Australia

&
New Zealand
Country Outlook
Asia Pacific Business Outlook 2010

David J. Murphy, Senior Commercial Officer and

Commercial Counselor – Australia & New Zealand
www.buyusa.gov/australia and www.export.gov
 Introduction

CS Australia & New Zealand

• Sydney (Covers Queensland)
• Melbourne (Covers Western Australia,
Northern Territory, South Australia)
• Wellington (Covers New Zealand)
• Specialists with industry knowledge and
contacts
Misconceptions
This Country is a Continent
U.S. Population Density
1 dot = 7500 people
 Australia Population Density

Australia is the 7th

most urbanized
country in the world.

More than 80% of population in

this ring
Australia’s Strong Business
Fundamentals

• Stable, transparent, developed

• World class infrastructure
• Global orientation
• Fierce competition on home
ground
• Fair & open tenders
• IPR regimes in place
• No corruption
Australia’s Economic
Performance

• 19 years of
consecutive growth.
• 2.4% GDP growth
forecast.
• Inflation forecast to
remain low at 2.4%
• Unemployment to fall
to 5.4%
 The Market Drivers

• Australia’s reliance on mineral

and commodity exports.
• An ageing population.
• A persistent drought affecting
much of Australia.
• Australian Government
commitment to reducing carbon
emissions.
 America’s Strong Trade
Position with Australia

• Australia is our 14th largest market

• U.S. exports to Australia - $17.6 billion
• U.S. imports from Australia - $7.6 billion
• U.S. trade surplus with Australia - $10 billion
• China, the U.S. and Japan are Australia’s major
foreign suppliers
 Australia-U.S. Free Trade
Agreement
Effective – January 1, 2005

Major Benefits for U.S. Companies

– Tariff Reduction (99% eliminated)
– Improved access for service providers
– Intellectual Property (strengthened protection)
– Opens all Australian state & federal govt procurement
– Investment access improved
Procedures Simplified for U.S. Companies
– Importer Must Claim Preferential Treatment
– No Certificates Required but Rules of Origin Apply
 Australia’s Standards and
Approvals

Few real barriers, but technical standards and

approvals must be met:

• Standards Australia - http://www.standards.org.au

• Australian Quarantine Inspection Service - http://www.daff.gov.au/aqis
• Therapeutic Goods Administration (TGA) - http://www.tga.gov.au/
 Australia’s Regional Role

• China as Consumer
• Closer Economic Relationship with New Zealand:
Free Trade Area - Duties Eliminated
• Australia has Free Trade Agreements with Thailand
and Singapore
• Australia Pursuing FTAs with China and Japan and
closer ties with India
 Australia
Best Market Prospects
• Aircraft and Parts • Mining Equipment
• Automotive Parts and • Oil and Gas Equipment
Accessories • Renewable Energy
• Cosmetics • Software
• Franchising • Water Resources
• Medical Equipment Equipment and Services
 Aircraft and Parts

•U.S.-made aircraft comprise the large majority of military, commercial and

general aviation fleets (66 percent of the 13,500 registered aircraft).

• Australian distributors are closely connected with U.S. standards, supply

lines, parts, and finished aircraft.

•Opportunities exist in:

- Parts and components for aircraft maintenance, repair, and overhaul
- Advanced avionics, display, communication, and control and navigational
instruments
- Unmanned aerial vehicles and systems for military use.
 Automotive Parts

• Australia has the third highest vehicle ownership rate in the world:
– over 700 vehicles per 1000 people
– oldest average age of cars at 9.9 years
• Opportunities exist for specialty aftermarket equipment/accessories as well as
the necessary aftermarket parts such as; 4WD parts and accessories, street
performance parts and accessories, and automotive tools.
• Demand is good for high-quality, innovative, environmentally conscious and
competitively priced parts and accessories.
• The U.S. is the second most important source of aftermarket parts supply, with
17% of the market or US$268 million, following Japan
• Green Car Innovation Fund
Cosmetics and Toiletries

• Almost 50 percent of cosmetics and toiletries are

imported.
• The U.S. maintains a significant import share of 30
percent.
• Future growth is predicted in skincare and anti-aging
products, as well as herbal, organic and spa-at-
home products.
• Both the National Industrial Chemicals Notification
and Assessment Scheme and the Therapeutic
Goods Administration regulate cosmetics and
toiletries. Websites: www.nicnas.gov.au and
www.tga.gov.au
 Franchising

• Australia has more franchising outlets per capita than any country in the
world and three times more per capita than the U.S.

• Franchised businesses in Australia are 2.5 times more likely to be

successful than non-franchised businesses.

•The top three franchising opportunities in Australia are:

-Retail trade non-food, including automotive services (35.5%)

-Retail trade food, including fast food (16.5%)
- Personal and other services, including movie hire and gardening
(12.2%)
 Medical Equipment

•Good prospects for U.S. manufacturers of new and innovative medical products.
Australia is the 9th largest export market for U.S. medical equipment.

•More than 90 percent of medical devices used in Australia are imported. The
U.S. is the major supplier followed by Europe and Japan.

•Australia is a mature and sophisticated market with a government-funded

healthcare scheme.

•Public hospitals account for approximately 70 percent of purchases of medical

equipment, with the remaining 30 percent from the private sector.

•Medical devices are regulated by the Therapeutic Goods Administration (TGA)

which closely follows EC requirements.
 Mining Equipment

• Australia is the world’s largest exporter of black coal, diamonds, iron ore, lead, rutile,
zinc and zirconium. It is the second largest exporter of gold and the third largest
exporter of aluminum and bauxite.
• In February 2010, The Reserve Bank of Australia’s Deputy Governor Ric Battellino
stated that Australia is experiencing a surge in mining activity driven by commodities
demand from China and India that could last more than 15 years. The mining sector
would expand over the next few years to be twice as big as in the previous boom that
ended with the global financial crisis.
• Opportunities exist for U.S. suppliers of:
- Products for open cut mining (as miners shift from underground to open cut)
- Filtration technology.
- Centrifuge and condition-monitoring technology.
- Dewatering systems.
 Oil and Gas
Equipment
•There are USD100 billion of projects under construction or at an advanced-planning stage.

•Projects are focused in Western Australia, the Northern Territory, and Victoria. The
largest of these is the Gorgon Project (Chevron) with a value around USD $9 billion

•Australian market is very international; global operators Apache, BHP-Billiton, Chevron,

Exxon, Santos, Shell, and Woodside all managing fields in Australia.

• Products and services that are important to the success of future projects include:
- LNG processing equipment and services
- Deepwater exploration and production technology
- Coal seam methane production equipment
- Drilling related equipment
-Technology that reduces labor or increases operational safety
 Renewable Energy

•Australia has invested around USD81 billion in generation, transmission and

distribution assets. Coal-fired generators account for the bulk of electricity generated.
•Federal Government has set targets:
- To reduce greenhouse gas emissions by 60 percent on 2000 levels by 2050,
5-15 percent by 2020.
- To source 20 percent of electricity from renewables by 2020.
• Wind powered energy is one of the fasted growing areas of the sector.
•Opportunities exist for U.S. suppliers of:
-Solar energy equipment, particularly for isolated communities.
- Small scale (<200kW) to large scale (>2MW) wind turbines.
- Energy storage technology for intermittent generation.
- Geothermal generation technology for low temperature sources.
- Biomass generating technology.
 Software

• Australian software market is valued at U.S.$6 billion, and is growing at four percent per
annum. Security software and Voice over the Internet (VoIP) are the standout subsectors.

•U.S. software products are well-known in the local market and new, cutting edge
products are readily accepted and received.

•Best end-user sectors markets for software include Government,finance/insurance,

telecommunications and retail markets.

•In demand solutions include voice messaging solutions (including VoIP), security
solutions for networks and email, workflow/document and asset management, corporate
governance compliance, and data cleansing and quality tools.
 Water Resources
Equipment & Services
• The water and wastewater treatment sector is worth US$4 billion.

• A severe national drought is fueling demand.

• Opportunities exist for U.S. suppliers of:

- Desalination technology
- Trenchless technology for pipeline replacement
- Smart metering systems for remote and
peak/off-peak measurement.
- New oxidation systems for the removal of
chemicals from industrial wastewater
- Filtration equipment for industrial applications
 Introduction to CS New
Zealand

• Wellington – Embassy
and Capital City

• Auckland – Business
Center
America’s Trade Position
with New Zealand

• U.S. exports to New Zealand

- $3.2 billion

• In 2009, the United States

was New Zealand’s third
largest source of imports

• Chinese imports are growing

annually
 New Zealand
Best Market Prospects

• Agribusiness
• Aircraft and Parts
• Energy Technology
• Medical Equipment
 Agribusiness in NZ

• Agriculture is New Zealand's largest industry and

largest export at 6% of GDP.
• Including downstream services escalates to 17% of
New Zealand's annual GDP.  
• 90% of farm production exported.

Dairy
15%
Forest
12% Other Other
48% Meat
Forest
Dairy

Meat
25%
 Aircraft and Parts

• U.S. aircraft represent more than 50 percent of New Zealand’s

aircraft fleet.
• Best Prospects exist for:
- Aircraft engines and aircraft engine parts
- Aircraft seats
- Aircraft safety glass
- Aircraft wiring sets
 New Zealand’s
Energy Sector

• Approximately 60% of
electricity from hydro stations.
Other sources:
– Geothermal stations
– Gas
– Coal and oil-fired thermal stations
– Bio-mass plants
– Wind farms

• The Government’s energy

policy initiatives are stimulating
the sector.

• Electricity demand to grow by

around 24% by 2025.
 Medical Equipment

• In 2010, the total market size for medical equipment

in New Zealand is forecast at $500 million

• The U.S. supplies 60% of market demand. Other

sources include: Europe 28%, Asia 10%, and local
2%

• Approximately 80% of healthcare in New Zealand is

publicly funded

• New Zealand has an aging population

 Market Entry Tips for
Australia & New Zealand

• Obtain the Best Market Intelligence

• Understand How Distribution Methods Differ
• Scale Volume and Margin Expectations to Market Size
• Account for Cultural/ Geophysical differences
• Undertake Due Diligence
 What some of our clients
have recently said…
“John was awesome to work with. He far exceeded my expectation level and delivered a full list of potential
agents in a very timely fashion. I will recommend his work to anyone that is looking to export to Australia.”
Combustion equipment manufacturer

“Melanie did a fantastic job of introducing me to some of the key players in the franchising business in Australia.
I would recommend her services to anyone.” Franchise business

“Although Australia is a difficult and mature market to penetrate, Duncan worked very hard at understanding our
needs and how to best pitch us to potential partners. A very capable Commercial Specialist. It was a
pleasure working with Duncan. Thank you.” Software developer

“I worked with Monique and found her to be very professional and knowledgeable. She researched our needs
and put me in touch with several very qualified potential partners in Australia.”
Medical device manufacturer
 Contact Information

David J. Murphy
Senior Commercial Officer and
Commercial Counselor for Australia and
New Zealand
Sydney, AUSTRALIA
Tel. 61-2-9373-9202
Fax. 61-2-9221-0573
Email: david.murphy@mail.doc.gov
Website: http://www.BuyUSA.gov/Australia