2011 events including the Japanese tsunami, eurozone crisis, sovereign debt default by Greece, the debt ceiling drama in the US and the Arab Uprisings meant that the global slow down was unsurprising.

Emerging markets and commodities which are increasingly important to Australian exporters, were also softening towards the end of the year. EFIC Senior Economist Dougal Crawford said that, “despite their relative out-performance, emerging markets have slowed noticeably, as a result of tighter monetary policy to rein in inflation and slowing export demand.”

Looking ahead to 2012, the EFIC report said that the biggest economic risk will continue to be the eurozone. Senior Economist Ben Ford said that the outlook is that Europe may do enough to avoid a chain of sovereign debt defaults, “But it seems unlikely that this would be enough to promote growth-oriented adjustment.” He believes, “the outlook for the eurozone is one of prolonged stagnation-cum-recession. Under these circumstances, the risk of future sovereign debt restructurings or moves by some member countries to exit the currency union won’t disappear.”

Australian exporters will be looking to their major trading partners in Asia to see whether they manage to grow regardless of international concerns. According to Crawford, “the region’s growth is becoming more self-sustaining. But it is still reliant on the eurozone as a market for exports. And it has its own home-grown vulnerabilities.”

The forum, which will feature 73 prominent international speakers, and over 1700 financial and business leaders from 32 countries and regions, is inviting participants from financial institutions and markets as well as investors and financial intermediaries to attend.

One of the highlights of the AFF is the opportunity for project managers to meet with investors in one-on-one meetings at the AFF Deal Flow. This ‘speed-dating’ session for businesses has proven to be one of the successes of previous forums.

David Thomas from Think Global will be taking an Australian Mission to the forum and says it’s a great opportunity  for those looking to learn more about the region, to look into developing business in Asia and those looking for Chinese investors, particularly for attendees from Australia. “Post GFC I think Australia has risen in everybody’s thoughts,” Thomas said at an AFF information function yesterday.

The Theme of this year’s AFF will be ‘Asia: Driving Sustainable Growth’ and will discuss growth opportunities and challenges in the Asia-Pacific region.

After a few months of research, it became clear that there wasn’t a one-stop-shop type brand in Australia that sold affordable products which would make a difference in women’s lives. “There were expensive brands out of Europe for skincare and cosmetics, and there were cheap brands out of Asia.” Maakrun launched Sasy n Savy as a skincare and aromatherapy company pitched somewhere in between. The name combines two aspects of her personality. “Women are sassy and they’re also savvy. They’re beautiful, they’ve got flair, they’ve got passion. They get what they want, they know what they want and they go out and get it.” Which is exactly what Maakrun herself has done.

The Asian opportunity

Starting with just her own savings and a small loan from her mother and sister, Maakrun began developing essential oils and aromatherapy from native Australian plants, launching the brand at the Mind, Body, Spirit expo in 2004. A week later, the brand was on shelves in Hong Kong. “We picked up a Hong Kong distributor and started developing the Asian market. We spent a couple of years just travelling around the Asian market, knocking on clients’ doors, presenting what we had.” Over the years, Sasy n Savy has developed a range of skincare products to complement the aromatherapy range, and Maakrun expects that will continue to grow.

The brand now sells in Hong Kong, the Philippines, Malaysia, Singapore, Taiwan and Japan, but Maakrun says Sasy n Savy’s Asian success didn’t happen overnight. “We’re constantly visiting, doing expos, seeing visitors and seeing what their demands are.” Sasy n Savy now has a Hong Kong office. “Because if you’re not there, a competitor will come along. There’s no brand loyalty because retailers want high profit margins and high turnover. You need to have an actual physical presence in the market for the longevity of the brand.”

Australian products are popular in Asia because they are perceived to be clean and green, Maakrun says. Realising Australia has strict research and development procedures and high quality ingredients, some Asian brands actually get Australian companies to manufacture for them, under their brand. “Big brands have been using our ingredients for a very long time. We import the end products back in and pay 20 times the price,” she adds.

The Australian edge

The ‘Australianness’ of the brand is its unique selling point, Maakrun explains. “We use Kakadu Plum, which is the world’s most vitamin C rich fruit. It stimulates skin cells and collagen. We use wild rosella and grass lily. Those ingredients will create the vitamins, antioxidants and nutrients for your skin’s daily intake.” While the ingredients may be unfamiliar to an international audience, customers understand the value of Australian natives. The brand has been using the ‘Australian Made’ logo from the beginning, and Maakrun wants to do more to capitalise on the popularity of Australian products. “We’re changing our packaging to slap ‘Made in Australia’ right across everything.”

Following its success in Asia, Sasy n Savy looked for a distributor in the Middle East (“it took three goes to get the right person”) and now sells throughout Europe. “Overseas, you’re competing against the top notch European brands that sit beside us on the shelf at Harrods. But people travel. The UK market is full of Asian and Arabic buyers, and it helps that we have a presence in Asia and the Middle East. People know the brand, that it’s from Australia and all that.”

Maakrun is determined to keep Sasy n Savy’s manufacturing in Australia. “There’s not many of us left. My aim is to still say Australian made, Australian owned.” But disappointingly, selling in Australia has been a difficult path. Many Australian retailers don’t have any confidence in Australian brands, Maakrun says. “A lot of retailers will only take on the big brands with the big marketing dollar. They want products to hit the shelf and walk back out again.” It’s starting to change, but many companies find it more profitable to invest in developing sales outside the Australian market. “We were doing expos, we were advertising in magazines, we had the website presence, we were doing seminars, newsletters, fax outs, everything; but at the end of the day the investment compared to the return wasn’t to be seen compared to the international market.”

Finding a way to finance Australian product development has been key to the brand’s success on a business level. This came in the form of private label manufacturing. After seeing Sasy n Savy products in a luxury hotel in Hong Kong, the Marriott hotel in Sydney approached Maakrun and suggested private label. One deal begets another, and now Sasy n Savy does private label manufacturing for a number of 5-star hotels in Australia and internationally. “The R&D for product development is extremely expensive, trying to get products right, testing back and forth,” Maakrun explains. “I’m not an expert so we have to consult that part out of our business.” Despite never advertising private label manufacturing, the profits now pay for product development.

Highs and lows

Manufacturing is a consistent challenge, Maakrun says. “”Every day is a different day. It’s non-stop, go-go. Nothing stays the same: regulations are changing, laws are changing, aromas are changing. Different countries like different aromas and different colours.” Finding and maintaining relationships with distributors can be extremely difficult, Maakrun warns. “You don’t always know who to trust and who’s ethical and professional and who’s not.” Distributors come and go, so you need to have a firm market presence in the country that isn’t reliant on that contract. “Then you’ve got a firmer hold on the country and more activity in the market.”

After nearly a decade of export triumphs and the odd mistake, the 37-year-old entrepreneur has learned it is vital to do your research and understand your market if you plan to trade internationally. “Understand your customers and your competitors, and make sure there’s a good profit margin in it. Be passionate and just go for it.”

Immensely proud of the work the brand has achieved to date, Maakrun says customer feedback remains her guide for measuring success. “People start to say my skin’s feeling firmer, tighter, nourished. You get a lot of good feedback from our products.”  Most importantly, the Sasy n Savy team of 12 have travelled the world and had fun growing the brand. “We’ve enjoyed our life. Which is one of our trademarks: Live, Inspire, Feel Good and Empower. We’ve managed to do that by developing these products for our lifestyle.”

In his statement, Stevens said the Reserve Bank would continue its “mildly restrictive stance of monetary policy” as the general macroeconomic outlook was strong. While the Bank expects Japanese production will decline dramatically following recent natural disasters, Stevens predicted the decline will not significantly impact the wider Asian region.

Stevens also credited Australia’s high terms of trade and growing national income as contributing factors to the decision to keep the rates unchanged. The RBA announced its decision before the Australian Bureau of Statistics revealed Australia’s terms of trade shrank dramatically in February, recording a trade deficit for the first time in 12 months.

Rising commodity prices have helped boost the Australian economy while driving consumer inflation in other parts of the world. While exports are down and outputs from resource-rich states Queensland and Western Australia have diminished in the face of January’s natural disasters, Stevens said production levels should recover within months.

The Eurobodalla diver works for a commercial exporter. He said poachers tend to take undersized abalone and sell them on the black market to local restaurants and if the practice continues unchecked it could severely damage the industry.

Abalone is Australia’s fourth most valuable fisheries export, currently worth about $180 million a year. Illegal harvesting gouges up to $23 million a year from the industry, according to the Australian Institute of Criminology.

“Poachers are damaging [the industry] because they’re taking below the size limit,” the diver said. “The limit was put there because abalone don’t spawn until they’re a certain size. If they’re not spawning there’s less and less every year.”

Ten years ago a licence holder could harvest 10 tonnes in a good season, the diver said. This year he harvested about a quarter of that. “Poaching causes depletion. It just wipes them out. It’s not like 10 or 20 years ago when they were everywhere. Now you struggle to find them in places, and it’s directly related to poaching.”

The new USD190 million Triple-E class ships scheduled for delivery between 2013-15, with an option on an additional 20, will be the largest of any type currently sailing at 400 metres long, 59m wide and 73m high. The 18,000 TEU (20 foot container) capacity is 16 percent or 2,500 containers more than today’s biggest container ship the Emma Maersk.

The Triple-E will produce 20 percent less CO₂ per container than the Emma Maersk and 50 percent less than the industry average on the Asia-Europe trade lane and consume around 35 percent less fuel than the other 13,000 TEU vessels to be delivered to other shipping lines in the next few years for the same service.

The design uses optimised hull and bow forms and two ultra long stroke engines to turn two propellers. An advanced waste heat recovery system will capture and reuse energy from the engine’s exhaust gas for extra propulsion with less fuel consumption.

All materials used will be mapped in a cradle-to-cradle passport that prescribes how they can be recycled or safely disposed of when the vessel is retired from service.

“It was a major logistical operation,” Barbara McGeoch says. Among the many jobs McGeogh is responsible for in the business she coordinates exports from Australia for Birkdale.

The Disneyland contract came out of a number of smaller export projects. Birkdale began exporting jacaranda trees to Japan in 1989 and the following year supplied plants for the Queensland and Australian exhibits at Expo 90 in Osaka.

“That was very successful and because of that, we gained a good reputation within the government of being capable of exporting. Our earliest export enquiries actually came through the government,” McGeoch says.

Birkdale responded to export enquiries on a reactive basis for two years before deciding to establish a dedicated export division. From that point, the Birkdale team actively sought business in South East Asia where there was a demand for Australian plants. Birkdale’s first major export project was supplying the Brunei royal family for a golf course and large public park.

“We soon learnt that you can never assume your client’s landscapers will know how to look after your plants, so we sent staff to assist with overseeing the planting and establishment process. It was a matter of selling the ‘sizzle with the sausage’,” McGeoch says.

Birkdale International drew on a large network of suppliers in Australia, but found soon enough that exporting everything from Australia was impractical. “It’s impossible to be competitive because of the freight and cost of production,” McGeoch explains.

Developing a supply network

A joint venture in the Philippines gave the Birkdale team their first experience of setting up a production nursery overseas, groundwork that would stand them in good stead for the Disneyland project. Birkdale worked with two landscape architects out of Los Angeles for two years before commencing work on the theme park in 2002.

To deliver the volume of plants required, Birkdale set up a 12 hectare production nursery in Guangdong province in China. Today Birkdale has a turf farm, tree farm and production nursery in China to service projects in South East Asia. McGeoch explains that they source product from other horticultural suppliers in China, Thailand, Malaysia, Indonesia, Egypt, Lebanon, Europe and Australia. Their diverse network is a key part of maintaining quality assurance under the ISO standards.

To this day, McGeoch cites the Disney project as the most challenging and rewarding project that Birkdale International has worked on. “It was a world first in terms of complexity and volume. We moved large trees and palms of up to 12 metres in height. We were the pioneers in this type of logistical management.” Their work paid off and Birkdale International established a reputation as capable and quality suppliers for high profile projects.

As demand for their service grew, Birkdale International expanded to include landscape installation and maintenance—“so we could provide the total package”, McGeoch says. Birkdale International won the tender to supply and install vegetation for James Packer’s City of Dreams Casino in Macau. With these high profile projects on the company’s resumé, McGeogh found that former clients began to recommend Birkdale for other jobs.

As international projects and contracts increasingly use suppliers from multiple countries, the agreement will help Exim banks and agencies to work together to support exporters from member countries.

Head of product management and risk transfer at EFIC, Chang Foo, believes that risk-sharing arrangements benefit exporters, buyers, project sponsors and the banks involved. “For an Australian company, it creates a one-stop shop for financing when they’re sub-contracting to an Asian firm or using Asian suppliers: only one set of documents needs to be negotiated with the agency providing the loan,” he said.

Risk-sharing will also free up an agency’s capacity to support more exports, Foo believes.

Foo said EFIC is increasingly being called on by Australian corporate clients to finance large domestic projects with an export focus in the resources and infrastructure sectors. The agreement will help EFIC provide stable, long-term finance.

“Risk sharing agreements mean that we can pool resources to meet these financing needs,” Foo said. “As most exports from these projects are destined for Exim member countries, especially China, Japan, Korea and India, agencies from these countries have a vested interest in working with EFIC to get the projects up and running.”

EFIC endorsed the agreement at the 16th Annual Meeting of the Forum in Busan, Korea, along with the Exim Banks of China, India, Indonesia, Japan, Korea, Malaysia, The Philippines and Thailand.

Hosted by Hong Kong-Australia Business Association’s NSW Chapter, the 2010 Asia Pacific Networking Function was created to facilitate the communication among guests who have connections in the Asia-Pacific region.

“HKABA is committed to promoting the business connections for its members and we are also looking forward to organising this function annually in the future,” said Peter Sinn, president of HKABA’s NSW Chapter.

Associations represented included:

• China Chamber of Commerce in Australia
• Australia India Business Council
• Australia-Japan Business Association
• Australia Malaysia and Singapore Association
• Australia-Philippines Business Council
• Australia-Philippine Chamber of Commerce and Industry
• Australia-Singapore Chamber of Commerce & Industry
• Australian Taiwanese Business Council
• Australia-Thailand Business Council
• Australia-Vietnam Business Council
• Australia Indonesian Business Council
• Japan Chamber of Commerce and Industry in Sydney
• Korean Society of Sydney
• Taiwanese Chamber of Commerce in Oceania.

The network event was sponsored by ANZ Bank, which has strong ties with the Asia-Pacific region.

Stevens noted that Europe only accounts for about five percent of Australian exports and “those exports have been declining over the past few years anyway because the euro area has been weak for a while” so its direct effects wouldn’t be significant.

However, the governor did warn that the crisis would become a global malaise since Europe had influence on other markets such as Asia and that “we in Australia must naturally keep a careful watch on all this,” he said.

It would also affect future global growth, he suggested. “Looking ahead, it has to be expected that the unfolding situation in Europe, which is going to result in earlier fiscal tightening than had been assumed by forecasters until now, will weigh somewhat on global growth in 2011.”