The Australian export market is buoyant, having grown by 4.2% in 2016, according to the latest figures from the Australian Bureau of Statistics. This is an excellent example of the hard work and innovation that is making Australian small businesses a global success.
Yet small businesses still face a number of challenges before they grow successful export operations. Not least, the ability to maintain the appropriate cashflow levels between export orders. One company, who has overcome this common cashflow problem and taken its innovative water solution to the world, is Western Australian firm, Natural Water Solutions (NWS).
A unique solution to water purification
Quenton Leach, Founder and CEO of Natural Water Solutions, says the secret to his company’s success is chlorine dioxide. “We’re a company that specialises in the global supply and ongoing development of new products utilising the unique properties of chlorine dioxide, which purifies water,” he says.
The key products developed by NWS are designed to treat water to make it drinkable. “It’s my belief that Australia, and the rest of the world, will increase its use of environmentally viable healthcare and water treatment products in commercial, industrial and residential applications,” Leach says.
In Australia, with the increasing use of water tanks in new residential construction, Leach says there has been an increase in the demand of their water purifying tablets. “We had a really tough initial introduction to business. A main part of our success has been due to our ongoing education campaign of making people aware of the environmental benefits and effectiveness of our product,” he explains.
“As part of our domestic expansion, we went through a stage of product development that moved from a liquid based two-part solution that required professional application, to a simple tablet that provided a whole solution. There’s a huge water tank market in Australia and this solution provided a real entry into this market. It’s probably our biggest seller in the residential market.”
Crossing the export waters
Global expansion started with an online enquiry through Alibaba, from one of the Philippines’ largest companies. Interested in the products NWS had on offer, as well as the range of potential applications, NWS developed an ongoing distributor relationship. “The relationship is exciting because they’re very proactive in finding new solutions to treat water with. They are currently doing this and treating municipality water with our products, as well as coconut plantations and hospitals,” says Leach.
“Since that initial export contract, our exports have continued to grow and now total about 50% of the business revenue. The fact that quality is controlled from Australia is a huge positive for us when it comes to selling Australian quality goods overseas,” says Leach.
With a distributor network set up in the Philippines, Leach says the plan is to expand further into the Asian market. However, with an increase in orders from their Philippines distributor, and continuing expansion activities, NWS needed a quick cashflow injection to ensure they could fulfil the quarterly distributor requirements without adding pressure to their working capital.
Cashflow injection leads to new opportunities
“We recently put on an accountant and he investigated Efic’s products and set up a meeting. We were having cashflow issues due to having to hold a fair bit of capital in our USD account to pay for product production for our orders.”
“Efic’s Small Business Export Loan has enabled us to use the funds in the business as we need it for orders as they come in,” says Leach.
The Small Business Export Loan is design specifically for small businesses who need access to finance fast. With funds available in as little as nine business days, small exporters are able to take on new opportunities quickly.
“If we hadn’t received the funding there’s no doubt that we would have had a difficult time balancing our orders and cashflow, as we had new projects coming up.”
Taking a nine month repayment term, Leach says the company is now open to take on new export opportunities they would not have thought possible two years ago.
“We believe we have an amazing set of products thanks to our great chemist. We’ve recently expanded our range to include natural products like toothpaste, mouthwash and hand gels, which all include our innovative chlorine dioxide in it.
“It’s a really exciting time for us, as we’re exploring all of these new industries where our products have real applications and can create a real difference,” says Leach.
For more information on Efic’s Small Business Export Loan click here.
About the author
Andrew Watson is Executive Director, Export Finance with Efic, which provides financial solutions to help small and medium-sized Australian businesses grow their exports, offshore investments and onshore export-related business opportunities. Prior to joining Efic, Andrew was Head of Rural & Regional Banking at Bankwest and successfully transformed this business, implementing a new sales framework and improving credit quality. He was also head of Bankwest’s Property Finance Business where he successfully implemented a new business strategy for the division.