Home' Forge : Vol 1 No 1 Contents 54 // FEATURE
Eight top opportunities in Asia
1. Clean food. Australian agriculture has a strong reputation in
the region for being of a high quality and free of contamination,
and there will be steadily increasing demand. It is estimated
that, in order to feed its richer, urban population, Asia’s food
production in 2050 needs to be 70 per cent higher than it is
today, with most of the new demand coming from the region.
In particular, there will be a focus on sources of protein, and a
wider variety of vegetables.
2. Niche manufacturing. Australian manufacturing is under
pressure domestically, but there are opportunities to expand
in Asia. For example, the Australian car industry may have
been closed down, but some Australian companies are
looking to continue their business activities in Asia. ‘The little
car component companies do quite well in Thailand and
India,’ says Harcourt.
3. Engineering. Australia has a strong capability in
engineering, which is attractive in many Asian countries.
According to a report by PwC, the Asia-Pacific market will
represent nearly 60 per cent of all global infrastructure
spending by 2025, driven mainly by China’s growth.
Western Europe’s share will shrink to less than 10 per cent,
from twice as much just a few years ago. That investment is
already creating great demand for engineering expertise.
4. Financial services in China. The financial markets in China
are yet to be fully developed, and with the signing of the free
trade agreement, opportunities for Australian companies
are opening up. Australian banks have been permitted
to expand their branch networks in China, Australian
fund managers will be able to invest on behalf of Chinese
institutions, and Australian insurers will be able to write
Chinese third-party motor-vehicle insurance contracts.
5. Project management. Harcourt says this is an area where
Australians excel. ‘I think Australians are the world’s great
project managers. In Mongolia, we manage a lot of the mines
because we are used to multicultural work. We are pretty
good at putting things together across vast distances. Even
in western China, we build most of the railways and airports
and civic buildings.’
6. Outbound education. The Australian university sector
has been bolstered by the influx of Asian students
since the 1960s, which in turn has created valuable
relationships with senior people in the region.
Increasingly, Australia’s universities and secondary
schools are looking in the opposite direction: establishing
campuses or partnerships in the region.
7. Outbound tourism from China. China is Australia’s
second-largest market for visitor arrivals, and Australia’s
largest market in terms of expenditure and visitor nights.
According to Tourism Australia, Chinese expenditure is
set to increase from $4.8 billion in 2013 to $7.4–9 billion by
2020. Australia ranks as the 10th most popular destination
for Chinese tourists.
8. Advanced Health. Australia has developed a strong capability
in biotech and health, which it is beginning to export to
the region. For example, Monash University is doing IvF
treatments in Malaysia. Its Kuala Lumpur Fertility Centre is
focused on getting patients pregnant.
proved to be problematic because of
difficulties finding the right partner
– something also experienced by
the big Australasian beverage
companies Foster ’s Group and
Lion Nathan. But after developing
better due diligence processes, the
company has been able to adjust.
Many of the opportunities in
Asia are in the service sector
especially in areas where
Asian countries are looking to
modernise and need assistance.
That means developing links
between countries at different
stages of development. An
example of a company taking
advantage of that opportunity
is Silk Road Associates, which
has offices in Melbourne and
Beijing. ‘The global consultancies
supported the big end of town,
and generally country-specific
small consultancies [serviced] the
rest of the market,’ says director
Ralph Simfendorfer. ‘However,
there was no-one servicing those
organisations asking the question,
“How do we choose between our
opportunities across Asia? Do
we set up in China or South-East
Asia, or both? Which part of China
should we enter first? Should we
start online before establishing
a physical presence? Which
countries are the best fit for our
Martin’s IMA Asia is likewise
concentrating on enhancing linkages.
The business began in Sydney, but
only one-tenth of its customers are
now Australian. ‘Asia requires a
high degree of adaptation,’ Martin
says. ‘No two markets have the same
requirements. We’ve built different
structures and teams to cope with
local markets. If you get this wrong,
you’ll fail to deliver, or blow your
cost structure out of the water.’
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