Asian engagement SPECIAL REPORT - WA Business News
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Asian
engagement
SPECIAL REPORT
Asian engagement F E AT U R E DIRECTION: Gordon Flake says China has an ageing population. Photo: Gabriel Oliveira 16 | June 15, 2020
FEATURE
China not the only game in town
With WA’s exports to China approaching $100 billion annually,
business leaders are considering how the state might create alternative
opportunities in a volatile environment.
“[China will be] the first coun- the group of 10 countries in the in this regard, with shipbuilder Australia’s trade relationship
try in the world to grow old Association of Southeast Asian Austal operating facilities in away from China, PwC part-
before it grows rich,” Professor Nations, particularly Indonesia. Vietnam and the Philippines. ner Andrew Parker cautioned it
Flake said. India was set to become the “We have as a government would not be easily replaced.
China’s statisticians report- world’s most populous country, the coordination and leadership “The diversification discus-
edly expect the country’s had a younger population than responsibility that shines a light sion in some ways does not fully
population to peak by the end of China, and had more upside for the private sector will follow,” Mr recognise the dynamics of what’s
the decade, and contract as much growth. Professor Flake said (see Tinley said. happening here,” Mr Parker told
as 20 per cent by 2065. page 22). “Particularly with Asian econ- Business News.
Professor Flake said a large While the COVID-19 pandemic omies and governments; they like “It was a sensible thing to be
Matt Mckenzie
matthew.mckenzie@businessnews.com.au segment of China’s labour force might delay development in a government-to-government doing,” he said, but there would
@Matt_Mckenzie_ was older than 50. India and Indonesia, the long- connection, the sub-national be a big challenge.
“There’s not a country in the term fundamentals were good, government connections WA has China was a large customer
16-PAGE FEATURE
world that’s been able to success- he added. in Asia are strong. that wanted what Australia pro-
W
ESTERN Australia fully alter the long-term decline In addition, Professor Flake “East Java ... our sister-state duced, so diversification should
exported more than in their fertility rate,” he said. said WA should think beyond relationship is 30 years old; be about looking at other ave-
$98 billion of mer- “I don’t know anybody who just trying to sell products. there’s a lot of evidence to sup- nues for growth, rather than
chandise to China in the 12 months seriously looks at China, their “We’ve got to deepen our port the activation of that.” replacement.
to April 2020, more than the total demographics … that thinks the engagement with their popula-
to all other countries combined. next 30 years will look like the tions and culture,” he said.
That’s up nearly 67 per cent last 30 years.” “We need to get the best and
on the corresponding period to Other challenges for China’s brightest down here and get
I’m far more concerned about
April 2018, supported in part by
a high iron ore price.
government included environ-
mental impact and democratic
them to love Australia.”
Asian Engagement Minis-
Chinese weakness than strength,
However, the past few months legitimacy. ter Peter Tinley told Business and one person who agrees with
have highlighted some of the “I’m far more concerned about News the state government had
drawbacks of this successful Chinese weakness than strength, prioritised diversifying rela- me is Xi Jinping - Gordon Flake
relationship. and one person who agrees with tionships, including through the
After the federal government me is [President] Xi Jinping,” Pro- the establishment of an Asian
called for an inquiry into the fessor Flake said. Engagement portfolio, the first With the Indonesia-Australia “The strategy should be not
origins of (and early response “The shift of China’s [policy] of its kind in Australia. Comprehensive Economic Part- China or, but China and,” Mr
to) COVID-19, China announced trajectory is born of anxiety.” Mr Tinley said businesses had nership Agreement due to come Parker said.
a tariff on Australian barley, a The Belt and Road Initiative accelerated their thinking about into force in July, Mr Tinley said China would add more pur-
ban on beef from Queensland was a good example, he said. alternatives to China during the work on this relationship would chasing power in the decade
abattoirs (for safety reasons), While there was much con- pandemic. step up (see page 24). ahead than the US, India and
and changes to inspection rules sternation about the program, “Too often businesses get “The free trade agreement is Indonesia combined, he said.
on iron ore shipments. through which China plans to focused on singular markets, and the start of the conversation, Mr Parker acknowledged China
That has added to supply chain invest up to $1 trillion into infra- the crisis has identified for some that’s a nation-to-nation agree- had a demographics problem, but
disruptions that emerged ear- structure across Asia, Europe industries and some sectors the ment,” he said. India had its own challenges.
lier this year as China entered and Africa, Professor Flake said folly of that, and the need to “The hard work really starts One optimistic forecast for
lockdown. China had been trying to drum always look for alternate cus- now. Australia’s trade with India was
These events have added fuel up fanfare. tomers,” he said. “We need to work sector by in former Department of For-
to calls for WA to diversify its “There’s a real question about “You cannot have a diversified sector … see where the match is eign Affairs and Trade secretary
trade relationships. China’s ability to sustain that economy without diversified and where the market is with Peter Varghese’s economic strat-
Diversification brings chal- much offshoring of their invest- markets. Indonesia.” egy for the market.
lenges, however, with businesses ment resources,” he said. “Lots of businesses are using Another focus would be That document targeted tri-
potentially needing to make Japanese foreign investment the opportunity of the crisis to attracting businesses from pling Australian exports to India
trade-offs between the best outflows outpaced China, Pro- realign.” Europe and the US to move to, by 2035, which Mr Parker said
returns and risk management. fessor Flake said. The state’s relationships with and invest in, WA, Mr Tinley said. would be $45 billion annually.
Perth USAsia Centre chief The world was likely to become China, Japan, and South Korea Here, proximity to Asia was a At that level, it would still be
executive Gordon Flake told multipolar more quickly, he said, were strong, Mr Tinley said, so big plus. much less than shipments to
Business News there were struc- meaning there would be numer- businesses would take the lead Other competitive advantages China.
tural reasons why WA would need ous centres of geopolitical power in those markets. included the skilled workforce, “India, Indonesia … these will
to look elsewhere for growth, in addition to the US, with China A priority for the government cheap energy and stability as a be important economies for
including India and Indonesia. included among them. would be around emerging jurisdiction, he said. Australia to focus on,” Mr Parker
That concern is partly For WA, there were several opportunities, he said. While there may be popular said.
driven by the ageing of China’s potential markets that should The minister cited Austal and sentiment in the community
population. be prioritised, such as India and CBH Group as success stories and media about transitioning Continued on page 18
June 15, 2020 | 17
FEATURE ASIAN ENGAGEMENT
Diversification calls amid China stoush
From page 17
Top destinations for WA merchandise exports branch president Adam Handley,
who is also a partner at law firm
“Vietnam is another one.
(year to April 2020) Minter Ellison.
“ There are tensions at a
“But we shouldn’t be think- Rank Country $m
national government to national
ing those economies alone or
1 China 98,207 government level,” Mr Handley
together are a substitute for
China.” 2 Japan 23,349 said.
“From a WA level, the govern-
He said Australia also needed 3 UK 12,744
ment has been taking the right
to be prepared for further trade
4 South Korea 10,976 approach, leaving national issues
disputes with China, follow-
ing the recent barley and beef 5 Singapore 7,893 at a national level.
6 Taiwan 3,782 “A lot of WA businesses are
restrictions.
spending effort to keep relation-
“There’s a very real risk that 7 Hong Kong 3,702 ships with Chinese counterparts
we haven’t seen the end of those
8 Malaysia 3,051 strong.”
kinds of conflicts,” Mr Parker
9 USA 3,043 Mr Handley said ACBC mem-
said.
bers were not talking about
“We have to get used to this 10 Indonesia 2,305
replacing relationships in the
sort of conflict.”
11 UAE 2,178 Chinese market but augmenting
However, he said history
showed trade disputes between 12 Germany 1,658 them in a ‘China Plus’ strategy.
Chinese businesses were doing
other countries and China had 13 Thailand 1,588
the same, he said, including
not reduced export growth. 14 India 1,425 diversifying their manufactur-
Similarly, coal restrictions
imposed in previous years had
15 Philippines 1,331 ing base into South-East Asia.
Mr Handley warned that
ultimately not led to a drop in
pressure from some federal back-
Australian exports to China. international students. “The opportunity for WA being Optimistic benchers for a more hawkish
And for WA, the state’s suc- “If you’re a Chinese parent, so close to the region, having ter-
Among those who remain opti- stance on China was unhelpful,
cess in handling COVID-19 would you be sending your kid rific products … [it] could come
would make it an even stronger to the US or UK at the moment?” out of this in better shape than mistic about China is Australia
contender for tourists and Mr Parker asked. other states.” China Business Council WA Continued on page 21
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ASIAN ENGAGEMENT FEATURE
China not the only
game in town
Lots of
From page 18 South Korea and Japan would be
good potential sources of capital to businesses are using
particularly in an environment tap, Mr Rosario said, with deals not
of capital flight. necessarily on worse terms. the opportunity of
“When I look at the COVID-19 “It depends what you’re look-
the crisis to realign
[budget] deficit we’ll be left with ing for,” Mr Rosario told Business
in Australia, foreign investment News. - Peter Tinley
plays a large part of an economic “In the past five to 10 years,
recovery,” he said. Chinese investors have had
Mr Handley said the Foreign better bid prices.
Investment Review Board ’s “But the Japanese, the [South]
recent hardened stance on Koreans will invest in long-term,
incoming investment, which strategic stakes.
resulted in some deals not pro- “When all that has been
ceeding, was wrongly perceived focused on is price, some of those
by some in China as targeted Japanese and [South] Korean
RESPONSIBILITY: Peter Tinley says the government is sticking to its strategy of finding
towards their country. investors have struggled to
“That has a cooling effect on match those prices.”
new markets. Photo: Gabriel Oliveira
potential investments,” he said. Sentiment about the impor-
Squire Patton Bog gs par t- tance of price was shifting, he But he said there were addi- “We always see that country Mr Chong said it was impor-
ner Chris Rosario sa id 2 0 2 0 said. tional hurdles to get through. as a whole as a call centre; there’s tant in Asian markets to build
would be the year of diversi- Tony Chong, who is also a Looking more broadly than more to India than that.” relationships rather than think
fication of foreign investment partner at Squire Patton Boggs, investment flows, Mr Chong Governments would need to transactionally.
in WA . said Chinese investment inquir- supported the idea that India, take the lead in developing these “From the Asian side of it, the
“ The circumstances with ies had not stopped despite the and ASEAN countries such as relationships, he said. relationship is fundamental,” he
China, increased scrutiny by FIRB challenges. Indonesia and the Philippines, An example was the WA gov- said.
… the WA business community is “They’re fully aware there’s a should be priorities. ernment’s 2017 sister-state deal “I’m yet to see one where the
looking at some of our other long- situation but it hasn’t stopped “We’re not doing enough [with with the Indian state of Andhra deal is done and it is successful
term partners,” he said. them,” Mr Chong said. India],” Mr Chong said. Pradesh. without a relationship.”
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June 15, 2020 | 21
NEWS & ANALYSIS
FEATURE ASIAN ENGAGEMENT
Electric
potential
in India
SPARK: Dantu Charandasi says India has big growth ambitions. Photo: Gabriel Oliveira
India could be the world’s next great growth story, and Australia is acting to strengthen
its relationship with the country of more than 1.3 billion people.
28
Matt Mckenzie country’s government was rolling Study Perth report, and were inputs would be located nearby,
matthew.mckenzie@businessnews.com.au out the red carpet to encour- worth about $102 million to the Mr Reed said.
@Matt_Mckenzie_ age foreign investment, and she local economy. He said the Indian government
A SURGE in India’s economic hoped the relationship would be For WA’s biggest export indus- was also looking at capital subsi-
development could profoundly
reshape the world’s economy in
about more than trade.
“It is both ways,” Ms Charan-
try, resources, there was potential,
too.
dies for processing plants in the
electric vehicle supply chain.
MEDIAN AGE IN INDIA
Source: Statista
the decades ahead, much as Chi- dasi told Business News. “WA can position itself as a Neometals plans to use its
na’s rise has done over the past “India is working towards strong supplier of commodities offtake from the Mt Marion Doherty told Business News per-
30 years. becoming part of the global and mining equipment, technol- mine to develop downstream sonal relationships and a brand
Prior to the COVID-19 crisis, supply chain. ogy and services,” Ms Charandasi processing. presence in the country had pro-
India’s Prime Minister Narendra “India is on a big step toward a said. Mr Reed said there had been vided a competitive edge.
Modi was hoping to double his growth-oriented future.” The supply chain for electric a large pool of businesses inter- “Where we shine is we back our
nation’s GDP to $US5 trillion by While China’s population is vehicles was one highlight. ested to work with Neometals on product with personal visits,” Mr
2024. ageing, a process that will reduce Business News understands the project. Doherty said.
Even if that ambitious target the size of its labour force, India representatives of Indian gov- That was whittled down over “They can buy Chinese prod-
isn’t met, India has consistently is still relatively young. ernment-backed business Khanij time as prices fell last year, with
ucts cheaper, but you’ll never find
posted GDP growth numbers The median age in India is Bidesh India visited WA last year those companies remaining
a representative or salesperson
around 7 per cent for most of the about 28, according to Statista, to inspect potential sources of largely interested for strategic
[on the ground] trying to push
past 20 years. meaning half the people in the critical minerals. purposes.
the product.”
India will generate about 15 per country are below that age. Pe r t h - ba s e d N e o m e ta l s “When you develop those
He said he regularly visited
cent of global GDP by 2050, at pur- Ms Charandasi said 20 per cent group, which developed the Mt products, you want guys that are
India and worked with a trusted
chasing power parity, according to of the world’s working age pop- Marion lithium mine, signed a strategically aligned for the long
local distributor.
a report by PwC. ulation would be in India in five deal with Indian business Man- term,” he said.
Evaporative air-conditioners
That’s double its current share. years. ikaran Power in 2019 to work on
These growth projections come Indian businesses were inter- a potential lithium refinery in Manufacturing success were largely unknown in the
as Australia’s government seeks ested in opportunities to contract India. A Welshpool-based business Indian workplace, Mr Doherty
to strengthen ties with India, for the public sector, she said, Neometals chief executive has turned traditional expecta- said, and buyers in that market
amid increasing geopolitical ten- particularly in information Chris Reed told Business News tions of a relationship with India had different expectations to
sions with China. technology. the Indian government hoped to on their head, with its exports Australians.
In early June, Mr Modi and In the other direction, Ms eliminate sales of internal com- evaporative air-conditioners. India represented about 15 per
Australian Prime Minister Scott Charandasi said there were edu- bustion engine vehicles within a Airgroup Australia business cent of Airgroup’s overseas sales,
Morrison held a virtual summit cational institutions in Western decade. development manager John he said.
and signed a defence pact, while Australia working on strategies Car makers in India were
there has been previous discus- to enter the Indian market. switching manufacturing lines to Neometals
.com.au
sion about an economic deal. India is the second largest electric vehicles, and battery cell
India’s consul general in Perth, source of international students makers were working to ensure There are 206 results from our index of 103,271 articles,
Dantu Charandasi, said the for WA, according to a recent cathode production and other 10,342 companies and 39,526 people
22 | June 15, 2020
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June 15, 2020 | PB
NEWS & ANALYSIS
FEATURE ASIAN ENGAGEMENT
Indonesia pact
a big deal
TRANSITION: Phil Turtle says businesses are looking afresh at Indonesia. Photo: Gabriel Oliveira
A new trade deal with Indonesia is creating opportunities for
industries as diverse as farming and cybersecurity.
500,000tpa
Matt Mckenzie Larissa Taylor said the trade deal This aspect of the deal was
matthew.mckenzie@businessnews.com.au had the potential to take a devel- expected be beneficial for barley
@Matt_Mckenzie_ oped relationship to the next growers, after the imposition by
CYBERSECURITY business Red level. China of tariffs following the
Piranha gained a rare foothold And it came as Australian grow- political fallout over suggestions
to enter a new market thanks to ers faced increasing competition. for an inquiry into the origins of FEED GRAIN TARIFF FREE TO INDONESIA
Australia’s trade deal with Indo- “We’ve gone from over $1 bil- COVID-19, among other things. FROM JANUARY 2021
nesia, according to non-executive lion wheat [exported annually] to However, the barley would be
director Richard Baker. Indonesia five years ago to prob- used for feed, rather than malting WA shipped $2.3 billion of mer- WA economy during COVID-19,
The Indonesia-Australia Com- ably a quarter of that,” Ms Taylor beer as with exports to China. chandise exports to Indonesia in with border controls and quaran-
prehensive Economic Partnership said. The second component of the the 12 months to April 2020. tine measures affecting student
Agreement was signed in March “Black Sea wheat from Ukraine trade deal was technical insight, movements.
2019 and comes into force next and Russia is significantly with local industry experts to Look afresh He said that might spark a
month. cheaper, landed into flour mills travel to Indonesia to train flour Australia Indonesia Business rethink of how the sector engaged
Perth-based Red Piranha was in Indonesia. mill staff in processing Western Council president Phil Turtle told with Asian markets.
invited to tender for a cyber- “The quality of that grain has Australian grain, Ms Taylor said. Business News changes to invest- Mr Turtle said Indonesia was
security contract with a major been improving … the competitive She said Grain Trade Australia ment rules through the trade deal emerging as an alternative oppor-
Indonesian government procure- pressure is significant. and the Australian Export Grains would create opportunities, par- tunity for many businesses, as
ment agency in the months after “We’ve lost our pre-eminent Innovation Centre had played ticularly in education, healthcare Australia’s relationship with
the signing. position in the noodle market in key roles in securing the best out- and aged care. China hit difficulties.
Previously, the company would Indonesia. I hope it’s temporary.” comes from the agreement for the Previously, Australian univer- “We’ve encouraged businesses
have been competing against Two key elements to the new industry. sities and education institutions to diversify their markets for
big German and American busi- partnership were expected to A range of other agricultural were unable to own a facility in years,” he said.
nesses, such as IBM, Mr Baker benefit farmers, she said. producers would also receive Indonesia, he said, while they It was a natural risk mitigation
said. As much as 500,000 tonnes expanded access following the could now control up to 67 per to build relationships in other
The deal highlighted Australian annually of feed grain would be deal, according to DFAT. cent. markets, Mr Turtle said, and busi-
businesses could produce more able to enter Indonesia from Aus- Frozen beef and sheep meat tar- While WA universities were yet nesses were now having a more
than just food and minerals, he tralia tariff free from January iffs would be eliminated over five to commit, Mr Turtle said Curtin active look.
said. next year, with 5 per cent volume years, while live cattle exports up University operated a campus in “There’s a flight [out of] China,
“Indonesia is not only Bali, and growth in the years after, the to 575,000 head would be allowed nearby Malaysia. Indonesia has been a beneficiary
the gate swings both ways ... most Department of Foreign Affairs duty free, the department said. Melbourne-based RMIT has a of that,” he said.
of their exposure is resources and Trade said. Business News understands Indo- campus in Vietnam, which was “That’s for the whole world, not
companies,” Mr Baker told Busi- The livestock feed component nesia is being considered a potential established in 2000. just Australia.
ness News. added to existing grain ship- growth market for seafood, which Mr Turtle said international “There’s a lot of reasons busi-
Grain Industry Association of ments used for food, especially is largely shipped to China under education had been one of the nesses should look afresh at
Western Australia chief executive noodles. existing arrangements. most disrupted sectors of the Indonesia.”
24 | June 15, 2020Asian
Business
Councils
Helping Western Australian
businesses to increase their
trade and attract investment
Market intelligence
Business networks
Asia capability
Asia Business Council Australia Korea Business China Chamber of Commerce Taiwanese Chamber
of Western Australia Council of Western Australia in Australia (WA Branch) of Commerce WA
www.abcwa.org.au www.akbcwa.org www.cccaau.org www.facebook.com/groups/TCCWA
Australia China Australia Malaysia Hong Kong Australia Western Australia Singapore
Business Council Business Chamber (WA) Business Association WA Business Connect
www.acbc.com.au www.ambcwa.org.au www.hkaba-wa.com www.wasbc.org.au
Australia Indonesia Australia Philippines Indonesia Institute Western Australian Chinese
Business Council (WA) Business Council www.Indonesia-institute.org.au Chamber of Commerce
www.aibc.com.au www.apbc.org.au www.waccc.com.au
Japan Chamber of Commerce
Australia India Business Australia Thailand Business and Industry in Perth Western Australia Vietnam
Council WA Chapter Chamber (WA) Inc. www.wanihonjinkai.com Business Council
www.aibc.org.au www.facebook.com/ATBCWA www.wavbc.org.au
Singapore Chamber of
Commerce (WA)
www.sccwa.org.au
WA’s Asian Business Councils are proudly supported by
Government of Western Australia
Department of Jobs, Tourism, Science and Innovation www.jtsi.wa.gov.au
June 15, 2020 | PB
View Western Australia’s Asian Engagement Strategy 2019-30 at www.jtsi.wa.gov.au/asian-engagementperthusasia.edu.au
WA's Key Regional Trade Partnerships
Ulaanbaatar
KAZAKHSTAN RUSSIA
MONGOLIA
Bishkek
Tashkent
KYRGYZSTAN
UZBEK-
ISTAN NORTH
Beijing
TAJIKIS
TAN KOREA
Dushanbe Pyongyang
Seoul
AFGHANISTAN
KASHMIR
SOUTH KOREA Tokyo
Kabul
$11bn JAPAN
Islamabad
CHINA $622m $23.3bn
$98.2bn $46m $2.8bn
PAKISTAN $5.6bn
New Delhi NE $62m
PA BHUTAN $360m
L Kathmandu
Thimphu
TAIWAN
Taipei
INDIA Dhaka $3.8bn
HONG
KONG $295m
$1.4bn S.A.R.
MACAU
Hanoi
$501m BANGLADESH S.A.R
HONG KONG $39m
MYANMAR
LAOS
$62m Naypyidaw $3.7bn NORTHERN
MARIANA
Vientiane $30m ISLANDS (US)
THAILAND VIETNAM $91m PHILIPPINES
$1.6bn $1.3bn Manila
Bangkok $1.3bn GUAM (US)
$2.8bn $372m $68m
CAMBODIA
N/A Phnom Penh N/A $34m
Palikir
SRI PALAU FEDERATED STATES
Colombo
LANKA MALAYSIA BRUNEI Melekeok OF MICRONESIA
MALDIVES Bandar Seri
Male
$3.1bn Begawan
$2bn Kuala Lumpur
$195m SingaporeLEGEND
SINGAPORE PAPUA NEW GUINEA SOLOMON
COUNTRY $7.9bn Jakarta ISLANDS
$ WA merchandise exports Dili
$1.8bn INDONESIA Port
(12 months to April 2020) TIMOR-
Moresby
$251m $2.3bn LESTE
$ WA merchandise imports
(12 months to April 2020) $961m
$ Visitor spend in WA (2019) $79m
Kununurra
Exports 2019
Commodity $
Iron ore.......................................................................... 95.8bn Broome
Petroleum .................................................................... 37.1bn NORTHERN
Gold................................................................................ 20.6bn TERRITORY
Alumina .......................................................................... 6.9bn
Nickel .............................................................................. 4.0bn
Wheat .............................................................................. 2.8bn Cape Lambert QUEENSLAND
Dampier Port Hedland
Copper ............................................................................ 2.0bn AUSTRALIA
Lithium ............................................................................ 1.4bn Cape Preston Karratha
Chemicals ...................................................................... 1.4bn Onslow
Exmouth SOUTH
Mineral sands................................................................ 1.2bn
Newman AUSTRALIA
Services exports 2019FY $ WESTERN
Personal travel.............................................................. 2.3bn
Education-related travel .......................................... 2.0bn AUSTRALIA
NEW SOUTH
Transport ........................................................................ 0.9bn Carnarvon ( s c a le e n l a rg e d ) WA L E S
Technical, trade-related & other business.................... 0.4bn
Government .................................................................. 0.4bn
Canberra
Mount
Regional Free Trade Agreements Magnet Leonora
VICTORIA
COUNTRY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DATE Geraldton
Australia – Singapore . . . . . . . . . . . . . . . . . . . . . . . . 2003
Australia – Thailand . . . . . . . . . . . . . . . . . . . . . . . . . . 2005 Kalgoorlie
Australia / NZ – ASEAN . . . . . . . . . . . . . . . . 2010 – 2012 Merredin
Australia – Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . 2013 Northam
Australia – Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2014 Fremantle Perth
Kwinana TA S M A N I A
Australia – Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015
Australia – China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 Bunbury
Australia – TPP-11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2018 Esperance
Australia – Hong Kong . . . . . . . . . . . . . . . . . . . . . . . 2020 0 200 400 600 Miles
Australia – Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . 2020
Sources: ABS, JTSI, Tourism WA Albany Map copyright Business Maps Australia 0 200 400 600 800 1000 KmFEATURE
NEWS & ANALYSIS ASIAN ENGAGEMENT
Familiarity, good
fortune finding
avenue to market
WAVES: James (left) and Simon Ch’ng are rebuilding Far West’s presence in Asia. Photo: Gabriel Oliveira
Marketing of food and beverage products into Asia can be challenging,
no matter how long a business has been operating.
Matt Mckenzie Far West owns about 20 scal- The Cantonese word for scal-
matthew.mckenzie@businessnews.com.au lop fishing licences across Shark lop, used in another context, could
@Matt_Mckenzie_ Bay and the Abrolhos Islands, mean ‘having sons’, Mr Ch’ng said, Scallops are particularly
JAMES Ch’ng’s first taste of West- with as much as 80 per cent of so it was associated with family.
ern Australian scallops convinced the company’s catch shipped Far West was one of 14 compa- important in Hong Kong to have
him the saltwater delicacy would overseas. nies awarded a combined $120,000
be a hit in Asia, to the point he In the years after that heat- in late 2019 through Access Asia at weddings - Simon Ch’ng
moved his family from Victoria wave wipeout, prices went up Business grants to support expan-
to WA and, in 1983, established Far significantly. sion in the Asian market. In terms of managing rela- offering was extended into direct-
West Scallops. “And if they didn’t, we wouldn’t The grant was to attend the tionships in Asia, Mr Ch’ng said to-consumer wine and beer.
Mr Ch’ng’s son, Simon, now have been around,” Mr Ch’ng said. FHA Food and Beverage Asia Sin- businesses should reinforce the Mr Leonhardt told Business
sales and marketing manager, “If we didn’t have buyers rusted gapore Expo, which was originally work of those before them, but News they were inspired by over-
told Business News his father had on willing to pay high prices … the to be held in early April, however not cut corners, because that whelming demand for premium
built Far West’s export business industry would have died.” those plans were delayed due to would hurt Australia’s reputation. Australian produce in South-East
by going door to door in Singa- With the catch down, over to the COVID-19 pandemic. “You don’t want to just sell on Asia, but recognised the market
pore and Hong Kong. time, consumers moved to other An exhibition two years ago price,” he said. was underserved from an e-com-
Although he wasn’t the first sources, including Queensland, in Hong Kong also generated “It’s very hard for Australia to merce perspective.
Australian to sell scallops into and then away from Australia as opportunities, although political sell on price. The new retail brand is Mer-
those locations, he was one of the east coast suppliers suffered their instability that has gripped the “We’re an expensive place to do chants of Oz.
first from WA. own problems. region had created issues to navi- business. It’s a lean business model, with
However, having cracked And prices fell. gate, Mr Ch’ng told Business News. “But we’re recognised as a warehousing outsourced to a
parts of the Asian market, the Mr Ch’ng said the business now “The scope of the business has high-quality provider of food. company in Singapore.
past decade has brought major planned to reconnect with con- changed,” Mr Ch’ng said. “[Businesses should] trade on “It’s all very much done on
challenges for Far West Scallops, sumers it had lost. “We were a third of the WA scal- the good name of Australian laptops and mobile phones,” Mr
which is responding by sharpen- “We still have a good reputation lop industry, and now we’re about products, but make sure you live Leonhardt said.
ing its engagement in the region. in Hong Kong and Singapore,” he two thirds. up to the reputation.” He said wine and beer were
A marine heatwave in 2011 said. “We can do things we haven’t easier to sell directly to consum-
severely damaged a number of “Scallops are particularly done previously.” Growing vine ers than perishable products,
WA fisheries, including scallops. important in Hong Kong to have Far West’s market share Trade Vine was founded by such as seafood and meat,
“They almost called it an at weddings. includes deals with supermar- James Leonhardt and Jim Ties- because those would require a
extinction event in the Abrolhos,” “People still remember scallops kets, such as Coles in Australia dale in 2015. physical presence on the ground
Mr Ch’ng said. from Australia very fondly. and City’super in Hong Kong. The business started wholesal- to ensure quality.
“Our catch went from 300 to 400 “If you can’t eat them out, Taiwan is one market the busi- ing Australian meat and seafood
tonnes per year to ... 30 tonnes.” people are learning to cook them.” ness is focused on targeting soon. into Asia, but in mid-2019, the Continued on page 30
28 | June 15, 2020Australia Indonesia
Business Council
Where do you see your future?
With the historic new Indonesia-Australia Comprehensive Economic Partnership WA shares a maritime border in the Indian Ocean with our nearest neighbour,
Agreement (IA-CEPA) about to burst onto the scene, there is no better time to and the same GMT+8 time zone with much of the country, so Indonesia makes
take a look at the amazing opportunities on offer in Indonesia. a lot of sense. Jakarta is after all closer to Perth, than Perth is to Sydney.
Across Western Australia, almost every industry stands to benefit from this landmark In WA, the Australia Indonesia Business Council (AIBC) works alongside its
Agreement, including the very important Education, Food and Agribusiness, Tourism, Members and key stakeholders, including the WA Government, to help unlock
Mining and METS, Energy, Infrastructure, Health and Aged Care, and Digital sectors. business opportunities, and deliver economic growth and jobs for the whole
community. Our Mission dovetails in with WA’s Asian Engagement Strategy
As many businesses look for diversification in their markets, Indonesia sits on our 2019-2030, which we are proud to support.
doorstep as the largest economy in ASEAN, the world’s 4th most populous country,
and 3rd largest democracy. Its Economy ranks close to Australia’s, with consistent Modern Indonesia is far removed from what many might expect, so visit us now
growth that will see Indonesia climb higher amongst the G20 over the next decade. at aibc.com.au and join us as Members on this journey.
Indonesia’s investment ratings and ease of doing business rankings have been The Australia Indonesia Business Council, proudly supporting its Members
steadily climbing too, seeing international companies and investors beat a path for 30 years, with Chapters in every Australian State and Territory, and affiliates
to be involved in an exciting range of projects. Such projects include the construction in over 5 major cities in Indonesia.
of a brand-new capital city, planned for the province of East Kalimantan on the
island of Borneo, which will embrace the latest in urban design, architecture, For more information, contact AIBC’s Perth-based National President,
smart city technology, transportation, and green energy solutions. Phil Turtle | E: president@aibc.com.au | M: +61 412 579 757.
Follow AIBC on Facebook, twitter and LinkedIn.
June 15, 2020 | PBFEATURE ASIAN ENGAGEMENT
Finding an avenue to market
From page 28 “The one big shining light is
the opportunity e-commerce
Trade Vine secured an Access presents,” Mr Leonhardt told
Asia grant to develop a social Business News.
media campaign for Merchants “It gives producers another
to boost WA craft beer sales in avenue or channel.
South-East Asia over Chinese “It’s going to be a long time
New Year. before domestic demand recovers.
“This was all about turbo- “Producers need as many chan-
charging the direct-to-consumer nels and markets as they can find,
business,” Mr Leonhardt said. at the moment.”
The COVID-19 pandemic had Mapizy, Swan River Seaplanes,
led to a shift in consumer behav- and West Cape Howe Wines were
iour towards online shopping, among the other businesses to
but also brought big challenges, receive Access Asia grants.
he said. West Cape Howe’s funding was
“Fortuitously … we saw a shift for tours of the company’s wine-
in consumption from restaurants making facility in Mount Barker,
and bars to the home,” Mr Leon- while Swan River Seaplanes hoped
hardt said. to develop a marketing strategy
“We were already making the for Japanese luxury travellers,
pivot to e-commerce channels. with direct flights from that coun-
“But having said that, try to Perth now operating.
there have been incredible CHEERS: Vasse Felix wines are on the menu for customers of Merchants of Oz. While tourism enterprises
difficulties in getting air freight Photo: Attila Csaszar received the most support,
up to Singapore; it’s just cost Mapizy’s funding was to attend
prohibitive. “Airlines were running pas- [lack of] passengers. about an uncertain recovery an exhibition in Singapore to
“For a period of time there senger planes empty… carrying “That’s thrown a spanner in the ahead, Mr Leonhardt said e-com- showcase artificial intelligence
weren’t any flights carrying cargo underneath, trying to works.” merce would unlock new angles mine monitoring and rehabilita-
freight. recover the revenue loss from While he remained cautious to enter Asian markets. tion software.
Message from the Consul General of the Republic of Indonesia in Western Australia:
Welcoming the Implementation of Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA)
It has been almost a year since the Western Yet such number should not deceive us, for it is the
Australia government launched its inaugural Asian ample room for its multiplication that actually
Engagement Strategy. It is admittedly a matters. Indonesia is indeed at the 13th rank
remarkable initiative and doubtlessly resonates among Australia's trading partners, but it is
with our mission at the Consulate General of the definitely Australia's nearest, with 270 million
Republic of Indonesia in Perth in a broad effort of population, unmatched by any other trading
continuously enhancing friendly relationship partners within and even beyond Southeast Asia.
between Western Australia and my beloved
country Indonesia. It is therefore could not be timelier to mention that
this opportunity is up for us to grab, and will even
In the past two months, like many countries in the further flourish under the long-awaited
world, Indonesia and Australia have endured the Indonesia-Australia Comprehensive Economic
most challenging time. As countries with open Partnership Agreement (IA-CEPA), which will enter
markets, both Indonesia and Australia have Ms Dewi Gustina Tobing into force on the 5th of July 2020. IA-CEPA will
Consul General of the Republic of Indonesia in Perth, WA
inevitably been affected by the COVID-19 significantly reduce export tariffs for both
pandemic and its wide and deep impact toward As for Western Australia, which ranks among the countries, and pave a greater bilateral economic
global supply chain. However, as the old saying best, no doubt, is now expecting a jump on and investment cooperation, including in the
goes, “the storm will pass”. So will this one. While business confidence level amid successful information and communication technology,
we face various degrees of challenges, I am pandemic handling. It is therefore a right education, financial services, health, agriculture,
pleased to witness both Indonesia and Australia momentum for us to rekindle what has been mining, and energy sectors.
have shown their strength and resilience through envisioned within Western Australian Asian
this situation. Engagement Strategy with regard to Indonesia and I call each and every one of you to seize this
Western Australia’s relationship. momentum. Do not let this opportunity slipped
In Indonesia, we have started to introduce through our net. We look forward to assisting you
measures to implement the “new normal”, an effort Western Australia is an important partner for to enhance the trade and investment between our
to keep Indonesian economy running while Indonesia. Our cooperation across a range of two countries. Thank you.
maintaining restrictions to contain the spread of sectors including trade, tourism, oil and gas,
the COVID-19. Indonesia’s economic growth is renewable energy, mineral resources, and agri-food Contact us at :
economy@kjri-perth.org.au Sponsored by
projected to remain positive toward the end of has created a mutual dependence, where a robust
2020 and its economy will gain a significant economy has become our shared-vision. At its
rebound in 2021, signaling our country’s optimistic peak, the aggregate value reached AUD 3.3 billion
Indonesian State-owned Energy Company
recovery.
30 | June 15, 2020 in 2019.Centen
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)JHI4USFFU 1FSUI"JSQPSU8" 8JMMJBN4USFFU 1FSUI 8" June 15, 2020 | PBAsian
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