Australia and New Zealand

Explore Export 2011

Out of the Ashes comes business...

Contents

1) Australia economic & political overview

2) Australia challenges & opportunities

3) New Zealand economic & political overview

4) New Zealand challenges & opportunities

5) Why do business in Australia & New Zealand?

6) Opportunities for British business

7) What we can do for your business

Australia - Overview

Australian economic/political overview

World’s 14th largest economy, GDP approx US$1 trillion Annual GDP growth rate 1998-2009 average 3.5%,

significantly higher than US, UK, Japan, France and Germany The only advanced economy not to have fallen into recession

during the recent economic downturn Ranked as the world’s most resilient economy for six out of

the last eight years* Service industries make up approx 70% of economy,

manufacturing around 10% and mining and construction around 8% each**

*IMD World Competitiveness Yearbook, 2009 ** Australian Bureau of Statistics

Australian economic/political overview

Australia has a sound, stable and democratic political environment that provides certainty to businesses

The UK is the second largest foreign investor in Australia, with stock worth AU$499 billion and invested another AU$34 billion in Australia in 2009 – 21% of total new investment*

The UK is Australia’s second largest trade services partner** Over 1,000 British companies do business in Australia each

day Europe accounts for 34% of all foreign direct investment in

Australia, creating around 1.4 million Australian jobs*** Harvard Business Review named Australia as its No 1 country

to invest in Jan/Feb 2011*Australian Bureau of Statistics, 2009 **Department of Foreign Affairs and Trade (DFAT) ***Austrade, Sept 2010

Australia – challenges/opportunities

Resources boom– How long will the boom last and what will replace it?

Strong dollar – exports and tourism suffering Adapting to a larger population

– Growth predicted of 65& (35 million) by 2049 (fastest in OECD)– Will cause housing/water/power/infrastructure/enviro challenges

Skills shortage in mining and construction – Shortage of engineers, construction industry professionals and skilled

tradespeople

Aging population/rising healthcare costs Moving to a lower carbon economy – overdependence on cheap fossil

fuels

Developing the National Broadband Network

New Zealand - Overview

New Zealand economic/political overview

New Zealand has a sound, stable and democratic political environment that provides certainty to businesses

Biggest trading partner is Australia, followed by China, US, Japan and UK – UK exports with NZ worth £390m in 2010

NZ economy generally performing well compared to other advanced economies despite effects of earthquake – GDP 2011 forecast is 1.4%*

World’s 2nd easiest country to do business** Worlds least corrupt country (equal)*** Services account for around two-thirds of New Zealand’s GDP

and manufacturing almost 20% Significant proportion of NZ exports based on primary

production, followed distantly by ICT and pharmaceuticals

*NZ Treasury ** The Economist, June 2010 ***Reserve Bank of New Zealand

New Zealand – challenges/opportunities

Free Trade Agreements (FTAs)– NZ has signed multiple FTAs with major trading partners China, ASEAN,

Singapore in previous five years – First OECD country to sign FTA with China (2008) – since then NZ exports to

China have increased 37%

Christchurch earthquake February 2011– Estimated NZ$11 billion damage bill – Big opportunities for UK companies in rebuilding infrastructure

Government debt rising – Cumulative operating deficits and weakened balance sheet could disrupt

major public spending and ability to weather future shocks

Science and innovation – Govt technology grants and voucher schemes present opportunities for UK

businesses – especially in clean tech and venture capital

Why do business in Australia and New Zealand?

Why do business in Australia & NZ?Strong economy

Stable economies with good current and future growth prospects

Business, legal & cultural similarities Familiar business, legal & regulatory framework Common language & customs Strong IP protection Many British businesses already there High regard for UK products

Gateway to Asia Skilled, educated, multi-lingual workforce Asia still the region of the world with the highest potential growth

Quality of Life 5 Australasian cities in world’s top ten most liveable cities*

* The Economist, Liveability Ranking, 2010 11

Australian sector opportunities

Opportunities – Oil & Gas

5th largest oil and gas industry in Asia Pacific and 14th in the world (worth A$100 bn)

More than A$87 bn predicted spend on new petroleum projects in next 10-15 years

Oil and gas industry predicted to grow at two to three times economy for next 15-20 years

A$43 bn Gorgon, Ichthys and other very large LNG projects expected to provide significant opportunities for UK companies

5 major areas of opportunity for UK companies within Oil&Gas are Subsea, Health & Safety, Skills & Training, Science & Technology and R&D

Opportunities – Biotechnology

Australia biotechnology hub of Asia-Pacific, world’s 6th largest market

Aust. health system spend in 2006-07 A$90 bn (£50 bn) Expected to increase to A$110 bn by 2012 Fast growing and aging population expected to greatly

increase market size The sales of medical devices in Australia amounts to

around A$2.5 billion per annum (£1.4 billion) Australia’s Nation Building plan includes significantly

increased funding for local healthcare infrastructure

Opportunities – ICT

Already one of the best prospects for UK businesses in Australia, consistent streamof ICT companies succeeding in Australia

A$43 bn National Broadband Network (NBN) planned to cover 98% of Australia in 10 years, will further expand opportunities and provide surety

E-health, e-utilities, e-learning and smart grids likely to be big growth areas

Opportunities – Low Carbon

Environment and low carbon worth A$22 billion - expected growth of 7% pa

A$2.3 billion Govt assistance package to encourage innovation and investment in clean energy technology

A$20 billion required to meet Australia’s renewable energy target alone, estimates suggest

Big opportunities for UK companies, particularly in joint ventures and using Australia as gateway to Asia

CPRS scheme delayed to 2013 Australia recognised by UKTI and British environment

industry as high opportunity market

Opportunities – Food & Beverage

Strong opportunities for foodstuffs and allied processing technology with favourable exchange rate

Two supermarket chains in Australia claim 70% of the market, but this is being eroded by cut price and high end retailers

Majority of private label products sourced from overseas Australian consumers won’t preferentially ‘buy British’

but tastes and culture are aligned well with UK

Opportunities – Education

Education makes up 4.4% of Australia’s economy Australia already imports A$330 million in printed

matter from the UK A$1 billion govt funding announced in 2009 to build

science laboratories and language learning And A$1.6 billion for infrastructure investment and

facilities in the training and higher education sectors

Opportunities - Business & Financial Services Australia’s largest contributor of GDP – approx. 70% Sydney and Melbourne financial hubs for Asia Pacific

after Hong Kong and Singapore Australian Stock Exchange (ASX) world’s 8th largest,

possible take over by Singapore Exchange in 2011 Aussie banks had low exposure to financial crisis and

banking system remains strong World leader in sophisticated retirement products due to

compulsory ‘super’ Strong opportunities in fund and wealth management,

Islamic Finance, M&A advisory, Forex, Project Finance

New Zealand sector opportunities

Opportunities Infrastructure 

– Rebuilding Christchurch’s infrastructure after the earthquake – Electrification of Auckland regional rail network & Auckland city rail loop

ICT– National Broadband Network and Rural Broadband initiatives worth NZ$1-3

bn – Digital media opportunities arising from improved broadband and digital TV

network– Software – Opportunities in health IT, educational resources, e-government

Medical Technology– NZ has one of the best funded public health sectors in the world – Imports of $1bn of medical devices each year

Life Sciences – World leader in research and development Including: therapeutics,

diagnostics, regenerative medicines,  industrial bio processing, bio fuels, specialism in cancer, diabetes and other similar diseases

Opportunities continued Renewable Energy  

– Best wind, wave and tidal resource in the southern hemisphere, including: Marine Energy Centre project Geothermal projects Biomass/ Gasification             

Agriculture – Opportunities for farming equipment, breeding, genetics, fertilisers – New rules opening door for imports of Pork and Turkey products

Oil & Gas – Huge potential offshore reserves of Oil & Gas– Some commentators calling NZ the ‘Southern Saudi’– Several companies actively exploring NZ waters– Very favourable market for companies with North Sea expertise in deep

water

Opportunities continued Education

– Development of ICT infrastructure in education is a priority for NZ Gov– Noticeable shift in procurement from physical to digital/online resources

Creative Industries   – High-performing creative computer services & gaming developers – British music continues to be an area of opportunity in New Zealand– Internationally successful film industry particularly in areas of animation &

post production

Marine – The marine industry is estimated to be worth NZ$2.2b to the NZ economy– One of the highest rates of boat ownership per capita worldwide

Rugby World Cup 2011– More than 80,000 visitors worldwide travelling to NZ for the rugby– UKTI hosting business networking event for British & New Zealand

businesspeople on Thursday 29th September in Auckland

What we can do for your business

What can UKTI Australia & NZ do for you?

Local knowledge: Tailored, experienced, impartial advice to maximise your chances of succeeding in Australia

Product launch: In one of our function rooms, available in most capitals

Introduction service: To prospective business partners, distributors, suppliers and Australian Govt bodies

Promotion: PR to local media, UKTI e-newsletters, emarketing and social media campaigns

Test the Market: Reduce the cost, risk and time of establishing your business in Australia by working in one of our business centres

The ANZ OMIS - Joint Overseas Market Introduction Service (OMIS) offering for both countries

My contact details

Paul Noon Deputy Consul-General & Director of Trade, Australia and NZ

Email – paul.noon@fco.gov.uk Twitter @uktiaustralia @uktinewzealandWebsites //ukinaustralia.fco.gov.uk/en/business//ukinnewzealand.fco.gov.uk/en/business