Doing Business in Australia 2014 - presentations

Doing Business in Australia

28 July 2014

Follow Scottish Enterprise on Twitter @scotent

Join the conversation using event hashtag #ScotHouse

Connect with Scottish Enterprise on Linkedin and Facebook

Doing Business in Australia2014

Julian Taylor

Executive Director - Asia PacificExecutive Director - Asia Pacific

Scottish Development International

Welcome & introduction

Australia – an economic powerhouse?

• Relatively unaffected by global financial crisis

• Uninterrupted growth over • Uninterrupted growth over past 20 years, averaging 3.5%.

• Historical trade links with US and Europe but close proximity to fast growing Asian markets

Scotland and Australia

• Scottish exports worth £400m

• 90 Scottish companies with presence in Australiapresence in Australia

• 50 investors in Scotland, employing 7,000 people

• Strong historical and cultural links create opportunities in a number of key sectors

How SDI can help...

• Up-to-date market information and specific opportunities

• Access to industry networks; • Access to industry networks; GlobalScots; other scottishcompanies.

• Practical advice business plan setting up overseas office


John Brown

Head of International Trade FinanceHead of International Trade Finance

National Australia Group

Australia as a business opportunity


David Cross

Operational Director Asia Pacific

Global Energy GroupGlobal Energy Group

Doing Business in Australia� Cultural considerations

� Routes to market

Global Energy Group Asia Pacific Pty Ltd.

Global SCSGlobal SCS

Doing Business In AustraliaDoing Business In Australia

Presenter: David Cross, Operations Director - Global SCSEnergy Projects Manager, Scottish Development International

Global Energy Group1


Group1

GLOBAL ENERGY SERVICES

GLOBAL ENERGY SERVICES

CPSCPSISLEBURNISLEBURN

COMPANY STRUCTURE

Executive Management Team

Executive Management Team

Board of DirectorsGE (Holdings) Ltd.Board of DirectorsGE (Holdings) Ltd.

EQUIPMENT MANUFACTURING, MAINTENANCE & QS

MARINE PROJECTSLOGISTICS & MARINE

OPERATIONSPROCESS PLANT

GLOBAL PORT SERVICESGLOBAL PORT SERVICES


ACCESS AND COATINGS

ACCESS AND COATINGS

RIGFITRIGFIT

GLOBAL LOGISTICSGLOBAL LOGISTICS

GLOBAL PROJECT SERVICES

GLOBAL PROJECT SERVICES

CUNNINGHAM CONSTRUCTIONCUNNINGHAM CONSTRUCTION

VERTECHVERTECH

GLOBAL RESOURCESGLOBAL RESOURCES

GLOBAL SCSGLOBAL SCS

GLOBAL TCCGLOBAL TCC

ROSS-SHIRE ENGINEERINGROSS-SHIRE ENGINEERING

PRIME PUMPSPRIME PUMPS

OGEOGE

REELREEL

GLOBAL DIVINGGLOBAL DIVINGONSHORE INDUSTRIAL

SERVICESONSHORE INDUSTRIAL

SERVICES

CALEDONIAN TOWAGECALEDONIAN TOWAGE

NIGG ENERGY PARKNIGG ENERGY PARK

Group Performance


NETWORK OF EMPLOYEES

IN EUROPE AND OTHER GEOGRAPHIES


OTHER GEOGRAPHIES

Operations Management & Coordination

Senior Management & Business Control

Skilled Operatives, Technicians & Trades

REVENUE PERFORMANCE



MITSUI

Doing Business In Australia2


Australia2

Scotland & Australia Connections

� Scots played many key parts in the story of Australia

� For hundreds of years Scots have packed up their families and their belongings and sailed to Australia to start a new life.

� So how many Scots in Australia today?

� 1,792,600 by ancestry

� 130,204 by birth


� 8.9% of total Australian population/ 17% Have Scottish Family Connection

� Perth Australia Coat Of Arms Has Perth, Scotland's’ Coat Of Arms Within

Australia - Size Does Matter

Darwin

Brisbane


City From City To Driving Time Distance Flying Time

Perth Darwin 45 Hours 4,164 kms 3.5 Hours

Perth Sydney

MelbourneAdelaide

Darwin Brisbane 45 Hours 3,842 kms 3.5 Hours

Brisbane Perth 56 Hours 5,218 kms 5.5 Hours

Australian Wildlife


Cultural Considerations

� Consider Territory Best Suited For Your Business, WA, NT, QLD, NSW, VIC, SA

� Different Territories Have Different Requirements

� Coffee Bar Culture- Business Done Over A Cappuccino

� Not The Best Idea To Turn Up At Meetings With Shirt & Tie

� Understand & Know Your Costs, including Super Annuation, Payroll Taxes and FBT !!


Taxes and FBT !!

� Understand The Australian Industrial Relations Laws (IR)

Cost Of Living Comparison

Description Glasgow Perth Difference %

Imported Beer (0.33 litre bottle) £3.00 £4.99 +66.18%

Milk (regular), (1 litre) £0.90 £0.92 +1.95%

Loaf Of Bread £1.05 £1.76 +67.69%

Petrol Per Litre £1.34 £0.84 -37.78


Rent 3 Bed Apartment Per Month £985.71 £2047.56 +107.72%

Buy Apartment Per m2 £1,887.50 £4,545.60 +140.83

Average From 50 Items +47.32%

Reference www.numbeo.com

• Typically UK Salary Multiplied By 1.5 Minimum For UK Expats• Superannuation - 9.50% (WA, Varies Across States)• Payroll Tax – 5.5% ($850k Threshold)• Fringe Benefit Tax – 49% (Average)• Private Healthcare (FBT)• Company Car & Accommodation (FBT)

Cost Of Living Comparison


• Company Car & Accommodation (FBT)

Good News………..Your Services Will Probably Be Charged At Double UK Rates

Australian Projects


Conventional Gas Resources

Coal Seam Gas Resources

Past Production

Gas Basin

Conclusion3


3

Conclusion

• Plenty Of Opportunities Still Available• Projects “On Hold” Still To Come On Line, Therefore Still Considerable Investments To Be Realised

• Mining Sector Should Be Considered As A Possible Additional Sector

• Opening An Office In Australia Can Seem Daunting Due To


• Opening An Office In Australia Can Seem Daunting Due To Costs, However Remember You Can Generally Charge More For Your Products Or Services

• Look At Australian Websites Such As ProjectConnect & ICN Gateway For Details On Projects


. . .working together for success


Case studies panel session

Real life stories & experiences shared


Steven King

DirectorDirector

Emtelle

Case study 1

The Emtelle GroupThe Emtelle Group

Emtelle’s Vision

• We will create value and make a difference everywhere we engage with customers by listening, understanding, innovating and adapting.

Introduction to Emtelle

• Emtelle been supplying telecommunications markets in the UK continuously since 1980 and international markets since 1996– Headquartered in UK

• Manufacturing facilities in Jedburgh and Hawick

– Acquired majority share in Dantex in May 2007. – Acquired majority share in Dantex in May 2007.

• Manufacturing facility in Sonder Felding, Denmark

– Acquired majority share in Parixit Industries in October 2010

• Manufacturing facilities in Ahmadabad

– Exports to 64 countries

– Group Financial for 2013

– Sales in Europe of €101.3m, EBITDA of €13.5m, 300 FTE

– Sales in India of €22.5m and EBITDA of €0.0m, 700 FTE

Emtelle’s Business Segments in Australia

• Distributed Temperature Sensing for HV Networks– Electricity Australia

– Value Added Partners Jubatus, Taihan, LS Cable

• Intelligent Transport Systems– Road Tolling

– Bus Ways– Bus Ways

– Airports

• Specialist Military

– RAAF Bases

– Royal Australian Navy

• Campus and Major Buildings– Theme Parks

– Hospitals, Prisons and Other Major Buildings

Emtelle in Australia

• Started exporting in 2000 using an Indirect Distributor Model– Geographical Coverage for Customers

– Lead Time

– Customs Clearance– Customs Clearance

• Established Emtelle Australia Pty in 2002 to allow Direct Sales Model for Specific Customers

– Local Employees and Direct Sales activities created Taxable presence in Australia

– “Local” sale

– Customs clearance

– GST recovery

Challenges to Overcome

• Protectionist Policies for Next Generation Broadband– Buy Australian

– Domestic competition, conventional technologies

• Building Sales with Indirect Partners– Our products are complex making it difficult to train competent – Our products are complex making it difficult to train competent

sales people in Indirect Channels

– Labour retention is a major issue for skills and competence in Indirect Channels

– Unwilling to commit to expensive stock

• Project Sales in Niche Markets– To operate within our Lead Time/Logistics constraints


Iain Weir

Director of MarketingDirector of Marketing

Ian Macleod Distillers

Case study 2

GLENGOYNE.COM

STILL SCOTTISH - STILL INDEPENDENT

Ian Macleod Distillers is a Scottish, independent, family-owned

company established in 1933 – third generation Leonard Russell is

the current Managing Director.

In a marketplace increasingly dominated by a few multi-national

IAN MACLEOD DISTILLERS LTD.GLENGOYNE.COM

In a marketplace increasingly dominated by a few multi-national

PLCs, our focus is on the traditional family values of premium

quality, value and customer service.

With the acquisition of Glengoyne Distillery (glengoyne.com) in

April 2003, Ian Macleod became a fully integrated distiller, blender

and bottler. In 2011 we also acquired Tamdhu Distillery on

Speyside.

GLENGOYNE DISTILLERYUNHURRIED SINCE 1833

TRADITION, PRESERVED

STILL SCOTTISH - STILL INDEPENDENT

The company has combined sales of well over one million cases,

with over 80% being exported to more than 50 markets worldwide.

IAN MACLEOD DISTILLERS LTD.

GLENGOYNE.COM

We are the 10th biggest Major Scotch Whisky group in the world

based on market share percentages (SWR 2013).

Ian Macleod produces a range of blended and malt whiskies, as well

as rum, gin and vodka.

SCOTCH WHISKY – STUNNING GROWTH

• Exports generated £4.3 billion (value) for the UK

balance of trade in 2013. In (volume) terms, the

equivalent of 1.3 billion bottles.

• 25% of all UK food and drink exports

• Over 140 million cases exported to over 200

GLENGOYNE.COM

• Over 140 million cases exported to over 200

countries.

• Exports earned £135 every second to the UK trade

balance.

• At home £1 billion contributed to the Exchequer in

taxes.

SCOTCH WHISKY – STUNNING GROWTH

• Demand for single malt continues to grow globally, with

exports rising by 5% in 2013 to reach a record £820 million,

nearly a fifth of Scotch exports by value.

• Over 35,000 jobs across the UK are supported by the

GLENGOYNE.COM

• Over 35,000 jobs across the UK are supported by the

industry.

• 20 million casks lie maturing in warehouses in Scotland.

• £1bn invested annually across the industry’s supply chain.

• Scotch Whisky continues to attract younger, affluent

consumers in newly emerging markets.

HOW WE STARTED TO EXPORT/DO

BUSINESS IN AUSTRALIA

• We have been trading with Australia for over 20

years.

• Originally with a local retailer (since purchased by a

competitor) selling competitively priced own label

GLENGOYNE.COM

competitor) selling competitively priced own label

brands not single malts.

• Of the top 20 Global importing single malt markets

(SWA 2014), Australia is now #12 (volume) and #14

(value).

HOW WE STARTED TO EXPORT/DO

BUSINESS IN AUSTRALIA

• The Australian single malt market has increased by

over 34% (volume) and 36% (value) in the last 12

months.

GLENGOYNE.COM

• 4 years ago we met our current distributor via Hong

Kong Vinexpo exhibition. Forecasting the above

premiumisation trends, they wanted to increase their

malts range – The Six Isles, Smokehead and 14

months ago our full Glengoyne Highland Single

Malt range were added.

THE GLENGOYNE RANGE

GLENGOYNE.COM

ASSISTANCE AND SUPPORT FROM SDI ETC.

• Whisky tastings with SDI in Sydney.

• Global funding/advice.

• Scotch Whisky Association (SWA).

GLENGOYNE.COM

• Scotch Whisky Association (SWA).

• Visit Scotland Events.

• Glasgow Marketing Board.

• Commonwealth Games media.

GENERAL TOP TIPS AND CONSIDERATIONS

FROM OUR EXPERIENCES

• Legislation – import/local mandatory labelling .

• Seasonality – temperatures, Father’s Day, Christmas.

• Associate with a proud Australian culture.

GLENGOYNE.COM

• Associate with a proud Australian culture.

• Food and wine appreciation - ‘Foodies’.

• Research/localise e.g. ingredients.

• Find that USP/link – e.g. Glenguin.

KEY ADVICE YOU WISH YOU HAD BEEN

TOLD IN ADVANCE

• Size of the country and the distances between major cities e.g. Sydney and Perth.

• Major cities are mainly coastal.

GLENGOYNE.COM

• Major cities are mainly coastal.

• Distribution/logistics.

• Personal in-country Travel.

• Expense.

THANK YOU.

GLENGOYNE.COM

THANK YOU.

Any Questions?


Coffee breakCoffee break10 minutes


David Crook

Senior Trade and Investment CommissionerSenior Trade and Investment Commissioner

Australian High Commission, London

Government initiatives & market opportunities

AustraliaAustraliaOpen for business

A1

Slide 51

A1 change visual to new cover?Author, 07/01/2014

An economy of scale

Australia – open for business

Key contributor to future global growth sectors


Innovation credentials

Australia – means opportunities

Australia is one of the fastest growing R&D spending economies


Australian universities ranked among world’s best


“With the Asia-Pacific region at the centre of global growth, Australia is in a unique position as a safe and reliable location from which to service that market”market”John Corcoran, Executive Chairman, Global Switch

LocationAustralia is connected through geographic proximity, trade, investment and cultural links with the fast-growing Asia-Pacific region.

Location


Asian demand drives Australia’s trade growth


An attractive destination for FDI


Traditional markets still strongest, and investment from Asia is increasing


Want to learn more?www.austrade.gov.au/invest

Austrade – for Investment [email protected]/investment

SDI – for Export Assistancewww.scottish-enterprise.com/internationalCall and talk to an export advisor


Ken Smith

Trade Commissioner for Europe and Agent General for UKGeneral for UK

Trade & Investment Queensland

Opportunities in Queensland Australia, including the Gold Coast 2018

• Population – 4.66 million

• Land – 1.73 million km2 ( 7 x size of UK )

• GSP – AU$295 billion (US$303 billion)

• Capital City – Brisbane (population, 2.19 million)

• Coastline – 6,973 kilometres

• Time Zone – GMT + 10:00

• Currency – Australian Dollar (AUD)

Queensland - Overview Queensland Overview

Why Queensland ?

• Located on Asia-Pacific’s doorstep, businesses in

Queensland are well placed to do business with Asia and the world.

• Queensland is forging ahead with new plans and initiatives to continue to

strengthen the State’s economy.

Why Queensland?

• The Queensland Government has embarked on a programme of capital

projects to upgrade and build new roads, railroads and

telecommunications networks.

• This, together with the most competitive payroll tax regime in the country,

makes Queensland an ideal place to do business.

Gateway to the Asia Pacific

Queensland Economic Map

Major Resources Projects

• Australia currently has over $200bn worth of LNG projects committed or under construction, and Queensland accounts for about 30% of these

• Australia is ranked 7th in the world - with respect to technically recoverable shale gas resources (437 tcf, or about 65% of the US reserves)

• Queensland is a significant player in the Oil and Gas industry with3 projects under construction – more in the pipeline > $60 billion committed (over the three projects under construction)

Queensland’s CSG-LNG Sector

Source: Access Economics Investment Monitor ; IBIS World, Mining 2012

Current QLD CSG – LNG Projects

Sources: Project websites and media releases *Estimations only and subject to change

Upstream activities:

Drilling: an estimated 350-500 new wells per annum will be required to supply a

single two train project. This intensive drilling presents opportunities for drill rig

manufacturers and service companies to set up in Queensland.

Gas processing and gas/water gathering networks:

The number of wells completed each year per project

will have an ongoing requirement for associated

equipment and materials which could be fabricated in

LNG Supply Chain Opportunities

equipment and materials which could be fabricated in

Queensland.

Midstream activities: Queensland’s CSG/LNG industry

will require up to four underground high pressure gas

transmission pipelines, each up to 500km in length

linking the gas fields to Gladstone.

Downstream activities: The first stage development of the proposed

projects will see six LNG trains established by 2014-2016.

Opportunities – Food and Agribusiness

The Queensland Government is committed to the growth of existing traditional sectors such as sugar, beef and grain production, as well as new emerging sectors within the food industry.

• Meat processing

as the largest beef-producing state in Australia, Queensland has sophisticated industry-related infrastructure and support services in place. The Queensland Government has committed $32m into the beef industry to fund new and improved bio-security and a network of world-class beef research facilities. bio-security and a network of world-class beef research facilities.

• Functional foods

Queensland’s biodiversity, wide range of climates, and variety of horticultural types, supports the production of a wide range of food. The State’s reputation for delivering clean, safe and high quality food products combined with an increasing global demand for health-conscious products presents a unique opportunity for companies interested in functional foods.

• A leading Aviation, Aerospace & Defence hub in Asia Pacific,

with a range of opportunities

• Queensland is the second-largest state for defence employment, home to a quarter of Australian Defence Force (ADF) military personnel and a 26 per cent share of national defence industry activity.

• Government has launched new Defence Industries Queensland unit and appointed a defence envoy to grow the local defence sector and attract more

Aviation, Aerospace and Defence

appointed a defence envoy to grow the local defence sector and attract more investment to Queensland. The unit will be a focal point for development of the sector in the state with a long-term commitment to advancing Queensland’s defence industries

• Design, manufacture, MRO, component manufacture and assembly, avionics, training, professional services, R&D, UAVs, Scramjet technology, advanced composites, rotary wing, general aviation

• Queensland Government committed to the development of the life sciences industry (including therapeutic medicines and devices)

• Excellent R + D climate with A$ 3.8 bn spent on science infrastructure in the last decade.

• 66 biotech-related research institutes employing approx 6,170 researchers generating revenue of more than A$1 billion per annum

Biotech and Health

generating revenue of more than A$1 billion per annum

• More than 20 drugs are in clinical trials.

• Global successes: Gardasil, Vaxxas, Coridon, Peplin

• Opportunities in complementary medicines and nutriceuticals

Queensland’s Gold Coast will host in 2018, following Glasgow in 2014

2018 Commonwealth Games

Economic benefit for the Gold Coast is estimated at $2 billion

• There will be in excess of $500 million spent on sport and transport infrastructure fast tracking existing initiatives

• Estimated 30,000 full time equivalent jobs in the tourism, construction and events industries building

• The 2018 Commonwealth Games Athlete’s Village will be constructed at Gold Coast Parklands, Southport

Commonwealth Games Infrastructure

at Gold Coast Parklands, Southport

• Redevelopment of Parklands will commence late 2013

• Construction of the Athlete’s Village will be completed late 2017 ready to house 6,500 athletes and Games Officials for the April 2018 Commonwealth Games

• The Athlete’s Village will be a key legacy component of the Gold Coast Health and Knowledge Precinct

Procurement

Building Construction and

Maintenance

General Goods and

Services

Information and Information and

Communications

Technology

Medical

Road Construction and

Maintenance

For further information on opportunities…

Queensland Government:

•Trade and Investment Queensland - www.export.qld.gov.au

•Department of State Development, Infrastructure and Planning -www.dsdip.qld.gov.au

•Projects Queensland - http://www.treasury.qld.gov.au/projects-queensland/

Queensland Resources

•Projects Queensland - http://www.treasury.qld.gov.au/projects-queensland/

•Department of Transport and Main Roads - www.tmr.qld.gov.au

•Department of Natural Resources and Mines - www.dnrm.qld.gov.au

•Queensland Treasury and Trade - www.treasury.qld.gov.au

•Department of Tourism, Major Events, Small Business and the Commonwealth Games – www.dtesb.qld.gov.au

Resources:• ICN Project Gateway

• http://energy.icn.org.au/ • http://rail.icn.org.au/• http://mining.icn.org.au/

CSG to LNG:• QGC - http://www.qgc.com.au/becoming-a-supplier.aspx• GLNG - http://www.glng.com.au/Content.aspx?p=130

Accessing Opportunities

• GLNG - http://www.glng.com.au/Content.aspx?p=130• APLNG - http://www.aplng.com.au/working-us/suppliers-and-contractors• Arrow Energy - http://www.arrowenergy.com.au/page/Contact_Us/Suppliers/• Fishermans Landing LNG -

http://www.lnglimited.com.au/irm/content/project_australia.html• Bechtel - https://supplier.bechtel.com/

Gold Coast 2018 Commonwealth Games• Forward Procurement Plan- http://www.business.qld.gov.au/commonwealth-

games/get-involved-games

Ken Smith

Trade & Investment Commissioner - Europe

T: +44 (0)207 4208 761

E: [email protected]

Kael O’Sullivan

Business Development Manager - Europe

T: +44 (0)207 4208 777

Contact Us

T: +44 (0)207 4208 777

E: [email protected]

DisclaimerAll figures are quoted in Australian Dollars, unless otherwise specified. This publication has been prepared by the State of Queensland as an information only source. The State of Queensland makes no statements, representations or warranties about the accuracy or completeness of, and you and all other persons should not rely on, any information contained in this publication. Any reference to any specific organisation, product or service does not constitute or imply its endorsement or recommendation by the State of Queensland. The State of Queensland disclaims all responsibility and all liability (including without limitation, liability in negligence) for all expenses, losses, damages and costs you might incur as a result of the information being inaccurate or incomplete in any way, and for any reason.


Q&A panel session

Panellists:

Name Organisation

Julian Taylor SDI

John Brown National Australia Group

David Cross Global Energy Group

Steven King Emtelle

Iain Weir Ian Macleod Distillers

Name Organisation

David Crook Australian Trade Comm.

Ken Smith Trade & Investm. Qld

Stuart Russell Gov. Of Western Australia

Jenna Donaldson Qatar Airways

Euan Duncan MacRoberts LLP


End of event

THANK YOU!


www.scottish-enterprise.com/international

Talk to an export adviser 0800 019 1953

Education

Doing Business in Australia 2014 - presentations