Why Australia?

1. UNCLASSIFIED Scott StrainUKTI Australia Director Trade A presentation on the Australian Business Horizon for the World Trade Fair in the Black Country

2. In partnership with: In partnership with: Why Australia? • You’ll feel at home immediately: • Over 1,000 UK companies and more Brits than in any other country • Very similar business, legal and regulatory culture • Best performing OECD country economically, with good growth prospects • Strong Australian dollar making UK goods and services more affordable • Closely linked to fast growing Asia-Pacific nations • Significant opportunities for UK companies in oil and gas, health, ports, transport infrastructure, ICT, education, low carbon, financial and business services

3. In partnership with: A comparison with Australia

4. In partnership with: UK Exports to Australia • UK exports to Australia grew by 80% from 2007-2012 to £10.3 billion • Total UK goods exports growth was flat in 2012, but to Australia still increased 6% • 7th biggest market for services exports and 18th largest for goods • UK is 2nd biggest foreign direct investor in Australia

5. In partnership with: Australia: it’s bigger than you think

6. Rail Projects in Australia • Projects with committed funding • Australian Rail and Track Corporation: Upgrades to the Northern Sydney Freight Line between North Strathfield and Newcastle, Commenced in 2012, Expected Completion: 2016; Cost: $1110m • Australian Transport and Energy Corridor: Construction of an inland railway from Surat coal basin to the Port of Gladstone, Construction to commence in the coming months, Expected completion: 2014; Cost: $1000m • Queensland DTMR: Cross River Rail – 18km north-south rail line in the Brisbane CBD, Plans announced • Expected Completion: N/A; Cost: $4500m • The North West Rail Link A 23 kilometre extension –including 16.9 kilometres in tunnel- to the existing City Rail network from Epping to Rouse Hill . • Estimated capital cost of the project is $7.5 to $8.5 billion. • Perth Rail Public Transport Package $500 million over 10 years to deliver a public transport project in Perth", either the $1.8 billion MAX light rail • system or the $1.9 billion rail line to Perth Airport.;

7. The Nation Building Programme • Potential Projects • NSW State Light Rail-project cost is an estimated $1.6 billion. • NSW State Rail Authority: Western Express City Rail Service – new underground platforms at several central stations, • Start date 2015, Expected Completion: N/A Cost: $5430m • Melbourne Metro - $3 billion contingent on matched funding from the Victorian Government, flagged for delivery as an availability Public Private Partnership (PPP), with the Commonwealth Government also noting an additional provision to support future availability payments; • $75.0 million for the Port Botany rail line upgrade to improve access and connectivity between the port and the future Moorebank Intermodal Terminal and future planning for the Metropolitan Freight Network.Access and connectivity between the port and the future Moorebank Intermodal Terminal and future planning for the Metropolitan Freight Network. In partnership with: Leah Gartner Senior Trade Development Manager Railways, Advanced Engineering and Marine Leah.Gartner@fco.gov.uk

8. In partnership with: Major Road Projects • Major Road Projects • West Connex, NSW • East West Link, Victoria • Bruce Highway, Queensland • Opportunities • Construction • Design, • Project Management • Engineering, • Project Finance & PPP • Drainage, • CCTV, • Road safety management and providers of building equipment, materials, and supplies. Antonia Yendell Senior Trade Development Manager UKTI Melbourne antonia.yendell@fco.gov.uk

9. In partnership with: In partnership with: Resources

10. In partnership with: Major offshore LNG projects Richard Goldsmith Senior Trade Development Manager Richard.Goldsmith@fco.gov.uk

11. In partnership with: Projects we are targeting

12. Australian opportunities: mining • As the mining boom moves from phase 2 to 3 in 2013, the nature of opportunities is shifting • The focus on cost-control is critical for identifying opportunities • Hi-tech machinery, eg. Automated, remote-control equipment. • UK export potential is not limited to mining-specific goods

13. Projects: QLD & WA • Carmichael Coal Project ($6.8bn) • Adani Mining. Feasibility Stage. • Alpha ($10bn) and Kevin’s Corner ($4.2bn) Coal Projects • GVK/Hancock Coal. First coal 2016. Work package on ICN Gateway • Galilee Coal Project ($8.8bn). • First coal 2016 • Waratah Coal. First shipment 2015 • South Galilee Coal Project ($4.2bn). At Feasibility stage • . • Roy Hill Iron Ore Mine & Infrastructure ($9.5bn) • Hancock Prospecting. Production expected 2015. • Oakajee Midwest Development ($4bn) • WA State Govt/private. On hold pending review. • West Pilbara Iron Ore Project ($6bn) • Australian Premium Iron JV. First shipment 2015

14. Australian opportunities: ICT • ICT contributes 4.6 % of Australia’s GDP (AU $82 billion) IBSA Dec 2010 • Building v fast broadband network to cover 95% of population (in 8-10 yrs) • At A$35.7 billion it’s the most expensive infrastructure project in Australia’s history • Opportunities in e-Health, e-Learning, digital entertainment, e-commerce for mobile • Internet usage in Australia is 90% penetration (5th best in the world) • Contact Jim.Thompson@fco.gov.uk for more information

15. Australian opportunities: e-commerce • Australians spent around £7 billion online in 2011 • Online sales grew 90% from 2010 to 2011 • Opportunities in sporting and outdoor goods, cosmetics and beauty products, books, media and fashion • Goods under $1,000 bought overseas do not attract 10% GST • Contact joanna.olivera@fco.gov.ukfor more information

16. Major projects New South Wales Hospital building programme will see $10 billion spent over the next 5 years on new and redeveloped hospital facilities. Projects and programs already underway:• Major hospital upgrades at Blacktown (due 2016), Campbelltown (2016), St George (2014), Hornsby (2016), Bega (2016), Dubbo (2014), Wagga Wagga (2017), Tamworth (2016), Lismore, Port Macquarie (2015) and Kempsey (2016).• Planning is underway for new hospitals in Byron Bay, Maitland and Sydney’s Northern Beaches to meet the future health demands of these regions. More info: http://www.hinfra.health.nsw.gov.au/projects/capital-projects?5701_p=1 Contact: Joe Dodd at Joe.Dodd@fco.gov.uk In partnership with: Australian opportunities: hospitals

17. Pharmaceutical Industry • No major R&D facilities for major pharmaceutical companies in Australia other than clinical trials • Large pharmaceutical and generic manufacturing capabilities • In 2012, Australian pharmaceutical market was valued at A$13.84 billion - forecast to reach A$16.1 billion by 2016 • Pharmaceutical imports A$10.5 billion and exports A$3.5 billion

18. Biotechnology Industry • Australia is the leading biotechnology location in the Asia Pacific Region. 6th largest in the world behind the US, UK, Canada, Germany and France • Around 450 core biotechnology companies amongst an industry total of 1200 enterprises • World class scientific, medical and agricultural research base

19. In partnership with: Routes to Market

20. What to expect from Australian importers • Value for money over price • Cautious about changing suppliers • Australian products preferred but they are open to international goods & services • Go with your best price – avoid haggling too much • Expect familiarity and a direct approach • Rigid enforcement of standards and practices – get it right first time!

21. Import Channels & Distribution • Internet: sell online through a .com.au site • Licensing your product or service • Importers & Wholesalers: usually small & specialist. Few general importers, • Distributors: numerous, small and usually specialist • Manufacturers & End users • Retailers: usually source locally & use importers for smaller orders • Establish a local presence and sell directly

22. Typical Distribution Channel costs (Retail example) • Overseas buying agents/commission agents 3-6% FOB • Importers & Wholesalers selling volume consumer goods 40-80% on landed duty paid goods • Discount Department Stores 35-40% of the selling price • Department Stores 40-75% of the selling price • Small Retail 50-100% of the selling price • Supermarket Chains 15-35%

23. Quoting & Getting Paid • US dollar the most common currency • Most exporters expect Free On Board or Free Carrier quotations but; • Those importing commodities often prefer Cost & Freight terms • Most Australian importers take out their own insurance so don’t expect Cost Insurance and Freight or Cost Insurance Paid terms • Remember that any customs duties will be based upon the FOB price • Offer your best price, don’t haggle too much. • Letter of Credit common place • Remember to factor in delivery times to your terms of payment

24. Key Elements for Success • Set medium / long term strategies • Set reasonable marketing plans and sales targets and review them regularly • Committed distributor - right for your product • Committed supplier • Complete openness - pricing / margins • Service is paramount • Get involved • Allow sufficient time

25. UNCLASSIFIED Key Lessons for a Market Visit • Think Australian - NOT POM, sell to Australians for volume • Add value vs local offering • Support distributor • Price-points (understand margins and currency) • Need to innovate • Create volume / increase rate of sale to win both trade and distributor support

26. In partnership with: How UKTI can help? • Passport to Export • Gateway to Global Growth • Export Market Research Scheme • Overseas Market Information Service • Trade show Access Programme • Trade Missions • Check out our presentations on • WWW.Slideshare.net • Scott.Strain@fco.gov.uk