engineering, and
government services.
• Consumer related exports to the USA,
including major commodities such
as beef and wine, remain very
significant to Australia. Australian
music, digital media and fashion also
remains very popular in the US market.
Consumer demand is the major driver
of the US economy however changing
tastes, overall economic conditions,
as well as factors such as exchange
rates can have a significant impact
on exporters requiring detailed market
knowledge and understanding of
trends together with a strong
communication and engagement
strategy.
Opportunities in Latin America –
‘the L6’
• The economic relationship between
Australia and Latin America is
dominated by mining and resources.
Latin America, as an emerging market,
is primarily characterised by Australia
as a significant investor with
many major resources companies
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 73
having operations in Latin America;
e.g. BHP Billiton, Rio Tinto, Xstrata,
Orica, GRD Minproc, and Mincom.
These operations, in turn, help to open
up and ‘pull through’ opportunities for
Australian suppliers of mining
equipment, technology and services;
eg engineering services providers
such as SKM, Worley Parsons,
Transfield Services, and GHD, as well
as equipment companies such as
Austin Engineering and Groundprobe.
• Latin America is a significant market
for Australian coal exports – especially
Mexico and Chile with the requirement
for LNG and geothermal products,
technology and services to increase in
those countries in particular. In
Brazil, wind power and LNG are
increasing renewable opportunities.
• Australia’s commercial relationship with
Latin America is increasingly diversified.
For example, Australian energy
companies (such as Pacific Hydro
and Hydro Chile) are investing in Latin
America, while Macquarie Group
recently launched its Mexican
Infrastructure Fund and
National Australia Bank has an office
in Brazil. There is also increasing
interest in Australian expertise in other
services, such as water and
environment.
• Key sectors of opportunity for
Australian exporters and investors
in Latin America include mining,
mining equipment, technology and
services, energy (coal, renewable, oil
and gas services and LNG), agribusiness
technology and services, infrastructure,
ICT, construction, education, and other
engineering and consulting services.
• Education services remains one of
the great stories of the last decade in
the L6 with over 30,000 students
annually participating in programs
offered by Australian institutions.
• In Brazil, Australian expertise in
sports infrastructure and services
as well as events management will
become an increased focus, with the
country hosting the 2014 FIFA
World Cup and the 2016 Rio Olympics.
Major events, such as the soccer World
FOCUS ON THE AMERICAS
Cup in Brazil and the Olympic Games
in Rio de Janeiro, will boost growth
and provide unique opportunities for
Australian suppliers and service
providers. Austrade is developing
dedicated programs to assist Australian
enterprises access to business in the
lead-up to and during these events.
• Austrade’s Latin America regional team
works closely with a range of allies to
ensure a fully integrated ‘Team
Australia’ approach to activities in
the region, including DFAT, the Council
on Australia Latin America Relations
(COALAR), the Australia Latin America
Business Council (ALABC), the
Australian Industry Group (Ai Group),
the Mining Equipment and Services
Council (MESCA), and Austmine.
• Colombia is one of Austrade’s Latin
6 priority markets and offers significant
opportunities for Australian enterprises,
particularly in mining & energy,
infrastructure, professional services and
education. In December 2009,
Minister Crean signed a bilateral
Memorandum of Understanding
to strengthen trade and investment
ties between Australia and Colombia.
Austrade currently operates a ‘virtual
office’ in Colombia with a single district
manager based in Bogota. Austrade is
actively considering options for
expanding dedicated resources to
support leveraging opportunities in
this growth market.
Opportunities in Canada
• Australia continues to enjoy a
strong and stable trade and investment
relationship with Canada with two-way
investment growing and no major
market access issues.
In many ways what has made us successful is making them successful.
So in a way we are selling to ‘peers’.
74 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
• Key sectors of opportunity for - Services – financial, professional
Australian exporters and investors in and business services; student
Canada include mining technology recruitment and facilitating
and services, clean energy and university-to-university research
environment (including water collaboration; medical and
management), financial, professional health devices and services; life
and business services, wine (one of sciences.
Australia’s largest per capita wine - Energy, mining and environment –
markets), health including medical, equipment, technology and services
pharma, biotech, and the for oil and gas; mining; clean tech;
commercialisation of R&D and green building; water technology.
technology. - Wine, food and agritech – wine;
• Australia investments in Canada are speciality, natural, organic
concentrated in mining and resources and health foods; meat; food
(BHP Billiton, Rio Tinto, Alcan) as well safety/traceability services; agri-
as services to the mining and energy sustainability services.
sectors (WorleyParsons, Transfield).
Conclusion
• However, Australia’s investments
The eight major target markets of
in Canada are becoming increasingly
Austrade in the Americas Region are all
diversified ranging from professional
high performing economies with robust
and financial to software and food
futures based on consumption, resources,
manufacturing:
services, agriculture, increasing populations
- Plenary Group and Macquarie
and sovereign wealth. In many ways what
Group (both are leaders in
has made us successful is making them
provision of public private
successful. So in a way we are selling to
partnership financial solutions
‘peers’.
for infrastructure)
These markets understand and admire
- Computershare (runs the largest
the role Australia has played in developing
share registry service in Canada)
its economy, capabilities and role within
- GHD, Coffey
the region, and see our exporters and
- Bakers Delight, Flight Centre (both
investors as adding great value to what
have extensive franchised
they already do. The sales pitch in this
operations)
region is that Australia is already an energy
• Austrade is continuing to promote
and mining ‘superpower’ managing to
Canada as a market distinct from the
adapt to living in an increasingly hostile
US while also seeking sectoral
climate environment, and has created an
synergies across North America as
outstanding financial and professional
they benefit clients. Sectors of focus
services base from which to operate
are services, education, energy, mining
globally. You, the exporter, will help them
and environment and wine/food and
create the same enviable capability and
agritech. Within these groupings,
lifestyle in their markets!
specific focus is on:

Brazil Trade Bureau -
The B of Bric:
By Luis Aroeira Neves, International Trade Advisor, Consulate-General of Brazil
Global and Australian media have, in recent years, repeatedly mentioned the growing
prospects of the Brazilian economy.
I
n the World Investment Survey 2009,
from the United Nations Conference
on Trade and Development (UNCTAD),
Brazil ranked fourth as the preferred future
destination for international investors.
The survey polled CEOs from 241 global
corporations. Amongst the main criteria
foreign investors quoted for selecting Brazil
were: size of the domestic market, market
growth, existence of suppliers and partners
clusters, availability of natural resources,
and access to international and regional
markets.
While many Australian companies have
been in Brazil for years (Nufarm, Agrichem,
Woodside and Pacific Hydro), others, such
as Seek Limited and WorleyParsons, have
recently joined them. However, many
companies are missing out mainly due to
FOCUS ON THE AMERICAS
lack of awareness of the range and depth
of opportunities available in Brazil. There is
a growing consensus about the economy’s
prospects and plenty of untapped potential
for investors.
For Australian businesses looking to
expand internationally, it may be the right
time and place to look beyond export-only
strategies.
Brazil basics
Brazil has always been a country of
superlatives. Having the largest land area,
economy and population of the Southern
Hemisphere, Brazil is also the fifth largest
country in the world in terms of land area
and population. Brazil has approximately
48 per cent of South America’s land area,
40 per cent of its GDP, and half of its
population. According to the IMF and
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 75
World Bank, it is the ninth largest economy
in the world, and is likely to become the
fourth or fifth largest by 2050.
The size of Australia with an extra
NSW, Brazil has a population almost 10
times that of Australia. It is Australia’s
oldest diplomatic partner, as well as its
main trading partner in South America.
Bilateral trade and investment have
been growing steadily between the two
countries.
Australia and Brazil share many
common economic characteristics,
endowed with mineral resources,
and boasting strong agribusiness,
manufacturing, banking and services
sectors. Culturally, Brazilians and
Australians share a common taste for
BBQ, beach and beer. Even Australian rum
FOCUS ON THE AMERICAS
and jacaranda trees can be traced back to
when the British fleets stopped in Rio de
Janeiro on their way to Australia. Aussie
gum trees dot millions of hectares of
planted forests in Brazil. Australian wine
is more common at Brazilian restaurants
than ever before.
The Brazilian economy offers a
domestic market with growing purchase
power and a strong manufacturing base:
from mining machinery and equipment to
luxury coaches; from renewable ethanol
fuel to remote sensoring equipment; and
from executive jets to soya beans. Brazil
produces and ships products around the
world with increasing efficiency.
This is still a developing country
and there is homework to be done, but
this is precisely where the opportunities
for Australian companies may reside.
Still, with seemingly endless water,
arable land, mineral, oil, renewable and
human resources, there is much room
to accommodate growth. Foreign Direct
Investment topped US$45 billion during
2008, with FDI growing at annual rates of
35 per cent.
Having hosted the Pan American
Games in Rio de Janeiro in 2008, Brazil
is now preparing to host the FIFA World
Cup in 2014 and the Olympic Games
in 2016. There are many opportunities
for Australian companies willing to
make the jump and open a subsidiary
or manufacturing base in Brazil. Many
international businesses’ first contact
with Brazil is by exporting, but after a
few visits to Brazil, they decide to open
manufacturing bases there.
When a country of superlatives
realises its potential
As a rule of thumb in Brazil, you
might want to have a local partner, or
acquire an established Brazilian business
(WorleyParsons did this in their acquisition
of CNEC Engineering). In most areas
there are no caps or limitations to foreign
companies’ ownership.
Australian companies should see Brazil
as a developing country that is quickly
realising its potential, and they should not
wait until all their competitors are already
there to consider it.
76 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
Brazil has a unique mix of size, In 2010, the government of Brazil
extensive mining, oil and renewable enhanced the export financing capabilities
energy resources, established of BNDES, the National Development
manufacturing clusters, growing Bank, by establishing an export credit
domestic market, prudent economic agency.
management, diversified economy, and Australian companies in the
stable democracy. Brazil also has access to construction, hotel, infrastructure, and
neighbouring markets within the South manufacturing sectors are strongly
American Common Market. encouraged to consider Brazil as part
Take agribusiness for example. In of their global strategy. Brazil topped
the last 20 years, Brazil changed from stock market returns amongst emerging
a middle-ranking country to being the economies in 2008. The property sector is
world’s largest exporter of beef, chicken, also blossoming. Brazil will invest heavily
green coffee, orange juice, sugar, ethanol, to upgrade the country’s infrastructure
tobacco, and soya beans. It still has a (Until 2014, US$2 billion alone is being
plentiful supply of arable land outside of invested to upgrade São Paulo’s subway
protected or ecologically sensitive areas. system).
Another example is oil. Brazil is The Brazil Trade Bureau, a division of
now self-sufficient in oil and posed to the Consulate-General of Brazil in Sydney,
become a major exporter after many has been building bridges between the
offshore oil field findings in the last years. two largest economies in the Southern
Petrobras, the Brazilian oil giant, is the hemisphere for decades. Our area of
world’s largest deepwater oil driller. In expertise relates to empowering potential
2009, Euromoney magazine ranked the investors in Brazil, as well as Brazilian
company as the best managed and most exporters, to find business opportunities
improved company in the whole of Latin in Australia.
America. With fuels and agribusiness
For more information, please contact:
booming, the industry clusters around it
Luis Henrique Aroeira Neves
also prospered.
International Trade Advisor
According to OECD’s 2009 Survey of
Brazil Trade Bureau
Brazil, by using prudent fiscal policies, the
Consulate-General of Brazil
country reaped the benefits of the boom
Phone: +61 2 9285 5713
in commodities exports, with a relatively
Email: luis.neves@brazilsydney.org or
mild downturn, and a quick rebound.
trade@brazilsydney.org
Both the World Bank and the IMF predict
Web: www.brazilsydney.org
Brazil will grow between 4 per cent and
5 per cent in the next two years. More
importantly, there is a growing consensus
that the long-term prospects of the
economy are very positive.
Benefits from establishing a
subsidiary or manufacturing base in
Brazil are many; from tax concessions,
export schemes, capital goods import
duty exemptions, and access to various
state and federal schemes trying to
address specific shortages. For instance,
there are public–private partnerships,
infrastructure projects, special schemes
for the World Cup and Olympic Games,
as well as for the manufacturing, mining
and agribusiness clusters. There are also
specific programs in states and regions
that need to develop further.
 FOCUS ON THE AMERICAS

Latin America could be the new

Asia, and Colombia is a market
on the move
Queensland Treasurer, Andrew Fraser

In April, I led a Queensland Government ministerial trade delegation to key markets in

Latin America, visiting Chile, Peru, Brazil and Colombia.

T
he trade mission confirmed my belief that Latin America is
shaping up as the new Asia for Queensland and Australian
exporters.
Global investment bank Goldman Sachs predicts that by 2050
the list of the world’s five biggest economies will include two Latin
American nations – Brazil and Mexico.
Latin America is a growing market for Queensland’s exporters.
The four countries that I visited imported a combined $1.45 billion
worth of merchandise goods from the State in 2008-09.
The region continues to grow and its governments are
implementing economic growth plans for continued development
in the medium-to-long term. Latin America is also showing signs
of recovering from the recent financial downturn quickly in
comparison to other global regions.
The International Monetary Fund (IMF), in its latest Regional
Economic Outlook report released in early May 2010, predicts
regional GDP growth of four per cent for Latin America in 2010,
after a contraction of 1.8 per cent in 2009. Five year growth is
forecast at more than 30 per cent.
These economic forecasts back our decision to place a new
Queensland Government business development manager in Chile,
and a new trade position in Brazil to be appointed in the next 18
months – a move that will make Queensland the first Australian
state with dedicated trade representation in Brazil.
These new business development managers will work to
assist the State’s companies to do business across the whole Latin
America region.
Today, Queensland companies are increasingly engaged in
Latin America. There are about 30 companies operating in Chile,
for instance, enabling a team approach to expansion in this
market.
Merchandise exports from Queensland to Chile were worth
$569 million in 2008/09 representing more than two thirds of
Australia’s exports to Chile. In Brazil, Queensland exports were
valued at $1.15 billion – more than three quarters of Australia’s
exports to this country.

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 77

FOCUS ON THE AMERICAS
Brazil’s economy alone is worth in
the vicinity of $2 trillion, and with the
Olympics and the FIFA World Cup coming
to the nation over the next six years and
new oil reserves being recently discovered,
there is certainly more business to be
done by Australian companies in Brazil.
Our business development managers
will be charged with supporting
Queensland’s exporters, as well as
increasing our presence and building new
export markets in targeted Latin American
growth markets – particularly Peru and
Colombia.
My visit to Colombia in April was
the first by a Queensland Government
Minister, and I am certain it won’t be the
last.
Queensland is working hard to enable
our businesses to take advantage of
Colombia’s growth phase.
Colombia is a fast growing export
market for Queensland in Latin America.
The state’s merchandise exports to
Colombia have grown, admittedly from
a small base, by an average of more than
30 per cent per year over the past five
years.
The IMF’s figures predict that
Colombia’s economy will grow in 2010
by a moderate 2.3 per cent, but this will
bounce back in 2011 to grow by 4.0 per
cent.
Trade Queensland has identified
strong opportunities in Colombia’s
mining, agricultural, and education
sectors, and there are also potential
opportunities in the telecommunications
sector.
Colombia is a nation that is breaking from its traditional image and
increasing its focus on doing business with the world.
78 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
These key opportunity sectors in
Colombia are well-suited to match the
strengths of Queensland’s exporters,
particularly in servicing the mining
sector and the associated infrastructure
requirements.
Colombia is already a key market
in Latin America for Queensland’s
international education and training sector.
In 2009, there were 3,254 Colombian
student visa enrolments in Queensland,
up almost 30 per cent on the 2008 figure.
Most of these students were enrolled in
English language or vocational education
courses.
Nationally, Colombia is second only to
Brazil as a source of international students
to Australia from Latin America, with
9,866 enrolments by Colombian students
in Australian educational institutions in
2009.
My visit to Bogata on 28 April 2010
continued the work that the Queensland
Government is doing to strengthen our
relationships with Colombia.
I signed a new Statement of Intent
with the Colombian Government and met
with Colombian Government and business
leaders.
Queensland is now the only Australian
State to have a trade agreement with
Colombia, giving our businesses and
institutions a valuable edge in gaining
ground-floor access to this market.
The new Statement of Intent focuses
on cooperation in mining-related
industries, education and training, climate
change initiatives and innovation – all areas
with great growth potential.
I also attended a key business
reception to discuss Queensland’s
current Statement of Intent with the
Colombian mining State of Antioquia,
which encourages collaboration in
mining research and development.
This state-to-state agreement aims
to improve mining efficiencies and
encourage information sharing on
mining-related public and private sector
programs in both Queensland and
Antioquia.
Under this agreement, there is
potential to increase business in
the mining sector, including safety
initiatives, health research, testing,
certification and training programs.
There is further potential business to
be done in environmental technologies
relating to mine site regeneration, water
management and climate change in the
future.
Reflecting a mutual trade interest,
Colombia is also taking a strong interest
in Australia. Colombia’s Minister for
Foreign Affairs, Mr Jaime Bermudez,
visited in March 2010 and announced
the establishment of an Australia-
Colombia Business Council. Colombia’s
Minister of Trade, Industry and Tourism,
Mr Luis Guillermo Plata, also came to
Australia in March last year.
Colombia, like the rest of Latin
America, should not be overlooked by
Australian exporters. It is a nation that is
breaking from its traditional image and
increasing its focus on doing business
with the world.
 FOCUS ON THE AMERICAS

Colombia: land of opportunities

for exporters and investors
By The Embassy of Colombia in Australia

Welcome to Colombia! We warmly invite you to discover a different country,

strategically located in the northern corner of South America, with coasts on both
the Caribbean Sea and the Pacific Ocean, offering access to markets in the US,
Latin America and the Caribbean. Competitive advantages make us your ideal
export platform.

O
ver the last few years, Colombia
has lived through an all-time
high growth and development
phase. As a result, social indicators have
improved dramatically.
Colombia has achieved solid structural
growth, based on an increase in the
investment rate and higher productivity
levels. The Colombian Government
is committed to generating the most
favourable conditions for domestic and
foreign Investment.
Preferential market access to more
than 1.2 billion consumers thanks to
Free Trade Agreements (FTA)
Colombia’s 2010 trade agenda
includes nine agreements with 45
countries. The Government is committed
to establishing Free Trade Agreements
with key strategic partner countries
to generate better conditions for
investment and trade. These agreements
have opened markets in the Andean
Community, Central America, Canada,
Mercosur, EFTA countries and more
recently with the European Union.
Attractive incentives for investors
In order to attract foreign investment
(one of the government’s key priorities),
new strategies were designed. These
include, amongst others, the creation of
free trade zones and the establishment of
legal stability contracts.
What are free trade zones?
Free trade zones are geographical
areas, within the national territory, for the
development of industrial goods and services
or commercial activities under a special tax,
customs and foreign trade regime.

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 79

FOCUS ON THE AMERICAS
Benefits
• Single 15 per cent income tax rate
for industrial users of goods,
industrial users of services, and
operators, except for commercial
users, which are taxed at the general
rate
• No customs taxes (VAT and customs
duties) on merchandise imported
from abroad
• VAT exemption for raw materials,
inputs and finished goods sold from
a national customs territory to
industrial users of a free trade zone
• Exports made from free trade
zones to foreign countries (except
Peru) benefit from international
trade agreements signed by
Colombia
• Goods produced, manufactured,
transformed or resulting from any
production process developed in a
Free Trade Zone are recognized as
being ‘of national origin’
• Possibility of performing partial
processing outside of the free trade
zone for up to nine (9) months
• Possibility of selling, inside the
national territory, 100 per cent
of the goods or services produced
in the free trade zone with customs
tariff and VAT payable only on the
percentage of inputs imported from
third countries.
The most competitive free trade zone in
Latin America: 15 per cent income tax
as well as the possibility to sell to local
markets
Income taxes – Deductible expenses
Deductions include the following,
amongst others:
• 40 per cent of the capital invested in
the acquisition of productive
real assets acquired
• 100 per cent of the amount paid
for Industry & Commerce, sign and
billboard, and property taxes during
the corresponding taxable year, as
long as they are directly related to
the taxpayer’s economic activity
• 25 per cent of the tax paid on
financial transactions may
be deducted, regardless of their
80 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
relationship to the taxpayer’s
economic activity.
Colombia offers legal stability
contracts to guarantee investment
projects
• Investments over US$1.84 million1
(150.000 T.U)2
• The condition that the investor pays
one per cent premium based on the
amount of the investment. 0.5 per
cent in unproductive periods.
• Signed contracts from three to 20
years maximum.
Investment opportunities
• Biofuels
- Income tax exemption for ten
years
- 6.5 million hectares (16.1 million
acres) suitable for biofuel
production
- World’s fifth largest palm oil
producer
- Productivity of 9,000 litres of
ethanol per hectare every year
- Growing market. For 2020, a
production of 1.4 billion litres
of ethanol and 1.2 billion litres of
biodiesel per year
- Assured demand. In 2020, E20
and B20
- Creation of a ‘green seal’ to
identify the national biofuel
production with good
environmental and social
practices.
• Cosmetics
- Market of US$2.6 million and
production of US$2.4 million
- Cosmetic exports grew by 23 per
cent between 2003 and 2007
- Country with the second largest
flora biodiversity in Latin America
- Market for men’s cosmetics pocket
share duplicates the European
women market share
- More than 242,000 professionals
and technicians available to work
in the cosmetic industry
- Products with natural ingredients
grew 9 per cent between 2003
and 2008.
• IT Services
- 27,000 business graduates and
13,000 engineering graduates
per year
- Seven cities with more than
500,000 inhabitants
- Neutral Spanish accent
- Market: US$1 billion, growing
at a rate of 42 per cent in
three years.
• Tourism
- 1.45 million foreign travellers
visited Colombia in 2008
- Tourism growth to Colombia
(9.73 per cent) more than doubled
the worldwide growth (2 per cent)
– 2008 data.
- Income tax exemption for new or
remodelled hotels
- Medical tourism: is the practice of
travelling abroad to obtain
healthcare services, generally at a
small fraction of the cost in
a person’s home country.
• Pioneer program in reproduction
immunology; the first test tube
baby born in Latin America; first
pacemaker in the world
• Colombia is the second best
country for scientific and health
infrastructure in Latin America:
(IMD, 2008)
• 3,000 medical graduates every
year.
• Infrastructure: Projects that add
up to more than US$25 billion,
just in 2009.
1 The investment requirement is calculated iwth an
exchange rate of COP$2000 = US$1. It is responsibility of
the investor to calculate the investment requirement at
the moment of submitting the application for the Legal
Stability Agreement.
2 One Tax Unit equivalent COP$24.555 or US$12.2
 FOCUS ON THE AMERICAS

Sector Tax exemption period Australia’s trade and investment relationship with Colombia:

Tourism 30 years for companies that build or Major Australian exports, 2009 (IN A$M):
restyle hotels before 2018 Nickel ores & concentrates 21
Electrical distributing equipment 6
Eco-tourism 20 years starting from 2003
Electrical circuits equipment 6
Late yield crops 10 years after the start of production in Electrical machinery and parts 4
crops planted between 2003 and 2013
Major Australian imports, 2009 (IN A$M):
Forestry Permanent exemption for investment in
Coffee and substitutes 17
new forest plantations, sawmilling and
Cut flowers and foliage 1
timber plantations
Insecticides, herbicides, disinfectants 1
Editorial Publishing of books, magazines, booklets Cereal preparations 1
or collections of scientific or cultural
characteristics are exempt until 2013 Source: DFAT
New medicinal 10 years for products manufactured in For additional information go to:
products and Colombia with high scientific and www.investincolombia.com or
software technological research content, starting www.mincomercio.gov.co
from 2003

Renewable energy 15 years for sale (by the generators) of

electricity based on wind resources,
biomass or agricultural waste

River transport 15 years starting from 2003 to provide

services in slabs and boats with net
weight below 25 tonnes

Source: Proexport

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 81

FOCUS ON THE AMERICAS

Doing business in Chile

By M. Paz Camus, AUSCHAM, Chile Australia Chamber of Commerce

Chile is a very attractive market, not only because of its 16 million inhabitants
(6.5 million of whom are located in Santiago), but also due to the large network of
trade agreements held with major countries in Latin America and the three countries
that make up North America. These agreements have positioned Chile as a competitive
and interesting country to establish a base of operations, with the objective of
developing the local market and, furthermore, tackling the rest of Latin America.

T
he political and economical stability
achieved in Chile through diverse
governments has also marked a
trend towards credibility and significance
of the country’s long term objectives. Like
Australia, the Chilean economy is based on
the export of raw materials, with copper
being the main export and mining the
major sector, followed by agriculture and
forestry.
Over the past few years, Chile has
used the word development as its main
axis of operation. The country joined the
Organisation for Economic Co-operation
& Development (OECD) and as the new
President of Chile, Sebastián Piñera,
has stated, the country is on its way to
becoming a developed economy in the
next 10 years, having also overcome
extreme poverty. As such, it is important
to attract capable investors, capital and
technology providers to achieve the much
expected growth.
Chile possesses a Foreign Investment
Statute (Law Decree 600) which has the
following benefits for foreign investment:
• Investment can be made in foreign
currency, tangible assets (new or
used), technology or in loans.
• The minimum investment accepted
(through the above methods) is
US$5,000,000 or equivalent in other
currencies (there are other manners
for minor investors). The loans
associated to the investment cannot
correspond to over 75 per cent of the
total foreign investment.
• The contract guarantees free access
to foreign currency for the remittance
of capital and profit or interest rates.
• The investor may repatriate the capital
one year after the date of admission.
Profit can be transferred abroad at any
time after paying the corresponding
taxes (due to profit) or having performed
the respective tax retention.
• The contract guarantees to freeze the
customs and value added tax until the
entry of the investment in physical
assets has been completed.
• The contract guarantees non
discrimination to Chilean investors.
Though constraints to internal loan
access might apply, all of them have
recently been removed.
• At the investor’s request, the
contract can guarantee a fixed
income tax rate of 42 per cent for
a period of ten years. However,
foreign investors may choose to give
up this tax rate and be subjected
to the overall income tax system.
The contract may also guarantee the
invariability of the special tax
to mining over a period of 10 years.
• There are additional benefits for
investors over US$50,000,000

82 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011


Market behaviour in Chile
Chile is an easy country in which to
operate without too many bureaucratic
requirements or special rules for
foreigners. There are equal opportunities
for locals as well as foreigners. To form
a company is a relatively simple process,
although longer than in Australia. It
takes approximately between 20 to 30
days until it is operational and has a Tax
I.D. Number.
There are a number of ways to
operate in Chile:
1. Assign a representative based
upon a contract whereby the
representative acts on behalf
of the investor and at the investor’s
risk to perform one or more business
transactions.
2. Create an agency or branch of the
foreign company.
3. Create a limited liability partnership.
The liability of the partners is
limited to the amount of individual
participation. The corporation is
managed by a manager and requires
two partners as a minimum.
4. Create a corporation. The liability
of the shareholders is limited to the
amount of individual participation.
Requiring two partners as a
minimum, the corporation may be
private or public and is managed by
a board of directors, whose members
may be replaced at any time. Public
corporations are subjected to the
control of the superintendence of
values and insurance.
5. Create a limited individual liability
partnership whereby the partner
is liable to the amount of capital
contributed or to a bigger amount
specified in the deed of the
partnership.
6. Create a partnership of shares which
can have one or more partners.
Taxes
All taxes in Chile are imposed
nationally. There are no significant
council, province or regional taxes
except for council permits.
The entity in charge of overseeing
taxes in Chile is the Service of Internal
Tax Office (SII). SII is also in charge
of issuing instructions, administrative
FOCUS ON THE AMERICAS
resolutions and interpreting tax
legislation.
The main sources of national income
taxes are:
• Tax on company and personal
income. This is based upon two
factors: the location of the taxpayer’s
residence and the source of income.
Foreigners pay tax only on income
obtained in Chile during their first
three years.
1. The first category tax, at a 17 per
cent rate (currently there is a
bill which would raise it to 19 per
cent and 18.5 per cent in the year
2011 and 2012 respectively and then
to return to 17 per cent
permanently) which applies to the
profits from industry, commerce,
mining, property and other activities
involving the use of capital.
2. Special tax to mining from 2006.
Mining activity is subject to an
additional tax named ‘Specific Tax to
Mining activity’, also known as
‘Royalty Mining’ and varies according
to the tonnes of exploitation (a
modification is under study).
3. The second category tax, with
progressive rates, applies to income
derived from the personal services of
employees.
4. The income of independent workers
and professionals are considered as
income related to the
complementary global tax (same
proportion and progress rates as the
second category tax) and applies to
the residents’ total income (coming
from both categories).
5. The additional tax applies to the
total income of both categories of
partnerships or non residents.
The profit generated by partnerships
which have non- resident partners
or shareholders are subjected to this
tax when this profit is withdrawn;
they are distributed as dividend or
remitted abroad.
• Value added tax (VAT) of 19 per
cent to all sales and services.
The VAT paid on imports, purchase
and services received (state credit)
deducted from VAT payable for sales
and services provided (state debit).
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 83
The taxpayer, seller or provider of
services must present a monthly tax
return declaration and pay the
state net debit on the 12th day
of the following month. Exports
are not VAT tax levied. The VAT
paid on the purchase of assets and
services, which are necessary
to produce the exported assets, are
deducted from the VAT payable from
other sales or it is reimbursed by the
Tax Service Office (SII).
• Customs duties on imports of
virtually all goods and products
amount to 6 per cent of the value
of the import, but between Chile
and Australia, as well as between
Chile and over 35 other countries,
there is a Free Trade Agreement and
therefore this tariff may become zero
depending on the item imported.
Stamp and stamps tax, due to
acquiring loans of 0.5 per cent, if the
loan is repayable on demand or has
an expiry date. The tax rate will be
1.2 per cent for foreign loans
regardless of the amount (there is a
bill to decrease it to 0.6 per cent).
Futhermore, the tax regime includes
property taxes, tax over inheritances and
donations (currently in the process of
modification) and other minor taxes.
Market opportunities
Chile is aware of the limitation
of being a country based upon the
exploitation and export of natural
resources. Australia, in this regard, is an
example for Chile. The development of
new technology, focused on the efficient
production processes of natural resources,
especially in mining and agriculture, are
welcome and can be very lucrative.
Chile is looking at desalination plants
in Australia, wind, and geothermal energy
in the hope of applying them to the north
of the country where the major part of
the mining sector is located.
Another interesting business
opportunity has arisen from the impact
of the disastrous 27 February 2010
earthquake. It has provided a market for
diverse alternatives of construction as well
as quick implementation materials.
FOCUS ON THE AMERICAS
Australia and Chile sign new tax
treaty: Taking a “regional” view,
and what will it mean?
By Harris Gomez Group
Australia and Chile have signed a comprehensive new income tax treaty. The treaty will
free up the exchange of taxpayer and bank information between the Australian and
Chilean tax authorities and will supposedly aid both governments in reducing tax evasion.
T
he Australian Government stated
that “the new income tax treaty
between Australia and Chile will
provide certainty and stability of tax
treatment for Australian and Chilean
cross-border investors and reduce
tax-related barriers so the economic
relationship between our countries can
continue to grow”.
Largely a consequence of Chile’s
desire to join the Organisation for
Economic Cooperation and Development
(OECD), the treaty will eliminate double
taxation on income and is likely to cause
a significant increase in the flow of
investments from Australia into Chile.
Provisions of the new tax treaty
include:
• Reductions in source-country
withholding taxes on certain cross-
border payments of dividends, interest
and royalties;
• Rules to determine when an enterprise
or an individual of one country may
be taxed on its activities abroad;
• An agreed basis for determining the
allocation of profits within a
multinational company to reflect
the pricing that would be adopted by
independent parties;
• Rules that ensure that profits derived
from the operation of ships and
aircraft in international traffic are
generally taxed only in the
country of residence of the operator.
Also, income derived by crew
members from employment exercised
aboard an aircraft operated in
international traffic is only taxable in
the cabin crew’s country of residence;
• Rules for the taxation of income,
profits or gains from the alienation of
property;
84 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
• Provisions that ensure that pension
and retirement annuities are taxed
only in the country of residence of the
recipient;
• A general obligation for both
countries to relieve double taxation
on cross-border income by permitting
tax paid under the other country’s
laws, and in accordance
with the proposed treaty, to be
allowed as a credit against tax payable
under their own laws;
• Mechanisms through which the
Australian and Chilean administrators
may, by mutual agreement, resolve tax
disputes and relieve double taxation;
• Rules to protect nationals and
companies of one country from tax
discrimination in the other country;
• A framework to provide for the full
exchange of taxpayer information;
and
• Special rules to preserve the
application of existing tax
arrangements between Chilean and
Australian companies under
the provisions of the Chilean
legislation DL 600 (Foreign Investment
Statute). This is of particular
importance to Australian mining
companies with investments in Chile.
Australian lawmakers are determined
to introduce legislation into Parliament
as soon as practicable to give the new
treaty the force of law. The provisions of
the new treaty will take effect in Australia
in four different stages after coming into
force, which will be 1 January 2011 if it
is ratified by Parliament this year. If it is
ratified sometime next year it will come
into effect on 1 January 2012 and so on.
Chile and beyond (how to really take
advantage of the double tax agreement)
Your business needs to be strategic and
take a regional view. Map out where you
want to go and in which new markets
you want to participate.
You should seek assistance in
understanding what is involved with
regards to taxes (local and international).
For example, are you intending to do
business in or manufacture in Brazil
or Peru? If so, what is involved locally
and what are the implications to your
Australian business?
Depending on your markets, you may
want to consider bringing your products
through Chile’s free trade zone in Iquique.
Chile, in comparison to Australia, enjoys
stronger and more competitive trading
treaties with many Latin American
countries, including Brazil, Colombia and
Mexico. There are also tax free zones in
Brazil that may serve you better. Chile
has over 55 Free Trade Agreements
and some 26 double tax agreements
so it is important to have up-to-date
and accurate advice in relation to the
following:
• Free Trade Agreements
• Double tax agreements
• Tax free zones
• MERCOSUR or MERCOSUL
• NAFTA
• P4 Treaty
• Madrid Protocol
If you need any assistance or have any
queries in relation to any of the above,
please feel free to contact Harris Gomez
at hmg@hgomezgroup.com, Sam Gearing
at sfg@hgomezgroup.com, or go to www.
hgomezgroup.com

Intellectual property (IP) rights
in Latin America
By Harris Gomez Group
Contrary to popular belief, there is no such thing as an “international” or “worldwide”
patent, or “international trademark” that covers the whole planet in one application.
A
mechanism exists under the
Patent Cooperation Treaty (PCT),
administered by the World
Intellectual Property Organization (WIPO),
whereby applicants can make international
patent applications. However, this merely
simplifies the process to make national
applications in each PCT member state (of
which there are over 125) and protects the
applicants’ rights to a national application
for a limited amount of time.
Similarly with trademarks, international
registrations can be made via the Madrid
Protocol (of which there are currently 84
member states, but of Latin American
countries, only Cuba is a member state)
and the Paris Convention (of which there
are over 100 members) however there is
no mechanism in place which provides
international blanket patent/trademark
protection.
Significant benefits arise from these
international treaties/conventions however
many applicants and/or patent/trademark
owners misunderstand their international
IP rights. Depending on the status of
any patent/trademark application with IP
Australia, further applications can leverage
FOCUS ON THE AMERICAS
off those IP Australia applications courtesy
of these treaties/conventions.
All Australian businesses that currently
operate, or intend to operate, in the Latin
American market should review their
current IP rights in relation to the region.
IP applications in Latin America
National applications need to be made
in each individual country in Latin America
and in some countries, for instance Brazil,
the process can take a minimum of three
(3) years until final registration. In general
however, the process takes approximately
two (2) years (presuming that no objections
are raised by the authorities or the public)
from application until final registration.
All applications need to be filed in
Spanish (except Brazil, which requires that
the application is filed in Portuguese), and
those translations need to be certified.
The applicant may choose to have a
local representative in that country of
application, and that relationship will need
to be evidenced in the form of a power of
attorney from the applicant to the agent.
Just like those applications in Australia,
the application will need to include designs
and/or drawings (in the case of patents),
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 85
logos, descriptions of those goods/services
in which it seeks to protect its trademark
and so forth.
Applications are reasonably
straightforward, however the authorities
can take a hard line on accepting some
trademarks (in the event of the prior
registration of a same and/or similar
trademark, and even in some cases where
the chances of there arising confusion in
the market are minimal). Any objection
raised by the authorities can be appealed
by the applicant.
Practical tips
It is common to see Australians come
to Latin America and market their product
and/or service (through various trade
shows), set up, trade and then realise they
have no protection, or even worse are in
infringement of a third party’s IP rights.
We advise our clients before even setting
up to ensure that their IP rights are
protected and that they are able to use
their IP. This can be achieved by conducting
quick and inexpensive searches.
From a business perspective, we have
found that our clients, who have their
IP in order, send a good message to the
marketplace as they are strategically and
effectively able to transact with their
buyers, especially in the case where the
buyer is a large multinational like BHP, who
in some cases require that you are the
owner of the IP rights prior to entering into
a purchase contract.
In most Latin countries, the rule of law is
adhered to and strictly enforced, regardless
of whether or not you are a foreigner, so
protection of one of your business’s most
valuable assets is a worthwhile cause.
If you need any assistance or have any
queries in relation to any of the above,
please feel free to contact Harris Gomez
at hmg@hgomezgroup.com, Sam Gearing
at sfg@hgomezgroup.com, or go to www.
hgomezgroup.com.
FOCUS ON THE AMERICAS

Powers of attorney in latin

america – part of “la vida”
By Harris Gomez Group

In comparison to Australia, where Powers of Attorney (POAs) (ironically referred to in

some circles as a ‘licence to steal’) are not an especially common instrument when doing
business, Latin America cannot operate without POAs, which are part of la vida. In a direct
business culture clash with Australia, in Latin America, parties entering into a contract must
have express and written authority to do so. The most common instrument of doing this
is a POA. Whilst Board resolutions can be used as an alternative for some functions, they
are less commonly used. POAs are typically used for instructing professionals, lawyers,
accountants, architects, engineers (not doctors or vets) and so forth.

I
n Chile, all incorporated companies
must have a legal representative. That
person must be a Chilean citizen, is
legally responsible for the company, and
rights of authority automatically vest with
the legal representative when the company
is incorporated. Where the company is
effectively a subsidiary of an Australian
company, it is common for the Australian
company to give a POA to the Chilean
company’s general manager/gerente
general or equivalent, to attend to day-to-
day functions in its role for the business,
for instance entering into employment
contracts, leases of office space and/or
to find the right balance. That is ‘wide’ with employment contracts,
buildings, entering into business contracts
versus ‘specific’. In some cases, Australian banking, debt collecting,
and attending to the company’s banking
companies give very limited powers in the representation before public agencies
needs.
POAs and are too specific, so much so that and political authorities, mail,
In the instance that an Australian
the general manager cannot do anything sales, business contracts, real estate
company wants to give a POA to a person
without the Australian parent company’s and so forth. Similarly, each section
in Chile, that POA must be signed in
approval. This obviously has negative can have a corresponding monetary
front of a Notary Public in Australia, then
practical impacts on the business. POAs limit; and
legalised at the Chilean Consulate and/
are easy to revoke, so they are safe in that 3. Separate the role of the general
or authenticated by the Department of
respect. manager and legal representative and
Foreign Affairs and Trade (depending
thus have a ‘check and balance’ (we
on the treaty with Australia regarding Practical tips on POAs:
find in many cases clients innocently
notaries). Once the original is sent to 1. Do a background search on whom
give one person both these functions
Chile, it then needs to get “locally” you intend to provide with a POA. This
and thus ‘put all your eggs in one
legalised and registered. A similar process is inexpensive and there are companies
basket’).
applies to granting a POA in Argentina, in Australia such as Seraphim Risk
Peru, Colombia and Mexico. Management from Melbourne that can If you need any assistance or have
The wider the powers contained in the attend to this; any queries in relation to any of the
POA, the more practical. However this has 2. Work out exactly what the person above, please feel free to contact
the drawback of being more dangerous. (to whom the powers will be vested) Harris Gomez at hmg@hgomezgroup.
If the person has too much power, he/she will be doing and work from there. com, Sam Gearing at sfg@
can close you down and deal with funds, Work out limits. For instance, the hgomezgroup.com, or go to www.
so the key is trust. The company needs powers can be split into dealing hgomezgroup.com.

86 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

FOCUS ON THE AMERICAS

Doing business in the United

States: legal issues
by Steven Williams BA DJuris

Though exporting to the United States can be profitable, conducting business

activities in what amounts to a foreign country raises a number of legal issues.

Legal risk
Unless an Australian company’s
product is regulated in the United States
(such as pharmaceuticals, medical devices
etc.), there is little that legally prevents
the company from doing business
directly in the USA. If the Australian
company can find a US customer for
its products, it can sell those products
directly to the customer. This is often the
simplest means of doing business in the
United States, but it carries a degree of
risk.
A foreign company, whether
Australian or other, that sells its products
in the USA can be made to answer in a
United States court for any injuries that
arise from the use of those products.
A company might also be subject to a
breach of contract claim in the USA or
some other commercial dispute with a
US customer, distributor, or sales agent.
One solution to these issues is to
ensure that the insurance policy covering
the Australian company covers any
injury claims that might arise in the
United States. Most Australian business
insurance policies specifically exclude
coverage in the USA though some
Australian insurance companies will
waive this exclusion (usually in exchange
for a higher premium for the insurance).
In regard to the risk of commercial
disputes, this can often be minimised
through written agreements between the
parties.
The process of making the sale in
the United States may be as simple as a
US customer placing an order with an
Australian company, and the Australian
company then filling the order. In such a
transaction, there may be a minimum of
documentation between the parties. This
can complicate the merits of the dispute
since the actual terms of the transaction
might not have been clearly defined,
and it can also raise other issues such as
whether Australian law or US law applies
to the dispute and where the dispute will
be litigated.

88 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011


To avoid these issues, it is usually good
business practice for the parties to enter
into a written agreement that clearly
states the terms and conditions applicable
to their transactions. Such agreements
are widely available on the internet
and from companies that publish legal
forms, but obtaining legal advice should
also be considered. Executing a written
agreement up-front can help prevent later
misunderstandings and legal bills.
Income tax
The US-source profits of a foreign
company doing business in the United
States can be subject to US income
taxation regardless of where the company
is based. For US federal income tax,
however, a double tax agreement (DTA)
between Australia and the United States
exempts certain Australian companies
from this rule. Under the DTA, the US-
source profits of an Australian company
are not taxable in the United States at
the federal level provided the company
does not carry on its business activities
through a permanent establishment in
the USA. Whether an Australian company
has a permanent establishment in the
USA is an issue decided on the facts and
circumstances of each case.
FOCUS ON THE AMERICAS
The right to assess income tax is not Australia are not protected in the United
exclusive to the US federal government, States. If an Australian company will
and the 50 individual US states also have be selling goods in the USA that bear a
the power to assess income taxes. With trademark, thought should be given to
only a few exceptions, every US state registering the mark in the United States.
assesses an income tax or a gross receipts
Travel to the United States
tax on companies doing business in their
Australians do not usually need a
state. Because the DTA is an international
visa to travel to the United States and
treaty between the countries of Australia
can enter the country under the Visa
and the United States, it is not binding
Waiver Program (VWP). Before travelling,
on the individual US states, and it
Australians must apply through the
provides no protection against state
Electronic System for Travel Authorization
income taxation.
at www.cbp.gov/xp/cgov/travel/id_visa/
Whether an Australian company esta/. The VWP allows admission into
will be subject to a particular state’s the United States for up to 90 days for
income tax regime usually depends tourism or limited business purposes
on whether the company has enough such as meeting with potential clients,
business contacts with that state to negotiating contracts for goods or
establish a nexus (a connection between services that will be provided from
the state and the foreign company) outside the USA, and attending trade
that is sufficient for the state to assert shows.
tax jurisdiction over the company. For Admission under the VWP does not
example, merely warehousing goods in permit the person to work in the USA
the USA is not enough to have set up a or to provide any kind of productive
permanent establishment under the DTA labour. Australians, like all other foreign
(so an Australian company storing its nationals, can work in the United States
products in the USA would be protected only if they have the appropriate visa.
from US federal taxation), but this may
be a sufficient nexus for the company to For further information, please
be liable for state tax in the state where contact:
the goods are stored. Steven Williams
Structuring US business activities to Tel: (02) 9238 6672
avoid or minimise US federal and state Email: steve@sbwilliams.com.au
Web: www.sbwilliams.com.au
taxation obligations should be given
careful consideration by an Australian
company planning to expand into US
markets.
Trademarks
A trademark is a distinctive mark,
usually in the form of a word or symbol,
which when applied to a good or
service, distinguishes it from similar
products made by competitors. This
permits consumers to tell one brand
from another, and trademark law
grants certain rights to parties that use
distinctive marks in relation to their
products or services.
However, since a country’s trademark
law extends only as far as the country’s
borders, trademarks used or registered in
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 89
FOCUS ON THE AMERICAS

An overview on selling to the

US retail sector
By Amy K Frey, President, ATC International

Measured solely by revenue numbers, the US represents one of the largest retail
markets in the world. According to the US National Retail Federation, total US
retail sales in 2009 was US$4.1 trillion. Although retail sales have declined in the
past two years, the US market continues to represent enormous selling potential
for Australian manufacturers.
Trends carry a wider assortment of general by an increasing number of fast internet
While a slower economy has required merchandise, mass merchants are selling connections in US homes. Direct market
US retail buyers to become more food items, and home improvement sales have also been increasing due to
assertive, the current climate has also retailers are selling appliances and enhanced marketing tools used by savvy
helped to encourage buyers to be more work clothing. While superstores are e-commerce sellers such as Amazon.com.
open to better pricing, smarter products rigorously competing with each other in To improve customer service and
and new vendors. This presents both every major category, direct marketers stay competitive among younger
a challenge and an opportunity for (including catalogue companies and demographics, traditional retailers are
companies selling to the US retail market e-commerce sites) are steadily winning working fast to integrate and upgrade
for the first time. customers from traditional brick and their internet systems. For instance, they
In recent years, major US retailers mortar stores. are offering multi-channel distribution
have been expanding their product In 2010, US direct market sales are networks such as being able to order
categories to gain larger market share. expected to grow by 3.5%. Growth in online and pick up instore or order online
Supermarkets and drugstores now online shopping has been largely driven and make a return instore.

90 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011


Brand names continue to play an
important role in US consumer choice and
US retailers are aggressively increasing
their store brands (i.e. private labels). As
store brands expand, major retailers are
sourcing direct from foreign and local
manufacturers at an increasing pace.
US retailers are continuing to identify
paths to more efficient logistics structure,
such as requiring their vendors to ship
direct to consumers to fulfill catalogue
or internet orders. They are also seeking
to manage their inventories with fewer
markdowns and greater perceived value
at regular price. To do this, retailers are
looking for vendors to help them develop
lower starting price points, which also can
result in a change in their traditional mix
of product.
Consumer tastes and expenditures
are trending toward “lifestyles of health
and sustainability”. Eco-friendly products
and services, eco-friendly facilities, and
eco-friendly activism are being heavily
promoted among US retailers and strongly
supported by US consumers. For the
future, analysts are predicting that the
US consumer focus will be on high value
items with long life, low impact on the
environment and low energy consumption
as well as items that promote a healthy
lifestyle.
Tips for approaching the US retail
market
Marketing materials and price lists
– Prepare marketing materials that are
US-friendly such as a price list in US dollars,
FOB pricing from a US warehouse and
trading terms that are consistent with
what other US suppliers offer. Avoid
colloquialisms like ‘jumper’ or ‘gumleaf’ in
product descriptions. If you are selling your
products wholesale, there is no sales tax so
references to GST should be removed. If
you are intending to bring giveaway gift
items to a trade show, do not ship them
with the samples –carry them with you
in your luggage! Trade show gift items
are often the cause of many tragic delays
when trying to clear trade show samples
shipments through US customs. Allow a
lot of extra time when shipping samples
and trade show items to the US.
FOCUS ON THE AMERICAS
US trade shows – trade shows are a
great place to learn about the market,
meet initial customers, gain publicity
for your product and to network with
potential sales representatives or other
valuable industry contacts. While you
may not write a lot of orders in the initial
show, the networks and market research
achieved through participating in US trade
shows will substantially help to establish
an ongoing US business. Make sure that
the trade show is right for your product
and, if possible, visit the show prior to
participating.
Start small – While large US retailers
have huge appetites for product, their
purchasing power makes them very
demanding customers. Because of these
demands they may not always be the
best way to begin in the US marketplace.
Mistakes on orders shipped to larger
retailers can be costly not only in terms of
charge backs but delays can even result in
losing the account. Start out with smaller
retailers to get the supply chain finetuned.
Smaller retailers will be more forgiving
if a shipment is held up in US customs
or if somehow a mistake was made in
communication. Larger US retailers are
more likely to cancel a late order and not
order again.
Payment terms – Most small and
medium-sized US retailers do not usually
pay by bank wire or transfers. Instead
they will pay by credit card or US dollar
cheque. Have a payment system ready
that involves either using your Australian
merchant facility to process credit cards
(be careful with exchange rates!) or
identify a convenient and inexpensive
solution for depositing US dollar cheques.
Find out how long it takes for overseas
cheques to clear in your bank and how
much it costs per cheque to deposit.
Establish a Base – US retailers prefer to
purchase products that are available
from a US-based warehouse. Third party
logistics providers can offer an easy
solution for holding product in the US
and some 3PL suppliers offer additional
services to help assist with other aspects
of doing business in the US, such as
bookkeeping or customer service.
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 91
Establishing a US – base is more
attractive to US retail buyers who prefer
not to receive orders from overseas.
Larger US retailers may also want
extended terms that can be up to 60
days.
Domestic Shipping – For many retail
industries in the US, the customer will
pay the freight from a US warehouse to
their store. This makes pricing easier,
but you will need to establish a system
for calculating the US freight upfront.
For smaller parcels, use www.ups.com
to gain a general understanding for US
domestic ground shipping costs. To do
this, you will need the US postal codes
(origin and destination) as well as the
weight of the parcel. Freight rates
(palletised orders) are also available on
the web and can be obtained from a
variety of carriers online. Freight rates
are usually less expensive if you ship on
the account of an established freight
consolidator or US logistics providers.
Be persistent – Most Australian
exporters are surprised at how much
longer it takes to secure their first
substantial order in the US. Be
persistent and continue to follow up
and visit the market regularly. While
the end result can be very lucrative,
as the saying goes, “good things take
time”. The US market is large, buyers
are approached every day by new
suppliers and it takes time to be seen
and get heard. Do not be discouraged!
Demonstrate that you are in the
US market for the long run and be
persistent.
ATC International has been helping
Australian exporters succeed in the
US market for over 20 years. In
addition to offering logistics and
business management services,
ATC also offers a variety of services
that are specifically designed
for exporters new to the US
marketplace.
GETTING HELP
Australia to heed safety
standard deadline
The European Commission has extended the deadline for the transition from
standard EN 954-1 to standards EN ISO 13849-1 and EN/IEC 62061. Rockwell
Automation Area Manager – Safety, Gary Milburn, explores the implications to
Australia’s industrial community.
I
In recent times, the functionality of
industrial machinery has advanced
considerably. Industrial processes are
being continually enhanced with more
sophisticated PLC-based technologies
capable of driving throughputs and
product quality to levels never thought
to be possible. As a result, the functional
safety standards that govern the
manufacture and safety rating of such
machinery and their components are
evolving to accommodate the latest
technological advancements. Machine
builders and component manufacturers
must be vigilant, and remain up to
speed with changes to performance
requirements, and the standards that
specify them.
For Australian companies—especially
those with export activities—of particular
interest is the impending transition from
EN 954-1: 1996 ‘Safety of Machinery,
Safety related parts of control systems’, to
92 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
the newer EN/ISO 13849-1: 2008 ‘Safety
of Machinery – Safety related parts of
control systems’, and EN/IEC 62061: 2008
‘Safety of machinery – Functional safety
of electrical, electronic and programmable
electric control systems’. Recently, the
European Commission extended the
three-year transition period to five years,
revising the deadline to conform to EN/
ISO 13849-1 to 31 December 2011.
With the complete withdrawal of EN
954-1 now inevitable, its continued use
alone is destined to become problematic
in Europe and closer to home. The
soon-to-be-superseded standard is
not suitable for some of the more
advanced technologies commonly used
in modern machine-control applications
and safety products. In fact, the impact
of the impending switchover is now
being felt, with many machine-specific
(C type) standards already calling for
compliance with EN/ISO 13849-1 and
EN/IEC 62061, with no reference to
EN 954-1. Importantly, this transition
has implications reaching farther than
in Europe alone—Australian machine
builders and component manufacturers
must also prepare.
Setting the standard
In order to plan a logical course
through the transition to these new
standards, it is important to realise that
the change affects two fundamentally
different user types; the designer of
safety-related subsystems, such as
controller and component manufacturers,
and the designers of safety-related
systems, such as machine builders.
Soon—if not already—working to EN
954-1 will be considered unacceptable by
both groups.
In contrast to EN 954-1, EN/ISO
13849-1 and EN/IEC 62061 have been
structured to accommodate the design of
more sophisticated safety control system
applications. In fact, EN/ISO 13849-1 is
fated to become the most commonly used
standard for all machine safety control
systems, including complete systems,
subsystems or individual components.
Both EN/ISO 13849-1 and EN/IEC
62061 incorporate a ‘probability of
failure’ assessment calculation—a feature
lacking in EN 954-1. Here, a performance
level (PL) is assigned once a range of
requirements are satisfied. These include:
reliability data for all system components;
diagnostic coverage (DC) of the system;
software requirements; and protection
against common-cause failure and
systematic faults. It’s important to note
that the category rating system will be
retained.

The new standards require control
system designers to calculate the
performance level of their safety
circuits so that the safety rated control
systems provide adequate integrity.
Product-specific functional data from
component suppliers may then be used
in conjunction with tools such as the
SISTEMA Performance Level calculation
tool from IFA (formerly BGIA) (Institute
for Occupational Safety and Health of
the German Social Accident Insurance)
to confirm that the PL rating has been
achieved. For Australian machine builders
and component providers, the early
adoption of these newer functional safety
standards is likely to yield long-term
benefits.
Attention exporters
At present, Australian industry has
adopted standard AS 4024.1 2006
‘Safety of Machinery’. However, like EN
954-1, AS 4024.1 does not incorporate
a probabilistic component, or require the
designation of a PL. While compliance
with AS 4024.1 will suffice (for the time
being) for machinery destined for local
use, it is a different story for local machine
builders and component manufacturers
with European export operations, as well
as those with export aspirations.
Even though compliance with EN
954-1 is technically acceptable until the
end of 2011, overseas purchasers of
Australian-made machinery are more
likely to demand compliance with EN/ISO
13849-1 in order to future-proof their
investments. If local machine builders
and component manufacturers haven’t
already implemented internal systems to
comply with EN/ISO 13849-1, or begun
this process, then international purchase
orders may be lost.
Interestingly, ISO 13849-1 was
published in 2006, which means machine
builders and component manufacturers
have already had four years to bring
their systems up to speed. The recent
time-extension to comply with the new
standards indicates that a significant
number of industrial businesses and
machine type C standards were not yet
in a position to comply by the original 31
December 2009 deadline.
GETTING HELP
Rockwell Automation streamlines safety calculations
Rockwell Automation has created a library of its safety products and their
associated functional safety data. Users can simply drag the product model
number into the SISTEMA Performance Level calculation tool and verify PL ratings
automatically—a real time- and labour-saving innovation. Additionally, documentation
produced by this calculation tool provides proof of due diligence of the safety rated
control system design.
To access this library of functional safety data, as well as other safety standard
information and tools, visit Rockwell Automation Safety Solutions Portal at http://
discover.rockwellautomation.com/EN_Safety_Solutions.aspx
Anecdotal evidence has suggested Additionally, enterprising solution
that complying with the new standard providers will develop tools to enable
comprised more work on its initial Australian machine builders to comply
implementation than first anticipated— with these newer standards as soon as
especially for small- and medium-sized possible. Early adopters will not only
machine builders with limited resources. move ahead of the competition and gain
Here, machine builders are potentially a competitive advantage, but also help
required to change their processes and better protect workers and machinery.
designs to satisfy the new requirements.
As a result, it would be prudent of
Company background
Australia-based businesses to learn from
Rockwell Automation Australia and
the oversight of some of their European
Rockwell Automation New Zealand are
colleagues and begin the process of
subsidiaries of Rockwell Automation,
complying with EN/ISO 13849-1 sooner
Inc.—a leading global provider of
rather than later.
industrial power, automation control
Global opportunities and information solutions that helps
There is real potential for the manufacturers achieve a competitive
requirements outlined in standard EN/ advantage in their business. The company
ISO 13849-1 to become those specified in brings together leading global brands
the Australian marketplace. Furthermore, in industrial automation which include
with electro-mechanical and electronic Allen-Bradley® controls and services and
control systems converging at a rapid Rockwell Software® factory management
rate, and the adoption of a quantifiable software. Its broad product mix includes
methodology, it makes sense for such a control logic systems, sensors, human-
global harmonisation of functional safety machine interfaces, drive controllers,
standards to take place. power devices, and software.
However, in the ever-changing field Headquartered in Milwaukee, Wis.,
of functional safety standards, many the company employs about 19,000
businesses don’t have the resources people serving customers in more than
to keep abreast of new requirements, 80 countries. In Australia, the company’s
let alone execute them in a systematic technical resources and national network
way. While the adoption of EN/ISO of distributors provide technical and
13849-1 and EN/IEC 62061will throw logistic expertise to ensure its customers
up some challenges, it will also present a meet their manufacturing productivity
number of opportunities for enterprising objectives.
Australian companies. Enquiries
As it becomes more difficult and time-
Anne-Marie Ward, Rockwell Automation
consuming for end-users to comply, it
marketing communications manager
is likely that they will look to outside
E-mail: award@ra.rockwell.com
contractors and experts. This presents
Australia
a business opportunity for system
37 Chapman Street
integrators in particular. By skilling-up and
PO Box 190
positioning themselves as experts in EN/
Blackburn Victoria 3130
ISO 13849-1 and EN/IEC 62061, system
Telephone: +61 3 9896 0300
integrators can relieve the workload from
machine builders and end-users.
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 93
GETTING HELP

Ai Group is the platform for industry access to the

standards setting process
The Australian Industry Group (Ai Group) is the key industry
representative stakeholder involved in the standards setting
process in Australia. Through Ai Group, more than 600 industry
representatives access over 300 Standards Australia technical
committees as well as other standards and regulatory bodies.
Maintenance and alignment of Australian and International
Standards is critical to industry participation in global markets.
Standards facilitate market exchange and trade, ensure product and
process safety, quality and integrity, integrate emerging technologies
and business models, and ensure environmental and social issues are
addressed. The Ai Group is committed to the standardisation process
through the recent appointment of a standards coordinator who
will coordinate appropriate representation of Ai Group members on
technical and regulatory committees.

Industry & Investment NSW

“
This opportunity has put the label on
the radar of the most influential
buyers and media in the USA. We
have also made sales”: a Sydney women’s
fashion designer who took part in G’Day
USA.
“We made great contacts and received
a lot of interest from the show”: a regional
builder that participated in the Big 5 in the
Middle East.
“The exhibition allowed us to not only
meet potential new customers but also re-
connect with existing overseas customers”:
a health care company that visited Medica
in Germany…
…a few of the comments from
companies that have benefitted from
Industry & Investment NSW’s trade
promotion program.
Breaking into new markets overseas
depends on having access to practical,
reliable and up-to-date information, with
advice on markets, customer preferences,
distribution and marketing practices,
political issues, cultural requirements,
legal problems, government assistance
programs, etc.
Industry & Investment NSW (I&I NSW)
provides a range of services to companies
across the State wanting to get into
exporting or build their export activities.
I&I NSW has a State-wide network of
Export Advisers available to give practical
advice and assistance to companies to take
full advantage of international market
opportunities.
The trade promotion program
comprises trade missions, international
exhibitions and individual market visits.
Participation in the program is a good way
to investigate the dynamics of your target
market first-hand.
Trade missions are a very effective way
for companies to visit international markets
and meet one-on-one with targeted buyers.
Trade missions are a good option for an
initial visit to a new market. They are either
a group from similar industries or a general
mission to specific countries.
As a member of an official government
trade mission, participants gain credibility
and often have access to important decision
makers who would be difficult, if not
impossible, to access if going alone.
International exhibitions are suited to
high volume markets such as consumer
goods, food and beverages, and sectors
such as construction, mining and
agribusiness. As an exhibitor you are
exposed to a high volume of potential
buyers, agents and distributors.
I&I NSW also assists businesses
preferring to travel on their own to target
markets. This option is particularly good for
businesses in niche markets where a few
key buyers can be identified and
approached.
To participate in I&I NSW’s trade
promotion program, a company must:
3 operate principally in NSW
3 produce internationally tradeable goods
and services
3 be export ready
3 have sufficient financial resources to
mount an export campaign
3 have at least two years trading history,
and
3 have positive growth in their domestic
business.
For more information on the trade promotion
program, go to: www.export.nsw.gov.au or
telephone (02) 9338 6918.

94 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

 GETTING HELP

TradeStart
TradeStart is a Federal Government funded program, and part of a national
network of export assistance offices, and partnerships between Austrade and a
range of local private and public sector organisations throughout Australia.
These TradeStart Partners employ Export Advisors who are well versed in
the needs of exporters and potential exporters and skilled in matters of
international trade.

T
he prime objective is to assist small and medium-sized
enterprises (SMEs) to commence exporting and to convert
irregular exporters to sustainable export activity. TradeStart
also provides assistance to established exporters to expand
into new markets as well as advice and guidance on overseas
investment and joint venture opportunities.
The TradeStart program addresses the needs of individual
businesses, drawing on the combined resources of Austrade
and the TradeStart Partner. The program contains elements
of coaching and action learning, with the goal being to assist
each business to achieve long-term success in their first and
subsequent export markets.

The TradeStart Program:
• Promotes exporting, international business and the Australian
Government’s trade agenda.
• Assists potential exporters to become established exporters.
• Assists established exporters to increase export sales and to
enter new markets.
• Works co-operatively with other relevant agencies to
maximise the export success of TradeStart clients.
• Represents Austrade and provides access to the full range of
its services for both existing and potential Austrade clients.
There is also access to assistance from Austrade’s extensive
coverage of overseas offices.
Am I eligible for this program?
To be considered eligible for the program your business
should have:
• a current Australian Business Number (ABN)
• Australia as its main place of business
In addition, your business must have:
• a product, service or patented intellectual property with clear
export potential
• management commitment to becoming an exporter and
developing the export side of your business.
This includes a willingness to visit the market if appropriate,
the ability to develop an export budget and the financial
resources to get into export, including budgeting to visit the
market
• a plan to grow the business
• marketing materials, such as a website or brochure, with an
understanding that materials specific to the
international market may need to be developed
• the ability to build supply capacity.
What is expected of you?
Participants are required to:
• commit resources and reasonable management time to the
program
• meet the various costs of participation, including travel
and the cost of using Austrade services in international
markets.
Ai Group has experienced export advisers ready to assist your
entry into the export market.
For more information please contact the TradeStart adviser below
or e-mail: tradestart@aigroup.asn.au to arrange an interview.
Your TradeStart Adviser: Victoria
Craig Malcolm (03) 9867 0170

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 95

GETTING HELP

Brand Australia
Brand Australia is a $20 million, four-year program that was announced by
Trade Minister Simon Crean on 26 August, 2009. The program will provide an
overarching, strategic approach to positioning Australia in the global marketplace.

T
he intent of the program is to ensure
that Australia is as highly regarded as
a global citizen and global business
partner as it is as a holiday destination.
For the last two years Australia has
ranked ninth on the Anholt-GfK Roper
index, which measures the image of 50
nations annually. The index examines
six dimensions of competence; exports,
governance, culture, people, tourism,
immigration and investment.
Australia’s highest rankings are in the
People and Tourism categories, and it is
also rated one of the most desirable places
to live and work. Another strength in the
country’s reputation is in Governance.
Our weakest areas of reputation are in
the categories of Culture and Exports –
although they are still highly competitive.
Brand Australia will emphasise the
aspects of Australia that make it attractive
as a business destination, such as:
• Australia’s economy was one of only
a handful of advanced economies to
96 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
grow through the recent global
economic turmoil.
• The World Bank rates Australia as one
of the easiest places in the world to
do business.
• Australia has one of the world’s
highest rates of patent applications
for innovations in renewable energy
and biotechnology.
• Australians invented the modern
standard for WiFi, with the
breakthrough IEEE 802.11a for
wireless internet.
• Australia is the world’s largest net
exporter of coal (accounting for 29 percent
of all exports). It also has the world’s
largest known reserves of zinc, uranium,
lead, nickel and silver.
• Australia is a world leader in mining
technology and services. Mining
software developed in Australia
is used by mines throughout the
world.
A concept called
‘Australia Unlimited’
has been chosen as
the visual identity
for Brand Australia
as it both encapsulates the current image
and perceptions that are had of Australia,
whilst at the same time allowing for
the incorporation of more assertive and
dynamic elements than are traditionally
known.
The next step is to develop the brand
architecture and encourage Australian
government organisations and businesses
to co-brand their products. This could
include Australia Unlimited branding
of overseas scholarships, and selected
exports.
The creative agency will also be
required to develop and implement
digital and direct marketing activities
to encourage the Australian exporter
community to become involved in the
Brand Australia program.
 GETTING HELP

Use Enterprise Connect to review

your business before you export
Thinking of exporting but feel you need to undertake a review of your whole business
first? Ai Group business advisers, through this free Australian Government service,
review every aspect of your business with you. As a result you can ensure that your
strategy, business processes, management systems, financial controls, marketing,
innovation measures and people are at their optimum before venturing into exporting.

T
he Australian Government will then match up to $20,000
spent by firms to implement improvements recommended by
the business review.
What is Enterprise Connect?
Enterprise Connect is a key $50M per year initiative designed
to ensure that business has better access to new ideas and new
technology. Under this service, business advisers offer free business
reviews to small and medium enterprises. Depending on the
particular needs of each company, advisers can apply one of a
range of business diagnostic tools to analyse a company’s strengths
and opportunities, benchmark against similar organisations
internationally, and recommend actions to help companies cut
costs, and become more innovative, efficient and competitive.
Who is eligible?
Companies meeting the following criteria are eligible:
• turnover between $2M – $100M (in regional areas
$1.5M – $100M)
• possessing an ACN (and trading for at least three years)
• operating in manufacturing or manufacturing-related services,
clean energy, mining technology, defence, creative industries or
remote Australia.
What is involved?
An independent business adviser will work with you to help:
• assess your business strategy
• identify the strengths and weaknesses of your firm
• identify potential areas for improvement and growth
• identify how the firm can address these areas.
Common recommendations include:
• strengthening strategic plans with revenue growth targets
• implementing sales and marketing strategies
• designing a staff training plan
• reviewing HR practices
• introducing formal innovation strategies and procedures
for development of new products (including those with export
potential)
• implementing lean audit/methodologies.
Access to $20,000 through tailored advisory service
Matched government funding of up to $20,000 is available to
engage specialist consultants to assist with the implementation of
recommended actions.
Connected services
Your business adviser can connect you with a range of other
Enterprise Connect services, including payment of half the cost of
a full-time researcher to work in your business for a year ($50,000),
searching for new technology or knowledge required by the firm;
and linking you with research organisations or other relevant
government grants and assistance.
An example of Enterprise Connect assistance
Apollo Window Blinds in NSW was established in 1988,
employs over 40 staff and turns over approximately $8M per year.
The company undertook a business review early in 2009 with an Ai
Group Enterprise Connect business adviser.
“The timing of the review was ideal given the economic
climate. We had the chance to analyse our business from a different
perspective, looking at current operations and evaluating new
business opportunities,” said Joe Zammit, Operations Manager.
“The review highlighted the importance of focusing on key
target markets to realise growth objectives, supplemented with
efficiency improvements and staff training in areas such as lean
manufacturing,” continued Mr Zammit.
Analysis of the business was undertaken over three to four
months via a series of sessions with senior management and
members of the sales, production planning and manufacturing
teams. An accurate picture of the organisation’s strategic,
operational and financial performance was assembled.
“The review confirmed the organisation’s commitment to
product and service innovation as part of its future direction. We
have recently launched our new cut to order take home blind
service in line with this strategy,” commented Mr Zammit.
“The review allowed us to step back and with David’s help ask
ourselves serious questions about the future of the business and
how these were going to be met both from an external market
perspective and internally through staff development and training.”
Ai Group is one of the partners in the Enterprise Connect
program funded by the Australian Government. Ai Group has 15
business advisers who are part of a larger Enterprise Connect team
located across Australia.
For contact details of your local adviser contact:
Anne Younger Tel: 03 9867 0172
Email: ayounger@aigroup.asn.au
Further details on Enterprise Connect can be found at www.
enterpriseconnect.gov.au

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 97

GETTING HELP
From Coleambally to California:
Rubicon Systems’ innovative irrigat
every drop of water
A global leader in irrigation technology, Victorian company Rubicon Systems have
developed canal gate technology that is substantially reducing water losses associated
with open canal irrigation across the American south-west.
M
r Trevor Boomstra, CEO,
Rubicon Systems America
Inc., says that similar climatic
conditions between Australia’s Murray
Darling region and America’s south-west
led Rubicon to seek opportunities in
America for its demand-driven irrigation
products.
“In the US, and in many other parts
of the world, old rudimentary techniques
are still being used regarding water
irrigation,” he said. “Around fifteen
years ago we recognised that water
distribution needed to be controlled in
a better way. This was confirmed when
Victoria recently experienced its longest
drought in 30 years.”
Mr Boomstra says that Rubicon
sought assistance from the Victorian
Government when they decided to enter
the American market three years ago.
“We did our research and identified
that opportunities existed in the
substantial markets of Colorado, Texas,
California and Arizona,” he explains.
“The Victorian Government was able
to help us with business matching,
networking and other introductions,
and the Victorian Government Business
Office in San Francisco facilitated an
introduction to the Californian Secretary
of Agriculture. Things really started
happening for us in the States after
that.”
Rubicon’s solutions include the
design and manufacture of highly
98 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011
engineered water control gates results in increased water distribution
and precision water measurement efficiency.”
instrumentation, combined with wireless
Victorian Government services a
communications networks and advanced
gateway to export opportunities.
monitoring and control software.
Despite a challenging global
“Our specialised irrigation software
economic climate, international markets
allows for the efficient release and
still offer a wealth of new opportunities
distribution of water in large irrigation
for Victorian companies, from major
areas, managing water flow and
manufacturers to small businesses
balancing water supply and demand,”
providing specialist services.
said Mr Boomstra. “Our software allows
To help capture these opportunities,
operators to control every drop of water
the Victorian Government offers a
in the system, because they know where
suite of programs and services for both
every drop is at any point in time.”
potential and established exporters
“We have had some great success
through its Opening Doors to Export
and have attracted some highly
Initiative.
experienced engineers to work for us in
The First Step Exporter program
the US,” he said.
provides up to $10,000 in funding to
“We have seen strong interest in our
help companies research and explore
solution in California, with a small Total
opportunities in their first export
Channel Control installation in place and
markets. Victorian companies have used
a larger installation contract recently
the program to attend trade shows in
signed in the Central Valley. There are
the USA, European Union, China and the
striking similarities between Victoria and
Middle East.
California in terms of climate, scarcity
The Grow Your Business program
of water, importance of agriculture,
offers grants for strategic reviews,
and a trend towards drier and warmer
business development plans, group
weather.”
activities and networking. Grants are
Mr Boomstra said that Rubicon now
also available to subsidise the cost
has over 30 customers in the US and
of participation in export-related
Canada with over 200 control gates in
workshops.
use today.
The Trade Fairs and Missions
“In the US, we are continuing
program enables groups of Victorian
to promote and focus on installing
companies to access overseas markets
total solutions that will enable better
on an industry sector or regional basis.
control and measurement of water that

ion technology tracks
Examples include the building and
construction industry trade mission to
Cityscape China in July 2009, the defence
and aerospace mission to the Singapore
Airshow in February 2010, and the Dubai
Gulfoods trade fair attended by a range
of Victorian companies in February 2010.
Financial assistance available for trade
fairs and missions includes:
• up to $40,000 for groups of
companies to participate in outbound
trade fairs
• up to $30,000 for groups of
companies to participate in outbound
trade missions
• up to $200,000 for groups of
companies taking part in Industry
capability missions
• up to $15,000 to support inbound
trade missions.
The Export Networks program
provides funding of up to $10,000 for
new and existing business networks
to provide export information, training
services and mentoring programs to
their members. These networks can be
organised along industry lines, regionally
or by market focus.
The Export Clusters initiative brings
together clusters of companies who
have complementary skills and services
to build critical mass and bargaining
power in bidding for major international
projects.
For regionally-based emerging and
existing exporters, the Regional Inward
GETTING HELP
Buyer program provides one-off grants Governor of Victoria Export Awards
to facilitate inbound buyer missions The Governor of Victoria Export
to regional Victoria and the Targeted Awards is one of the most prestigious
Trade and Investment Missions business awards in Victoria. There is a
program provides support to regional total of 12 award categories, plus the
Victorian companies and industries to Victorian Exporter of the Year Award
develop overseas markets. and the Victorian Export Award for
Assistance and initiatives focused on Innovation Excellence. All category
specific industry sectors includes: winners are automatically entered into
• the Agribusiness Development the Australian Export Awards.
program, which helps grow the These major awards are a great way
export potential of Victoria’s agrifood for companies to add value to their
producers businesses by boosting market awareness
• the ICT Trade Events and Export of their products in the local and
Assistance program, which supports international marketplaces, generating
export ready ICT companies to attend increased respect within their industry
overseas trade fairs and missions and promoting company pride.
• the Education Provider Bookshelf
program, which helps registered
educational institutions enhance their
international marketing activities.
Arts Victoria’s International
Program and Victoria Rocks - Music
Touring Grants are available to support
local artists and arts organisations to
exhibit and perform overseas.
The Access Program offers on-the-
ground export support to companies
through Victorian Government Business
Offices around the world, and includes
Access America, China, Japan, Malaysia,
India and Middle East. The program
offers short term office facilities and
market support services in-country and
has been used by hundreds of Victorian
companies.
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 99
GETTING HELP

Support for Queensland

exporters
By Trade Queensland

The Queensland Government’s export agency, Trade Queensland, assists

Queensland businesses – big and small, regional and metropolitan – to go global
with their world-class products and services.

T
rade Queensland’s General Manager,
Rob Whiddon, says that many global
economies are showing signs of
recovery from the recent economic crisis
more quickly than was first expected, and
Trade Queensland is working to meet
renewed demand for access to market
information and resources in key overseas
markets.
“The global financial crisis saw
Queensland businesses closely examining
their operations and expansion plans, with
many becoming interested in exporting
as a way to access new markets, and to
more evenly distribute business risk.
“As a result, Trade Queensland has
continued to seek out new opportunities
globally, and to direct its resources to
help businesses access export markets
wherever Queensland has a competitive
advantage.
“We recognise that it’s important
for us to have people in the right
places globally to advise and assist our
companies, and make it easier to do
business in those places at the right time.
“We continually assess the value to
our clients of our overseas trade and
investment representation, and we try to
maintain a strong degree of flexibility,”
Mr Whiddon said.
“The Latin America region is a
case in point. The economic recovery
in Latin America is advancing faster
than anticipated, according to the
International Monetary Fund (IMF) in its
latest Regional Economic Outlook report
released in early May.

100 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011


“According to the IMF, we can expect
strong growth in Latin America with
regional GDP expected to grow by four
per cent, after contracting by 1.8 per
cent in 2009 as a result of the financial
crisis.
“To take advantage of this growth,
the Queensland Government recently
announced that Trade Queensland will
establish on-the-ground representation
in Latin America, with new business
development managers in Chile this year
and in Brazil in 2011.
“China, India, the Middle East,
and South-East Asia stand out as
priority growth markets for Queensland
exporters in 2010-11. And we continue
to pursue opportunities with our major
traditional trade partners, including
Japan, the USA and the UK.
“Papua New Guinea is also shaping
up as a key growth market, especially for
export-ready businesses located in key
service centres in North Queensland.
“In terms of key export sectors,
opportunities continue to arise for
Queensland companies in mining,
infrastructure and construction, and
in servicing development assistance
contracts. There is additional new global
interest in ‘green’ building products and
services.
“Opportunities are beginning to
present themselves in countries hosting
significant world sporting events such as
the 2014 FIFA World Cup and the 2016
Olympic Games in Brazil, and the London
2012 Olympics, where government
spending is creating significant business
activity.
“Queensland’s international
reputation for providing world-class
education services also continues to
grow, with more than 100,000 overseas
students from around 120 countries
enrolling in Queensland in 2009.
“International students have a
double value in terms of trade outcomes.
They boost the local economy, while
helping to promote our State’s strengths
overseas and build important links that
can form the basis of future business
GETTING HELP
relationships,” Mr Whiddon said.
With headquarters in Brisbane, Trade
Statewide network:
Queensland has a domestic network of Brisbane (City)
export advisers spanning the state, and
a global network of representatives in Gold Coast (Southport)
15 key overseas locations – all dedicated
Mackay region (Mackay)
to helping Queensland business achieve
exporting success. This will grow in 2010 North Queensland (Cairns
to 16 locations with the appointment of
and Townsville)
a business development representative in
Santiago, Chile. Rockhampton region
Most services are provided to
(Rockhampton)
business free of charge, shaped by
the needs of Queensland’s new and Sunshine Coast (Birtinya)
established exporters, and are aimed at
assisting Queensland companies to Toowoomba (Toowoomba)
achieve greater profit through going Wide Bay Burnett
global.
In 2008-09, Trade Queensland (Bundaberg)
assisted nearly 3,000 clients to become Western Queensland
export-ready and make new export deals.
Approximately 44 per cent of these were (Barcaldine)
based in regional Queensland.
Lockyer Valley (Gatton)
The agency managed 21 trade
missions, with 307 Queensland
companies participating. These missions
covered destinations such as China,
Global network:
Japan, the USA, Europe, Latin America, China (Beijing, Guangzhou,
the Middle East, South East Asia and
South Asia.
Hong Kong, Shanghai)
The agency contributed to more than Europe (London)
$500 million in export deals in 2008-09.
India (Bangalore, Mumbai
and Kolkata)
Indonesia (Jakarta)
Korea (Seoul)
Japan (Tokyo)
Saudi Arabia (Riyadh)
Taiwan (Taipei)
USA (Los Angeles)
United Arab Emirates
(Abu Dhabi)
Latin America (Chile) -
from late 2010
THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010
2010-2011
2011 ● 101
GETTING HELP

Sustainable approach underpins

good business
By Kylie Hargreaves, Executive Director – International Markets & Trades, Industry & Investment NSW

Eco-sensitivity, corporate social responsibility (CSR), sustainability – the notion is

simple; corporations can and should take into account the impact of their actions
on communities and the environment.

T
he idea has been around for several
decades, often referred to as the
triple bottom line; people, planet,
profits.
But it hasn’t really been until recently
that the notion of sustainability has gone
mainstream, and its application in business
is now seen as good business sense.
Australian exporters need to be aware
of the fact that sustainability is a market
driver that is here to stay. It is also a trend
that is more prevalent in many overseas
markets, than it is here in Australia.
There are almost daily debates occurring
in markets like the UK, Europe and the
US; do consumers really want responsible
products and services, and will they pay
a premium for them? What are the pros
and cons of eco-labelling, the dangers of
‘greenwashing’ (false claims), and how can
small business cost-effectively provide for
independent auditing of claims?
But while we are still a fair way of from
this all being sorted out, exporters need to
think carefully about the potential impacts
on their business.
Increasingly, foreign buyers are
asking potential suppliers to outline their
eco-credentials along with all their other
product/service benefits.
Put another way, they are applying
a ‘sustainability scorecard’ to suppliers.
Suppliers with poor ratings may
increasingly find themselves locked out of
international supply chains. Kylie Hargreaves

102 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

 GETTING HELP

Walmart, the world’s largest retailer,

rocked the world earlier this year when
it announced they would be applying an 1 Self-understanding – identify where you consume the
index to all 100,000+ suppliers around
the world.
most energy and water, where you generate the most
They further announced that they waste. Focusing on the largest consumption and waste
would be seeking to eliminate 20
million metric tonnes of greenhouse gas
areas ensures you get bigger results, faster.
emissions from their supply chain by the
end of 2015.
2 Gather baseline data, so you will be able to identify
One surmises that suppliers who don’t improvements. There are numerous free online tools to
improve their index rating, won’t be asked
to supply in the near future.
help you with this step.
Marks & Spencer, the UK’s largest retailer,
recently announced they want to be
3 Identify ways you could reduce consumption and
the world’s most sustainable retailer by waste – reduce, reuse, recycle.
2015. This after their 2007 pledge of
200+ million pounds for their five-year 4 Get all your employees involved; create a new KPI or
‘Plan A… because there is no Plan B’ CSR
strategy.
award system to help people strive to innovate, conserve
Why so aggressive a stance? Because and create
to be very crass, being ethical pays.
By 2009, only two years into Plan A, M&S 5 Ask your suppliers to communicate to you any of their
reported that the energy and waste cost
savings alone had already made over 39
own sustainability credentials, programs and ideas
of the Plan A strategies cash positive.
6 Think about getting certified or awarded – there are
Importantly, according to research by
the Reputation Institute, Plan A had also numerous choices; find one that works for you and most
made M&S the most reputable brand in
importantly, is recognised by your customers
the UK.
Which brings us to consumers.
7 Beware of ‘greenwashing’ – make sure any claims
A recent survey covered in Brandweek
(USA) noted that despite the very negative you make can stand up to scrutiny. Reputations and
impacts of the GFC, 75 per cent of
businesses can be destroyed on-line, in an instant,
consumers surveyed still believe that
social responsibility is important, and these days.
55 per cent of consumers said that they
would choose a product that supports a 8 Lastly, don’t forget you can also give back though a focus
particular cause against similar products
on community – it doesn’t all have to be eco-friendly
that don’t.
So if finding new customers, saving activity.
energy and water, and reducing waste
sounds like good business to you, think
about focusing on your sustainability
scorecard.

THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011 ● 103

GETTING HELP

Trade and export development

Ai Group Trade Desk provides comprehensive information, mentoring assistance
and advice on trade and export issues. The depth of experience and knowledge of
trade and export means that you can get the most professional, specialist advice
and support to establish or expand your business overseas.
Acting for you • Trade missions: we work with governments to provide low
The Australian Government is currently negotiating to cost trade missions and exhibitions.
improve market access for Australian goods and services via a • Market research: designed for companies who know what
range of bilateral, regional and global forums. Ai Group’s Trade they want to do and where they want to go, but don’t have
Policy team is responsible for advocating the views of industry the time to do the legwork.
in trade negotiations. As a result, Ai Group works closely with • Publications: the Export Manual clarifies exactly what it
government and member companies to ensure that industry’s takes to be a successful exporter, and breaks the export
specific interests are safeguarded. process down into a number of easily followed and
practical steps.
Assisting your business
• TradeStart: provides companies with a flexible package of
• Telephone advice: import regulations in various countries,
advice, market research, coaching/mentoring, training and
export documentation, government grants, banking and
practical support to help them achieve export sales.
logistics, accessing free trade agreements, visiting overseas
Ai Group also has a range of information services to
markets.
provide members with up-to-date information on trade and
• Export documentation: we have the authority to issue
export development issues. These include:
certificate of origin, letter of free sale, letter of support for
• TradeWays e-zine
visa applications, certificate of manufacture.
• Market visit guides
• Courses, Seminars and Workshops: we have programs
• Exporters guide
suitable for owners/directors, export marketing
• Industry magazine
management and clerical staff.
• Industry newsletter
• Ai Group website www.aigroup.com.au

104 ● THE AUSTRALIAN INDUSTRY GROUP EXPORTERS GUIDE 2010-2011

 GETTING HELP

Advancing Australian Industry • Preparation of promotional materials for export marketing;

With extensive experience in international marketing, • Assistance with the development of an effective export
export market development and business planning, the Ai marketing plan or market entry strategy;
Group Trade and Export Development Team is well placed to • Assistance with business and strategic planning to position
assist you in developing your international business. your company for growth; and
Our consultancy services include: • Assistance in accessing various government grants and
• Export documentation and certificate of origin. assistance programs.
• Overseas market research to provide you with the market
For more information on our services contact the Ai Group
intelligence needed to develop a successful international
Trade Desk.
business strategy;
Tel: 03 9867 0158
• Business matching to assist you in identifying suitable
Fax: 03 9867 0157
agents, distributors or partners in your target market;
Email: trade@aigroup.asn.au
• Organising market visits;
Web: www.aigroup.com.au/trade

If you’re starting to export
or keen to grow your
international business,
Industry & Investment NSW
(I&I NSW) can help you.
I&I NSW provides information,
advice and support to help NSW
businesses develop their export
capabilities. We also offer workshops
and events to help potential and
existing exporters develop and
grow their business, including:
IF YOU’RE READY
TO EXPORT, WE’RE
READY WITH THE
RIGHT ADVICE
• Getting Started in Exports
• E-business for Exporters
• Exporting Australian Services, and
• industry sector and market-specific
briefings and seminars.
I&I NSW also offers financial
assistance to help eligibleNSW
businesses participate in trade For more information,
missions and international exhibitions. call 02 9338 6958 or email
We have export advisors across export@business.nsw.gov.au
the State. Contact one for mentoring
and advice.
www.export.nsw.gov.au
Ex-CB01-04/10