More than just the sparkling image of Sydney Harbour, New South Wales is a state also characterised by its resources and innovation.
The Sydney skyline-featuring the Harbour Bridge, Opera House and Centrepoint Tower-is as much an icon for Australia as it is for New South Wales’ capital city. Surprisingly, however, tourism doesn’t even rate in the top 10 list of NSW exports. Number one is coal at almost $5 billion, which more than doubles revenue received from the second biggest export, aluminium.
The diversity of exports is something David Howard, Austrade’s NSW/ACT state manager, believes makes NSW exports hard to define. Asked what he sees as NSW’s strengths, he lists financial services, technology, wine, mining services, agribusiness and fashion as some of the more visible industries but concedes: “I struggle to name one particular strength from NSW: we have a lot of strength in a lot of diverse industries.”
“There’s a big spread of what we do because of the size of the population,” agrees Peter Mace, NSW general manager at the Australian Institute of Export. Mace believes NSW excels in providing services, from architecture and education to financial services and insurance, mentioning companies like Macquarie Bank and QBE Insurance. “A lot of the head offices of companies are Sydney-based.”
Howard says Sydney’s position as a global city does put financial services as a key NSW industry over other states. “Financial services is an area where I think there is a distinction in NSW. There’s more focus in Sydney than anywhere else. Melbourne might want to challenge that, but on the numbers it’s a hard one to challenge,” he says.
And while both acknowledge the huge coal industry centred on the Hunter Valley area, making Newcastle one of the busiest ports in the world, Mace believes that advanced manufacturing is making its mark in the state. “You have gaming machines by Aristocrat, high-tech food processing and companies like Resmed and Cochlear, two innovative manufacturers both from New South Wales,” he notes.
Cochlear, which took out the 2007 Australian Exporter of the Year Award, has since joined other NSW exporters like educational institution University of NSW and tourism provider Bridgeclimb in the Export Hall of Fame, reserved for exporters that have won their category three times at national level. The fact that NSW often dominates the awards is testament to its strength in exporting across a range of sectors.
Howard believes that NSW’s Department of State and Regional Development (DSRD) does well to support businesses and provide relevant programs, including some in partnership with Austrade. “DSRD does a good job helping organisations get to point where they’re export capable and then we have a program called TradeStart,” he says. “DSRD is also very good at supporting NSW companies in terms of getting them offshore and in missions. We led a financial services mission to New York in June, in conjunction with the NSW government. We thought we were just helping people connect to a market, but it turned out there were real business connections made, and real opportunities developed quickly. It was an astounding success.
“The other thing is, the money that a lot of other folks put into offshore representation and an office, [DSRD] decided many years ago to give it to their constituents, the companies that are looking to get offshore and invest, which is why they have such good, broad plans to help them get out and into the market.”
One area where NSW might be able to improve is recapturing the high-spending tourist dollar. While NSW is still a strong brand overseas, particularly Sydney, the Hunter Valley and the Blue Mountains, we’re losing the international conventions that bring more lucrative tourists, says Mace.
But NSW has not become complacent, says Howard. “If anything, [NSW people] are aware of that story and it really galls them, so you get a really good deal from NSW because they’re trying hard to overcome the perceived complacency.”
NSW online
Department of State & Regional Development: www.business.nsw.gov.au
Exporting NSW: www.export.nsw.gov.au
NSW Business Chamber: www.nswbusinesschamber.com.au
Premier’s Export Awards: www.exportawards.gov.au/nsw
Small Business September: www.smallbiz.nsw.gov.au/sbmonth
CASE STUDIES
Signature Prints
Sydney has always been the most flamboyant city in Australia, so it’s no surprise that design company Signature Prints has built its empire on selling vivid textiles, striking wallpaper, distinctive art, and even contemporary luggage.
Husband and wife owners David and Helen Lennie evolved Signature Prints from a manufacturing business to what is now a niche textile designer brand. The Lennies are custodians to famous designs by the late Florence Broadhurst, with exclusive worldwide commercial licence to her design library. Just like Broadhurst, a musical personality who performed internationally before she became a designer, Signature Prints was “born global” and now exports to 21 countries.
The business still manufactures products by hand from its Sydney location. With Broadhurst once again a talking point-due to the release of a couple of biographies and a documentary, Unfolding Florence, by Gillian Armstrong-Signature Prints can certainly take some credit for reviving international interest in Australian design.
Ilum-a-Lite
Ilum-a-Lite managing director Mark Rutherford is relieved that the first product the business tried to export was imperfect. Back in 1997 the manufacturer, which designs and produces energy-saving devices for fluorescent lighting, had a naïve approach to export: “China is a big country, let’s see if we can sell there.” All that happened was their ‘partner’ copied the sample and their export attempt failed. “Fortunately the sample was an early model and not very good,” Rutherford recalls.
It was another four years before they exported again. The second time, Rutherford used NSW’s Department of State & Regional Development (DSRD) and Austrade for a more structured approach to export. “Primarily we started to take advice and become educated. We joined the Australian Technology Showcase [ATS] run by DSRD and, through that, had access to different forums to learn about export,” he says. “Most significantly, a lot of our business has come from attending trade missions run by DSRD.”
It was via a trade mission to China that the business came to own a 51 percent share in a joint venture there. “We did business matching through DSRD and Austrade. It took three visits to China-two of those official trade missions-before narrowing it down to a potential of two partners and choosing one. We also used Austrade to identify in-country resources to help us form that joint venture and take us through all the laws and the regulatory side of things to get set up,” explains Rutherford.
The next step is to expand the product range and look at new markets in Africa and South America, where rising energy prices have started to make Ilum-a-Lite’s products more attractive. Rutherford recently returned from a trade mission to Africa and the company now aims to distribute through Ghana and South Africa. “It’s an energy-saving product and it’s most successful in places where energy costs are high and there is a demand for energy-saving. I know that’s worldwide, but in some places it’s more prevalent than others.”
Rutherford doesn’t hold a grudge against the early export failure. If anything, it means today’s product is more difficult to copy. The only thing he would differently in hindsight is start slowly and research properly. “We could have waited a bit longer and gone in with a measured and considered approach and we might have saved ourselves a couple of years.”
Rutherford’s recommendations:
Find endorsement: “If you have a unique technology, ATS is something I’d recommend. It provides forums to engage with and carries a bit of kudos. We’ve benefited from funding to do market research in India, which led to us setting up a licensing arrangement there.”
Find a good freight partner: “Freight companies, if they’re not doing their job properly, can be disruptive. We’ve gone for a smaller, more boutique company, possibly not the cheapest around, but we get a high level of attention.”
Secure payment early: “Have a strict policy on payment and adhere to it. We basically don’t give credit, but we do give people incentives to pay via telegraphic transfer or letter of credit.”
Ilum-a-Lite is a micro-business finalist in the 2008 NSW Telstra Business Awards, winner to be announced this month.
