South Australia is a smaller market compared to many other states – and that’s the point – While it may not lead the way in the country’s exports, Cameron Bayley still finds exporting to other markets is vital to many South Australian businesses, and hugely important to the state’s economy.
If necessity is the other of invention, South Australian exporters are fast becoming a group of very enterprising offspring, according Chris Rees, Austrade’s state manager for South Australia.
"The change I see in South Australian companies is that they’re far more aware of the need to be involved, to anticipate markets, do proper research, anticipate where markets are going to open up, and actually work out how to access those markets," he says. This new breed of savvy South Australian exporters know full well the Festival State might not be as widely known as its neighbours, and some extra work might be needed to succeed in the global marketplace. "It’s not a glamorous place like Sydney or the Gold Coast," Rees explains. "Businesses are realising that it isn’t easy, and if we want people to pay attention to us we have to do the hard yards. I think we’ve got a tougher position than some of the more natural destinations in Australia, and I think that’s why South Australian companies are becoming a bit leaner and meaner in their marketing approach."
Necessity also means that although South Australia may contribute just six percent of Australia’s exports, those exports make up around 13 percent of the gross state product. "Which means exports are important to the South Australian economy," Rees says. Raymond Garrand, chief executive for the South Australian Department of Trade and Economic Development (DTED), agrees with Rees, and says the size of the state means businesses need to look to other markets to stay viable, whether that is interstate or overseas. "A lot of our manufacturers have found themselves having to be globally competitive," he says. "They have to invest in innovation, they have to invest in R&D. Likewise, they have to focus on exports, and they probably are a bit more aggressive than some other companies interstate in that regard.
It’s a crucial part of their business." With figures showing the state exported around $9 billion worth of exports in the last financial year, South Australia is showing similar growth to Australia as a whole. Garrand explains that while it may lack huge exports in minerals or fuels, compensation comes through exports of elaborately transformed manufactures (ETMs), such as biomedical products, optical lenses and electronics. And of course you can’t talk (or write) about South Australia’s exports without mentioning wine. Rees proudly calls this industry the flagbearer for the state’s economy. Garrand adds that the state’s wine exports, totalling around $1.5 billion, accounts for between 50 and 60 percent of the country’s total.
Other top exports for the state include copper and motor vehicles. The General Motors plant in Elizabeth is the state’s primary motor vehicle producer, supplying the US, the Middle East and other markets. Rees adds that seafood exports are on the increase, with tuna and lobster prices on the rebound, and figures released from the Department of Foreign Affairs and Trade (DFAT) show a 15 percent increase in the export of fish. Other commodities within the state’s top 10, according to the DFAT figures, include wheat, wool, and refined petroleum.
While services exports are less than the national average of around 25 percent, Garrand says growth in that area has recently been very strong, particularly in the state’s education sector, which in the last financial year increased by almost 150 percent to $550 million. "There’s been a large increase in both students studying offshore and international students studying here. South Australia has very much promoted itself, particularly Adelaide, as an education state or education city."
The future in this area looks even rosier with the highly ranked Carnegie Mellon University in the US recently establishing a campus in Adelaide, the first time a US-based university has established a campus in Australia, Garrand explains.
Cooperative Industry
Having worked in several states, Rees says exporters in South Australia show a tendency to work together that’s not seen as much elsewhere. "I think the relative smallness of the business community in South Australia has meant that there is a lot of very effective co-operative work."
This clustering occurs in key industry sectors. "The classic example of that is the wine industry, where in the last few years they have approached markets collectively as a group of wine companies to access key markets," Garrand says. The ICT and electronics industries also are good at this. They conduct trade missions together or have a group presence at a trade fair, to show off the commodities of the state.
The film industry is another example, says Rees. "And a lot of it is because those businesses are prepared to work together and co-operate and behave as an industry. And as a cooperative industry, not only share work and help each other but they market themselves as a destination for film."
South Australia not only has some established film production companies such as Rising Sun Pictures (see our case study) and KoJo Productions, it has long been the place where internationally acclaimed filmmaker Rolf de Heer makes his base. Rees also highlights the work Premier Mike Rann has done to promote the state’s film services to India, which has had very positive results, including a majority of the Bollywood film Love Story 2050 being filmed at various locations including Adelaide, the Flinders Rangers and Kangaroo Island.
But it’s not only the state’s exporters who work together. The Export South Australia website (http://www.exportsa.sa.gov.au) was developed by DTED in collaboration with Austrade, the International Trade Association of South Australia, and other relevant bodies such as chambers of commerce and industry associations. Rees says the groups work very hard towards creating a single platform of export services. "The level of co-operation is really quite extraordinary and it’s a huge plus for the state." The site makes sure exporters get easy access to all the help they can at all levels, he explains. "That’s almost our contract with exporters, that whoever touches them first is responsible for making sure they speak to all the other people they need to speak to. It’s been quite rewarding to bring that about."
Looking ahead, Garrand highlights a new strategy developed by the state government, that aims to treble the value of exports by 2013 to $25 billion. More growth is expected from the food and wine sector (the goal is to double wine exports to $3 billion). And two new mine developments should give the state some clout in the minerals sector—Oxiana’s Prominent Hill copper and gold mine, and the extension of BHP Billiton’s Olympic Dam, which Rees says will become Australia’s largest open-cut mine. As has been shown in states such as Western Australia, the mining industry can provide a boon for small to medium service providers, both locally and overseas. "I’m hoping these developments will bring growth in locally-based mining services companies who will become a South Australian export industry in their own right," Rees says.
Garrand says encouraging the entrepreneurial attitude of local businesses will play a big part in pushing export growth even further. "The challenge for us as a state, and for businesses generally, is to make exporting a key part of business strategy and for their business plan to be going forward, not just adding on exporting.&
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Case Study: Sunny Side Up
Didier Elzinga, CEO of Rising Sun Pictures (RSP), is a big fan of South Australia’s community spirit. "In the communities within which we work, there is an incredible camaraderie and people work really well together. That’s a great thing." While the film industry in South Australia might be close-knit, clients can come from far and wide. With a head office in Adelaide, RSP now works almost exclusively with offshore clients, providing visual effects to the film industry, with a folio including recent films such as Superman Returns, Charlotte’s Web and Blood Diamond. "Our nearest client is 14,000 kms away," Elzinga says.
It’s not a bad effort for a company that began as a post-production facility in 1995, doing local work on TV commercials and CD-ROMS. Deciding to specialise in visual effects, RSP entered the international film industry in 2001. It wasn’t the best timing, Elzinga admits. With September 11, SARS, and the Screen Actors Guild strike, there was no work for six months. "We almost died, but we managed to hold on. From that point on it’s been like a vertical rise."
Thankfully, after their work on the film Red Planet, their reputation spread and the company hasn’t looked back. "In the film industry, Australians are known for being pragmatic—finding good solutions with potentially not huge amounts of resources," Elzinga says. "So we’re the people they call when they go ‘I’ve got this problem, I’m not sure how to solve it’. And they don’t have a whole lot of money.
That’s often where we thrive." The team’s international success was recognised at last year’s Export Awards, where they took home the state and national awards for the Arts, Entertainment and Design category. While the company operates a Sydney office, two-thirds of their staff are located in Adelaide and, Elzinga says, when given the choice new staff don’t always go for the glitzier, big-city choice. "Adelaide’s been quite attractive to people, particularly when they have a family. But also to people looking to do something a little different and get away from the bigger city."
The assistance from the state government also makes South Australia a good choice for exporters. Elzinga says the company has benefited through various programs and assistance run by the government and other relevant bodies, and praises the way they work together for exporters. And while RSP is now becoming synonymous with world-class visual effects work, it’s also flying the flag for its home state. "One of the things we get quite a bit from people in Hollywood is, they only know three things about South Australia," Elzinga says. "And that’s the South Australian Film Corporation, the Barossa and Rising Sun Pictures."
