Australia and New Zealand

1
Australia and New Zealand

• Business Prospects

Keith Kirkham A/Senior Commercial Officer
CS Australia/NZ
2
Outline

• The Good Story
• The AUSFTA
• Some Key Opportunities in Australia and New
  Zealand
  
• How to Begin

3
Differences Obvious Subtle

• Counter-seasonal
• Multicultural with European patterns
• Indigenous Supply
• Influence in the Region

4
Misconceptions
5
This Country Is a Continent
6
Australia Population Density
Australia is the 7th most urbanized country in
the world.
More than 80 of population in this ring
7
The Good Story

• Strong, Resilient Economy
• Ease of Doing Business
• Purchasing Power
• A-US Free Trade Agreement

8
The Economy

• 15th year expansion
• Low Inflation/Low unemployment
• High Capacity Utilization and Capex
• Forecast 3.25 growth

9
Americas Strong Trade Position

• American exports to Australia 17.7 billion
• in 2006
• U.S. trade surplus with Australia approx US8
  billion
  
• U.S. is major foreign supplier15.2 of the
  import market
  

10
The Market Drivers Australia

• Commodity Prices strong Asian demand
• Infrastructure spending to add capacity
• Trading partner growth

11
Role of Resources
12
Aus Mining Capacity
13
Aus Adding Capacity
14
Drought

• Shaving almost 1 off GDP growth
• During high commodity prices
• Crop yields 50 or less than normal
• Water use and major projects

15
Suddenly, Im Thirsty
16
Market Drivers New Zealand

• Commodity Prices (e.g. dairy)
• F/X
• Trading Partners Economies
• In Migration
• Tourism

17
New Zealand Risks

• Oil prices
• Strong NZ drags export economy
• Highly Leveraged consumers shift demand from
  consumer to industrial spending

18
Australia Risks

• Oil prices
• Continued Drought
• Labor shortage/wage inflation

19
Strong A and NZ Effects

• Drags export growth and revenue in F/X sensitive
  areas
  
• Increases U.S. exporter price advantage, Aussie
  and Kiwi purchasing power

20
Ease of Doing Business

• Sophisticated Market
• World Class infrastructure
• Politically stable
• Excellent IPR regime
• Transparent processes
• Technology intensive

21
Purchasing Power
22
Purchasing Power Getting Richer Quicker

• Terms of trade rose 13
• Real Gross Domestic Income (GDI) 5.2
• National income growth among highest in the
  developed world (higher than US or Japan)

23
Australia-U.S. Free Trade Agreement

• Major Benefits for U.S. Companies
• Tariff Reduction
• eliminated on 99 of manufactured goods
• eliminated all agricultural tariffs, distilled
  spirits
  
• Intellectual Property (strengthened protection)
• Access to Australian Government procurement
• Investment access improved

24
AUSFTA vs NAFTA

• Like NAFTA
• Uses rules of origin and calculations for
  regional value
  
• Unlike NAFTA
• Onus on importer not exporter
• No prescribed certificate form

25
Qualifying U.S. Goods

• An Originating Good Must Be
• Wholly obtained or produced entirely in the
  United States (e.g vegetables harvested in U.S.)
  
  
• Produced in the United States wholly from other
  originating materials from either Australia or
  the United States or
  
• Produced in the United States partly from
  non-originating materials, but meeting the
  requirements of the origin rules

26
Australia Financial Services

• Total turnover in financial markets A68.9
  billion,
  
• Largest, most liquid stock market in
  Asia-Pacific, after Japan
  
• Australia's investment fund asset pool the
  largest in Asia, 4th largest in the world
  
• Funds under management reached A839 (US648)
  billion in March 2005 and will reach A2.5
  trillion by 2015.
  

27
Opportunities

• Australia
• Infrastructure Projects
• Medical Devices
• Information Technology Services
• Construction Machinery
• Oil and Gas Field Machinery
• Water Technologies

• New Zealand
• Infrastructure Projects
• Power Generation/Electricity
• Supply Chain technologies (RFID)
• Agricultural applications
• Food Processing and Packaging

28
Agribusiness Opportunity Fieldays 2007

• New Zealand Fieldays 115,000 visitors and 1,000
  exhibitors.
  
• U.S. Pavilion
• Event runs June 13 16, 2007 Hamilton, New
  Zealand
  
• CS New Zealands Webinars
• www.fieldays.co.nz

29
New Zealand Agriculture
30
How to Begin

• Assess Market
• Determine Modifications to Product Business
  Model if Necessary
  
• Determine Appropriate Scale
• Market Entry Plan Find Distributor
• Promotional Opportunities (e.g. trade shows)

31
Due Diligence Advised
32
Contact Us

• U.S. Commercial Service
• U.S. Consulate General
• 19-29 Martin Place, 59 MLC Centre
• Sydney NSW 2000
• http//www.BuyUSA.gov/australia
• Tel. [phone] Fax. [phone]