Now in their 42nd year, the Australian Export Awards are an annual pat-on-the-back for companies involved in international business, recognising those who achieve excellence in exporting. Megan Sheerin takes a look at eight of last year’s entrants to see what makes them global go-getters, and how they intend to keep it up.
For many Australian SMEs, the choice to export is an easy one. If they want to succeed, or just stay afloat, selling products and services to international markets is essential.
And, increasingly, many are not just doing this but doing it in ways that are earning them interest and accolades, along with additional revenue.
Mike Searle began producing independent television in his family garage 16 years ago. But he didn’t stay there for long. Now he’s chief executive officer of production company Storyteller Media Group (SMG), an Australian industry leader producing programmes for more than 60 countries, earning the company a place as a finalist in the 2004 national Export Awards’ arts and entertainment category, and winner of the same regional accolade on two previous occasions.
"We wouldn’t be here if we didn’t export, simple as that," says Searle, who started internationally distributing his programmes and documentaries, which highlight environmental issues and the plight of endangered species, "straight away, more or less". Exports now generate between 95 to 98 percent of the company’s overall revenue. "It’s really difficult to make TV in Australia unless you work for a network," Searle explains.
With a small domestic film and television market—both in terms of target audience and funding potential—for Perth-based SMG to succeed it needs international backing and buyers. Searle believes that finding this support is the most challenging part of being a global production company. "When one does deals with the Discoveries of this world, they never fund the whole programme so you may have to bring together three or four organisations, or use Australian investors."
With target audiences ranging from the end viewer to the commissioning editor to please, being an award-winner helps. "When you’re dealing with a Discovery or a National Geographic and they see on your letterhead or you mention in conversation that you have won an export award on a number of occasions, they feel more comfortable about doing business with you."
An upside to being Australian when competing against the likes of National Geographic or the British Broadcasting Corporation—both of whom are also customers and the latter the "gods of wildlife filmmaking", according to Searle—is price point.
"Aside from the fact that they are better, when you consider car hire, travel costs and per diems, it’s cheaper for us to send Australian film crews over there (Britain)," he explains. "We are therefore in a much stronger position to do deals with Discovery or National Geographic because it’s much cheaper for them to use us."
While Imagination Entertainment produces entertainment of a different kind, chief executive officer, Shane Yeend, likens his company’s success to that of a television programme. "What Millionaire did for game shows, we have done for the board game industry," says Yeend, of the Adelaide-owned and operated business, which won the arts and entertainment category in last year’s export awards. "We have basically innovated an industry globally."
Imagination creates, produces, and distributes interactive games throughout Australia, North America and the United Kingdom, and has 15 other countries currently under licence, with offices in the US, Europe, and Australia.
Yeend says making the traditional social experience of playing board games an interactive one by using DVDs and television has changed the way people play games forever. Initially, Yeend took an individual approach to exporting, deciding in 2001 to sell his products directly to stores overseas to get greater market traction rather than relying on a distributor.
Exports are now "98 percent of our revenues and 100 percent of our focus," says Yeend. Overheads have increased, as have staff numbers, but Imagination now sells its games to 85,000 retailers directly, is growing at a rate of 100 percent annually, and has a joint venture deal with Hasbro Europe, one of the largest toy and game companies in the world, to distribute its games to 46 countries. "Innovation helped us win that distribution," he says.
By contrast, Alan Porter, managing director of the Jaden Kanga Group, passes up international distributors in favour of marketing and disseminating his products via his own company. Following success in Australia, Porter and joint managing director Doug McIlwraith, established their own business initially in the US and in turn the UK in 2004, to market and distribute the innovative earthmoving equipment they make in Queensland. Jaden Kanga was a finalist in the Export Awards’ small-to-medium manufacturer category last year.
"It’s very difficult soliciting large orders from companies when you are developing a new market and a new concept in the marketplace," says Porter. "Gaining the confidence of people to place large orders was tedious. We knew we could do it [ourselves], so we did."
It is easy for an Australian manufacturer to quickly outstrip local demand given the small population base. But Porter says that cheaper international labour and the high value of the Australian dollar make developing global markets more difficult.
Despite 2004 being Jaden Kanga’s biggest year yet in terms of exports, with 50 percent of its gross turnover of AU$25 million being export-related, and improving domestic sales and product development as a result, Porter is critical of the lack of government support he’s received as an exporter.
"They do little better than provide lip service. The EMDG (Export Market Development Grant) was a helpful incentive in the beginning but we have burnt them all up now because they have a limited life." Making the EMDG available to exporters for different global markets rather than simply for a five-year period from the outset of exporting, would be more meaningful, says Porter.
He attributes his company’s success to self-determination and motivation. "We just don’t take no for an answer. And we don’t look over our shoulder."
Yet for other exporters, help has been forthcoming. Heather Brown, managing director of Australian Crocodile Products, has found her local Northern Territory government "extremely supportive" of her efforts to market and export the crocodile skin fashion accessories she creates.
"They refer business to us, we custom-make some items for them," says Brown, adding that the government also regularly offers her opportunities to "slot" into brochures and other initiatives that might interest her.
Brown’s point of difference is the premium Australian saltwater crocodile skins—the most valuable animal hide in the world—she uses to fashion her unique handbags, shoes, belts and other accessories. The high quality skin, and the way she positions her products, is making them popular with affluent and fashion conscious consumers in the US, Italy, UK, France, and Spain. Enough to make her a finalist in the 2004 small-to-medium manufacturer awards’ category.
Brown has found a niche export market—and she’s working it. "The bottom line is that whatever business you’re in, in marketing you have an uphill battle in terms of product differentiation," she says. In their case, "the raw material was outstanding, it was in limited supply and no one was doing it".
With both wholesale and retail businesses, Brown uses her retail outlets in Sydney and Darwin to boost product visibility, which leads to repeat purchases. "Distance is not a problem once customers see the quality and the range. We communicate new colours by email and because we can ship easily anywhere
in the world, they can just reorder."
But how does one go in terms of exporting less tangible products? Such as an education, for example? A 2004 Export Awards international education finalist, the Friends’ School in Tasmania, tailors its international marketing tactics and courses to meet the needs of students from 11 countries including Germany, Japan, Singapore, China and, occasionally, South America.
Education was Australia’s third largest export-earner last year, increasing 13 percent on 2003. Latest figures from Austrade show that 228,555 students from 114 countries enrolled in Australian higher education institutions in 2004.
"We used to attend lots of trade fairs. Now we probably attend only one a year and we use an agency network to market ourselves internationally," explains commercial manager, Nick Hutton. The Friends’ School also liaises directly with parents overseas who may have heard of it via word-of-mouth or the internet.
Students from China typically arrive with a poor grasp of English, so the school offers them intensive language classes which it adjusts during the year to suit students’ developing capabilities. By contrast, their German counterparts often have strong English skills and so they focus on courses that dovetail into their school curriculum at home.
A company with another experience to sell is BridgeClimb, whose ability to generate strong media interest has seen some 1.5 million people conquer the Sydney Harbour Bridge since the company began operating in 1998. Around 60 percent of all climbers have been international visitors and the climb is particularly popular with those from the UK, Ireland, and North America. The company’s website describes its product as "simply, the BridgeClimb experience".
Turning a deceptively simple idea into an export winner saw BridgeClimb named a finalist in the tourism category of last year’s awards, and take numerous other industry accolades since its inception.
Global social and economic trends are also key drivers of Australian exports.
"Everyone is looking for solutions because of global terrorism," says Murray Rankin, founder and special projects director of Canberra-based software solutions company, The Distillery. "There’s no doubt about it—9/11 changed the world."
The 2001 tragedy and subsequent changes in the social and economic landscape have fuelled interest in the company’s solutions for intelligence-driven organisations, which focus on national security, counter-terrorism, law enforcement, and corporate fraud.
But, while The Distillery’s growth has benefited from a recent government research and development grant and some significant contracts, the Australian "cultural cringe" remains an obstacle to the domestic and global success of last year’s emerging exporter finalist.
"People will tend to look overseas first because they believe the smarter technology comes out of Silicon Valley or somewhere, and that’s not true."
Geoff Hutchinson, from Ocean Software echoes Rankin’s sentiments: "We’re not scared off by competition from global giants," says the director of corporate business at the Melbourne-based company, when commenting on also being named an emerging exporter finalist. Ocean Software began its international marketing campaign approximately two years ago but already has offices in the UK and Canada, which the company has used as a base to launch into the US.
Overall, Rankin believes that while the Australian Export Awards raise companies’ profiles and credibility in the marketplace, organisations still have to make their own success and it can be hard for small Australian companies to "get their heads above the noise.
"Things like the export awards give you visibility. They don’t give you customers."
Export can provide growth and profit. Austrade research shows that exporters:
• pay their staff, on average, better wages than non-exporters
• provide a safer and healthier workplace
• offer increased opportunities for training and career development
• are more in touch with new and changing technologies than their domestic counterparts
The Australian community also benefits from international trade, as exports:
• increase the standard of living for every Australian
• represent around 18 percent of Gross Domestic Product (GDP)
• account for one in five jobs (one in four in rural Australia)