WA zooms in on Asia

For Asia, the best is in the west. Western Australia’s proximity to Asia and its abundant agricultural resources make it uniquely positioned to take advantage of the opportunities in the world’s fastest-growing region.

September’s WA budget announcement included a number of initiatives aimed at making use of the state’s geographical advantage and capabilities for trading with Asia and creating new opportunities across the state.

The initiatives could help to fuel renewed economic prosperity in the state’s regional areas which account for 34 per cent of the WA’s GPD and 95 per cent of its exports.

The focus on growing opportunities in Asia has a natural alignment with regional areas considering our near neighbour’s already strong and growing demand for our high-quality, reliable and safe food and fibre.

“While there are some shining examples of WA enterprises realising their Asian opportunities, the reality is there could be many more.”  - Kathleen Jahour

While there are some shining examples of WA enterprises realising their Asian opportunities, the reality is there could be many more. 

Growth into Asia

Initiatives unveiled in the WA State Budget 2017-18 aimed at encouraging Asian opportunity.

  • Development of an Asian Business Strategy and tools to foster growth into Asia is integral in supporting small businesses entering regional markets and boosting job creation opportunities;
  • $A750,000 to establish the Asian Business House to develop formal networks which link businesses with people and resources to enable and support success in regional markets;
  • $A800,000 over four years for the annual ASEAN Dialogue which is hosted concurrently with a trade and investment show and Asian Arts Festival; and
  • $A1.2 million over four years to promote WA's education and mining sectors in Asia.

A key barrier to regional WA enterprises to take the plunge and look to Asia for new opportunities is a lack of skills, knowledge and confidence. But aside from the wider economic positives, the benefits of expanding into Asia for individual business owners are significant.

ANZ’s Opportunity Asia report showed Australian businesses with existing operations in Asia have a turnover 16 per cent higher than those who were domestically focused.

In addition, 60 per cent of regional businesses operating in Asia said doing business in Asia has made sustainable growth more achievable.

Not surprisingly, the findings also pointed to agriculture as a driving force behind a surge of regional exports which has increased by more than 85 per cent in the last eight years. 

The positivity and interest around regional Australian business and agriculture was also highlighted by CEDA in their Outbound Investment publication.

This report suggests with Australia being perfectly situated close to Asia, and agriculture becoming increasingly important to national economic growth, there is a growing need for food processing in regional centres close to production.

High growth, high potential

In WA, a recent report released by the WA Department of Agriculture and Food, identified 20 sectors considered ‘high growth, high potential’ which could look to grow processing onshore and target export opportunities. One such sector is the wine industry

The Wine Report from the WA Department of Agriculture and Food suggests the onus should be on developing a premium wine offering into Asia, particularly into Singapore, Hong Kong and China with attention paid to highlighting the product’s provenance and story, and in turn building interest in agritourism.

Margaret River premium wine producer Wills Domain has a renewed focus on wine exports into Asia, relying heavily on provenance to tell a compelling story and using Australia’s clean green image to its advantage

The company estimates this has added between 15 per cent to20 per cent of value to its product and believes it’s also benefited strongly by WA’s alignment with Asian time zones.

The run of reports has coincided with the with the Federal government’s new $A50 million Export and Regional Wine Support Package. The aim of this package is to increase wine exports by up to $A565 million, whilst also lifting international tourism into Australia worth nearly $A170 million over three years.

 The announcement noted the China-Australia FTA has seen wine exports increase from $A364 million in 2015 to $A516 million in 2016 and is expected to see further growth in exports to China of up to 17 per cent as result of this package.

This all points to renewed interest and an acknowledgement of the critical role regional Australia and agriculture play in not only supporting an economy but also in growing it.

Over the course of the coming years as the budget and economy look to shake off the rust and regain momentum, the opportunities our geographically close trading partners present should not be understated.

The opportunities though are only half the story - our businesses and industries must be ready and willing to look, learn and take the plunge.

Kathleen Jahour is Head of Regional Business Banking WA at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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