State Focus: South Australia’s tech success
SA Profile
Capital City: Adelaide
Population: 1.6 million
Export Revenue: $10.6 billion (excluding services)
Top Three Exports: Metals and other confidential commodities; road vehicles, parts and accessories; wine
—Source: Department of Trade and Economic Development
CASE STUDY
Tarac Technologies
A wine company with a difference, Tarac Technologies collects grape marc—skins, seeds and other residuals—for reprocessing. The result is recovered grape alcohol, extracts and tartrates that are then sold back to the industry.
Joint CEO Chris Zajac notes that a decline in the Australian demand for brandy and fortified wines led them to look at international markets. “We had to export because the growth of the wine industry increased the amount of residuals available, but demand for grape alcohol was reduced,” he says.
Tarac currently exports its value-added residuals to South Africa, Europe and the US. With four plants in wine-growing areas of Australia—three in South Australia and one in New South Wales—it has considered setting up a US plant. “The US is still an opportunity for us to explore further because there have been some changes with regard to the alcoholisation of wine. Our preference is to do it in partnership with someone who knows the local laws and regulations,” says Zajac.
The business also keeps abreast of shifts in the industry that may present other opportunities. Recent changes in the European Union allowed it to gain a foothold there. “Their industry grew on subsidies,” he explains. “That changed in 2008 when subsidies were slowly reduced. For the first time, that allowed us to be competitive. We knew that was going on, so we started to develop some market knowledge of producers and users so that when the opportunity did present itself we were in a position to provide what the market required.”
Last year, in addition to winning South Australia’s Regional Exporter Award at Austrade’s Australian Export Awards, Tarac had an opportunity to further its research on the Chinese market when they were selected as part of a travel group for Telstra and Business Club Australia’s Win Business Gold in Beijing competition. “We do have a distributor in China for some of our extracts and we continue to try and build on that relationship,” says Zajac of Tarac’s future there.
One area where Tarac worked hard was on negotiating its trading terms. Zajac says they like to keep control of the bills of lading until the account has been paid to avoid having to organise letters of credit. “Once the ship sails we fax the bill to the customer giving them evidence that the goods have been shipped, and upon receipt of those funds we then courier the original documents”, he explains. “The value of the goods and the potential excise is just phenomenal so we monitor that extremely closely.”
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