The Madrid Protocol is a system designed to simplify the protection trade marks internationally. Providing the trade mark owner resides in a member country, they can protect their trade mark in several member countries at once by filing an application directly with their own national or regional trade mark office; in Australia, that office is IP Australia.

Tom Rinder, a trade marks attorney at MacMillan Trademarks explains: “For an international business, the Protocol means that a single trade mark application can be undertaken to register a company brand—name or logo or slogan or other—throughout a large part of the world.” Additionally, other Protocol countries can be added after international registration. Each member country still examines the application according to its own laws, and if the trade mark needs to be renewed or any changes recorded, this can also be done in a single request. Rinder notes: “The registration of a trade mark should be undertaken in every country where the business brand will be used, sold or licensed. Typically the Protocol works best where a number of countries are included in the application.”

There are several advantages of the Madrid system for trade mark owners:

• The ease of filing: Rather than filing applications in several countries, in different languages and paying several different fees, international registration can be achieved with one application, in language and with only one set of fees to pay.
• The ease of renewal: One payment, every ten years to the International Bureau of WIPO
• Ease of alteration: A change of name or address is easily recorded with all member states by means of one form.
• Quicker processing: The time period for overseas trade mark offices to issue a provisional refusal of the mark is limited to 12 or 18 months.

Administered by the International Bureau of the World Intellectual Property Organisation (WIPO) in Geneva, the Madrid system for the registration of marks was established in 1891 and operates via two treaties, the Madrid Agreement Concerning the International Registration of Marks (1891) and more recently, the Madrid Protocol, which came into force on April 1, 1996. The two treaties together provide an international system for the registration of trade marks, with the aim of making protection easier and simpler to achieve and manage. Both are open for membership to any state that is a party to the Paris Convention for the Protection of Industrial Property. In addition, the Madrid Protocol is open to an intergovernmental organisation such as the European Union, if the organisation satisfies certain criteria.

Note, however, that Australia is a signatory only to the Protocol, meaning that an Australian business would typically only file an international trade mark under the Madrid Protocol, not the Madrid Agreement.

The treaties are parallel and independent, but in 2008 new rules allowed that states previously bound by both the Agreement and the Protocol, will now only be bound by the provisions of the Protocol, the more recent and flexible of the two treaties. Also in 2008, the Madrid System became fully trilingual, meaning applications can be filed in English, French or Spanish.

While also historically significant, the Madrid Protocol is more influential now than ever, with the number of member countries increasing. In 2008, WIPO received a record 42,075 applications for the international registration of trade marks, reporting a 5.3 percent growth rate.

Who uses the Madrid Protocol?

In 2008, WIPO reported that applicants from Germany topped the list of filers for the 16th consecutive year, followed by France, USA, and the European Community. WIPO director general Francis Gurry said: “Even in economically difficult times, businesses continue to recognise that a trade mark is a smart investment in a company’s reputation and long-term sustainability.”

Businesses looking to sell their products overseas are advised to protect their investment with international trade mark registration. It is a cost effective way to protect your name, brand, product, and reputation overseas, and hence, is a critical step for exporters. Registering trade marks provides the exclusive legal right to use, license or sell the goods and/or services for which it is registered. Protection of intellectual property and product or corporate branding are both vital when you’re launching a new product or into a new territory.

The beating geographical heart of Europe is currently experiencing a velvet crisis according to the Polish deputy Prime Minister, Waldemar Pawlak: “Paradoxically, Poles were helped by the global economic crisis.” With the International Monetary Fund (IMF) also describing Poland as the “bright spot in recession-hit Europe”, what opportunities can Poland offer the world’s other great economic survivor, Australia?

A democratic state with a population of more than 38 million people, in 2008 Poland was the world’s 18th richest country, generating GDP valued at US$525.7 billion. With a temperate climate and beautiful landscape stretching from the unspoilt Baltic coastline to the Tatras mountain ranges, Poland has a strong agricultural heritage and is a leading European producer of dairy, apples, potatoes and rye.

Pawlak described Poland’s stable political and economic situation, as “rare as a sunbeam in the midst of polar night” in his May 2009 interview with the Polish Information and Foreign Investment Agency; this has positioned Poland as an entry point into the European market. In the midst of a global economic slump, Poland is actually experiencing something of a renaissance.

Poland will achieve a world-leading one percent real growth this year, says the latest IMF Real Gross Domestic Product Forecast for 2009; Australia is second with 0.7 percent. Interest rates were at 3.5 percent in July 2009, and retail trade went up in May by 1.1 percent.

Its natural beauty and historical significance are drawing a flourishing tourist trade, and with 20 years of relatively stable politics and economic growth under its belt, overall, the country is looking pretty healthy, despite the global downturn. On August 13, 2009, the IMF’s Delia Velculescu confirmed: “While Poland has not emerged unscathed from the crisis, it has fared much better than its neighbours.” Successive years of growth averaging nearly 5.5 percent had increased average Polish incomes and reduced unemployment.

The Polish banking system reportedly escaped the global economic crisis with little damage, and consumer confidence as of August 2009 had risen to its highest point for the year. The country is ripe with potential, says Pawlak: “Poland is the region’s biggest politically and economically stable country, and that creates chances for successful long-term investment. Poles account for 24 percent of the region’s population, and produce nearly 40 percent of its GDP. That is an indicator of the Polish economy’s potential.”

New exporters

Given the strength of Australian business at the moment, there is much to be said for striking while the iron is hot. Based in Warsaw, Austrade senior trade commissioner for central, southern and eastern Europe Paul Sanda lists numerous areas of growth across several sectors. “Poland has a significant mining industry: coal, copper and minerals and the opportunities for investment, technologies such as mine planning, management and safety systems are strong,” he says.

In fact, Austrade is coordinating a mining mission in March 2010 that will seek out new opportunities for Australian mining and mining services firms in Russia, Ukraine and Poland. “There are many opportunities given the synergies between Poland and Australia as a coal supplier, for instance efficiencies in mine safety and security and quality control processes,” says Sanda. “Then there’s the whole issue of carbon capture and storage for power generation, and clean coal technologies.”

Another area of opportunity is information technology, with several companies already active in Poland. Interestingly, Australian online accommodation site Wotif.com recently launched there due to demand, and the take-up has been described as ‘staggering’, reported Polish Business News in August 2009.

Other areas of potential include agribusiness, specifically consulting services, food security and advanced processing technologies and large commodity or semi-processed food and agricultural commodities. Sanda comments: “There is demand in some markets also for genetic material and aquaculture technologies, particularly for exotic species such as barramundi.”

Kevin Witkowski, president of the Polish Chamber of Commerce Australia, supports a push with boutique wine and expensive seafood, and suggests using seasonal differences to our advantage as another possible export tactic: “Poles are big producers of fruit and vegetables and the Polish ‘out of season’ is our prime season.”

Existing exporters

Many Australian companies in a diverse array of fields are already active in Poland, beginning with real estate development and commercial property development. Packaging specialists Amcor have made a significant investment in Lodz, advises Sanda, while Macquarie is involved in the Gdansk Deepwater Port. Mincom is supplying mine planning and asset management software, while Bovis Lendlease is involved with the supply of project management and construction services. Redflex is another Australian company supplying traffic management and speed control/enforcement technologies.

Sanda notes that there are many other companies actively seeking commercial opportunities in “infrastructure (toll roads), investments, food processing, traffic management and ticketing solutions, security and early fire warning systems, consulting and the services sectors”. Note also, with the proximity of the Baltic Sea and a large lake region, there are opportunities in the marine sector, most notably marinas and associated services, ship and ferry building and associated services and technologies.

Another area of significant potential is franchising, says Sanda, who observes that Gloria Jeans has recently opened stores in Warsaw and Prague.

Indonesia is the world’s fourth most populous country and, perched on Australia’s doorstep, one with which we have a unique and important relationship. The Department of Foreign Affairs and Trade (DFAT) reports that there are more than 400 Australian companies currently operating in Indonesia in such sectors as mining, construction, finance, food and beverage, and transport, including some of Australia’s most trusted names: BHP Billiton, the Commonwealth Bank and Goodman Fielder.

The Australian Bureau of Statistics valued investment in Indonesia at $3.4 billion in 2008. Two-way trade in goods and services reached $10.3 billion in 2007/08, making Indonesia our 13th largest trading partner, and our 11th ranked export market. Australia primarily exports live animals, aluminium, wheat, crude petroleum and sugars to Indonesia, with our major service exports being education-related travel and personal travel.

In 2009/10, Australian aid to Indonesia will be worth an estimated $452.5 million, making Indonesia the largest recipient of Australian aid, and demonstrating our commitment to neighbourly relations.

Risky Business

Recent high-profile court cases on drugs, perceived complexities in doing business in Indonesia, previous terrorist attacks such as the Bali bombings, political upheaval and natural disasters such as tsunamis and earthquakes are all existing sources of negative investor sentiment for Indonesia. Cautious investor confidence has, however, returned since the Bali bombings, and was greatly enhanced by the re-election this year of President Susilo Bambang Yudhoyono for another five-year term.

The 2009 terrorist attacks on the Marriott and Ritz-Carlton Hotels in Jakarta challenged this growing confidence. Although the attacks appeared to target foreign businesspeople, a DFAT spokesperson says early indications are that the bombings “are not significantly adversely affecting business and investor sentiment. Anecdotal evidence suggests that if they are isolated events these attacks will have little lasting impact on investment planning by Australian investors”.

Roger Donnelly, chief economist of the Export Finance and Insurance Corporation (EFIC), reports in the agency’s World Risk Developments paper that prior to the bombings, the currency, share and bond markets had all been rallying and that interestingly, “the blasts completely failed to shake this optimism”.

Indonesia still faces many challenges moving forward, however. In the World Bank’s Doing Business 2010 report, Indonesia ranked 142 on contract enforcement, with investment risks largest in the mining and energy sectors, where not coincidentally foreign investment has stagnated over the past decade, according to Donnelly.

“High tax and royalty payments, an uncertain regulatory environment and concerns over the sanctity of contracts, all accentuated by the devolution of power to regional bodies, are the chief headaches,” he says.

Australia Indonesia Business Council (AIBC) national vice-president Ross Taylor agrees, noting that addressing ‘KKN’ (corruption) is a major problem for the Yudhoyono government, and that “dealing with a number of recalcitrant regencies as a result of the introduction of regional autonomy legislation presents some enormous challenges.”

Other challenges are business systems and governance Taylor adds: “Many major companies involved in telecommunications and in the resources sector still want more transparent and simplified systems for establishing and operating large scale businesses in Indonesia.”

EFIC identified that “budgetary constraints mean the government has limited capacity to invest. Roads have seen little investment over the past decade, while ports cannot accommodate the larger cargo ships. Electricity generation is struggling to keep up with annual demand growth of 8 percent.”

Donnelly also found that direct investors were holding tight and that a bigger setback for the economy than the bombings was on the horizon—oil price rises. “The fall in world commodity prices in general, and oil prices in particular, from vertiginous peaks last year has conferred several benefits: cutting Indonesia’s import bill, lowering rupiah prices of fuel and rice, damping inflation, and enabling the central bank to cut interest rates. But now that the oil price is climbing again these effects are unwinding. The budget is particularly vulnerable because it subsidises fuel and electricity prices.”

With our domestic market necessarily limited by population and geography, taking your franchise global is a very attractive step. As franchise expert David Stafford of DC Strategy comments: “Australia represents less than two percent of world GDP [gross domestic product], so there is more opportunity in the rest of the world than there is here for most businesses. And with the economic downturn, there are some really good opportunities at the moment.”

Adding to the attraction, Australian franchises are highly regarded internationally. For instance, each year the Franchising and Licensing Association in Singapore invites a single nomination from each of the 36 member countries of the World Franchise Council, for recognition in the International Franchise of the Year awards, held in Singapore.

In 2008, it was an Australian franchise, freight and logistics company Pack & Send, which was named runner-up to the winning Chinese company, Inner Mongolia Little-Sheep Catering Chain. Being considered the second-best franchise in the world was an enormous boost for the company, which has 92 stores across Australia, in the United Kingdom and New Zealand.

Taking your franchise global brings with it the possibility of great reward and financial success, but it also brings a fresh raft of challenges. Happily, most of these can be avoided with research, preparation and the right advice.

Primarily, it’s important not to go too early and risk taking an immature business global. Significant expansion cannot be expected unless the fundamentals are well and truly in place. With 85 percent of businesses that try to go international failing to reach their development objectives, it’s critical your strategy be a sound one, from day one.

5 mistakes franchises make

1. Trying to expand an immature business

There are three basic non-negotiable conditions that must be in place before you even entertain the thought of going global.

• Strong cash flow and capital base, and profitability.
• Strong market position, meaning a solid proportion of domestic growth has been already achieved. This demonstrates also that your business systems and processes are in place and no longer need to be subject to refinement.
• The business must have the requisite senior management resources that can be taken from the Australian business and devoted to expansion in the foreign market.

“Unless those three conditions are met, most people struggle. And struggle badly,” says Stafford. “Traditionally what happens is an email arrives from a fan, who says ‘saw your brand, really liked it, it belongs in my country, I’m really good at what I do, why don’t you come here?’ And this deal fever erupts and all of a sudden you’re letting a stranger dictate your international expansion strategy.”

Usually in these cases, the business gets established in the marketplace but stagnates as there is no system or plan for growth.

2. Selecting the wrong business model

Sometimes business owners don’t really understand what the most appropriate business model is, be it a franchise model or other structure. Deciding what roles and responsibilities each party will have in the business model is critical, as is understanding and communicating who is going to do what.

3. Selecting the wrong country

Due diligence cannot be underestimated in choosing your overseas market. “Most people do this poorly,” says Stafford. “They make a decision on the basis that they know a little bit about that market or they went there on holiday—those sorts of subjective reasons—when really the decisions need to be based in some good solid robust research.”

4. Having inappropriate cultural assumptions

Just because things are done a certain way in the originating country, doesn’t mean that it’s done that way everywhere else in the world. It’s important to do your research and make sure your business fits with the cultural environment.

One example is McDonald’s in India. Whereas elsewhere in the world, McDonald’s is famous for its beef hamburgers, in India, beef isn’t compatible with the predominantly Hindu local culture. So, with this awareness in mind, McDonald’s built a sizable business around alternative products such as the Maharajah Mac, a chicken burger.

“You have to understand the local nuances,” explains Stafford. “And some of them can be really big. It can be the difference between success and failure; and some of them can be quite minor, such as how you write your operations manual, or telling the time.”

A common result of understanding cultural differences and local nuances can be that the brand name or logo needs to change. Says Stafford: “It happens more than you would think. There’s a very big brand baby food company out of America, called Gerber, but when it was released into France, the brand had to change as the French word gerber means ‘to puke’.”

5. Not having a big enough capital base

Having enough cash to back the move overseas is understandably a necessary element. Consultation with finance experts is a must to ensure sufficient financial depth to support the expansion. This is important also considering you might enter some markets as a franchise but use alternate structures in others. A sizeable number of franchisers in Australia would have a reasonable percentage of company-owned stores, whereas this may not be the case when they enter a foreign market.

Exporting

In the financial software industry, conducting business at a national level is an enormous achievement. Pure Commerce recently upped the ante with a deal to provide a multi-currency payment solution to the Korean Exchange Bank (KEB) for the next five years, the first time an Australian company has sold payment technology into a Korean financial institution.

Not just any Korean bank either, but the largest foreign exchange bank in South Korea. Established in 1967 and headquartered in Seoul, KEB is the fifth largest bank in South Korea, as measured in assets. With the largest global network, it has an important role in the development of South Korea’s new banking strategy.

Pure Commerce is an Australian exporter of flexible international payment solutions for financial institutions and corporate partners. Launched in 1997, the privately owned company has offices in Singapore, Sydney, London and Zurich. It specialises in partnering with financial institutions seeking new ways to extend their existing systems.

Their product offering includes currency conversion, EFTPOS solutions, multi-currency payment processing, treasury and rate management and online eBanking tools.

Currently based in Singapore, CEO Daniel Lavecky had just returned from a Pure Commerce family fun day when Dynamic Export caught up with him. “We had our corporate fun day last weekend for the Sydney team and their families. We’ve got offices in Sydney, Singapore and London, and Korea now as well, so I’m thinking we’ll have to do the same thing for them for next year,” he says. “Maybe my role as CEO will now become that of party manager?”

It’s obvious Lavecky is successful at building relationships, a skill that has stood Pure Commerce in good stead throughout their historic export journey to South Korea. Traditionally the Korean market is well known for being extremely complex for foreign companies to understand the business culture and sell into, with local companies and services the preferred option in most cases.

However, according to Austrade’s senior trade commissioner in Seoul Martin Walsh, Korea is the third largest export market for Australia, and in fact, Korean financial institutions often look to Australia’s financial system as a successful model.

With its history of regulation problems, Korea is currently implementing a new financial services system largely mirrored on the Australian framework. This then provides an opportunity for savvy operators like Pure Commerce to capitalise on the interest, which then opens the market to other Australian businesses to provide financial solutions for the developing model. So, how did this landmark agreement occur?

Making introductions

Prior to Pure Commerce arriving in South Korea, they conducted research and made appointments with banks that were genuinely interested in their product.

“Rather than just getting on a plane to Korea and saying ‘We’re here!’ we worked very closely with the trade commission prior to going,” explains Lavecky. “We identified all the banks, ranked them in priority, and then the trade commissioner made initial contact to find out who the senior executives were, which really saved us a lot of time.”

The team also made many early presentations, usually in PowerPoint, which were translated into Korean and sent over. In 2006, KEB and Pure Commerce then met during an Austrade mission to South Korea.

To build the relationship following their initial positive feedback from KEB, Pure Commerce opened a local office and courted the bank’s executives for many months.

“In Korea, you need to speak the local language. They’re very happy to work with foreign technologies because they like to say they’re using new brands, but this needs to be supported by local presence,” explains Lavecky. “You can either achieve this through using agents or opening up an office yourself.”

With this in mind, and following the success of the trade mission, Pure Commerce asked their Korean sales person to relocate to South Korea permanently. “We invited Yong to stay in Korea to continue building relationships, which he saw as a great opportunity. In addition to presentations, there were a lot of executive lunches, golf games and corporate entertainment. This is especially needed in Korea,” says Lavecky.

“A lot of money has to be invested to create a situation where they not only say ‘yes you’ve got good technology’ but also, ‘we like working with you’. The relationship took a year to build to a point where the bank was willing to talk to us about using our technology.”

Exporting is challenging at the best of times, let alone if the coffers are on the dry side. Businesses need working capital to take advantage of opportunities and grow their business. Indeed, it’s a topic close to the heart of many SMEs at the moment.

The JP Morgan-Fujitsu Consulting Australian SME Market Report published in July 2009, found the number one priority for SMEs when borrowing funds is to maintain sufficient working capital.

The report included survey responses from 15,000 SME business owners and found that it now takes longer for companies to be paid by debtors, with the average delay more than 50 days, compared to less than 40 days in 2006. Because of this, SMEs are becoming more reliant on loans to maintain adequate working capital, and are borrowing at high interest rates.

Of those surveyed, 44 percent carry interest rates of between 6-8 percent, with 36 percent paying above eight percent interest. In a business climate with shrinking confidence, it is more important than ever for exporters to leverage the best assistance available.

What is working capital?

Vince Cali, senior manager of product management in supply chain finance and working capital services for the National Australia Bank (nab) says: “Working capital is the day-to-day cash required to run a business, and cash flow best captures the essence of it.

“For exporters, competition not only comes from domestic firms, but organisations on the world stage. To remain competitive, exporters are often required to extend favourable trading terms to customers, which can mean longer delays in collecting payments compared to other businesses.

“On the input side, exporters often need to pay suppliers of goods or services in support of their sales quickly, which places further pressure on cash resources. Exporters still need to pay staff and meet other expenses, so sound working capital becomes critical.”

Traditional sources of working capital include an overdraft on a bank account, loans, business credit cards, sales of account receivables, sale and leaseback of equipment, and future credit card receipts.

Conflict

Avoid getting into a dispute to begin with by contracting clearly, equitably and unambiguously, getting legal advice early and conducting due diligence. “That’s the first thing anyone can do to protect themselves. Due diligence can be done through Austrade offices overseas, and with the assistance of your accountant and law firms here and overseas,” explains Andrew Hudson, partner at law firm Hunt & Hunt.

“You will need to ensure that they can provide assistance here and overseas in the jurisdiction in which you are going to trade. Local information is vital.”

Ask for legal, commercial and financial references, make sure you check them and keep accurate documentation of your due diligence process. “I often hear, ‘I found them on the internet so they should be all right’. People can’t be bothered with due diligence and it’s always those ones who are back within a week saying they have a problem,” says Hudson.

Careful contracting

When contracting, ensure the agreement is properly drafted in English and legally effective. You can have versions in English and in another language, but the agreement must reflect that the English version takes precedence.  Performance reviews should also be stated, accompanied by clear benchmarks.

Don’t forget to be explicit regarding intellectual property (IP). “Regarding intellectual property, the most important thing you can do is ensure you’ve registered your IP in all the relevant jurisdictions. This gives you a better ability to enforce your rights,” says Hudson.

Also ensure the agreement includes a proper dispute resolution clause covering cost, jurisdiction and enforcement.

“One popular option is a cascade process based on alternative dispute resolution given that there can be difficulties in using court systems overseas,” says Hudson. “In the event of a dispute, the first step is to have nominated representatives meet to negotiate in good faith. Should that fail, the parties have mediation, and failing that, they then, perhaps with the ICC rules. If no success with mediation, then they have arbitration to an agreed set of rules.

“Parties can elect to adopt the rules set to resolve disputes by the International Chamber of Commerce, the United Nations or , for instancethose of the Australian Commercial Disputes Centre for Dispute Resolution. However, before proceeding it is important to understanding  the content of the which arbitration rules you are to adopt willing to submit to is critical as well; don’t just rely on the ‘brand’, actually check the rules before referencing them in the agreement.”

He adds: “You also need to reserve your right to urgent interlocutory action, for instance, to get an urgent court order to stop the other party behaving badly by breaching non –- competition, or confidentiality obligations or your IP rights.”

Make sure the governing law is Australian and the governing language is English for dispute resolution, even if you’re arguing the dispute overseas. Also, if you have to go to mediation or arbitration, “you’d like to make sure that it is accordance with Australian jurisdiction ideally. Or Singapore, Hong Kong or London,” he suggests.

Be aware that if you are selling particular commodities, they may already be governed by standard forms of agreement and arbitration. For instance if you sell grain, there are grain trader forms and processes already in place.

Born in Czechoslovakia, Josef Chromy followed his father into the meat business, completing a master butcher and smallgoods maker’s diploma by the age of 20. With his family town a regional base for a Nazi command during World War II, and the country devastated by successive Nazi and Soviet occupation, Chromy decided to escape in 1950.

Unable to even tell his parents or siblings of his plans, as they would be interrogated, Chromy set off to Russian-occupied Austria with two friends, never sure he would see his family again.

Though minefields, soldiers and dogs guarding the border, the three boys made it across. The next step was to travel by train to Vienna. Sadly Chromy’s two friends were caught and returned to Czechoslovakia for imprisonment, while Chromy managed to elude the cordon and board another train several hours later.

While on the train, he again escaped capture by pretending to be deaf and dumb to cover his inability to speak German when the train conductor approached him. Chromy survived five months in Vienna before sailing for Australia, a country he believed had a bright future, and was about as far away from Communism as he could get.

New beginnings

Only 20 years old, without cash or even the currency of speaking English, Chromy started working at Goliath cement and asbestos sheeting factory at Railton in northwest Tasmania. Working two jobs, he saved enough to start his own meat business. Unfortunately it fell over due to lack of capital and language barriers.

Undaunted, Chromy paid off the creditors and started again, also marrying Alida, a new arrival from Holland, in 1954. Together they learnt English and in 1957, Chromy opened his own butcher shop in Burnie.

In 1958, he changed its name to Blue Ribbon Meat Products, with an initial turnover of $160,000 per annum and five employees. Over twenty years, Chromy developed the company, acquiring farms, 18 butcher shops, piggeries, distribution centres, factories and abattoirs along the way.

In 1972, he announced his intention to establish an export standard abattoir so he could enter overseas markets with premium lamb and beef cuts from Tasmania.

In 1979, he bought the Killafaddy Abattoir at Launceston, which enabled Blue Ribbon to commence exporting Tasmanian beef, lamb and mutton. Chromy continued to expand the business and moved to Launceston in 1984 to facilitate the running of what was now a statewide business with plants at Smithton, Camdale, Launceston and Hobart.

An industry-wide rationalisation saw Chromy sell off all of his red meat operations to the RMI Group in exchange for shares in 1985. However, when the rationalisation fell over a year later, the shares were rendered worthless.

Chromy rebuilt and in 1992, at the age of 62 years, was awarded Tasmanian Executive of the Year. Blue Ribbon then employed over 540 people, with annual sales in excess of $75 million. In 1993, Blue Ribbon was successfully floated on the ASX and in 1994 the company won the Austrade Agricultural Products category at the Australian Export Awards.

The Perfect Drop

The entrepreneur then saw a new challenge in the emerging Tasmanian wine industry, noting that it was undercapitalised but with huge potential for growth.

The Blue Ribbon float provided the capital for Chromy to set up the JAC Group of companies, and in 1994, they bought Heemskerk, Rochecombe and Buchanan vineyards, also establishing a new vineyard at Kayena; the purchase also included the Janz brand. This effectively made the Heemskerk Wine Group the second largest major producer in Tasmania’s wine industry.

In 1997 Chromy was awarded the Medal of the Order of Australia for services to the meat industry. The same year the Heemskerk Chardonnay (1995 vintage) was awarded Chardonnay of the Year by Winestate magazine, beating 841 others from Australia and New Zealand. In 1998, Chromy moved forward again, selling the Heemskerk Wine Group to Pipers Brook for $11 million. He retained the Kayena vineyard and built a new winery there called Tamar Ridge Wines in 1998.

Chromy also began investing in premium heritage properties around Tasmania, including Custom House in Launceston.

The Tamar Ridge experiment became a huge success with sales of 9,000 cases of wine within the first 12 months. By 2003, Tamar Ridge was rated five stars by Australian Wine Companion writer and critic James Halliday. Chromy then sold Tamar Ridge wines to Tasmania’s largest company, Gunns Limited. In four years it had won 12 trophies, 20 gold, 36 silver and more than 100 bronze medals in wine competitions nationwide, with export markets developed in Canada, the United Kingdom, Denmark, Singapore, Japan and more.

The story today

Following the success of Tamar Ridge, Chromy bought another winery only 10 kilometres from Launceston at Relbia. Called Josef Chromy Wines, in only two years the winery has won more than 10 trophies, 17 gold and 93 medals, making it one of the most successful launches in the history of the Tasmanian wine industry.

The JAC Group of companies continues to diversify, purchasing land around Tasmania for housing sites and also the Sea Cat terminal at George Town for development into a tourist and residential marina.

In August 2005, just before his 76th birthday, Chromy suffered a stroke, but with his usual determination and extensive therapy, has worked hard to recover.

Chromy continues as chair of the JAC Group, with his world-class wines still winning awards. Chromy himself was awarded the Export Leadership Award at the Tasmanian Export Awards 2008 and in June 2009, Minister for Trade Simon Crean presented him with an Australian Export Heroes award, initiated by the Australian Institute of Export.

The Australian Capital Territory, with its capital city Canberra, is only two hours from the coast, the snow and the city lights of Sydney. Indeed, the Territory was born of compromise. At the turn of the last century, both Sydney and Melbourne vied for the coveted role of Australian capital city and with neither willing to cede the ambition, a place was diplomatically selected between the two. The ACT has now become the heart of the Australian government, but also of a thriving knowledge export economy.

The ACT officially came into being on January 1, 1910, and it hasn’t stopped growing since. And for good reason. While being within easy reach of holiday destinations, life in the territory has much to offer: the lowest unemployment rates and the highest wages in the country, the seat of national government, the best universities, national arts institutions and a climate that embraces all four seasons. The ACT also plays host to a dynamic and vigorous export economy, one that consistently punches above its weight.

Smart thinking

When you look at the ACT’s international trade data, some aspects on the surface appear hard to explain. For instance, according to the ABS, France was the ACT’s principal export destination in 2007/08: the recipient of 41 percent of the ACT’s exports. This is an example of the data skewing, often due to one company, in this case Australian Scientific Instruments (ASI).

ASI manufacturers and exports instruments for the geochemistry and geomechanics industries. Their SHRIMP ion microprobe costs millions of dollars and when they win a contract to supply a microprobe to an international university, it tends to disproportionately affect the ACT’s international trade statistics.

And while one industry skews the figures, others get overlooked. The Royal Australian Mint, for instance, tends to be forgotten in all the success of private industry. In 2007/08 the Mint exported $910,000 worth of gold coin and legal tender to overseas markets.

The biggest export success stories however are based on service industries and public administration, with Canberra’s largest discrete export category being education services. At $222 million in 2007/08, it represents 22 percent of the Territory’s total exports.

Canberra’s tertiary education institutions are particularly significant exporters with annual revenues and expenditure approaching $1 billion. A great example is the winner of the ACT Chief Minister’s Exporter of the Year award for 2008, The Centre for Customs & Excise Studies, based at the University of Canberra. The Centre provides customs research, consultancy and internationally endorsed educational programs ranging from vocational through to postgraduate and doctoral level. In fact, the Centre went on to become only the second ACT organisation in the history of the ACT Export Awards to win a category award at a national level

Why is the ACT so strong at exporting in knowledge-based industries? Chris Horsburgh, Austrade regional manager for the ACT, says it is due in no small part to its nature as the home of the Australian government.

“Many firms have extensive experience in selling to government and as such this provides them with some distinctive advantages in the sophisticated selling necessary to succeed in targeting the government sector globally,” he says.

This level of comfort with government is the foundation for the success of many ACT exporters over several industries. Obvious examples are defence and security exporters’ success selling to the Australian Department of Defence, which has then catapulted companies like CEA Technologies, Compucat, Codarra and EOS Space Systems into the path of other defence agencies including those in the USA and the UK. Information and communication technology companies such as Intelledox, Stratsec, Contentkeeper Technologies have also benefited.

And in the medical field, Aspen Medical is an excellent example of a business which has designed innovative solutions for the Australian Defence Force (ADF) and subsequently been noticed by defence organisations around the world. Aspen provides healthcare services to remote areas of high demand and are now the largest provider of health services to the ADF, providing all the health services to Australian forces in the Solomon Islands and Timor.

Another driving force for local ACT companies is the need for growth external of the territory, due to the natural limitations of trading in the ACT.

Horsburgh confirms: “International expansion can be a sound strategy for locally based firms as it can reduce reliance on a single market and provide diversified income flows.”