Setting sail for global success

Setting sail for global success article image

marineAustralia is a land girt by sea, so it’s no surprise we have a thriving marine sector at home and abroad selling everything from widgets to yachts, engineering services to marine maintenance. The Australian marine industry is highly diverse, with 2,700 companies generating a $7.5 billion turnover while employing 29,000 people. There is a thriving export industry of more than $1.2 billion annually. The world-class industry is located around Australia, contributing to regional economies. The key driver for the development of export markets is that the domestic market is limited by population, therefore to build world-class products and achieve a return on investment, Australian marine manufacturers and service businesses need to consider a global market when designing and selling products/services. There are a number of different types of marine exporters, including companies that manufacture the product in total here, manufacturers that import certain products to manufacture here, manufacturers producing under licence, and companies that own the intellectual property and do research and development here but manufacture overseas. In terms of selling, most manufacturers go direct, appoint distributors or have agency agreements. The global marine industry is essentially two markets: leisure and commercial. Conventionally, New Zealand, North America and Western Europe have provided the best opportunities in the recreational and leisure boating sectors, whereas Asia, the Middle East, the former Soviet bloc and South America have been regions where exporters have focused on the commercial segment. However, there is increasing interest from these areas in the leisure boating sector, with several companies making inroads into these markets.

New exporters

Opportunities for new marine exporters are highly dependent on the product and the market research undertaken by the business. The Australian International Marine Export Group (AIMEX) organises the Australian pavilion at key international boat shows and encourages new exporters to join the pavilion or to visit the market. These visits prove invaluable for new exporters who invariably make good contacts, receive referrals to other members’ agents or distributors, and ultimately have a softer ride into the market. However, whether you participate at a fair or exhibition or undertake some other form of market development activity, opportunities come to those that are present in the market to participate. Especially in these recent turbulent times, commitment to a market is seen and noted, if not for now, then for future reference.

Existing Exporters

There are opportunities for existing exporters through development of new and innovative products or value adding to existing products and services. They should also carefully look at the emerging markets and how they can establish their company in these markets and position for growth when it comes. It always comes down to the energy of a company, the relationships they build with clients, how in tune they stay with the market and, of course, what value they place on R&D. It is essential for exporters to visit their markets regularly and stay in contact with their customers. When companies are struggling to survive and everyone is looking to reduce costs, it can be an opportunity for those who have close relationships with their customers. Suppliers can collapse, and this obviously offers opportunities to competitors. While the domestic economic growth rates in China and India sound attractive, their marine sectors are growing from a relatively small base. Potentially, the larger growth in dollars may come from aggressively attacking a market to gain share where there is already an established, significant sector for your product in operation. Mature markets such as France Italy, Spain, the UK and the USA should form a part of your balanced market development activity.

Advanced exporters

There has been a big push from both state and federal governments for marine exporters to look at the emerging markets of China and India. While there will be opportunities in the future, China has proved difficult and things have moved slowly for the marine sector. India is similar: there has been minimal infrastructure development in India and there is still a way to go before good sales come from this market. Korea is another emerging market where AIMEX has put a toe in the water, organising the Australian pavilion at the Korea Boat show for the past two years. Progress will be slow until the infrastructure is more advanced, but this is a country where there is a real push and local government initiatives to develop a leisure boating industry. AIMEX has a mentoring scheme for new exporters; AIMEX has a wealth of knowledge within its membership and board, so the scheme is the ideal way for advanced exporters to share their experiences. This has proved to be incredibly valuable for those who have limited knowledge of exporting and the pitfalls that they can encounter.


A key issue for many exporters is the tyranny of distance, high freight costs, logistics of international warehousing, the unpredictable Australian dollar, and the issues currently being faced by many larger exporters in obtaining credit insurance and regulatory issues. Traditionally, Europe and the USA have been our major competitors. In recent times, Asian manufacturers are developing and marketing a broad range of boats and marine equipment. Emerging countries are working hard to develop their own manufacturing facilities and often only want our IP and technical knowledge.  Many companies now export their knowledge, skills, and IP. With the cost of manufacturing so competitive overseas, we predict we will see more Australian companies simply exporting services. Services are an expanding portion of Australia’s overall export and are a way of extending your portfolio of business offerings based on your core competency. Turning your process of designing a new product or solving a problem in your own business can be a service that you can package and offer to other companies in the industry, even competitors. Think about protecting IP so that it doesn’t get: a) stolen; or b) accidentally given away for free. You don’t always need a trademark or IP lawyer to help you in this task, you can use the resources you already have available.

The future

Australia has a reputation for producing quality, innovative products at competitive prices. Australian marine industry companies are known for their can-do attitude and responsiveness to customer needs. Many Australian manufacturers have targeted niche markets and continue to grow in these markets. However, to maintain their competitive position into the future, they need support in this area. More funding allocated to in-country service and support would certainly make entry and development of markets easier, particularly in the Asian markets. There is no consistency between states and many do not appear to really understand the marine sector and the economic value to the state and the country from these exports. Many will look to manufacture offshore, simply retaining the IP and sales and marketing arm. To retain these jobs, the government needs to provide support to this sector as they have done with automotive. Australia as a marine nation will always be a significant player globally. Our advantage is often in our innovation and quality. R&D is a high cost to any business and investment by the government in R&D will be essential in the future as will a strong Export Market Development Grant scheme (administered by Austrade) and an effective Export Finance and Insurance Corporation (EFIC) providing relevant financial services to the small and medium export players. We can wait for events to overtake us, or individually and collectively design the future we want for our business and for the industry. Perhaps our future is one where we have a combination of high value-add tasks such as research, development, design and early commercialisation conducted in or from Australia, but with some manufacturing completed offshore to give Australian and global customer access to the best cost platform. Today, this discussion is about participating in the global marketplace and ensuring that our businesses have a future. -Mary Anne Edwards is the chief executive of AIMEX, the peak body representing companies involved in the design, manufacture, refitting, repair and service of recreational and light commercial craft, equipment and fittings, and organisations involved with marinas and other storage and servicing marine centres ( Read on for our case study on one business' marine export experienc

ronstanCASE STUDY: Ronstan International

Boat and architectural hardware manufacturer Ronstan is the brainchild of boat builder Ron Allatt and toolmaker Stan LeNepveu, who together started the business in 1953. The two successful sailors soon began to receive orders from others for their innovative fittings, and the business grew by word-of-mouth. Initially the concept of export came about because of seasonal advantages: they wanted to keep their staff over the winter months. Eventually, they secured their first export sale to Canada. Today, Ronstan sell to dozens of countries and are one of the three biggest supplies in the world for their product type. At the moment, clientele tend to come from developed countries, particularly in Europe and the USA. "Asia to us is, in general, relatively small because sailing isn't as much a pastime there," says managing director Alistair Murray, though he admits that sailing is emerging in markets like Singapore. "In general, I see sailing as a good thing to be associated with. It's environmentally friendly, it's family-oriented, it's fitness; it's a positive activity and I would hope it has a future." He nominates South America as a region of future growth, but also says the company's diversification into the architectural sector will stand them in good stead. "It's not as developed as the sailing side. In Asia there are opportunities in both boating and architecture." After more than 55 years in operation, Ronstan have racked up a room of accolades ranging from a fistful of Australian Export Awards, to AIMEX's 2009 Australian Marine Industry Exporter of the Year. They've also shared in Australia's 1983 America's Cup victory and several sailing medals at a number of Olympic Games, which give them double exposure through construction and competition. While Murray says they don't directly use the awards for marketing, they use the attention internally to build morale, and externally to build a reputation. "Its our international orientation I'm most proud of. I enjoy doing business around the world, I like the relationships I've built up over the years," he says. This carries through to a dedication to the company, which Ronstan's management team-Murray included-bought after a few ownership changes. And that commitment can be key to success, he adds: "Get your own people on the ground because you never get the dedication from independent people as you do from your own." -Adeline Teoh

Alistair's advice:

  • Visit markets before making any decisions or commitments. Trade shows are a great opportunity to see all the leading industry people and products in one place. Make contact prior to the show, set up meetings, go to functions, check out your competition.
  • Respond to prospective customers with efficiency, and follow through with every commitment you make. There is so much poor service out there that this is not hard!
  • Don’t commit to potential distributors too quickly. Meet a few people, weigh up your options and make decisions when you are ready.
  • Don’t underprice. In an effort to be competitive it is easy to commit to business that has too low a margin.
  • Aim at the right level. Seeing a purchasing officer will get you nowhere compared to making direct contact with the owner or CEO. The greatest advantage you have, compared to all the local businesses they could deal with, is that you have traveled all the way from Australia to see them.


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