Colour by numbers

Five-time winners of the Tasmanian Export Awards, part of the Australian Export Awards, Launceston-based design house Autech have become world leaders in software development based around colour and its use in different industries, including fashion, cosmetics, building products, paint supplies and interior design. They have gone on to develop smartphone applications, and are developing a product for the much-anticipated Apple iPad.

Managing director Rex Hesline founded Autech in 1993, and in 1997 he offered chief executive officer Darren Alexander a partnership. When Hesline began marketing his first software system, it cost a cool $35,000. Alexander believes that in today’s economy it would be the equivalent of $100,000—a lot to pay for a single application. When he came on board, he let Hesline know he had different ideas very quickly, and has since gone on to restructure the product to have broader commercial appeal.

“I didn’t think he had the right business model,” Alexander says. “Suppliers and retailers were not going to pay such a huge amount of money. I said the only way it would work is if we developed the application for the [cheaper] CD-ROM format. We made it commercial so that mums and dads would buy it.”

Alexander took this new product to the Color Guild trade show in the USA’s most well known tropical destination, Hawaii, but didn’t spend his time sipping pina coladas. Instead, he spent the company’s last $30,000 on a presentation that he delivered to representatives from 500 paint companies around the world.

He walked away with $1.5 million in sales: “And that’s when the Australian dollar was worth US49 cents!” he quips. The 40-odd clients he picked up that day have become regular customers; he has since worked hard to build trust and gain credibility for the company by ensuring products were delivered on time and on budget.

The next phase was about ensuring repeat business, he says. “We’d visit them every year and look at other areas of their business where we felt we could add value. If you do the right thing, customers will continue to spend with you.”
When the economy first began to reel from the downturn, he believes businesses began to panic and stopped spending money on marketing: the complete opposite action that should be undertaken, according to Alexander. “A downturn is the most important time that brands need to be in front of the consumer’s face,” he says.

Instead, they cut a nominal amount from their annual $250,000 R&D budget and used it to improve their cash flow so they could offer customers flexible payment arrangements, which was a strategy that proved to be a great success in keeping business steady, and even growing.

“We increased our price but allowed [the clients] to pay it off,” he explains. “We knew they wanted to do the project but, because our price was higher than that of other people’s, we said our show of commitment to them was to offer interest-free payment arrangements. When I increased the price, though, I inbuilt a percentage rate so we wouldn’t lose money. In the end, we found we actually had more people wanting to spend.”

Autech can now count Jotun, one of the top 10 paint suppliers in the world, and the Color Society of the United States, who commissioned them to develop an e-learning application for the make-up artists at L’Oreal, as just a couple of their high-profile clients. The 2008/09 financial year saw the company experience a 451 percent jump in profits from the previous year.

Alexander notes: “Just because we come from a small place, we don’t think small. The technology we’ve developed is state-of-the-art, and we’ve been a world leader for a number of years.”

To what does he attribute Autech’s unusually successful expansion in the face of such a dismal economy? He is quick to proclaim that a lot of the success is down to his team. “At the end of the day, a company is only as good as its staff. I’m lucky that I have some very talented young people that all have the same agenda I do,” he says.

When I think about all the things I love to eat and drink, I tend to think of Cowra cheese, Tasmanian smoked salmon, champagne from, well, Champagne. But why do I particularly ascribe to food and drinks by region? Is Tasmanian smoked salmon all that different to the smoked salmon farmed or fished around, for instance, Wollongong? Apparently so, which is why they use ‘Tasmanian’ on the packaging. ‘Tasmanian’ is registered as a geographical indication (GI), a form of intellectual property that represents the quality, consistency and flavour of local Tasmanian produce.

GIs are currently only used by the wine industry here in Australia, but ‘Tasmanian’ could be protected as a GI for smoked salmon in the future. Interest in where food and drinks come from is on the rise, and GIs are going to become far more prevalent in the marketplace, both locally and overseas.

A GI identifies goods that have a specific geographical origin and possess qualities, a reputation or some other characteristic essentially attributable to that area of origin, according to IP Australia. Cowra, Coonawarra, Tasmanian, Barossa Valley and Champagne are all examples of wine GIs, the latter international, all registered as GIs in Australia.

Who benefits?

Both the producer and the consumer benefit from the use of GIs. The producer benefits from marketing their product on the back of the reputation of the region, perhaps the high quality or particular flavour of the products known to be from that area, so sales increase. Many retailers that use a GI have reportedly been able to increase their prices as well, because demand has risen. The consumer benefits because they have more information about the product upfront, so they can make a more informed choice.

The main industries that benefit from GIs are food and beverages: wine, tea and dairy in particular. However, GIs aren’t limited to agriculture; for example, ‘Bohemia’ is recognised as a GI for specific products, such as crystalware, made in the Czech Republic. The timber industry has also been known to use GIs.

Producers of goods in a particular region that has staked out a reputation for quality, or perhaps industry groups and authorities that regulate the production of goods in a particular region are the entities most likely to seek formal protection of a GI. For example, the Winegrowers Association may seek GI protection to support the promotion of the unique attributes and qualities of the wines produced by its members.

And that’s what a GI essentially boils down to: a marketing tool. But when used effectively, it may also enhance unit returns for producers and provide quality assurance and a point of differentiation for consumers, both within Australia and abroad. GIs identify goods that have a specific geographical origin and possess qualities, reputation or some other characteristic essentially attributable to that area of origin.

Ian Goss, general manager for Business Development and Strategy at IP Australia, says the value of a GI is inextricably linked to its branding and marketing. “A GI that has no reputation and little market recognition is unlikely to add value to products. The Barossa Valley, for example, is a well known growing area and its produce has obtained a significant reputation in Australia and overseas.” The Barossa Valley is registered as a GI on the Australian Register of Protected Names; other well known GIs include Coonawarra, Margaret River and Swan Valley. Being well-known for specific products, such as wine, also enhances a region’s ability to benefit from tourism, as many producers have experienced in the various wine regions.

Using geographical indications

While Australia doesn’t have a single system for registering geographical indications, the Register of Protected Names maintained by the Australian Wine and Brandy Corporation is the closest thing to official, and includes wine GIs from both Australia and the European Community.

It is possible to seek registration of GIs for all types of products through the certification or collective trade mark system, which is regulated by IP Australia. Overseas producers seeking to protect their GIs in Australia use this route.

Australian wine and spirit GIs are protected from misuse through specific legislation, the Australian Wine and Brandy Corporation Act 1980, while all others are protected through a range of unfair competition and consumer protection legislation, including the Trade Practices Act 1974.

“An exporter wishing to include an indication of geographic source, whether or not it is a GI, needs to ensure it accurately portrays any relationship with the source. False or misleading labelling could lead to action under trade practices, trade description, unfair competition or food standards laws,” Goss further explains.

Certification trade marks also have governing rules, he adds. “If an Australian GI is protected as a certification trade mark, then the Australian producer wishing to use it would need to adhere to the requisite rules governing its use. If an Australian GI is protected as a collective trade mark, then the exporter would need to be a member of the collective to use the mark.”

This goes for the use of GIs on the Register of Protected Names. “Similarly, if a GI for an Australian wine area is included on the Register of Protected Names, the Australian Wine and Brandy Corporation Act 1980 has specific rules regarding the amount of wine originating from the designated area that must be contained in a product before the GI can be used,” he says.

Canada has long been considered the younger sibling of the USA, adapting some of its ways and relying heavily on bilateral trade. However, Canada’s star as a destination investment market is on the rise, and there has never been a better time for Australia to strengthen its strong relationship with its first cousin. Both large, geographically dispersed countries with Commonwealth roots, a Westminster system of government, and a comparable standard of living, Australian-Canadian trade has been quite straightforward, thanks to the similarities.

Australia and Canada have an extensive trading history, and grant each other preferential tariff rates on a limited range of products agreed under the Canada-Australia Trade Agreement (CANATA), established in 1960 and amended in 1973. As CANATA pre-dates the multilateral trading system, most of its provisions have been superseded by World Trade Organisation tariff reductions. With merchandise trade at $3.81 billion, Canada is Australia’s 22nd-largest trading partner.

Around 3,000 Australian businesses either export to, or operate in, Canada every year, with top performing exports in wine, medicaments (including veterinary) and passenger motor vehicles. Companies exporting to Canada include food processors and retailers, consumer product retailers, packaging, software, tourism, financial services, and mining technology and services.

Eyes on investment

In contrast to the USA, their closest neighbour and ally, Canada has been a closer mirror of Australia in terms of weathering the global financial crisis, only briefly slipping into recession before bouncing back to experience strong growth. Austrade’s senior trade commissioner and consular general, Stefan Trofimovs, predicts that Canada will “get back to three percent growth levels, or even higher, by the end of the year”.

Australia’s investment in Canada, which was $3 billion in 2005, increased dramatically to hit $27 billion in 2009, thanks to our strong economy and Canada’s diversification of opportunities for foreign entities. Canadian investment in Australia has increased from $9 billion to $10 billion during the same period.

Throughout this period, the USA has slipped into a deep recession, affecting trade relations between the North American nations and forcing Canada to seek out new trading partners. “The focus is now on forging new partnerships with the more resilient economies of South America, especially Brazil, while continuing to use Australia as a launching pad into the Asian markets,” Trofimovs explains.

Back to the mine

The enormous Australian investment increase in Canadian interests is in part due to Rio Tinto Canada’s friendly takeover of Canadian company Alcan, resulting in Rio Tinto Alcan, of which Australia has a sizeable share because of parent company Rio Tinto’s Anglo-Australian origins. Since then, the Montreal-based mining giant has acted as a magnet for drawing new businesses and services into the country.

Mining has become a dominant import sector for Canada. Sydney-based WorleyParsons acquired the privately held Colt Companies based in Calgary, Alberta for $1.13 billion, to gain increased access to Canada’s oil sands industry.

Transfield Services is another mining services organisation making waves in Canada. An Australian company providing operations, maintenance and asset management services in the mining, transport and utility sectors; clients include major national and international companies, as well as all levels of government, creating opportunities for new mining services exporters who may be looking to capitalise on the groundwork already done by these larger firms.

In a similar vein to mining, engineering has become a dominant industry that Australian exporters are keen to invest in. Local engineering firms Coffey Geotechnics and GHD have both set up substantial presences in Canada; Coffey Geotechnics with an office in Alberta and three across Ontario and GHD setting up office just north of Toronto. Trofimovs believes the key to enduring international success is relationships. “Many companies from across all sectors are realising the importance of establishing a presence in the country they are exporting goods and services to, giving weight to nurturing long-term relationships between manufacturer, exporter and consumer,” he says.

Lanyon, together with her husband, Ian, own and manage the tomato farm with the help of 16 part-time casuals. At a time when the economy is in a slump and the drought is in its 10th year, Simply Green Tomatoes is expanding impressively, both into new products and new business ventures. With a new Indigenous product on the way and the recent acquisition of Aussie Wool Quilts, things have never looked better for the couple.

The core of the Simply Green Tomatoes business is, of course, green tomatoes. Each summer they’re hand-picked for size and colour, triple washed, sliced and soaked in a salt and vinegar brine for two days, then drained and poured into a mix of garlic, oregano and olive oil and stored underground in a shipping container. Vacuum-packed in 100-gram, 250-gram and 700-gram packs, or five-kilo buckets for the food-service industry, the antipasto favourite is now available in more than 350 outlets throughout Australia, and in 22 countries around the world.

Opportunities and growth

With an uncanny knack for identifying new opportunities for growth, and with domestic sales having been steady for the better part of the decade, Lanyon has had time to focus on the export side of the business. With a major push occurring in the Middle East, especially Kuwait and Dubai, Simply Green Tomatoes are now available in the upscale Dean & De Luca gourmet stores in both cities. With plans for further expansion of the Dean & De Luca stores throughout the Middle East, taking with them the Simply Green Tomatoes brand, the partnership has been very fruitful for the Lanyons.

Simply Green Tomatoes is also expanding their product lines and distribution by the day. With a new Indigenous product on its way, where Simply Green Tomatoes will be co-branded with another company, planned expansion into airlines and shipping companies, huge growth in the food-service industry, and the new wool bedding venture, the sky’s the limit for this little company from rural Victoria.

“We’re also exploring tourism,” explains Lanyon, who has partnered up with other local operators and Loddon Shire Council to conduct day tours of the farm, bringing in tourism dollars as well as operating as a marketing vehicle. “Each person that comes to the farm and tastes the products will go home and tell their family, neighbours, friends… it’s a great way to get our name out there into households.”

Busloads of tourists, greeted enthusiastically by the family dalmatian, Whiplash, as well as the talking pet cockatiel who says “hello and welcome”, now come for a homemade morning tea of quiche, breads and dips under the lofty trees. They’re then given a tour of the factory, shown a DVD presentation and given an opportunity to buy the products, then taken along to other farms within the area to sample anything from olives to the Greek delicacy, spanakopita. Supporting and being supported by partnership with other local operators in the region, the tourism side is steadily growing and the local economy is blossoming, good for both residents and the businesses in the area.

In acquiring small business Aussie Wool Quilts, the Lanyons have identified a completely different gap in the local market and are now branching out into wool manufacturing alongside tomato growing. Visitors to the farm can see for themselves how the chemical-free handmade quilts, underblankets and pillows are produced. With sales of both the tomato and wool products consistently high, Lanyon believes there is strong cross-selling because they are very different products that aren’t in competition with each other.

Recipe for success

With a burgeoning international business under her belt from a single antipasto recipe, Lanyon believes the key to their success was getting familiar with which markets have a need for a particular product. “Doing a lot of research is critical to anyone starting up a new venture, whether for domestic sales or export,” she explains. “I’ve also had a lot of help from Government bodies, both federal and state. Austrade’s New Exporter program is a fantastic resource for getting to know overseas markets.”

From product packaging colours to shelf life in particular climates, a firm grasp on a product’s suitability for different areas should ideally equate to a firm grasp on the market share.

Networking with other business owners and embracing new technology are the other two key aspects of creating growth and avoiding problems, explains Lanyon. “For anyone just starting up, or wanting to drive their existing venture further, attend as many learning and development courses and trade shows as you can. You can chat with other SME owners about the successes and pitfalls they’ve experienced and swap advice in a mutually beneficial setting.”

New technology has helped Simply Green Tomatoes expand throughout the world, as Lanyon has begun teleconferencing with potential traders and clients so that she can cut down on travel costs and time away from the day-to-day running of the company, and has even held remote trade shows online, furthering her global standing from home.

This mother-of-five, with a grandchild on the way, who began the business at 55, has shown how much can be achieved just by having a simple idea, the determination to succeed and, of course, a passion for her product. As the American writer Lewis Grizzard famously said, “It’s difficult to think anything but pleasant thoughts while eating a home-grown tomato.”

Nominated by trend analysts and forecaster Worth Global Style Network (WGSN), kikki.K has the personal backing of WGSN’s managing director Asia-Pacific Julie Harris, who said the nomination is well deserved. “kikki.K’s nomination for a World Retail Congress Oracle Award positions them amongst the finest and most innovative retailers in the world,” she said.

Founded in Melbourne in 2001 by Swedish-born Kristina Karlsson, the Australian-owned design label quickly earned a cult following among the fashion and design-conscious for its distinctly Swedish stationery and accessories. Today, over 40 privately owned kikki.K boutiques are located across Australia, New Zealand, and most recently on Singapore’s illustrious Orchard Road.

Karlsson says the nomination highlights the opportunity for further international expansion. “This nomination confirms our relevance on the world retail scene, and the endless possibilities ahead of us. It’s always been my dream to open kikki.K boutiques in my favourite cities around the world… this takes us one step closer,” she says.

The World Retail Awards, to be held this year in Berlin, are judged by a panel of industry experts. Previous winners include Apple, Nike and Saks Fifth Avenue.

“HRD Antwerp is one of the world’s most respected diamond testing and certification labs in the recognised centre of the international diamond business in Belgium,” Macdonald said. “Magellan’s technology is being used by HRD Antwerp to accurately monitor thousands of precious stones that pass through its testing and grading processes. Sydney technology is providing complete security for millions of dollars worth of gems in one of the world’s most exclusive industries.”

The NSW government has helped Magellan Technology with export support through its Australian Technology Showcase (ATS) program, and the company was a finalist in this year’s ATS Patrons Award for export success. Magellan teamed with Dutch firm Scanology to install its technology at HRD Antwerp.

Magellan says its technology delivers accurate identification up to 10 times faster than other RFID technologies.

The roll-out of full-body scanners would take place at a small number of international airports—most likely Sydney, Melbourne and Brisbane—and be used for flights to the USA.

After rewriting eight earlier drafts and encountering lengthy delays, Prime Minister Kevin Rudd and his senior ministers will today finalise a White Paper on counter-terrorism.

In a move triggered by the arrest of terrorism suspects in Melbourne last August, and a botched attempt by a passenger to blow up a plane approaching Detroit in the US in December, the White Paper will also ramp up security for incoming cargo from international locations.

Crean said the deals on bananas and tropical products would generate much-needed momentum towards concluding the Doha Round in 2010.

“This demonstrates that with goodwill countries both large and small can get together in the World Trade Organisation (WTO) to solve their commercial disagreements,” he said.

The dispute on bananas, which was lodged with the WTO in 1993, was resolved last week in Geneva. The agreement to cut EU import tariffs was agreed to between the European Union, the USA, and banana-producing countries in Latin America, Africa, the Caribbean and the Pacific.

“This breakthrough on bananas is good for farmers in small developing countries, good for consumers, good for international trade, and good for the WTO and multilateralism,” Crean said.

The related agreement on tropical product EU import tariff cuts could also prove to be lucrative for Australia, Crean explained.

The complete list of tropical products has yet to be finalised for each market, but it could include important Australian exports such as canola oil, citrus fruits, avocadoes, and nuts such as macadamias and almonds.